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James Fisher and Sons plc
Annual report and accounts
This Report has been printed in the UK. Our printers are environmental
management system ISO 14001-accredited and Forest Stewardship
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This Annual Report is available at www.james-fisher.com
James Fisher and Sons plc
T: +44 (0) 1229 615 400
F: +44 (0) 1229 836 761
E: enquiries@james-fisher.com
W: www.james-fisher.com
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Annual report and accounts 2020
James Fisher and Sons plc is a leading service provider to the global marine industry and a specialist
supplier of innovative engineering and technical services to the energy industry. Our 2,500 employees
operate across 23 countries around the world striving to deliver our common purpose of pioneering safe
and trusted solutions to complex problems in harsh environments. Our customers are predominantly
large multinational corporations and governments that value the contribution our specialist skills make.
We achieve this through a commitment to the safety and wellbeing of those that work for and alongside
us, underpinned by our core valued behaviours: pioneering spirit; integrity; energy; and resilience.
STRATEGIC REPORT
Highlights ................................................................................................................ 1
Chairman’s statement ............................................................................................. 2
Chief Executive’s review ......................................................................................... 6
Business model ..................................................................................................... 12
Strategy ................................................................................................................. 13
Sector review ........................................................................................................ 14
Financial review ..................................................................................................... 22
Key performance indicators ................................................................................. 25
Engaging our shareholders ................................................................................... 26
Supporting our local communities ....................................................................... 27
Empowering our people ....................................................................................... 29
Health and safety .................................................................................................. 32
Partnering with our customers and suppliers ...................................................... 35
Protecting our environment .................................................................................. 37
Non-financial information statement .................................................................... 41
Principal risks and uncertainties ........................................................................... 43
GOVERNANCE
Chairman’s introduction ....................................................................................... 52
Board of Directors ................................................................................................ 54
Corporate governance report .............................................................................. 56
Nominations Committee report ........................................................................... 63
Audit Committee report ........................................................................................ 66
Directors’ remuneration report .............................................................................. 72
Directors’ report .................................................................................................... 88
Statement of Directors’ responsibilities ................................................................ 91
FINANCIAL STATEMENTS
Independent auditor’s report ................................................................................ 92
Consolidated income statement ........................................................................ 104
Consolidated statement of other comprehensive income ................................. 104
Consolidated and Company statement of financial position ............................. 105
Consolidated and Company cash flow statement ............................................. 106
Consolidated statement of changes in equity .................................................... 107
Company statement of changes in equity ......................................................... 108
Notes to the financial statements ....................................................................... 109
Subsidiaries and associated undertakings ......................................................... 150
Group financial record ........................................................................................ 152
Investor information ............................................................................................ 153
James Fisher and Sons plc Annual report and accounts 2020
Highlights
Highlights
Revenue
Underlying operating profi t*
£518.2m
£40.5m
2019: £617.1m
(16)%
2019: £66.3m
(39)%
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Underlying profi t before tax*
Cash conversion
£31.5m
2 1 7%
2019: £58.5m
(46)%
2019: 99%
Net borrowings
£1 98.1m
2019: £ 230.4m
( 14)%
2020
2019
Statutory operating (loss)/profi t
£ (43.5)m £55.6m
Statutory (loss)/profi t before tax
£ (52.5) m £47.8m
Statutory diluted (loss)/earnings
per share
(114. 2)p
72.7p
Dividend per share
8.0p
11.3p
• Priority remains safety and wellbeing of employees and customers
• Group faced dual challenges of Covid-19 and energy prices during the year
• Swift management actions taken to reduce costs, optimise cashfl ow and protect liquidity
• Underlying operating margin resilient at 7.8% (2019: 10.7%)
• Strong cash performance reduced net borrowings by £32.3m
• Strategic review progressing well
* excludes separately disclosed items
James Fisher uses alternative performance measures (APMs) as key fi nancial indicators to assess the underlying performance of the business. APMs are used by
management as they are considered to better refl ect business performance and provide useful additional information. APMs include underlying operating profi t,
underlying profi t before tax, underlying diluted earnings per share, underlying return on capital employed , underlying Ebitda, cash conversion and underlying net
borrowings. An explanation of APMs is set out in note 2 of the Notes to the Financial Statements.
James Fisher and Sons plc Annual report and accounts 2020
1
Chairman’s statement
Chairman’s statement
I pay tribute to all our management
and staff who worked so diligently in
extraordinarily diffi cult circumstances
to maintain our services for the benefi t
of all our stakeholders.
Malcolm Paul Chairman
When I reported at this time last year,
few could have imagined the impact
that the Covid-19 pandemic would
have on communities around the world
and also on our own business.
In March 2020, the fi rst UK national lockdown was
announced which gave rise to the initial challenge of
keeping our employees safe, whilst continuing to service
our broad customer base. In addition, internationally and
offshore, where we often operate in extreme and dangerous
environments, we took action to ensure effective and
appropriate health and safety regimes were in place. It is
right that I fi rstly pay tribute to all our management and
staff who worked so diligently in extraordinarily diffi cult
circumstances to maintain our services for the benefi t of all
our stakeholders.
Through a sensible and robust approach to the effective
management of our facilities, including the use of protective
equipment and social distancing, we were able to continue
to operate effi ciently in many, but not all, of our business
divisions. In response to the UK Government’s call to
manufacturers, we should all be proud that JFD, with its
position as a global leader in subsea breathing apparatus,
developed the InVicto™ Ventilator, a non-invasive medical
device to assist patients with breathing diffi culties.
The management team has made good progress on
the strategic review which has confi rmed the strong
fundamentals of the Group but identifi ed scope for
signifi cant fi nancial and operational improvement. We will
seek to improve the quality of our business by focusing on
structurally growing markets, improving operating margins,
increasing returns and sustainably delivering value for all
stakeholders. The strategy will be presented to shareholders
at a capital markets day in the fi rst half of 2021.
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James Fisher and Sons plc Annual report and accounts 20 20
Results
Inevitably, the pandemic had a material impact on our annual
fi nancial results with Group revenue 16% lower at £518.2m
(2019: £617.1m). Currency fl uctuations had a small adverse
effect which was offset by the contribution from recent
acquisitions. We had a stronger end to the year with revenue
in the fourth quarter 7% higher than the previous quarter .
Underlying operating profi t for the year was slightly ahead
of previous guidance at £40.5m (2019: £66.3m) and
refl ects a relatively resilient performance in three of our four
divisions, all of which were impacted to some degree by the
pandemic. Underlying profi t before tax and underlying diluted
earnings per share were £31.5m (2019: £58.5m) and 47.9p
(2019: 92.8p) respectively.
The Marine Support division continued to disappoint. Whilst the
ship -to -ship business had another strong year our operations
in the challenging offshore marine and oil & gas markets were
impacted by the pandemic with projects delayed or cancelled.
As announced in January 2021 and within total separately
disclosed items of £84.0m (2019: £10.7m), we have made a
material impairment charge of £70.4m against the carrying
value of certain assets in this division.
On a statutory basis the Group reported a loss before taxation
of £ 52.5 m (2019: profi t of £47.8m) and statutory diluted
earnings per share was a loss of 114. 2 pence (2019: earnings
of 72.7 pence) .
The Group has a strong historical record of cash generation .
By continuing to focus on working capital and, with tighter
restrictions on capital expenditure in response to the
pandemic, net borrowings reduced by £32. 3 m to £198.1m
at December 2020 with headroom from committed bank
facilities at the same date increasing to £120.2m (2019:
£41.7m).
Chairman’s statement
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Swimmer Delivery Vehicles
In 2020, JFD successfully delivered a multiple number of
SEAL Carrier swimmer delivery vehicles under a multi-million
pound contract to one of its defence customers. JFD supplies
a range of surface and subsurface vehicles which facilitate
the insertion and extraction of special forces and equipment.
Other applications include specialist maritime operations,
mine countermeasures, counter -terrorism, counter-narcotics,
counter-piracy and maritime protection operations.
The SEAL Carrier can achieve transit speeds of up to
30 knots on the surface before switching to submerged mode
for a covert fi nal approach at 4 knots. This critical capability
along with long endurance and rapid transition to sub surface
covert mode were key features in winning the contract.
JFD’s advanced range of SDVs is specially designed to
provid e navies with the capability to deliver the payload
(operators) safely to their intended destination at a high level
of readiness.
Dividends
Faced with the uncertainty of the pandemic and wishing
to preserve cash resources, the Board announced in
March 2020 that it had suspended the fi nal dividend for
the year ended 31 December 2019 and this dividend was
subsequently cancelled. Having overcome the initial impact
of the pandemic and with trading no longer deteriorating,
the Board announced an interim dividend of 8.0p per
share, amounting to £4. 0m, in August 2020, which was
paid in November 2020. During the second half, further
enforced Covid-19 restrictions across many of the areas the
Group operates negatively affected fi nancial performance,
particularly in Marine Support. Although the Board recognises
the importance of dividends to its shareholders, in view of the
2020 fi nancial result, the Board is not recommending a fi nal
dividend for the year ended 31 December 2020.
Business review
Our principal focus has been on supporting our businesses
during these diffi cult times, ensuring that they have the
resources to deliver our services in a safe environment.
In order to preserve cash, we introduced a salary reduction
plan across our wider leadership team in the early months
of the pandemic which was subsequently repaid, save
for our senior leadership team and members of the Board
who accepted a salary cut for the second quarter at this
crucial time. Where appropriate we made use of the UK
Government’s Covid-19 support scheme furloughing certain
employees especially in the Marine Support division in
order to preserve many jobs. Unfortunately, as the year has
continued, we have had to make some redundancies to
right size the business to match market opportunities.
In 2019, the Group invested in two dive support vessels
to take advantage of identifi ed market opportunities with
diving and offshore construction services for oil majors.
Both vessels required an element of refurbishment before
they were able to come into service. The purchase and
subsequent refurbishment of these vessels coincided with
the rapid decline in oil prices coupled with the delays in
supply chains brought about by Covid-19. Both vessels
are now available for use but, recognising that end markets
have changed, we have taken the view that we should write
these assets down to their estimated recoverable amount.
The three divisions of Specialist Technical, Offshore Oil and
Tankships have all produced creditable results demonstrating
our strong and diverse position in these markets. Many of
the issues experienced by Marine Support were outside our
control but nevertheless, we remain an important provider of
services in the offshore marine and renewable s sectors and we
are well positioned as these markets recover.
Sustainability
During 2020 our business continued to deliver operational
carbon reductions, developing business travel alternatives,
plastic reduction and continued support to multilateral global
environment initiatives. This year also saw our fi rst CDP
submission, which is an important milestone in our disclosure
of greenhouse gas impacts and further demonstrates our
James Fisher and Sons plc Annual report and accounts 2020
3
Chairman’s statement
Chairman’s statement (continued)
At the beginning of the Covid-19 pandemic, JFD applied its
experience in breathing systems to rapidly develop a new
ventilator in response to a call from the British government
for the design and production of ventilators .
Within a month of the initiative, JFD developed InVictoTM and
initial testing of the prototype was carried out at UK hospital
laboratories. InVictoTM is a non-invasive ventilator that sits in
its own medical device space between traditional continuous
positive airway pressure (CPAP) and full invasive ventilation.
Its innovative design and function allows it to provide
automatic assisted ventilation for sedated patients, whilst it
can also operate as a patient triggered non-invasive
ventilator for conscious patients. As well as providing a
therapeutic advantage over CPAP treatments through
respiratory support, the design also controls the consumption
of oxygen giving a much reduced consumption rate of
oxygen whilst maintaining a high level of oxygen enrichment
for the patient. Results show an average consumption rate of
fi ve litres per minute of oxygen versus rates of greater than
40 litres per minute with CPAP treatments.
The InVictoTM ventilator is a disposable item between
patients thereby minimising the risk of cross contamination
and eliminating the need for sterilisation.
Whilst the UK Government chose not to proceed with
InVictoTM, JFD has begun clinical trials in Bangalore,
India, with the fi rst patient to use InVictoTM taking place
in December 2020. InVictoTM has received two awards
for its novel design: Healthcare & Medical-Covid
response category at the Collaborate to Innovate
Awards and Covid-19 Pandemic Initiatives Award at the
2020 IMCA Awards .
commitment to drive the business with renewed purpose over
the long -term. We are positioning to take advantage of the
on going energy market transition, where many of our customers
are setting net zero carbon commitments and looking to us for
solutions to help them reduce their own carbon footprint. Our
history in supporting the marine environment means we are
well placed to service the continued global growth in offshore
renewables. This global shift to a greener energy transition is
also having an impact on our business in parallel ways, as we
support sustainable approaches to the decommissioning of
existing oil and gas assets.
The Board
It was announced a year ago that, having completed nine
years as an independent Non-Executive Director of James
Fisher including three years as Chairman, I would step down
as a Director once a replacement had been appointed. In
January 2021, following an external search, that the Board
agreed to appoint Angus Cockburn as a Non -Executive
Director and Chairman of the Company with effect from 1 May
2021. I will retire as a Director on 30 April 2021.
Angus is a chartered accountant with an MBA from the IMD
Business School in Switzerland and is currently Group Chief
Financial Offi cer at Serco Group Plc, a position he has held
since October 2014. He will step down from the Serco Board
at its AGM in April 2021. His previous roles have included
Chief Financial Offi cer and Interim Chief Executive of Aggreko
plc and Managing Director of Pringle of Scotland. Angus is
currently a Non-Executive Director of Ashtead Group plc and
the privately owned Edrington Group Limited.
On 20 March 2020 it was announced that Fergus Graham
had stepped down from the Board to pursue other business
opportunities. I would like to thank Fergus for his contribution
to the Group since his appointment to the Board in 2018 and
wish him every success in the future.
I would like to record my thanks to all the Directors for the help
and support they have given me over the last ten years and in
particular during this diffi cult last 12 months. Your Company
has a well-balanced and experienced Board of Directors who
bring a wealth of experience and knowledge across a wide
spectrum of subjects. I am confi dent that the Board, under the
new direction of Angus, will bring the right mix of continuity
and change to support the Executive Directors .
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James Fisher and Sons plc Annual report and accounts 20 20
Outlook
Although early in 2021, the Group is trading in line with our
expectations, however caution remains due to the ongoing
effects of the pandemic . T he Group has a resilient business
model with a broad spread of end markets, customers
and geographies, supported by a strong track record of
converting its operating profi t into cash .
Our ongoing strategic review confi rms the fundamental
strengths of the Group and has also identifi ed scope for
signifi cant fi nancial and operational improvement. Our goal
is to improve the quality of our business by focusing on
structurally growing markets, improving operating margins,
increasing returns and sustainably delivering value for all
stakeholders.
Malcolm Paul Chairman
Chairman’s statement
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James Fisher and Sons plc Annual report and accounts 2020
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Chief Executive’s review
Chief Executive’s review
I am immensely proud of how
our employees have adapted to
rapidly changing circumstances
and continued to operate safely
and effi ciently.
Eoghan O’Lionaird Chief Executive Offi cer
Having joined the Board on 1 October
2019, my fi rst full year as Chief Executive
has been one of the most challenging in
the Group’s 173-year history; a year like
no other.
However, despite the many issues we have faced, our
employees have shown great resilience and the operating
and fi nancial performance of the Group held up well in the
circumstances, confi rming the benefi t of strong market
positions, responsive niche businesses and a broad spread of
end markets and geographies.
Our employees
In facing the challenges of the pandemic, our priority
throughout has been to protect the safety and wellbeing of
our employees. Since the third week of March, the majority
of our offi ce-based staff throughout the world have been
working from home utilising video conferencing technology .
At our operational sites we introduced enhanced safety
measures, deep cleansing and social distancing which has
helped to keep people safe, whilst maintaining good levels
of effi ciency and performance. Additionally, recognising
the stress and strain resulting from the pandemic-related
constraints, we adopted practices and procedures to support
the mental wellbeing of our employees.
Response to Covid-19
In the fi rst half of 2020, oil prices were adversely impacted by
over production and this was quickly followed by the global
lockdown due to Covid-19. At the start of the pandemic
we quickly established our priorities: to keep our people
safe; preserve as many jobs as possible, and to protect
the interests of the Company and its stakeholders. Within
that context, we continued as far as possible to provide
our services and goods to customers, whilst supporting
and maintaining our supply chain. I am immensely proud
of how our employees have adapted to rapidly changing
circumstances and continued to operate safely and
effi ciently.
In March, we established weekly Executive meetings
and a weekly video call for the senior leaders of all our
businesses. This ensured a quick and, where appropriate,
consistent approach and enabled learning from each other’s
experiences in conditions not previously experienced. We
set out clear Group practices in response to Covid-19 but
recognised, as a decentralised international Group, the value
of local autonomous teams having the latitude to respond
appropriately. In addition, we increased communications to
ensure the Group was well informed and aligned.
Customers and suppliers
Throughout this period our businesses have remained open
and our teams have worked hard to provide our unique
products and marine services to our customers globally. The
pandemic challenged our ability to receive supplies promptly,
to complete projects overseas and generally to move
people and equipment around. Our businesses responded
innovatively to these challenges and supported the supply
chain throughout.
Martek, our marine safety products and services business,
responded quickly to new crew change guidelines due to the
pandemic, by launching a corona virus antibody test. It also
provided comprehensive personal protective equipment to its
marine customer base.
JFD responded to the UK Government’s call for rapidly
manufactured ventilators to provide essential medical
equipment to the NHS. Using its world-leading breathing
gas reclaim systems, the InVictoTM ventilator was quickly
developed, tested and designed for minimal oxygen
consumption, which could become a scarce resource. While
the UK medical authority did not take InVictoTM forward, the
ventilator is being used to treat patients in India .
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James Fisher and Sons plc Annual report and accounts 20 20
When the Covid-19 pandemic struck, Martek was quick to
respond, launching occupational screening tests designed
to help customers test their employees and prevent and
manage outbreaks of the virus in the workplace. Martek’s
Lifecare division launched kits that combined antigen and
antibody testing, providing a 98.6 % detection rate within the
fi rst 5.5 days of infection.
The occupational screening tests helped employers
continue operating as close to normal as possible
and proved useful within the Group as well to external
customers, as James Fisher Shipping Services took delivery
of 300 kits to test employees, including those working in our
Tankships division.
Chief Executive’s review
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Martek also assisted with sourcing items for a care pack
that was delivered to all UK-based James Fisher employees
as they began returning to their normal places of work throughout 2020. The packs included items essential for
operating safely during the pandemic, such as a reusable facemask, hand sanitiser and disinfectant wipes.
Communities
We recognised the importance of supporting the
communities in which our employees live and work during
these challenging times. Many of our businesses supported
local charities and made donations of protective equipment.
In addition our employees helped distribute vital food
supplies to the vulnerable unable to leave their homes during
the fi rst lockdown. In Singapore, we supported the Courage
Fund to help provide relief to susceptible individuals and
families affected by Covid-19.
Financial response to Covid-19
The Group took swift actions to reduce costs, optimise cash
fl ow and protect liquidity. This included the deferral of all
discretionary capital expenditure, instituting a hiring freeze,
placing approximately 400 UK employees on furlough and
implementing a 20% pay deferral for approximately 800
employees across the world. The deferred pay was repaid in
the second half, except for all Board members, the Executive
and our senior leaders .
In addition, the Group took immediate action to preserve
and improve liquidity, increasing committed borrowing
facilities by £50m in the fi rst half. Actions taken to defer
bonuses, tax payments and defi ned benefi t pension
scheme contributions improved liquidity by approximately
£16m in the fi rst half which reversed in the second half
save for around £3m, which will be paid in 2021 . Due to
the uncertainty of Covid-19, the Board took the decision to
cancel the payment of the fi nal dividend in relation to the
year ended 31 December 2019, which was due to be paid
in May 2020 and this reduced cash outfl ows by £11.8m in
the year.
Strategic review
After joining James Fisher in the latter part of 2019, this
year was an opportune time to revisit and re-test the
Group’s strategy and to create a plan for further growth in
shareholder value for the future. Despite the challenges of
2020, the strategic review has progressed well and each of
our businesses has developed a structured plan for future
growth. We will provide shareholders with full details at a
Capital Markets Day in the fi rst half of 2021.
Since 2001, the Group has delivered a strong trend of
increasing underlying diluted earnings per share and
dividends since 2001. However, in the last fi ve years,
the quality of our business as indicated by its underlying
operating margin has remained fl at. Over the same period,
return on capital employed, our measure of the return to
shareholders, has marginally declined. The challenge we
have set for ourselves through the strategic review is to
sustainably improve the quality of our business by increasing
our margins and to increase the return to our stakeholders.
Our fi ndings have led us to the conclusion that to achieve
this goal, we need to extend the purview of our strategy to
encompass all our primary stakeholders – our employees,
our customers and suppliers, the local communities in
which we operate, the environment, and our shareholders.
James Fisher and Sons plc Annual report and accounts 2020
7
Chief Executive’s review
Chief Executive’s review (continued)
By creating and executing effective strategies aimed at
all our stakeholders, we aim to create a more intrinsically
sustainable company.
With the support of the Executive, the Group has
commenced a process to become a purpose-led company,
which defi nes how we sustainably create value for all
our stakeholders. We operate a decentralised model that
facilitates autonomy and accountability and encourages
leadership teams to react quickly to changing circumstances.
Whilst each of our businesses has its own identity, there is
a common thread linking them together which is to pioneer
safe and trusted solutions to complex problems in harsh
environments.
The Group has earned a reputation for pioneering unique
solutions to demanding operational and technical challenges
around the world. In partnership with our customers we
continue to tackle the toughest problems, supporting
energy production safely and reliably, providing life-
saving equipment and securing critical infrastructure.
A diverse group of businesses and people, we are united
by an entrepreneurial spirit, technical expertise, and a
strong commitment to safety. The Group aspires to be an
exceptional place to work, have fair and trusted relationships
with customers and suppliers, support communities to grow,
protect the environment, and provide strong returns for our
investors.
We have identifi ed three macro-economic trends that will
impact the markets in which the Group operates:
(i)
Changing energy mix as renewable energy reduces
carbon emissions and environmental concerns will lead
to an increased focus on innovation, new technologies
and decommissioning. Whilst recognising that oil and gas
will remain part of the energy mix for some time, we aim
to provide services to production, maintenance, delivery
and decommissioning in the safest, most sustainable
way whilst actively supporting and investing in the energy
transition to low carbon sources.
(ii) Acceleration of innovation as customers seek effi ciencies
and more effective asset management; and
(iii) Shifting economic power to developing regions giving
potentially increased political risk and increased defence
spending.
These trends are central to the development of the Group’s
strategic aim to deliver sustainable benefi ts to our fi ve
key stakeholders. Capital will be allocated to growth
opportunities, supplemented by selective acquisitions whilst
business with below benchmark return potential will be
divested. Delivery of the Group’s strategy will require a strong
focus on both commercial and operational excellence.
Financial performance
The Group’s goal is to deliver sustainable long-term growth in
underlying earnings per share and dividends. With the sharp
drop in energy prices followed by the global pandemic, the
results in 2020 interrupted a lengthy period of double-digit
growth in earnings and dividends.
Three of the Group’s divisions and its ship-to-ship transfer
business performed with resilience in the year. However,
project-related businesses, particularly subsea activities
within Marine Support, were signifi cantly impacted by
deferrals or cancellations. Group revenue was 16% below
2019 at £5 18.2m (2019: £617.1m) and underlying operating
profi t was £40.5m (2019: £ 66. 3 m). Swift actions to reduce the
cost base resulted in a 17% reduction to selling, general and
administration costs.
Underlying cash conversion, which measures the proportion
of underlying operating profi t that is turned into operating
cash, was 217% (2019: 99%) refl ecting actions taken to
optimise cash fl ow and to increase liquidity.
The Group reported an operating loss, on a statutory
basis, of £43.5m (2019: profi t of £55.6m) due to signifi cant
non -recurring charges of £84.0m which are more fully
described below and in note 5. Cash performance was
strong with net borrowings reduced by £32.3m in the year.
Acquisitions
The Group acquired Fathom Systems in March for £1.2m.
It is a market leader in diver communications, gas analysis,
diver monitoring and integrated diving control systems and
complements JFD in our Specialist Technical division.
8
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James Fisher and Sons plc Annual report and accounts 20 20
Chief Executive’s review
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JF Nuclear’s large-scale righall facility at Bower in
Caithness, Scotland is well positioned to provide trial and
testing of equipment for the decommissioning of local
nuclear power and testing site at Dounreay. In 2020, it has
been utilised to support the trials and testing of equipment
for the decommissioning of the Magnox Steam Generating
Heavy Water Reactor core at Winfrith, Dorset.
The Bower facility allows for the development and integration of
equipment for large-scale projects in an inactive environment,
before being deployed on-site, and has increased JF Nuclear’s
capacity to carry out large-scale trials and testing operations.
The site has been fi tted with a set of Covid-secure self-
contained accommodation modules, to provide safe
accommodation for team members working at Bower’s test
rig and offi ces throughout 2021.
Over the next 12 months, trials of remote handling and size reduction equipment will be carried out on a mock-up of
parts of the Magnox reactor, before being deployed to the Winfrith site in 2022. Tests of mast-mounted manipulators
have already been conducted using a bespoke load testing frame installed during 2020. In addition, JF Nuclear expects
to commence design and testing projects for Do unreay.
Divisional performance
Revenue
Underlying
operating profit
Underlying
operating margin
Operating
(loss)/profit
2020
£m
249.4
130.4
78.0
60.4
–
518.2
2019
£m
311.6
149.4
88.2
67.9
–
617.1
2020
£m
10.1
14.0
11.2
8.0
(2.8)
40.5
2019
£m
24. 5
18.4
14.2
12.0
(2.8)
66. 3
2020
%
4.0
10.7
14.4
13.2
–
7.8
2019
%
7. 9
12.3
16.1
17.7
–
10.7
2020
£m
(69.5)
12.4
8.4
8.0
(2.8)
(43.5)
2019
£m
1 4.6
18.1
1 3.7
12.0
(2.8)
55.6
Marine Support
Specialist Technical
Offshore Oil
Tankships
Corporate costs
Group
Marine Support
Marine Support revenue in the year was £62.2m (20%) lower
at £249.4m (2019: £311.6m). Subsea projects for offshore
wind and oil & gas were c .£70m below than 2019 and the
impact of the pandemic substantially reduced revenue
across marine services and products, stress testing and
monitoring. Despite Covid-19 interruptions, progress on the
early and temporary beach landing project for the new gas
fi elds in Mozambique and a good performance in ship-to-
ship transfers partly offset the lack of subsea projects.
Underlying operating profi t was £14. 4m lower at £10.1m
(2019: £24. 5m) with the fall in revenue partly mitigated
by a 20% reduction in overheads. Ship-to-ship services
performed well, with a particularly strong fi rst half refl ecting
transfers in and out of storage capacity.
The Group responded swiftly to the challenges, particularly
in subsea projects and carried out a signifi cant restructure
during the second and third quarters of 2020. The division
also suffered from challenges in receiving prompt payment
James Fisher and Sons plc Annual report and accounts 2020
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Chief Executive’s review
Chief Executive’s review (continued)
for offshore services to the oil & gas market in challenging
parts of the world and, whilst relentlessly pursuing
settlement, considers it prudent to make provision. In light
of the performance in 2020, we have taken a goodwill
impairment of £17.0m and in consideration of the prospects
for dive support vessels, impaired carrying values by £3 1.6m.
Due to their size and their irregular nature, these items have
been disclosed separately and are more fully described in
note 5.
Marine Support holds leading positions in ship-to-ship
services and renewable energy, particularly in high
voltage jointing, blade repair and unexploded ordnance.
Opportunities in offshore wind continue to increase and are
rapidly expanding globally outside of the North Sea .
Specialist Technical
Specialist Technical performed with resilien ce in 2020 with a
13% reduction in revenue to £130.4m (2019: £149.4m) and
the impacts of currency and businesses acquired offset each
other. At JFD, our defence and diving equipment provider,
the pandemic affected the completion of projects, particularly
in the Asia Pacifi c region and delayed the arrival of specialist
components from our suppliers. Submarine rescue and
escape exercise services were reduced or curtailed as a
consequence of the pandemic. Decisions on new projects
were also delayed, which impacted the second half. Our
nuclear decommissioning business, which represents around
30% of the division, quickly adjusted to homeworking and
delivered increased revenue and profi t in the year.
Underlying operating profi t was £4.4m lower at £14.0m
(2019: £18.4m) due to the revenue fall but mitigated by a
14% reduction in overheads. Underlying operating margin
was resilient at 10.7% (2019: 12.3%).
JFD completed customer acceptance testing of its landmark
500m saturation diving system in December, having suffered
challenges due to the pandemic of getting into the Asia
Pacifi c region to complete assembly and approval. It also
completed its contract to deliver six swimmer delivery
vehicles during the fourth quarter. Two submarine rescue
vessel projects are progressing well with delivery dates in
2021 and 2022.
Nuclear decommissioning performed well through the
pandemic due to improved project delivery and good
progress in nuclear source distribution. Its Hamburg based
radiation detection and instrumentation business was sold in
the year for £1.6m.
Offshore Oil
Despite the dual challenges of energy prices and Covid-19,
Offshore Oil performed resiliently. Revenue was 12% lower
at £78.0m (2019: £88.2m) and underlying operating profi t
was 21% down at £11.2m (2019: £14.2m) which was a
creditable result given energy price movements and the
global pandemic. Lower volumes in 2020 impacted gross
margins but pricing was broadly maintained. Selling, general
and administration costs were reduced by 18 % in the year as
the businesses reacted quickly to the challenging economic
conditions. This mitigated the impact on underlying operating
margin which was 14. 4% (2019: 16.1%).
Our businesses in Offshore Oil are predominantly the rental of
specialist equipment with specialist people to the inspection,
repair and maintenance market and the extension of asset life
services. Strategically we have sought to limit our exposure
to exploration which reduces earnings volatility in the event of
sudden changes to energy prices. In parallel, our businesses
continue to evolve to support the changing energy mix.
Revenue from supplying our products and services for bubble
curtains in renewables and for the decommissioning of oil and
gas infrastructure represented 14% of the division’s annual
sales in 2020.
Tankships
Tankships traded well in the fi rst four months of 2020
but experienced a sharp drop in utilisation in May as the
immediate effect of the lockdown reduced demand for the
clean petroleum products it delivers. Utilisation improved each
month thereafter to recover to just below 90% by the end of
the third quarter, and despite some fl uctuations in the fi nal
quarter due to the second wave of Covid-19, utilisation was
maintained in the high 80 s.
Revenue in 2020 was 11% lower than prior year at £60.4m
(2019: £67.9m). With the cost of operations relatively
fi xed, the reduction in sales impacted underlying operating
profi t and was only partly mitigated by a 13% reduction in
overheads. Underlying operating profi t was £ 4.0m lower at
£8. 0m (2019: £12.0m).
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Throughout 2020, James Fisher Offshore (JFO) expanded its presence
in the oil and gas decommissioning sector, using the global reach of
its expertise and equipment to complete projects around the world.
In the UK, JFO teams conducted critical path well severance work in
the Viking fi eld off the coast of Lincolnshire, working to cut and remove
30 inch multi-string conductors sitting proud of the seabed, as well as
severing two large piles .
Further afi eld, JFO completed a high-assurance pipeline and jacket
removal project in the Persian Gulf, minimising costs and lead times
for the customer by operating from its facility in Dubai. It has also
completed projects in Malaysia and Thailand, supporting the latter
with its fi rst rigs to reef campaign.
JFO has facilities in the UK, Malaysia, Dubai and the Gulf of Mexico,
meaning its powerful and effective ultra-high-pressure abrasive water
jet cutting system can be used with short lead times in many regions
across the globe.
Chief Executive’s review
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Health and safety
Given the inherent risk in some of the work we complete
and the environments in which our people operate, we have
a responsibility for the health and safety of our employees,
contractors, suppliers and customers at all times. Health
and safety is the fi rst item on the agenda of every quarterly
business board meeting and Group-wide safety meetings
share and promote best practice to recognise potentially
hazardous situations and appropriate mitigation.
The need to embed and commit to this objective is never
more necessary than when catastrophic outcomes occur. I am
profoundly saddened to report that in October we lost a long
serving employee and a customer to an accident. On a pile-testing
project in Kenya, the transportation barge which employees were
travelling capsized following an engine failure. Everyone on board
was rescued, or managed to swim to safety, except for the two
fatalities. We are deeply saddened by this event and investigations
indicate that nothing could have been done to avoid this tragic
outcome . Our thoughts remain with both families.
Eoghan O’Lionaird Chief Executive Offi cer
James Fisher and Sons plc Annual report and accounts 2020
11
Business model
Business model
We are focu sed on market segments where our responsive, niche and entrepreneurial businesses can deploy innovative
products and services that create superior value whilst attaining the highest standards of safety, effi ciency, environmental
performance, regulatory compliance and ethical standards. Our customers are predominantly large multinational corporations,
governments and other high assurance counterparties. Further details about our products and services is set out in the
Sector review on pages 14 to 21.
Purpose
Our purpose has always been clear and consistent, but the
continuous expansion of the Group through acquisitions and
organic growth has caused us to revisit our purpose and to establish a
renewed, shared understanding and direction.
Our purpose seeks to inspire people to contribute their time, energy
and imagination to the Company. It ensures an authentic connection
between what the organisation believes, states and does and enables
us to make practical choices about our day -to -day actions by serving
as a constant, unwavering reference point.
Focusing on why we exist and how we create value for all our
stakeholders , we have re-defi ned our purpose as:
‘ Pioneering safe and trusted solutions to complex problems
in harsh environments to create a sustainable future.
‘
Culture
The key element at the core of James Fisher is our people. Our
decentralised and entrepreneurial culture encourages personal
accountability and development through an understanding
customers’ needs , overcoming the unique challenges of the
environments in which we operate and support ing development and
deployment of unique solutions focused on value creation for all our
stakeholders through rapid decision making.
Resources and
relationships
Underpinning our strategy and business model, our aim
is to create value for all of our stakeholders:
• Our shareholders
• Our employees
• The local communities in which we operate
• Our customers and suppliers
• The environment
By being purpose-led, we strive to inspire and motivate
employees who increasingly seek meaningful work
and values-based working cultures, to be better able
to adapt to change, and more readily able to harness
the power and opportunity for innovation.
We recognise that customers want to work with
responsible businesses that take issues such as
sustainability seriously and that investors progressively
use environmental, social and governance criteria to
decide in which companies to invest.
By aligning behind a strong shared purpose, we support
the long-term sustainable development of our business
and our people and we enhance our impact on society
and the environment.
The strategic objectives related to our stakeholders
can be found within our strategy on p 13.
Valued behaviours
We are a business that strives to successfully solv e our customer s’ complex and diffi cult problems in some of the harshest
environments . We do this only by engaging, enabling and empowering our people to achieve, supported and guided by our values:
Pioneering spirit:
• We respond innovatively to
our customers’ current and
future needs
• We are entrepreneurial and
think creatively to solve
diffi cult problems
• We challenge conventional
thinking and fi nd better
ways
Integrity:
• We always strive to do the
right thing
• We treat everyone as we
would like to be treated,
creating relationships based
on trust and fairness
• We collaborate by listening
respectfully and speaking
honestly
Energy:
• We go above and beyond,
delivering exceptional
results for all stakeholders
• We love what we do and
take pride in our positive
impact
• We are empowered to take
the right decisions, quickly
Resilience:
• We are accountable and
courageous, and face up
to diffi cult situations
• We are tenacious in the
pursuit of our purpose
• We seek feedback, we
learn and we develop,
together
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Strategy
Strategy
The Group’s strategy is to grow organically through
leveraging its existing skill, technology and asset base in
areas of specialist expertise and through investment in
people, working capital and equipment. This is supported
by selective acquisitions that expand the product or service
offering or extend geographical coverage to strengthen
our value proposition. James Fisher has a number of
entrepreneurially-led businesses which are market leaders
in their specifi c operational niche that are supported and
encouraged to pursue new opportunities that contribute to
our operational excellence objectives.
Our businesses operate in harsh and challenging
environments where our specialist expertise in solving
complex problems in response to customer needs is highly
valued and rewarded. We pursue opportunities in market
segments and geographies that are less mature and fast
growing where our track record in delivering safe and
trusted solutions provides assurance to our customers.
Our niche capabilities create further possibilities to
pursue adjacent market sectors and exploit integration
opportunities to increase the value we create.
Our focus on operational excellence requires
that our businesses:
To deliver the Group’s strategy we have fi ve strategic
objectives which are aligned with our key stakeholders:
Shareholders: to grow the return for
shareholders
Deliver long-term growth in underlying earnings per share,
dividends and return on capital employed
Grow organically by leveraging existing specialist skill
base to a global market
Create additional value through expansion of our service
offering and capabilities through bolt-on acquisitions
Communities: to be a good citizen
and active member of the community
Consider sustainability in our decision-making process
Encourage our employees to make a difference
Create local employment and sourcing opportunities within
our communities
Employees: to make James Fisher
an exceptional place to work
Ensure the safety and wellbeing of all employees
• are cash-generative
Encourage and support innovation and accountability
• have operating margins
in excess of 10%
• provide returns on capital
employed in excess of 15%
Bolt-on acquisitions both broaden and strengthen the range
of products and services that we provide. Our acquisition
strategy is focused on niche businesses with a strong
entrepreneurial culture which fi t well with our purpose,
valued behaviours, and strategic agenda. As a cash
generative Group with a strong balance sheet, businesses
are usually acquired using existing cash or borrowing
resources. The businesses acquired have a strong track
record and typically benefi t from the additional resources
and support the Group provides to achieve their next
growth phase. Where an acquisition bolts on to existing
businesses, we seek to optimise shared back offi ce
functions, and opportunities for procurement effi ciency and
cross-selling within the Group. The Group commenced a
strategic review during the year, further details are set out in
the Chief Executive’s review on pages 6 to 11.
Develop individual and organisational excellence
Customers and suppliers: to establish
and deliver on shared goals
Develop our products, service and geographical offering to
meet current and anticipated needs of our customers
Exceed our customers’ and suppliers’ expectations in terms
of trust and safety
Choose select suppliers that share our values and
commitment to excellence
Environment: to uphold responsible
business practices
Conduct our operations in a responsible way, identifying
opportunities to improve
Support our customers in achieving their environmental
targets
Select suppliers who share our commitment to making
positive environmental contributions
More information on stakeholder engagement is set out
on pages 26 to 40.
James Fisher and Sons plc Annual report and accounts 2020
13
Sector review: Marine Support
Marine Support
Our Marine Support businesses provide products, services and solutions
to the global marine industry. These are supplied to a range of end market
sectors including marine, oil and gas, ports, construction and renewables.
Revenue (£m)
Underlying operating profi t* (£m)
2020
2019
2018
2017
2016
249.4
311.6
269.8
229.6
195.9
2020
10.1
2019
2018
2017
2016
24.5
28.2
25.9
20.8
Statutory operating profi t ( £m)
Return on capital employed (%)
(69.5)
2020
2019
2018
2017
2016
*before separately disclosed items
14.9
29.1
24.7
20.7
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James Fisher and Sons plc Annual report and accounts 20 20
2020
5.0
2019
2018
2017
2016
11.9
17.9
18.0
14.9
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Sector review: Marine Support
Market drivers
Fendercare is a leading provider of pneumatic fl oating
fenders and other mooring equipment to the global
marine industry. It services commercial shipbuilding, ship
refurbishment, defence, port developments and the oil and
gas markets for project applications.
Fendercare is also a leading provider of ship-to-ship services
for the transfer of crude or refi ned oil, liquefi ed natural
gas or bulk cargoes. The demand for these services is
driven by the volume of oil trading between oil majors and
independent traders, and also by production where local
port infrastructure is unable to accommodate large tankers.
JF Marine Services is a leading provider of specialist
subsea and topside services to support offshore wind
construction, operations and maintenance through delivery
of an integrated service offerings that encompasses the
wide range of marine skills to create increased customer
value. Demand for its services is driven by the operation
and maintenance activities in the marine, oil and gas,
renewables and communication sectors. This includes the
specialist provision of ROV systems and diving personnel
for underwater surveys, UXO identifi cation and disposal,
construction support, inspection, repair and maintenance
JF Testing Services is a leading provider of strain gauges
to the marine industry, which are used in a range of
applications such as mooring systems on ships and in ports
as well as being used to monitor the structural integrity of
infrastructure in the construction and transport sectors.
The sectors serviced encompass new shipbuilding, ship
refurbishment and life extension, port developments, and
projects for the oil and gas market.
It is also a leading provider of specialist testing and
monitoring services to the construction and maintenance
sectors, and designs and manufactures testing and
monitoring equipment, supporting customers worldwide.
The market drivers for JF Testing Services are new projects
in the marine, oil and gas, infrastructure and renewables
sectors, where our niche offering and innovative products
and services provide a competitive advantage.
Subtech provides a range of marine services to the Middle
Eastern and Africa region. With locations in Durban, South
Africa, Mozambique, Nigeria and Dubai UAE, it supports a
wide range of projects requiring specialist diving and marine
skills. Demand for its services is driven by port construction,
diving and marine projects.
Our princip al businesses
Operations
Fendercare
End markets
Locations
Marine products and services, ship-to-ship transfers,
offshore terminal services
Marine, oil and gas, renewables and defence
UK, Singapore, Australia,
UAE, Brazil
JF Marine Services
Integrated marine services, including remotely operated
vehicle (ROV) systems and diving services
Marine, oil and gas, renewables, tidal power
and communications
UK, France
JF Testing Services
Products and services that measure and monitor
structural stress, instrumentation and materials testing
Marine, oil and gas, renewables, civil and
construction
UK, UAE, Singapore,
Malaysia
Subtech
Marine and diving services
Oil and gas, marine and construction
South Africa, Mozambique,
UAE, Nigeria
James Fisher and Sons plc Annual report and accounts 2020
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Sector review: Specialist Technical
Specialist Technical
Our Specialist Technical businesses supply diving equipment and services, submarine
rescue vessels and through-life rescue services and engineering solutions to the international
defence market and UK nuclear decommissioning market. Other subsea services provided
to the defence sector include special operation swimmer delivery vessels. JFD also supplies
saturation diving systems which are installed onto dive support vessels and support deep
subsea diving activities. James Fisher Nuclear (JFN) provides engineered solutions which
operate in hazardous environments in the nuclear industry.
Revenue (£m)
Underlying operating profi t* (£m)
2020
2019
2018
2017
2016
130.4
149.4
159.6
149.6
151.8
2020
2019
2018
2017
2016
14.0
18.4
20.9
18.8
19.9
Statutory operating profi t ( £m)
Return on capital employed (%)
2020
2019
2018
2017
2016
12.4
18.1
20.2
19.0
19.3
*before separately disclosed items
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James Fisher and Sons plc Annual report and accounts 20 20
12.9
16.7
18.5
18.5
2020
2019
2018
2017
2016
27.8
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Sector review: Specialist Technical
Market drivers
JFD is a world leader in saturation diving systems and
related diving equipment. Its end markets are oil and gas
and defence. Saturation diving systems are both fi xed and
portable. Fixed systems are usually built into dive support
vessels (DSVs). JFD provides the equipment and the
follow-on consumables, support and maintenance to the
DSV operator. The construction and replacement of DSVs
drives new build saturation diving systems which in turn
drives ancillary service and product spend. JFD’s defence
market is based on service, repair and on-going calibration
requirements, and on projects requiring specialist diving
equipment.
JFD is also a leading provider of submarine rescue
services. It encompasses the ability to design, deliver
and operate submarine rescue vehicles. It has long-term
service contracts with navies providing a very niche area of
capability. The driver is the tendering of defence projects for
provision of the equipment, which can then lead to longer-
term service contracts to operate the service. We currently
provide submarine rescue services to the UK, Singaporean,
Australian and Indian navies. The business also provides
swimmer delivery vessels to the special operations markets.
JFN provides engineered products and services to the
nuclear industry both in the operation of nuclear power
plants and decommissioning. Its products and services
operate in hazardous environments. The business provides
instrumentation, non -destructive testing, calibration and
digital radiography to the nuclear, aerospace and process
industries. The market drivers for JFN are the demand
for its products, services and lifetime support from the
UK decommissioning industry, radiological calibration
requirements and projects within the aerospace, process
and defence industries.
Our princip al businesses
Operations
JFD
Design, supply and servicing of diving and subsea
equipment, submarine rescue and special operations
services
JFN
End markets
Locations
Defence, commercial and defence diving,
hyperbaric and submarine rescue
UK, Australia, Singapore,
Sweden
Engineered solutions in remote handling, non-
destructive testing and calibration services
UK nuclear decommissioning and
aerospace, process and defence industries
UK
James Fisher and Sons plc Annual report and accounts 2020
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Sector review: Offshore Oil
Offshore Oil
Our Offshore Oil businesses supply a range of services and equipment to the global oil and
gas and renewable energy industries . This includes the design and engineering of specialist
equipment, platform maintenance and modifi cation, well testing support, subsea operations
and maintenance services. RMS and renewable energy industries pumptools is also
established as a world leader in artifi cial lift specialist completion technology and innovative
accessory tools for electrical submersible pumps.
Revenue (£m)
Underlying operating profi t* (£m)
2020
2019
2018
2017
2016
78.0
88.2
71.4
63.1
62.8
2020
2019
2018
2017
3.0
2016
4.4
5.9
11.2
14.2
Statutory operating profi t ( £m)
Return on capital employed (%)
8.4
13.7
2020
2019
2018
5.0
2017
2.7
2016
4.2
*before separately disclosed items
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James Fisher and Sons plc Annual report and accounts 20 20
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10.3
2020
2019
2018
2017
2.4
2016
3.1
4.6
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Sector review: Offshore Oil
RMSpumptools is a world leader in artifi cial lift specialist
completion technology and innovative accessory tools for
electrical submersible pumps. RMSpumptools supplies
products to the global downhole oil and gas market
which improve the productivity of wells utilising electrical
submersible pumps.
Fisher Offshore provides winches, hoists, cutting tools,
marine cranes and subsea hydraulic equipment to the oil and
gas and marine sectors. Its market driver is maintenance,
inspection and repair demand and subsea projects. It also
specialises in providing mass-fl ow excavation tools and
services to cover or uncover subsea pipelines or cables,
where demand is driven by cable and pipeline projects in the
oil and gas, renewables and communication sectors.
Market drivers
ScanTech AS is a leading provider of ATEX (ATmospheres
EXplosives) products and support services to the energy
sector. Its products and services are supplied to the
Norwegian oil and gas market and are used for platform
maintenance, well testing and specifi c projects. Equipment
is designed and certifi ed to the NORSOK standard. The
driver for the business is the operation and maintenance
spend on offshore rigs in the Norwegian sector.
Scantech Offshore is a leading provider of air compressors,
steam generators, heat suppression equipment and qualifi ed
personnel for the well testing and offshore wind markets
worldwide. It rents equipment to large multinational oil
service and major marine contracting companies, and
provides qualifi ed personnel to operate the equipment. The
driver for the business is the operation and maintenance
spend on offshore rigs around the world and the need
to provide protection of the marine environment through
the mitigation of noise produced during offshore piling
operations and unexploded ordnance (UXO) disposal.
Our princip al businesses
Operations
ScanTech AS
Design and engineering of specialist equipment,
platform maintenance and modifi cation, well testing
support and subsea operations
Scantech Offshore
Provides products and services to well testing
companies
End markets
Locations
Oil and gas
Norway
Oil and gas, Offshore wind
UK, UAE, Brazil, Australia,
Malaysia
RMSpumptools
Artifi cial lift specialist completion technology and innovative
accessory tools for electrical submersible pumps
Oil and gas
Fisher Offshore
Provides range of lifting equipment and services to the
marine, offshore and subsea and mass -fl ow excavation
services
Oil and gas, marine
UK, UAE
UK, Malaysia, UAE,
Mexico, Singapore
James Fisher and Sons plc Annual report and accounts 2020
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Sector review: Tankships
Tankships
Our Tankships division operates a fl eet of product and chemical tankers which trade along
the UK and northern European coastline carrying clean petroleum products and chemicals
including increasing volumes of bio fuels. The division performed 1,362 port calls this year
carrying liquid cargos from refi neries and terminals, to major coastal storage facilities. The
division also operates a port in Plymouth, UK.
Revenue (£m)
Underlying operating profi t* (£m)
2020
2019
2018
2017
2016
60.4
60.7
67.9
57.0
55.5
2020
2019
2018
2017
2016
12.0
9.9
8.0
8.8
8.2
Statutory operating profi t ( £m)
Return on capital employed (%)
2020
2019
2018
2017
2016
8.0
12.0
9.9
8.8
8.2
*before separately disclosed items
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James Fisher and Sons plc Annual report and accounts 20 20
2020
2019
2018
2017
2016
25.5
35.4
37.8
34.2
31.9
Sector review: Tankships
Market drivers
James Fisher Everard (JFE) distributes clean petroleum
products and chemicals under contracts with primarily oil
majors around the European coast and to islands, to ports
with restrictions on the size of ships they can accept. It
operates a fl eet of double-hulled product and chemical
tankers with capacity ranging from 3,000mt to 35,000mt.
The business driver is the level of consumption of clean
products (petrol, diesel, gasoil and kerosene) and chemical/
biofuels in the UK, Ireland and northern Europe. Products
carried serve the marine, transport, agriculture, aviation and
chemical industries.
Shipping dramatically reduces our customers’ carbon
footprint compared to other modes of transportation.
Shipping’s CO2 emissions are half that produced by road
freight, and just one full ship keeps more than 150 trucks off
the roads.
The division operates Cattedown Wharves, a port in
Plymouth which provides berthing and marine services to
the oil majors which own tank farms in Plymouth. It also
handles dry cargoes such as animal feed being imported into
the South West and clay being exported from the region. The
primary driver for the business is the level of consumption of
clean oil products within the South West region of the UK.
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Our princip al businesses
Operations
JFE
End markets
Locations
Delivery of clean petroleum products around the
European coastline
Distribution of clean petroleum products
UK
Cattedown Wharves
Port operations
Wet and dry product distribution
UK
James Fisher and Sons plc Annual report and accounts 2020
21
Financial review
Financial review
Two of our objectives at the start of the
pandemic were to optimise cash fl ow and
protect liquidity. Net borrowings reduced by
14% in the year to £198.1m, which when
combined with a £50m increase in committed
facilities, resulted in headroom of just over
£120m by the end of 2020.
Stuart Kilpatrick Group Finance Director
2020 results
2020 was undoubtedly challenging to
many businesses around the globe and
the results for the year are testament
to the dedication and hard work of our
people .
Whilst revenue for the Group was down by 16%, three
divisions, Specialist Technical, Offshore Oil and Tankships
were 12% lower than 2019, showing some resilience to the
two challenges of the global pandemic and a sharp fall in
energy prices. Similarly, underlying operating profi t in these
three divisions was £11.4m lower, whereas due to the lack
of subsea projects, Marine Support was £14.4m lower .
Group underlying operating profi t was 39% down at £40.5m
(2019: £66. 3m).
Gross margins decreased from 29.9% to 26.6% due to lower
volumes covering the non-variable element of cost of goods sold.
Prices held up well. Swift actions to respond to market conditions
reduced administrative expenses by £20.5m (17%) in the year
and mitigated the fall in underlying operating margin to 7.8%
(2019: 10.7%).
The Group’s main currency exposure is in respect of US
Dollar cash infl ows and the average rate in 2020 of £1:$1.29
(2019: £1:$1.28) was similar to prior year and therefore had
no material impact on the fi nancial results.
The challenging market conditions had the largest impact
on project depend ent businesses, primarily in subsea
services. As a result, the Group has taken a substantial
separately disclosed charge totalling £84.0m (2019: £10.7m)
with the majority in relation to the Marine Support division.
A major restructuring in Marine Support cost £3.9m and
reduced headcount by 202. This was commenced in the
second quarter with due care taken to protect the Group’s
renewables business where future opportunities are strong
globally. Annualised savings from the restructure are
approximately £ 8.0m. In addition, whilst continuing to pursue
settlement vigorously, an impairment provision of £ 19.3m
was considered prudent against overdue receivables in
relation to primarily three projects within Marine Support.
Non-cash impairments in respect of goodwill and other
intangible assets amounted to £19.4m and a further £ 31.6m
was charged in relation to two dive support vessels refl ecting
utilisation experienced to date. The net cash outfl ow in
relation to separately disclosed items was £3.3m.
Profi t before tax on an underlying basis was £31.5m (2019:
£5 8. 5m) and on a statutory basis, a loss of £ 52.5m (2019: profi t
of £ 55.6m).
Finance charges
Net fi nance charges were £9.0m (2019: £7.8m) inclusive
of non-cash charges in respect of pensions and leases of
£1.9m (2019: £2.0m). Bank related fi nance charges increased
by £1.3m to £7.1m (2019: £5.8m) due to higher borrowings
as a result of capital investment in 2019. Interest cover, the
ratio of underlying operating profi t to net fi nance charges,
based on our banking agreements was 6.1 times (2019: 12.3
times), which compares to a covenant of 3.0 times.
Taxation
The tax charge before separately disclosed items for the year
of £ 7.2m (2019: £11.6m) represents an underlying effective
tax rate ( UETR ) of 22.8% (2019: 19.8%). The UETR, which
refl ects the geographical mix of profi ts, tonnage tax relief on the
profi ts from tanker operations and expenses disallowed for tax,
increased in the year due to unrelieved losses in a number of
jurisdictions. The total tax charge for the year on the loss before
tax was £4.8m (2019: £11.1m) as the impairment charges within
separately disclosed items did not benefi t from tax relief. The
Group paid £7.9m (2019: £9.6m) of corporation tax in cash
across all of its jurisdictions . A further £ 28.1m was paid in the
UK in respect of payroll taxes (2019: £31.3m).
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James Fisher and Sons plc Annual report and accounts 20 20
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The Group’s tax strategy and policy is to manage our tax
affairs in a responsible and transparent manner and with
regard for the intention of the legislation rather than just the
wording itself. Our objectives are to comply with all applicable
tax laws and regulations, including the timely submission of
all tax returns and tax payments and to undertake all dealings
with local tax authorities in a professional and timely manner.
The Group’s tax strategy is reviewed and approved by the
Board annually and is available on our website.
Earnings per share and dividends
Underlying diluted earnings per share were 47.9 pence per
share (2019: 92.8 pence) refl ecting the fall in underlying profi t
before taxation. Statutory diluted earnings per share were a
loss of 114.2 pence per share (2019: earnings of 72.7 pence) .
Due to the uncertainty created by the global pandemic, the Board
initially suspended the proposed dividend in relation to the year
ended 31 December 2019 of £11.8m, which was due to be paid
on 11 May 2020, and subsequently confi rmed its cancellation.
An interim dividend of £4.0m was paid on 6 November 2020.
Summary of cash flow
Underlying operating profit
Depreciation & amortisation
Underlying ebitda*
Working capital
Pension / other
Operating cash flow
Outflow on sep arately disclosed
Interest paid & tax
Net capital expenditure
Businesses acquired / disposed
Dividends paid to shareholders
Other
Net cash inflow / (outflow)
Net borrowings# at 1 January
Non -cash movements
Net borrowings# at 31 December
Right-of-use operating leases
Net borrowings
Financial review
2020
£m
40.5
3 4.2
7 4.7
19.5
(6.5)
87.7
(3.9)
(14.6)
(17. 8)
(7.1)
(4.0)
( 1.9)
38.4
2019
£m
66.3
29.9
96.2
(21. 3)
(9. 1)
65. 8
(7.4)
(14.6)
(90.2)
(19.1)
(18.4)
(0. 6)
(84.5)
(203.0)
(113.6)
(10.4)
(4.9)
(175.0)
(203.0)
(23.1)
(27.4)
(198.1)
(230.4)
Cash fl ow and borrowings
* Underlying earnings before interest, tax, depreciation and amortisation
# Underlying net borrowings before right-of-use operating leases
Operating cash fl ow increased to £87.7m (2019: £65.9m)
as the 22% reduction in underlying Ebitda was offset by a
working capital infl ow of £ 19.5m (2019: outfl ow of £21. 3m).
Cash conversion, which is the ratio of operating cash fl ow to
underlying operating profi t, was 217% (2019: 99%).
The cash outfl ow of separately disclosed items relates to
Marine Support restructuring costs. Net capital expenditure
was much reduced at £17. 8m (2019: £90.2m) and the Group
spent £7.1m businesses acquired or disposed. Fathom was
acquired for £1.2m in February 2020 and the balance was
deferred consideration paid to the vendors of Martek (£1.0m),
EDS (£2.3m) and businesses now forming part of JFD
(£2.7m). Transaction costs were £ 0.7m and this was offset by
net proceeds from disposals of £1.3m.
The net cash infl ow in the year was £38.4m compared to an
outfl ow in 2019 of £84.5m and net borrowings decreased by
£32.3m to £198.1m (2019: £230.4m) inclusive of right-of-use
operating leases.
Balance sheet
The Group swiftly took actions to protect and improve its
balance sheet in response to the global pandemic. Additional
committed revolving credit facilities of £50m were agreed in
the fi rst half of 2020 increasing total committed facilities to
£300m (2019: £250m).
In addition, the Group reduced discretionary costs and
capital expenditure and increased the focus on cash
collection. Net borrowings decreased in the year by £32.3m
to £198.1m (2019: £230.4m) and at 31 December 2020, the
Group had £120.2m (2019: £41.7m) of undrawn committed
banking facilities. The ratio of underlying net borrowings,
which excludes right -of -use operating leases of £23. 1m
(2019: £27.4m), to underlying earnings before interest,
tax, depreciation and amortisation (Ebitda) was 2. 3 times
(2019: 2.1 times).
The Group’s banking agreements are based on underlying net
borrowings but inclusive of bonds and guarantees of £28.3m
(2019: £54.8m) and the net debt to Ebitda for covenant
calculations was similar to previous year at 2.8 times
(2019: 2.7 times). With the support of its banks, the Group’s
net debt: Ebitda covenant was amended during the year to
3.95 times at 31 December 2020, 3.75 times at 30 June 2021,
reverting to 3.5 times at 31 December 2021.
James Fisher and Sons plc Annual report and accounts 2020
23
Financial review
Financial review (continued)
Pensions
Impact of Brexit
The UK’s exit from the European Union is not expected
to materially impact the Group’s profi tability. A free trade
agreement announced at the end of 2020 is welcomed and,
whilst not underestimating the potential impact on trade and
logistics between the UK and the EU, it is relevant that 9% of
Group turnover is sold to EU countries.
Stuart Kilpatrick Group Finance Director
In the year, the Group contributed £4.8m (2019: £5.0m) into
defi ned contribution pension schemes through which existing
employees receive pension benefi ts. The Group has an
obligation of £8. 8m (2019: £0.4m) for its own closed defi ned
benefi t scheme. A formal triennial valuation of this scheme
was carried out at 31 July 2019 which reported a funding
defi cit of £8.2m with an 88% funding level. Contributions
paid in the year amounted to £1.2m (2019: £1.6m).
The Group also contributes to two industry-wide defi ned
benefi t schemes, the Merchant Navy Offi cers Pension Fund
and the Merchant Navy Ratings Pension Fund, of which
the Group share of the accounting defi cit was £1.5m (2019:
£5.4m). With no worsening of the defi cit based on each one’s
triennial valuations, contributions are currently scheduled
to cease in 2023. The defi cit reduction in 2020 was due to
contributions of £3.8m (2019: £7.0m).
Scantech Offshore has successfully expanded into
renewables, winning a series of contracts to support the
construction of wind farms worldwide through using its air
compressors and air fi lters to create bubble curtains.
Over the last year, operations have rapidly expanded from
Europe to Taiwan. In 2020, Scantech Offshore successfully
supported two major Offshore Wind Farm projects in Taiwan,
delivering an exceptional service and on time delivery
considering the global pandemic. The success of this earlier
work has now led onto a further three major offshore wind
contracts in Taiwan being awarded (two out of three of the
projects are already underway) . Th ese projects will take the
team right through 2021 and sets Scan tech Offshore up as a
trusted provider of noise mitigation in wind farm installation not just in Europe but also in Taiwan.
Bubble curtains are used underwater to protect marine life from loud noises during subsea operations. Ordinary
construction noises travel much more easily underwater, and sound levels can be fi ve times higher than in open air,
potentially harming and even killing marine life. However, air bubbles resonate in response to sound, absorbing sound
energy and when formed into a curtain they refl ect the sound, effectively keeping it within the curtained area.
24
James Fisher and Sons plc Annual report and accounts 20 20
Key performance indicators
Key performance indicators
Underlying operating profi t (£m)
Operating margin (%)
2020
2019
2018
2017
2016
40.5
66.3
62.1
54.1
50.8
2020
2019
2018
2017
2016
7.8
10.7
11.0
10.8
10.9
Underlying operating profi t is after adjusting for
separately disclosed items and is the underlying
profi t from operations before interest.
Operating margin is the ratio of underlying operating
profi t to revenue. The Group’s operating margin in
20 20 was 7.8% (201 9: 1 0.7%).
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Underlying profi t before tax (£m)
Return on operating capital employed (%)
2020
2019
2018
2017
2016
31.5
58.5
56.1
48.6
45.8
Underlying profi t before taxation is after interest and
before separately disclosed items and related taxes.
Underlying profi t before taxation in 2020 was £31.5m
(2019: £58.5m).
2020
2019
2018
2017
2016
6.7
11.3
12.2
12.0
13.0
Return on operating capital employed is defi ned
as underlying operating profi t divided by average
operating capital employed. Operating capital employed
comprises tangible fi xed assets, intangible fi xed assets,
operating debtors net of creditors, less provisions. The
Group’s post-tax return on operating capital employed
was 6.7% in 20 20 (201 9: 1 1.3%).
Cash conversion (%)
Gearing
2020
2019
2018
217
99
157
2017
57
2016
103
2020
2019
2018
2017
2016
2.3
2.1
1.3
1.7
1.4
Cash conversion is defi ned as the ratio of operating cash fl ow
to underlying operating profi t. Operating cash fl ow is defi ned
as underlying operating profi t, adding back depreciation and
amortisation and adjusting for net movements in working
capital, pension payments and for the cash profi ts of
associates. The Group’s cash conversion was 217% in 20 20
(201 9: 99%) and has averaged 122% over the last fi ve years.
Gearing is defi ned as the ratio of underlying net
borrowings to underlying earnings before interest, tax,
depreciation and amortisation. The gearing of the Group
at 31 December 20 20 was 2.3 times (201 9: 2.1 times).
James Fisher and Sons plc Annual report and accounts 2020
25
Engaging our shareholders
Engaging our
shareholders
See page 26 for more information
Supporting our
local communities
See pages 27-28 for more information
Empowering our
people
See pages 29-34 for more information
Partnering with our
customers and suppliers
See pages 35-36 for more information
Protecting our
environment
See pages 37-40 for more information
Engaging our shareholders
The Company engages with shareholders by maintaining
regular communication from which it values the interaction
and feedback. The Annual Report and Accounts and the
Group website set out the Group’s strategy, progress against
its strategy and the Group’s activities.
Formal preliminary announcements and interim management
statements are provided throughout the year. Investor
days are held periodically when presentations are made to
investors and analysts. In addition, the Company invites
regular direct communication with its shareholders as part of
the Company’s investor relations programme.
During 2020, these events went ahead, and additionally the
Company sought specifi c feedback from shareholders and
shareholder groups in relation to the proposed changes to
the remuneration policy and the LTIP rules, both of which will
be presented for approval at the AGM. While the feedback
received was largely positive and has been accounted for
in the proposed changes, shareholders also communicated
their views over remuneration outcomes for 2020 in light
of the challenges encountered by the Company over that
period. These views have been carefully considered by the
Remuneration Committee in establishing the remuneration
outcomes set out in the Remuneration report. This
engagement was led by Aedamar Comiskey in her role as
chair of the Remuneration Committee.
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James Fisher and Sons plc Annual report and accounts 20 20
Annual General Meeting (AGM)
Due to the restrictions in place as a result of the Covid-19
pandemic, we were unfortunately unable to welcome
shareholders to our AGM. For 2021, and in anticipation
of restrictions which may still be in place in April, the
Company is planning for an AGM with the minimum number
of shareholders present to form a quorum, in the interests
of health and safety. However, in order to provide an
engagement opportunity for shareholders, the Company will
hold an online webinar available to all shareholders before
the proxy voting closes. More details can be found in the
notice of AGM.
At the webinar the Directors will provide a presentation on
the performance of the business, and will hold a question
and answer session . The Company intends to return to its
traditional AGM in Barrow -in -Furness as soon as possible,
with all attendees invited to meet members of the Board
informally after the AGM to discuss the business and raise
questions. The Company is proposing to change its articles
o f association to allow for “hybrid” meetings in the future,
which will not replace the physical AGM, but will enable
those shareholders who are not able to attend in person to
attend remotely and have an opportunity to participate.
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Supporting our local communities
Supporting our local communities
The Group operates in more than 40 countries worldwide with facilities and employees in the Middle East, Asia, Africa, Brazil,
USA and UK.
We are continually seeking opportunities to engage with and support the local communities in which we work through local
procurement and content sourcing, recruitment, training and development of local employees, and by supporting local social
and economic enterprises. Our initiatives in our local communities are important to the success of our businesses, which are
reliant on the support of the people and communities around them.
Each business has its own local communities strategy and actively encourages and supports its employees to engage with
projects across the UK and internationally to help make a positive impact, either through charitable fundraising, volunteering
their time, or collection and distribution of items to support those less fortunate or in need. At each quarterly business board
meeting, the MDs are asked to report on progress against their local communities strategy and each business board considers
the potential impact of its decision-making on local communities. This came into particular focus this year, as many of our
businesses responded to needs of their local communities in the face of the pandemic . More details are set out below .
The Sir John Fisher Foundation (the Foundation), which owns approximately 2 5% of the Company’s Ordinary share capital, is
a charitable trust founded in 1980 by Sir John Fisher (the former chairman of the Company and grandson of the founder) and
Lady Maria Fisher with the objective of distributing income to charitable causes throughout the UK focused on seafarers and
the Arts, but with special regard to those based in and working for the benefi t of people living in Barrow-in-Furness and the
Furness Peninsula, where the Company is registered and maintains its headquarters.
Progress against 2020 goals
•
Embedding social responsibility as an integral strand of the culture of each operating company by sharing across the Group
the activities and contributions being made in the various parts of James Fisher:
•
The intranet and internal newsletter (Pelican) are being used as effective platforms through which to communicate social
responsibility case studies and ideas across the Group.
• All Group companies have embedded delivery of value to local communities into their strategies.
•
Encouraging and enabling all our colleagues to contribute to their local communities, and respond to community needs:
•
As part of the roll-out of our employee engagement survey we ran a Group -wide competition with the winners receiving
a donation to their chosen charity.
James Fisher and Sons plc Annual report and accounts 2020
27
Supporting our local communities
Supporting our local communities (continued)
•
Over the course of the year, employees were involved in numerous types of community-focused projects and charity
initiatives, for example:
- EDS HV employees volunteered with local charity SOS Bus NI to help distribute vital food supplies to vulnerable
people unable to leave their homes to get food items during the fi rst lockdown and have also helped operate a local
Covid-related helpline .
- Strainstall’s Isle of Wight offi ce donated desks to local Mountbatten Hospice and to members of the community who
required equipment to work from home, as well as making fi nancial donations to Kidney Research UK and Ability Dogs .
- Employees from Martek, James Fisher Offshore, Scantech Offshore and the corporate offi ce stepped up at Christmas
time with donations to food and toy banks and team fundraising for charities such as Macmillan, Save the Children
and The Wishing Tree .
- A number of our businesses have also been actively involved in STEM initiatives, undertaking enterprise advisor work
in schools, supporting careers and women in engineering events as well as producing videos to promote adoption of
STEM subjects.
RMSpumptools continue to strengthen their relationship with Acorn (a charity providing support and housing for
adults with physical / learning needs) and plan to introduce someone who has benefi ted from the Acorn program into
their production team to enable them to benefi t from a working environment . Unfortunately, Covid-19 has temporarily
prevented the work experience going ahead but this is planned to resume when it is safe to do so .
Collections of old IT hardware have been made with items being refurbished for sale to generate profi ts for the charity .
Obsolete equipment has been recycled for the benefi t of the local community – for example, cable drums have recently
been transformed into a wellness seating area for recuperating fi refi ghters.
•
•
•
2020 achievements
•
•
•
JFD employees in Singapore supported the Courage Fund to help provide relief to susceptible individuals and families
affected by Covid-19.
JFN put its design engineering skills and materials to work using 3D printers to produce mask visors for local hospitals in
Preston, UK, as PPE was in short supply.
EDS sponsored a classroom at Northern Lincolnshire University Technical College and are actively seeking ways to develop
the relationship further in 2021.
2021 goals
•
•
•
•
•
Establish a Local Communities working group to help consolidate and focus initiatives where they maximise impact,
align with the areas of greatest infl uence and to facilitate the sharing of best practice and ideas so as to further support
communities around the globe .
Better understand the local community projects our customers are involved in so we can offer support where possible .
Further develop our existing local community partnerships .
Continue to support STEM initiatives in local schools .
Endeavour to work with local communities as co-implementers rather than simply focusing on them as benefi ciaries.
28
James Fisher and Sons plc Annual report and accounts 20 20
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Empowering our people
Empowering our people
Geographically dispersed across a number of continents and representing a multitude of cultures, our people are our most
important asset. United by a common purpose and shared valued behaviours, their talents, energy and commitment enable us
to create value for all our stakeholders. We recognise the responsibility we have to our people and are committed to ensuring
that James Fisher is a great place to work by empowering and supporting our people so they can make a real contribution to
the Group’s success and attain their personal goals by achieving their potential. This is a central focus for the Chief Executive
Offi cer, responsible for all employee matters, and the Group Head of Human Resources.
This year, navigating through the Covid-19 pandemic has been an obvious priority . Meanwhile our people helped redefi ne our
corporate purpose and values, and with their adoption throughout the Group. Our people have demonstrated their resilience
throughout. Our activities in relation to these matters are set out in more detail below. Throughout the year, we have increased
our internal communications and also created numerous new working groups to enable the employee voice to reach the
Executive team and Board on key issues, including Covid-19. This was complemented by the feedback we received from the
engagement survey and the work of Inken Braunschmidt as Non-Executive Director responsible for employee engagement.
In recognition of the pivotal role of our people, the need to retain them and encourage their development, we’ve revitalised our
employee strategy to facilitate an engaged, creative and high performing culture by focusing on fi ve core components:
Engagement – We are committed to engaging our employees through employee training, management development, CPD,
valued behaviours, onboarding, engagement surveys and engagement indices.
Diversity and inclusion (D&I) – We are focusing on talent attraction, global HR planning, graduate / apprenticeship campaigns
and enhanced support mechanisms for returning parents.
Wellbeing – We are building on existing initiatives through effective communications and change management, instilling
greater trust and confi dence in the future and by re-evaluating pay, reward and recognition.
Talent management – We are concentrating on our talent succession, career development paths, performance management,
appraisal reviews and development plans.
Organisational structure – We are optimising our resource planning, organisational and job designs to create opportunities for
individual development, accountability and recognition.
Gender diversity
Main Board Directors
Executive Team
Senior Managers*
Employees
* Those reporting to members of the Executive Team, including senior managing directors
2020
Male
5
5
34
2,115
Female
2
2
25
623
2019
Male
6
6
58
2,579
Female
2
2
13
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James Fisher and Sons plc Annual report and accounts 2020
29
Empowering our people
Empowering our people (continued)
Progress against 2020 goals
•
Continue empowering and engaging employees with clear development opportunities:
•
•
•
During the year we have celebrated a number of graduate and apprentice success stories – Erin Mutch, a recent
business administration apprentice from Fisher Offshore and Carly Robertson, a design and business development
graduate at JF AIS, are amongst the most recent employees to complete their programmes and begin progressing their
careers within the Group.
To embed a culture of high performance conversations, we are currently testing a new performance management
system within the business, which enables collaborative goal setting, insightful feedback to drive genuine behavioural
change and the ability to measure performance without bias.
Supporting continuous development and growth of our internal talent, we are working with our current learning supplier
to strengthen our mandatory induction/onboarding initiatives and our career/learning pathways.
•
Strengthen the Group’s approach to diversity and inclusion (D&I):
•
•
•
•
•
A new D&I delivery plan has been formulated with a focus on talent attraction and management, engagement, inclusion
and reporting.
A D&I working group with representatives from all around the Group has been established to actively champion D&I
across the Group and to support the delivery of the Group’s D&I objectives.
Existing Group D&I policies have been reviewed and refreshed.
Internal targets have been established to increase female and BAME talent attraction .
A review of current recruitment partners has been undertaken as a means to ensure diverse candidate streams.
•
Launch a Group-wide communications platform:
•
•
A new, refreshed group-wide intranet launched in the middle of 2020, and serves as a central portal where employees
can access news and information from wellbeing advice and tips, to Group policies, IT and cybersecurity guidance.
As part of a wider Offi ce 365 roll-out, the collaboration tool Microsoft Teams has been implemented and has enhanced
int ra- group communication.
•
Initiate an engagement and education programme for employees to ensure the promotion of safety during all travel:
•
The diffi culties of travel during the pandemic and the safety incidents we have encountered in the year have brought
this into focus.
•
Ensure at least one established mental health fi rst aider in operating companies:
•
We are investing in mental health awareness and mental health fi rst aid training. Over the course of the last twelve
months, we have increased our provision of mental health fi rst aiders across the Group from 54 to 110 and have worked
to increase their visibility.
•
Reinvigorate the recruitment of apprentices into Group operating companies, aiming to take on fi ve new apprentices across
the Group:
•
Following a Group-wide exercise to identify apprenticeship opportunities across the businesses, Covid-19 has
unfortunately delayed our plans in this respect but we are keen to progress with our next cohort once conditions allow.
2020 achievements
•
•
Comprehensive review of employee strategy undertaken.
Regular employee planning discussions held between Inken Braunschmidt , Group CEO and Group Head of Human
Resources throughout the year, advancing projects such as the Group -wide pulse survey and comprehensive employee
engagement survey, both of which were completed in 2020. Inken regularly invites the Group Head of Human Resources to
attend and present to the Board on key issues, and to allow feedback from the workforce to reach the Board .
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Empowering our people
•
Direct employee feedback and insights gained from the engagement survey on topics such as leadership, communications
and change management, company strategy and employee recognition:
•
Participation rate was 67% (2019: 40%) and responses indicate a good degree of engagement.
•
Employee wellbeing and engagement working groups formed in addition to the diversity and inclusion working group .
2021 goals
•
•
Begin to build a scalable and effi cient delivery model capable of responding effectively to strategic business opportunities,
ensuring optimal organisational design with no more than fi ve layers from CEO downwards.
Continue to create effective recruitment, development and learning opportunities for all employees. We will design and
implement a talent management process to ‘grow our own’, setting us on course for our goal of fi lling 25% of all roles by
internal candidates by 2025.
•
Implement actions in response to the employee engagement survey:
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Detailed results of the engagement survey will be reviewed by Inken Braunschmidt before the key messages are
shared with the Board later in the year.
Alongside the Group-level results, detailed business-level results are being shared with the managing directors of
each business. Each managing director has been asked to respond directly to the employee feedback relevant to its
business, and all managing director presentations to the Board in 2021 will include a summary of actions being taken
in response to the employee feedback received .
Provide further opportunities for direct employee feedback – such as Non-Executive Director Q&A sessions for employees.
Appoint a dedicated Learning and Development HR business partner.
Continue to strengthen the Group’s approach to diversity
and inclusion, utilising the dedicated working group to
help build awareness of its importance and to support
the implementation of processes focused on promoting
diversity in the workplace including through talent attraction ,
recruitment and STEM initiatives.
Foster a culture of continuous improvement, using
refi nements in our performance management system to
create a meritocracy, supporting the highest standards of
integrity and delivery.
Ensure strong local expertise and talent across all our
geographies.
Further embed our new Group-wide valued behaviours at all
levels of the organisation.
Continue building on the success of the Group-wide intranet
by increasing opportunities for engagement within the
platform.
Form a talent management working group in support of the
new employee strategy to help unlock and empower the
talent of today, tomorrow and the future.
•
•
•
•
•
•
•
•
James Fisher and Sons plc Annual report and accounts 2020
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Health and safety
Health and safety
The health, safety and welfare of our employees, together with those who work with us, or are impacted by our activities,
whether customers, suppliers, contractors, agency workers or others is of paramount importance to the Group. Our intention is
that everyone who works with us returns home safely, and in that regard health and safety is embedded into our organisational
culture and is the fi rst priority in all our management reviews and board meetings. Our aim is to equip everyone with the
knowledge, skills and equipment to work safely, and to provide the support to foresee potential hazards and to act to mitigate
the risks appropriately.
Unfortunately there have been a number of safety incidents in 2020, including one fata lity amongst our people working in overseas
locations. Whilst thorough investigations show that primary responsibility for the fatalit y is not with the Group, th is is a devastating
and sobering event and gives added impetus to our own efforts towards continuous improvement in health, safety and welfare.
Our strong focus on employee training, regulatory compliance and accident reduction provides the support to allow
accountability to remain with local management who are best-placed to ensure that their businesses comply with local laws
and regulations and specifi c needs on a day-to-day basis.
Given the challenging environments and complexity of the solutions we provide, we recognise that there is inherent risk in
what we do and that the sharing of incidents, near-misses, investigations and best practice amongst the Group is a powerful
means of increasing awareness and providing fresh insight and thinking. We are committed to learning from any events and
implementing training, procedural controls, protective equipment and technology to achieve our goal of zero incidents.
The Covid-19 pandemic has served as a reminder that we must constantly be aware of the potential risk posed by our working
environment, and has brought the health and wellbeing of all our employees into sharp focus. The Company responded
quickly to Covid-19 and the impacts of the resulting restrictions. This included increasing to weekly the frequency of Executive
team meetings, as well as introducing a weekly call between the Executive team and the managing directors of the operating
businesses. The results of these meetings have been reported on a regular basis to the Board. All of these meetings, along
with all Board meetings, have started with an update on the health and safety of our workforce throughout the pandemic.
The imposition of national lock downs, work and travel restrictions has introduced new, previously un-encountered hazards
where our employees need to balance enforced isolation from their colleagues with the need to work in a new way, and in
some cases provide support to dependants.
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Health and safety
In response we:
•
rapidly established a Covid-19 working group responsible for formulating and communicating the Group’s response across
different Group locations.
•
introduced enhanced safety measures, deep cleansing and social distancing at our operational sites to help keep people
safe whilst performing their roles .
• provided access to support and advice through the rollout of our Employee Assistance Programme.
•
•
Increased the number and visibility of our mental health fi rst aiders.
Provided employees with a Covid-19 care pack with guidance on safeguarding their own and their families’ wellbeing,
details of how to access support and practical items such as hand sanitiser and masks.
We are saddened to report that two of our colleagues independently contracted Covid-19 outside of work and sadly passed
away.
During these incredibly diffi cult times, our people have been truly amazing at identifying and organising ways to help
safeguard their colleagues and their families from both the direct and indirect effects of the pandemic. A number of colleagues
volunteered to be available on Christmas Day, for example, to hold a group call for anyone struggling over the festive period,
and a number of mental health fi rst aiders made themselves available over the course of the holidays.
Progress against 2020 goals
•
Continuing to strive towards zero incidents across the Group:
•
•
•
•
Our Group safety forum, comprising the health and safety leaders from each business, continues to embed lessons
learnt from all incidents, to share best practice and to advise the Group Health and Safety Committee on new Group-
wide initiatives.
The Group adopts the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (RIDDOR)1, and
the number of reportable incidents across the Group in 2020 was 3 (2019: 3).
The Group’s overall RIDDOR reportable frequency rate2 in 2020 was 0.06 (2019: 0.05).
The Group recorded 1 lost time accident (LTA 3) in 2020 (2019: 2).
•
Continue to drive focus on health and safety throughout James Fisher:
•
•
Health and safety is the fi rst agenda item at all Board and working group meetings across the Company.
In light of the global pandemic, a Covid-19 working group has been established. Meeting regularly, the group actively
monitors the ever-changing situation and communicates recommendations and Group guidelines.
•
Set up a “Health and Safety Hints and Tips” section on the Group intranet to share best practice:
•
A HSE and wellbeing section has been created on the Group intranet which includes HSE hints and tips as well as
including fi rst aid and safety performance sections.
•
Develop “Health and Wellbeing” programmes in all divisions:
•
Established an employee assistance programme for all employees. A free and confi dential service, it provides advice
on a range of topics including work/life balance, fi nancial management, mental wellbeing and family concerns .
•
Continue to enhance reporting of near misses:
•
As a result of the diversity of businesses, geographies and industries supported across the Group, there were
numerous near miss reporting and root cause analysis methodologies. During 2020 the Group Safety Committee,
assisted by the Group safety forum, has established and implemented a uniform reporting methodology and template,
which has improved the quality of information available and enabled better discussion and sharing of best practice
amongst the forum. Each business uses the information to roll out monthly H&S campaigns (including messaging and
toolbox talks) based around themes emerging from the improved near miss reporting .
1 A reportable incident under RIDDOR is a work-related injury which results in a person’s incapacitation for more than seven days.
2
The RIDDOR reportable frequency rate is the number of RIDDOR reportable incidents per one hundred thousand hours of work.
3 An LTA is an incident which causes a worker to be incapacitated for three or more consecutive days, not including the day of incident
James Fisher and Sons plc Annual report and accounts 2020
33
Health and safety
Health and safety (continued)
2020 achievements
•
•
•
•
•
A concerted focus on mental wellbeing has led to the doubling of the Group’s trained mental health fi rst aiders, the
development of a dedicated mental health resource library on the intranet, frequent wellbeing communications with hints
and tips and initiatives such as a voluntary wellbeing call on Christmas Day.
Launch of Group-wide exercise challenge, as well as local initiatives promoting exercise and wellbeing at a Group company level.
Large scale roll-out of Covid-19 care packs. Care packs included practical items such as reusable masks and hand
sanitiser as well as informative literature on healthy eating, exercise and Covid-19 guidelines.
During the year, our Tankships business James Fisher Everard (JFE) made 628 voyages and carried over 2.25m metric
tonnes of product with no product spill in the water.
Our principal operating companies maintain internationally recognised occupational health and safety management systems
accredited to OHSAS 18001 or OHSAS 45001.
2021 goals
•
•
•
•
•
•
Continue striving towards zero LTAs across the Group.
Continue driving focus on health and safety throughout James Fisher .
Continue to enhance reporting of near misses, as well as bringing more consistency to root cause analysis through the
Group safety forum.
To act quickly in the event that an accident / incident occurs, to thoroughly investigate and ensure learnings are adopted.
Further increase the number of mental health fi rst aiders to 200 by the end of 2021.
Continue to monitor the uptake of the Employee Assistance Programme and take action to introduce further support
mechanisms where required.
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Partnering with our customers and suppliers
Partnering with our customers and suppliers
Responsiveness to our customers’ current needs and anticipating their future requirements defi nes our purpose, and reinforces our
valued behaviours. Our success depends on achieving a deep understanding of the challenges that our customers face and the
complexities posed by the environments in which they operate – an understanding which can form and sustain effective customer
relationships.
Individual trading companies within the Group are best placed to understand and respond to these needs and best able to
manage their supply chains effectively. They engage directly with their customers and suppliers, supported by Group functions
and assisted by the sharing of best practice by the customer and supplier stakeholder working groups. Our businesses rely
on being able to deliver services (through our people) and/or products throughout the world. The challenges created by the
restrictions on movement imposed by governments in the face of the pandemic have made this more complex. However, our
businesses worked quickly to adapt, and have listened to the changing needs of our customers, and worked closely with our
supply chain to create dynamic and often complex methods of delivery in the face of adversity. Examples of that resilience and
responsiveness are set out below.
We are also alert to the macro-economic trends that will shape our customers’ future business, and share their concerns about
creating a sustainable future. In response we are: reaffi rming our commitment to supporting their efforts to drive continuous
improvement and effi ciency; actively taking steps to reduce our greenhouse gas emissions wherever possible ; and , identifying
adjacent segments where our assets, skills and resources can innovate in pursuit of a sustainable future.
•
•
Scan Tech AS has been developing a solution to improve the health and welfare of fi sh stocks for the aquaculture sector in
Norway.
Scan tech Offshore has been deploying its offshore air compressors to deliver bubble curtains to protect marine wildlife
from noise and debris during offshore wind farm construction.
We wish to work with organisations who share and can assist us with achieving our goals . We will continue to make our
supplier choices on: greater clarity on environmental credentials; legal compliance; respect for human rights; and transparent
business ethics. Our assessment of performance in these areas will underpin our future sourcing strategy and will be more
determinate than simply price or quality.
As we seek to increase alignment between our customer needs and supplier credentials, we are taking steps to gather
objective data on our progress and will be seeking feedback from our customers and suppliers that assesses our performance
and measures us against our valued behaviours.
James Fisher and Sons plc Annual report and accounts 2020
35
Partnering with our customers and suppliers
Partnering with our customers and suppliers (continued)
Progress against 2020 goals
The focus in 2020 has been on the importance of contract negotiation as an engagement opportunity with customers and
suppliers in order to build on commercial relationships, to demonstrate the Group’s values and to establish a fair balance
of risk and reward. Individual businesses have also worked with their supply chain to ensure that they work in a way that is
consistent with the Group’s values, including respect for human rights and business ethics.
•
Leveraging across the Group the benefi ts already identifi ed from utilisation of performance monitoring of key suppliers. The
goal is to have these incorporated as part of the new supplier process, to facilitate sustainable continuous improvement of
our supply base.
•
Supporting on-going supplier engagement initiatives to help them identify sustainable cost-savings and tendering enhancements:
•
With respect to the two targets above, the Group is establish ing a supplier working group, with an Executive sponsor
and purchasing representation from around the Group. The aim of the working group is to identify improvements in
supplier engagement through sharing of best practice between businesses, including (i) making shared use of the
performance monitoring process and data already available, and increasing its scope to other businesses; and (ii)
identifying cost-savings and tendering enhancements. We expect to be able to report further progress on this next year.
•
Embedding Group standards and policies within new relationships with suppliers and driving support for our sustainability
initiatives through our supply chain:
•
During the year, we have consolidated and rolled out a Group standard on-boarding questionnaire, requiring
suppliers to confi rm their compliance with Group standards and policies, and our businesses employ health, safety,
environment and quality (HSEQ) questionnaires to verify supplier minimum standards in these areas. Going forward,
we are aiming to bring some increased consistency and further coverage to the HSEQ questionnaires to seek
increased supplier support for our sustainability initiatives.
•
Further embedding in all Group operating companies the bespoke web-based platform introduced in 2019, which gives
businesses the tools to carry out robust due diligence on agent and joint venture relationships:
•
This initiative has been fully implemented across the Group, covering all historic and future third party agent and joint
venture relationships, resulting in better decision-making through enhanced due diligence, and rationalisation of the
risk profi le of the Group’s third party relationships.
2020 achievements
•
•
•
•
Martek, our marine safety products and services business, responded quickly to new crew change guidelines due to the
pandemic, by launching a Coronavirus antibody test. It also provided comprehensive personal protective equipment to its
marine customers.
JFD promptly answered the UK Government’s call for rapidly manufactured ventilators to provide essential medical
equipment to the NHS.
Customer needs have been recognised as an integral part of the Company’s new purpose-led approach with an emphasis on the
need to adequately align company, customer and supplier interests.
Customer engagement was a key focus at the Senior Leadership
Conference with mechanisms for improvement considered
particularly during pre-signature discussions and post-signature
contract management.
2021 goals
•
•
•
•
Strengthen our feedback processes and report progress on a
regular basis with actions identifi ed and implemented as required.
Continue to affi rm our commitment to supporting customers in
their efforts to drive continuous environmental improvements.
Establish customer and supplier working groups with
representation from across the Group, to share best practice and
embed consistent approaches.
Request visibility of suppliers’ sustainability plans where
possible, with audits performed on key suppliers.
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Protecting our environment
Protecting our environment
The Group is committed to protecting the environment, both in terms of our operational footprint and the nature of the activities we
undertake. The acknowledgement of the body of scientifi c evidence that identifi es the signifi cant impact of human activity on climate
change will infl uence the energy transition, the Group’s investment choices and growth agenda . The Group’s environmental policy
recognises our responsibility to protect the environment for the benefi t of all and we set out an intent to ensure that we minimise the
impact of our activities, our consumption of raw materials and our production of waste.
As we make further progress, we will continue to push our suppliers for greater clarity on their environmental credentials, as we
do with legal compliance, respect for human rights and transparent business ethics, to ensure responsible sourcing throughout
our supply chains.
We also consider the direct and indirect impact of our own activities on the environment. 2020 was the fi rst year that
the Company responded to the Carbon Disclosure Project (CDP). Investors, customers and regulators want to know
how companies are adapting to a changing climate. Accordingly, we continue to build on the implementation of the
recommendations set out by the Task Force on Climate-related Financial Disclosures (TCFD), more information about which
can be found below. We are actively taking steps to reduce our greenhouse gas emissions, moving to lower or zero emission
technologies when and where possible.
Operationally, Covid-19 and the rapid shift in working practices enabled by technology has contributed to a signifi cant
reduction in business travel for our employees . Virtual meetings, digital connectivity and homeworking have changed the
requirement for business travel, commuting and offi ce space and we will continue to evaluate what positive improvements
should be retained for the long -term.
Our operating companies continue to mak e tangible environmental improvements by continually focusing on innovation,
changing customer need and operational excellence:
•
RMSpumptools – pioneering electrical submersible pump artifi cial lift and subsea connector technologies to maximise
well effi ciency, thereby reducing new exploration and production activities, and minimising local gas emissions through its
innovative design.
•
Fendercare – sustaining an exemplary safety record in avoiding spills to water during thousands of ship-to-ship transfers.
•
JFMS, EDS , Rotos 360 and Scantech Offshore – actively engaged in the transition to renewable energy through
supporting construction and maintenance of offshore wind farms.
• Fisher Offshore and JF Nuclear – sustainable decommissioning and waste management of end-of life assets in the nuclear
and oil & gas sectors.
•
AIS and JF Testing Services – utilising the latest advances in digital technology to provide real-time insights to identify
improvements in operating effi ciencies, reduced maintenance schedules and asset life extension.
James Fisher and Sons plc Annual report and accounts 2020
37
Protecting our environment
Protecting our environment (continued)
The Group has considered the impact of climate change risks and opportunities on the Group in the Principal Risks section of
the report on pages 43 to 51.
Progress against 2020 goals
•
Driving further fuel effi ciencies in our shipping activities, including accelerating plans for investment in fuel-effi cient and
environmentally-friendly technologies:
•
Our Tankships division is supporting its customers to improve fuel effi ciencies and minimise emissions, including
through plans to access dual-fuel propulsion vessels by 2022. This could reduce fl eet vessel emissions of carbon
dioxide by up to 21%, and of NOx and SOx by over 90%, based on the use of LNG as marine fuel . LNG also provides a
signifi cant advantage in terms of improving air quality when compared to conventional fuels, which is important in ports
and coastal areas.
• Encouraging our businesses to further develop their supply chains to enhance responsible sourcing initiatives:
•
We are establish ing a supplier working group, with an Executive sponsor and representation from around the Group to
drive forward various initiatives including pursuing more responsible sourcing activities through the supply chain and
establishing minimum requirements for supplier onboarding.
• Encouraging all our businesses to make James Fisher a “plastic bottle free zone”:
• A number of companies, including Fisher Offshore and JF Marine Services, have provided their employees with a
reusable water bottle. This initiative is ongoing.
•
Encouraging employees to make use of all available technologies as alternatives to travel, with air travel to be used only for
essential business:
•
The timely and widespread introduction of Offi ce 365 with its collaboration tool Teams has enabled widespread
adoption of ‘virtual’ meetings, thereby considerably reducing the need for travel.
•
Operating companies to make a positive effort towards investing in LED light fi ttings to reduce energy consumption at our sites:
•
•
Strainstall is the latest of our offi ces to fully change the lighting throughout its premises to LED.
JFD, JF Nuclear, EDS and RMSpumptools are amongst the businesses transitioning or fully-transitioned over to LED
lighting.
2020 achievements
During 2020, all of our businesses have embedded their individual environmental strategy into their wider strategy, and report
quarterly on progress against that strategy, allowing the environment to be considered alongside other stakeholder interests in
individual business decision-making, both in terms of minimising impacts, but also identifying opportunities, as described above.
James Fisher acknowledges the global threat posed by climate change and recognises the need to reduce greenhouse gas
(GHG) emissions. The Group has a governance structure in place to consider carbon emissions and energy usage to minimise
the impact of its operations on the environment.
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Protecting our environment
We accept our responsibility to comply with emerging climate change legislation and regulation, and to reduce our GHG
emissions as far as is reasonably practicable through appropriate initiatives. Part of the Sustainability Committee’s remit
includes keeping this issue under review.
Energy consumption was measured across the Group by recording data on the combustion of fuel and the use of electricity at
its facilities. The Group’s total GHG emissions are:
Emissions total (in thousands of metric tons)
CO2 equivalent from electricity consumption in facilities
CO2 from combustion of fuel at facilities and road vehicles
CO2 from combustion of fuel in vessels
Total emissions (CO2)
The Group’s total energy usage is:
Energy usage (Kwh)
UK
Non-UK
Total
2020
1.6
2.9
76.7
81.1
2019
1.8
3.5
89.4
94.6
2020
207,538
77,692
285,230
• The Group’s 2020 carbon intensity ratio calculated against the Group’s revenue remained consistent at 0.02% (2019: 0.02%).
•
•
•
•
•
•
•
•
•
97% of our operating companies operate environmental management systems (EMS) certifi ed to ISO 14001 standard.
This internationally recognised EMS enables a systematic approach to handling environmental issues.
The Group continues to support the UK Government’s ‘Cycle to Work’ scheme, increasing the maximum certifi cation value
from £1,000 to £5,000 to allow employees greater choice and to take advantage of e-bike offers.
A number of businesses, have begun investing in solar energy installations to reduce their facility’s carbon emissions.
Strainstall ’s new REC N-Peaks panels have reduced their site’s carbon emissions to date by over 4 ,600kg.
Group companies are also working to reduce their environmental impact by actively monitoring paper usage with a
commitment to reducing consumption across our offi ces and shredding non-confi dential paper for use in product packaging.
A number of our businesses have committed to using only green merchandise at events and prohibiting the printing of single-
use or low-use banner stands by replacing them with laptop s or video screens.
We’re actively promoting environment-related days like World Earth Day and Zero Waste Day using social media and
newsletters to help raise awareness, both internally and externally.
14,000 litres of potentially contaminated diesel fuel returned from job-sites and 22,000 litres of hydraulic oil used in Hydraulic
Power Units and cranes have been fi ltered and recycled by Scan Tech AS.
Our workshops have introduced re-fi llable spray cans to reduce consumables.
Promoting a greener product line by replacing diesel with electrically powered units at Scan Tech AS - increasing our rental
fl eet of large electrical compressors for both ATEX and Marine installations. These are a viable alternative to large diesel
machines, and have zero emissions, automatic start-stop and are quieter in use. They also require less maintenance, have
less fl uids to change, weigh less (transport emissions) and have a smaller footprint .
•
RMSpumptools is reducing energy usage by adopting lower-power consuming ‘mini-desktops’ for its employees.
2021 goals
•
•
•
•
Continue to raise awareness amongst the Group of the importance of environmental considerations; including rolling out
‘lunch and learn’ sessions focused on environmental issues for employees.
Promote chemical-free cleaning methods where possible.
Use our nanobubble technology to reverse environmental damage at a local lake within Stavanger Municipality –
Hålandsvannet, Norway for the benefi t of the local community and wildlife.
Continue our focus on delivering clean alternatives to diesel-fuelled equipment and identify products and systems to reduce
the amount of gas fl aring for Middle East, Africa and Asia Pacifi c region .
•
Minimise the use of single-use plastics in production and paper usage in stores wherever possible.
James Fisher and Sons plc Annual report and accounts 2020
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Protecting our environment
Protecting our environment (continued)
Task Force on Climate-related
Financial Disclosures (TCFD)
Investors, customers and regulators want to know how
companies are adapting to a changing climate. Here we
describe in more detail how we are implementing the
recommendations set out by the TCFDs, which is enabling us
to identify and evaluate the potential risks and opportunities
arising from climate change for our business model and to
respond accordingly.
Governance
Members of the Board, Audit Committee and Risk Committee
maintain oversight of the Group’s approach to risk management.
This is assisted by the Sustainability Committee which advises
those bodies on climate-related risks. Risks are monitored
as part of our standard operating processes to ensure
that appropriate mitigations are in place as part of regular
management reviews. Quarterly operating business board
meetings report changing risk and relevant mitigation methods
and progress. This business-level view of risk is considered by
reference to the Group-level risk profi le by the Risk Committee.
The Risk Committee and Executive Directors report the results
of both the bottom up and top down view of these to the Board
and Audit Committee. Climate-related issues are assessed by
the Sustainability Committee when reviewing and developing
strategy, policies and planning. These are reported to the Board
and relevant Committees on an on-going basis via the Group
CEO who sits on the Sustainability Committee.
Strategy
Our purpose is pioneering safe and trusted solutions to
complex problems in harsh environments, to create a
sustainable future. Amongst other macro trends, climate
change is creating impacts on the Group and its customers,
in particular through an energy transition from fossil fuels
to renewable energy sources. The Company has aligned its
purpose and strategy to try to meet some of those challenges,
in supporting the energy industry’s own transition (for example
through decommissioning), and in targeting opportunities in the
growing renewables market. The Group’s fundamental climate-
related transition risk is that we fail to gain a strong foothold in
the challenging renewables market, threatening our ability to
respond to transitioning customer demand. As energy markets
change, some of our assets used to provide our services may
become of less value to our customers.
The Group’s primary climate change-related opportunity is to
continue to strengthen our renewables business to match our
customers’ requirements. We have seen some challenges in 2020
to that strategy, mainly due to the impacts of Covid-19.
However, this remains a core part of the Group’s strategy.
Alongside this, there are opportunities in our existing oil and
gas businesses. Firstly, using our expertise to support the
decommissioning of our customers’ sites and assets – our Fisher
Offshore business continues to grow in this area. Secondly, to
repurpose some of our own assets, which have traditionally
been used for purely oil and gas related activities, for different
applications outside of oil and gas. Our Scantech Offshore
and Scan Tech A S businesses have been targeting alternative
applications in this respect in the renewables and aquaculture
industries respectively.
Risk management
Climate-related risks are identifi ed and assessed by the Risk
Committee, assisted by the Sustainability Committee. Through
scenario planning, these bodies identify the risks which the
Group may encounter, their relative signifi cance by reference
to other climate-related risks, and by reference to other risks
which the Group faces. Those risks are set out in more detail
on page 45. This assessment also takes into account the
existing and emerging regulatory requirements related to
climate change, including limits on emissions. There is natural
mitigation of such requirements, through the diverse nature
of the Group’s operations and a lack of direct impact of those
requirements on the Group’s businesses, although we monitor
the indirect impacts on our customer base, and the resulting
change in their own strategies. The Group completed its fi rst
CDP reporting in 2020, and is using the results as a baseline to
assess the potential size and scope of identifi ed climate-related
risks, as well as to target initiatives that, once implemented,
will improve the carbon performance of our businesses. This
includes looking at alternative lower carbon fuel supplies for our
tanker fl eet, and reducing energy consumption at our operating
sites. Over the coming months, we will be undertaking analysis
to review the resilience of our strategy, taking into consideration
various climate-related scenarios .
Metrics and targets
We disclose greenhouse gas emissions performance in this
report. Our CDP response also provides further analysis of
climate-related risks, opportunities and performance. During
2021, we are targeting establishing more detailed targets and
metrics to measure the progress of our initiatives which are
aimed at climate-change and reduction of emissions. In this
respect our CDP response provides a useful baseline. We
aim to provide more detail on this during 2021, and report on
progress in our 2021 Annual Report.
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Non-fi nancial information statement
Non-fi nancial information statement
The information set out below, together with the cross references listed in the table below as to where further information can
be found in the main body of the Strategic report, is in compliance with the Non-Financial Reporting requirements as set out in
sections 414CA and 414CB of the Companies Act 2006:
Reporting requirement
Description
Business model
Location
• Business model
Environmental matters
• Group Health, Safety and Environmental policy
• Protecting our environment
• Principal risks and uncertainties
Employees
• Group Health , Safety and Environment al policy
• Empowering our people
• Code of ethics
• Principal risks and uncertainties
• Directors' report
Social matters
• Code of ethics
• Supporting our local communities
Respect for human rights
• Modern slavery and human traffi cking policy
• Principal risks and uncertainties
• Code of ethics
Anti- bribery and corruption
• Anti-bribery and corruption policy
• Principal risks and uncertainties
Principal risks
Non-fi nancial KPIs
Our policies
• Principal risks and uncertainties
• Key performance indicators
Page
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25
A combination of online and in person training on all the key policies is carried out across the Group, and there is also a system of
bi-annual certifi cation for compliance offi cers, certifying that the relevant individuals in their businesses have read and understood
the policies and are fully compliant. All employees, contractors and third parties are encouraged to report any circumstances
where there is a suspected or actual breach of any Group policies, applicable laws, or the high standards as set out in the Code of
ethics. All reported incidences of actual or suspected breach of any of the policies are promptly and thoroughly investigated. The
Audit Committee also considers any high-risk areas identifi ed by the internal audit function, the Group legal team or the business’
compliance offi cers.
Key policy
Code of ethics
Group Health, Safety and
Environmental policy
Relevant policies
James Fisher is committed to ensuring the highest standards in its activities and is particularly
concerned that appropriate and ethical policies and procedures are followed in all business dealings
across the Group.
The Group strives for a culture of honesty, openness and accountability. The Group’s commitment to
the highest level of ethical conduct should be reflected in all our business activities including
relationships with our stakeholders.
All employees and others must conduct themselves according to the language and the spirit of this
Code and seek to avoid any appearance of improper behaviour.
Health and safety is the top priority and the Group actively strives for the continuous improvement of
health and safety in the workplace. We aim to provide a healthy and safe working environment for all
our employees and to ensure the safety of others affected by our operations .
The Group recognises its responsibility to protect the environment for the benefit of all. This policy
represents a declaration of our intent and commitment to minimise the environmental impact of our
activities, our consumption of raw materials and our production of waste.
The ultimate responsibility for health and safety, and the environment rests with the Group Chief
Executive Officer, the Board members, and the Executive team. This responsibility is cascaded through
the organisation via divisional/regional MDs and their leadership teams.
In the case of health and safety, this is supported by the Group Safety Committee, as well as by the
Group safety forum and its individual members, who are the HSEQ representatives for each business.
In the case of the environment, this is supported by the Sustainability Committee, and by the
environmental working group, with representation from across the Group.
James Fisher and Sons plc Annual report and accounts 2020
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Non-fi nancial information statement
Non-fi nancial information statement (continued)
Key policy
Relevant policies
Anti- bribery and corruption
policy
Modern slavery policy
James Fisher has zero tolerance for any form of bribery or corruption and is committed to complying
with all applicable anti-bribery and corruption laws. The Group has an established anti-bribery and
corruption policy and has introduced a compliance programme which has the support of the Board
and senior management within the Group. This includes communication of the statement and policy,
training, risk assessment and ongoing monitoring. Employees assessed to be at risk are required to
complete the training and to self-certify that they understand and agree to be bound by its provisions.
On-going compliance is monitored by local compliance officers who are required to report to their local
boards and to the Group Compliance Officer on at least a biannual basis. The compliance officers are
responsible for ensuring that risk assessments, training and awareness are carried out where
appropriate and are kept up-to-date.
In addition to ensuring that our people are compliant with the Group’s anti- bribery and corruption
policy, we require that all third party agents and joint venture partners engaging with any Group entity
comply with these policies in order to ensure compliance with applicable anti-bribery and corruption
laws.
The policy is supplemented by due diligence on all third party agent and joint venture relationships,
enabled by a bespoke web-based platform available to all Group businesses. It provides a robust tool
through which our businesses can risk assess agent and joint venture partners with whom they are
considering doing business. It forms part of our internal control procedures and helps mitigate the
business’ compliance risk. The platform has been rolled out throughout the Group during 2020.
James Fisher respects fundamental human rights, and is committed to acting ethically and with
integrity in all our business dealings and relationships and to implementing and enforcing effective
systems and controls to ensure modern slavery is not taking place anywhere in our own business or in
any of our supply chains or in the communities in which we operate across our international
businesses. We have implemented work practices and policies throughout the Group which are
designed to ensure that respect for human rights is integrated into the systems and culture of our
businesses. We do not tolerate the use of child or forced labour within our business and take all steps
possible to ensure that our suppliers and customers also uphold internationally recognised human
rights. This is enabled through risk assessments undertaken by our Group businesses which identify
parts of their supply chain which could be susceptible to risk in this area, as well as confirmation from
our suppliers of compliance with our policy and relevant law. Our progress in the area of modern
slavery is set out in our annual Modern Slavery statement which is available on the Group’s website and
outlines steps taken by the Group to ensure that there is transparency in the Group and throughout our
supply chains. The Group encourages any concerns relating to modern slavery to be raised using the
procedure set out in the whistleblowing policy.
Section 172(1) statement
This section serves as our section 172 statement explaining how Directors fulfil section 172 of the Companies Act 2006.
The Board aims to promote the success of the Company for the benefit of its shareholders as a whole, taking into account the long-term
consequences of its decisions while giving due consideration to the interests of the Company’s stakeholders (including employees,
customers, suppliers, shareholders, as well as the environment and local communities which are impacted by our operations), while also
considering the importance of maintaining our reputation for high standards of business conduct. Examples of what that has looked like in
practice over the past year can be found as follows:
Stakeholder:
Shareholders
Employees
Customers/suppliers
Environment
Local communities
Strategic report:
Page 26 (Engaging our shareholders)
Pages 29 to 34 (Empowering our people) (Health and safety)
Pages 35 to 36 (Partnering with our customers and suppliers)
Pages 37 to 40 (Protecting our environment)
Pages 27 to 28 (Supporting our local communities)
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Principal risks and uncertainties
Principal risks and uncertainties
Managing risk during 2020
The Board and Audit Committee continue to recognise the
importance of risk management in achieving the Group’s
strategic objectives. Keeping risk management integral to the
operation of our businesses is a priority, requiring a continuous
scan of all threats and opportunities. Our risk management
processes aim to anticipate risks before they impact upon our
activities to ensure that we are in the best place to mitigate
those risks, and recognise the opportunities they may bring
in a competitive marketplace. For all our key risks, we identify
the key mitigating controls and their ownership. Our assurance
activities are focused upon those controls so we can continually
gauge their effectiveness.
Within that context, the Group is disappointed to report
signifi cant separately disclosed items in both 2019 and 2020,
the details of which are described in the Financial review
as set out on pages 22 to 24. The items relate to strategic
initiatives that were either not executed successfully or were
severely impacted by the global pandemic and energy price
changes in the fi rst half of 2020. The Board has carried out
a detailed cause and effect review and combined with the
strategic review, a more rigorous approach to the markets
the Group seeks to provide services into and the capital
allocated to those activities has been implemented.
Pandemic risk
During the extraordinary circumstances created by the
pandemic the Company needed a robust response from all
areas of the Group. As events and Government policy have
progressed, the Group has responded quickly to keep our
people safe; to preserve as many jobs as possible, and to
protect the interests of the Company and its stakeholders.
The pandemic continues to bring signifi cant uncertainty to the
operation of the Group, and further lockdowns and restrictions
are possible. Nonetheless the Group continues to demonstrate
sound control and resilience, with people working from home
where possible and those not able to work from home working
in operational environments adapted in accordance with
Government guidelines and best practice, and with those
needing to travel to deliver for our customers fi nding ways to
do so safely and effectively.
Climate change
During 2020 the Group has been impacted by volatile energy
prices. Following its analysis of risk and opportunity relating
to climate change, the Board expects that oil and gas will
remain an important part of the energy mix for many years
to come. However the Board considers both the transition
from fossil fuels and the matching growth of the renewables
market as part of a lower carbon environment represent a
risk and an opportunity for the Group. The risk is mitigated
by the continuing strategic diversifi cation of the Group into
new markets by supporting the energy transition, which also
provides growth opportunities.
Risk map
1 Health & safety risk
2 Cyber risk
3 Operating in emerging markets
4 Climate change
5 Contractual risk
6 Project delivery risk
7 Recruitment and retention of key staff
8 Financial risk
9 Pandemic risk
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Likelihood
Increasing risk
Decreasing risk
Unchanged risk
New risk
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Principal risks and uncertainties
Principal risks and uncertainties (continued)
The Group’s emerging and principal risks
We set out below the emerging and principal risks which could materially impact upon the operation of the business and its
strategic objectives:
1 Health & safety risk
Nature:
Potential impact:
Mitigation:
Group trading companies may experience
an adverse operational incident or failure to
maintain appropriate levels of health and safety
• The health and safety of our workforce and
others could be impacted by our operations
• The Group’s reputation could potentially
suffer if there was a major accident or health
and safety issue
• Claims and regulatory action may be
taken against the Company or the affected
business
• First item on Plc and business board agendas
• Policy and training
• Group H&S Committee
• Group safety forum
• Insurance
Context:
There have been a number of safety incidents in 2020 including one fatality. Whilst thorough investigations show that primary responsibility for the fatality is
not with the Group, it is a sobering event and gives added impetus to our own policies and processes. Executive management has continued to increase
the level of awareness and focus on HSE, including mental health. The net risk has increased in 2020 due to the global pandemic and every effort is being
made to mitigate that risk and to learn from and avoid the incidents in 2020, with greater diligence and awareness in this area
Movement:
Increase. In light of the environments in which the Group companies work, health and safety is an inherent risk. There has been an increased focus in this
area in the last 12 months
Opportunity:
Operating in competitive markets there is an increased opportunity to provide differentiation to our customers by our strong commitment to health and
safety, thereby building long-term trust
2 Cyber security risk
Nature:
Potential impact:
Mitigation:
The Group may experience loss or harm
related to technical infrastructure or the use of
technology within the Group
Cyber-attacks could result in fi nancial and
reputational damage by way of signifi cant
interruption to business systems. Phishing could
result in fi nancial and reputational damage by
way of theft or fraud
• Introduction of new Group-wide operating
system with enhanced security, alongside
infrastructure and software updates to existing
systems
• Regular review of IT security issues, including
penetration testing
• Enhanced cyber awareness training and
regular briefi ngs
Context:
Following a cyber security incident in November 2019, a number of infrastructure and security improvements were implemented. A rollout of Offi ce 365
was fast-tracked, providing additional security improvements and further investment in specialist cyber security software was approved for implementation
early in 2021
Movement:
Unchanged. The Group is reliant on its systems in order to operate effectively and has invested in the last year to enhance security. The external threat is
continually adapting and increasing, notwithstanding the mitigating activities. A combination of new software and training will bring extra vigilance
Opportunity:
Upgraded IT systems increase security, but also fl exibility, facilitating secure working while travelling or from home
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3 Operating in emerging markets
Nature:
Potential impact:
Mitigation:
The Group operates in overseas emerging
markets and key growth economies with
fl uctuating legislative restrictions, embargoes,
sanctions and exchange controls, often
undertaken in association with local joint venture
partners
Those operations may expose the Group
to increased risk of governance and
compliance issues. Any signifi cant failure to
comply with laws or regulations could lead
to penalties and other fi nancial liabilities, as
well as reputational issues. Where there is a
jurisdictional requirement for local investment or
representation, the Group’s ability to continue
business in that jurisdiction could be adversely
impacted from an ethical or legal perspective
• Limits of authority and other internal corporate
governance
• Risk tracking of JVs, agents and other third
party relationships, including use of bespoke
web-based platform
• Policies and training
• Corporate structuring of relationships, using
external local legal advice
• Internal audit operating overseas using
co-sourced PwC resources to leverage
advantages of working in local language and
consistent with local law/regulation
Context:
Operating in challenging conditions in developing markets remains a key part of our strategy. This has been made more challenging due to worldwide
Government-imposed travel restrictions in response to Covid-19, making control and communications in relation to our operations in developing markets
more challenging
Movement:
Decreased. Improved commercial and fi nancial controls, project management and on-going improvements in risk management in this area decrease the
risk of one-off charges experienced during 2020
Opportunity:
The Group’s ability to operate in emerging markets for global customers offers an increased opportunity to be differentiated from our competitors
4 Climate change
Nature:
Potential impact:
Mitigation:
The Group operates in industries which may be
adversely impacted due to the change in energy
mix. The Group is committed to minimising the
impact of its operations on climate change
The Group may suffer operational impacts of
extreme weather events, as well as potential
changes in technologies, markets and regulation
in response to climate change which could
increase costs, challenge the viability of Group
services or affect asset values. The Group
is also conscious of the need to reduce its
impact on the climate, including its emission of
greenhouse gases
• Continuing the Group’s end markets and
geographical diversity
• Initiatives to reduce the Group’s emissions and
other impacts on the environment
Context:
The Board is conscious of the risks and opportunities created by climate change. During 2020, the Group’s businesses have been impacted by a
combination of volatile oil prices and Covid-19. Whilst it is expected that oil and gas will remain an important part of the energy mix for many years
to come, the transition to a lower carbon environment represent both a risk and an opportunity for the Group. The risk is mitigated by the continuing
diversifi cation of the Group into new markets by supporting the energy transition which also provides growth opportunities
Movement:
New and increasing. The impact of Covid-19 may accelerate the changing energy mix and individuals’ travel and work patterns
Opportunity:
The Board believes that the global market for renewable energy will continue to grow, and therefore sees the energy markets as an opportunity
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Principal risks and uncertainties
Principal risks and uncertainties (continued)
5 Contractual risk
Nature:
Potential impact:
Mitigation:
The Group operates in markets where larger
project-based contracts may seek to pass risk
down the supply chain
Through its growth and diversifi cation into new
markets and geographies, the Group may be
exposed to increased contractual risks, which
could result in fi nancial impact caused by late
payment, or cost overruns, increased claims
and litigation, and/or exposure to non-UK legal
jurisdictional uncertainty
• Internal contract management governance,
including policy and training
• Internal and external specialist legal support
• Appropriate balance of risk and reward in
contract
• Targeting increased contract management
skills
Context:
As the Group continues to grow, contractual risk remains signifi cant, as the potential liabilities under contracts increase, and customers attempt to pass
more risk down the supply chain
Movement:
Unchanged.
Opportunity:
As the Group pursues its strategy of increased diversifi cation, contracts become a key mechanism for managing risk and also enhancing engagement with
our customers and suppliers
6 Project delivery
Nature:
Potential impact:
Mitigation:
Group businesses may fail to meet customer
expectations or contractual requirements on
project delivery
This could cause signifi cant adverse fi nancial
and reputational consequences, and/or
increased cost and management time resulting
from management of disputes and litigation
• Increasing the specialist project management
skillset across the Group through training and
recruitment
• Implementation of project management best
practices
• Focus on post-signature contract
management
Context:
The successful management and delivery of projects continues to be of high importance to the Group, as the profi le of the work undertaken by the
businesses has moved more towards project work. 2020 has seen on-going and increased challenges in project delivery and close out, exacerbated
by the Covid-19 pandemic. While the Group has processes for managing project risk, our focus is to improve outcomes across a diverse group where
resource and skills in certain areas are less mature
Movement:
Un changed.
Opportunity:
Our customers require suppliers which can manage large projects in demanding environments. The Group is in a key position to support them, grow our
customer engagement, and win new work
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7 Recruitment and retention of key staff
Nature:
Potential impact:
Mitigation:
The Group may fail to attract, retain and develop
personnel of the requisite calibre and to plan for
succession in key leadership positions
This may result in the Group not being able to
maintain its existing strong and experienced
management teams in its operational
businesses, and/or a risk to the Group’s delivery
of its strategic objectives, which depends on
recruiting and retaining the right people in all
areas of our business to maintain competitive
advantage
• New employee strategy
• Graduate recruitment
• Talent identifi cation and management
• Management development programmes
• Appraisal process
• Training plans
• Remuneration incentives
• Succession planning
Context:
Progress continues on succession planning across the Group. 2020 has seen material senior management changes across the Group, as well as roll out
of a new employee strategy aimed at various areas, including improvement in recruitment and retention. The new CEO has brought new focus on people
development and retention
Movement:
Unchanged. Succession, recruitment and retention remain a key risk but has been managed well at a business level, and the new employee strategy will
bring additional improvements
Opportunity:
Improvements in recruitment and retention will strengthen our teams worldwide, as well as the ability to compete in our chosen markets
8 Financial risk
Nature:
Potential impact:
Mitigation:
The Group is exposed to interest rate, foreign
exchange and credit risk
An increase in interest rates or change in
exchange rates or credit restriction would have
a fi nancial impact on the Group
• Non-syndicated banking relationships
• Loans with spread of maturity profi les
• Centralised fi nance function management of
Group cash, debt, and foreign exchange
• Forward currency contracts
• Interest rate swaps
Context:
Interest rates, foreign exchange and credit risks remain key risks and are reviewed regularly by the Board. The Group is exposed to USD cash infl ows and
uses forward contracts to reduce earnings volatility
Movement:
Unchanged.
Opportunity:
None
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Principal risks and uncertainties
Principal risks and uncertainties (continued)
9 Pandemic risk
Nature:
Potential impact:
Mitigation:
The Group is a global business and continues
to be impacted by the Covid-19 pandemic. The
Group may face a risk of future pandemics,
and in particular an enhanced international
government response to future potential virus
spread which may lead to quicker triggering
of restrictions on work and travel in the places
where the Group needs to provide its services
The current impact on the Group’s operations
created by the Covid-19 pandemic may
continue. A future pandemic, or governmental
response to a potential virus spread may impact
the Group’s ability to provide services to its
customers
• Tracking and following Government
restrictions and recommendations
• Making offi ce locations safe for work
• Home working where possible, supported
by improved IT services enabling better
communication
• Covid-19 working group providing advice and
support to employees
• Enhanced employee assistance programme
Context:
While pandemics have previously been considered a risk for the Group, this is the fi rst time the risk has increased and is now considered one of the
Group’s principal risks. In light of the Covid-19 pandemic, and the restrictions imposed by governments in locations where the Group needs to provide its
services, there is an on-going risk posed by Covid -19. Future pandemics may be less problematic, but governments are likely to have a quicker and more
con servative approach to tackling possible future pandemics, meaning restrictions may be imposed deeper and quicker
Movement:
New risk.
Opportunity:
We aim to assist our customers and suppliers to manage through a global pandemic and innovatively developed products and services in 2020 in relation
to safety and testing
Emerging risks
We have identifi ed three macro-economic trends that will impact the markets in which the Group operates:
• Changing energy mix as renewable energy reduces carbon emissions and environmental concerns lead to an increased
focus on decommissioning. Whilst recognising that oil and gas will remain part of the energy mix for some time, we aim to
provide services to production, delivery and decommissioning in the safest, most sustainable way whilst we support the
energy transition to low carbon sources. This forms part of the Board’s analysis of the impact of climate change on the
Group, and has already been considered as one of the Group’s principal risks (and opportunities) ;
• Acceleration of digital innovation as customers seek effi ciencies and effective asset management; and
• Shifting economic power to developing regions giving potentially increased political risk and increased defence spending.
These macro trends are seen as emerging risks and potential opportunities for the Group and, as such, are central to the
development of the Group’s strategic aim to deliver sustainable benefi ts to our fi ve key stakeholders. Capital will be allocated
to growth opportunities, supplemented by selective acquisitions whilst business with below benchmark return potential will be
divested. Delivery of the Group’s strategy will require a strong focus on both commercial excellence and operational excellence.
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Managing risk – our framework
Internal Audit
The Board is responsible for the management of risk in the
Group. Our internal control and risk management framework is
regularly monitored and reviewed by the Board and the Audit
Committee, and comprises a series of policies, processes,
procedures and organisational structures which are designed
to ensure that the level of risk to which the Group is exposed
is consistent with the Group’s risk appetite and strategic
objectives, as defi ned by the Board. A robust assessment of
the Company’s risk management and internal control systems
is carried out annually by the Audit Committee on behalf of the
Board. The results of that assessment are reported in the Audit
Committee report as set out on pages 66 to 71 and below.
Board oversight
The Board specifi cally approves: risk management policies
and plans; signifi cant insurance claims, legal claims or
settlements; acquisitions, disposals and capital expenditures;
and the Group budget, forecast and fi ve-year plan. The
Board has put in place a documented organisational
structure with strictly defi ned limits of authority. These have
been communicated throughout the businesses and are well
understood by the Executive Directors, and by functional
and business leaders who have delegated authority and
specifi c responsibility for ensuring compliance with and
implementing policies at corporate, divisional and business
unit level. During 2021, the Risk Committee is focused on
bringing improvements to the limits of authority and their
implementation through the Group. Group functions and
operating units are each required to operate within this
control environment and in accordance with the established
policies and procedures. This includes ethics, anti-bribery
and corruption, confl icts, treasury, employment, slavery and
human traffi cking, whistleblowing, data protection, health
and safety and environment.
Group functions
The Group’s trading companies are supported by Group
functions. Each functional head reports to an Executive
Director. The Board retains an oversight role and receives
regular reports on key issues: on fi nancial, tax and treasury
matters from the Group Finance Director, on people and HR
matters from the Group Head of Human Resources , and
on legal and regulatory matters from the Group General
Counsel and Company Secretary. The Board has a schedule
of matters specifi cally reserved to it for decision, designed
to ensure that it maintains full and effective control over
appropriate strategic, investment, fi nancial, organisational
and compliance issues. This schedule is subject to review by
the Board on an annual basis.
The Group’s Internal Audit function is supported by a co-
sourcing arrangement with PwC, and undertakes regular
reviews of the individual businesses’ operations and their
systems of internal controls. It makes recommendations to
improve controls and follows up to ensure that management
implements the recommendations made. The annual Internal
Audit plan is determined on a risk assessment basis and is
reviewed and approved by the Audit Committee. Internal
Audit’s fi ndings are reported to the individual management
team, the Executive management team, the functional
heads, and the chairman of the Audit Committee. The head
of Internal Audit attends all Audit Committee meetings and
twice annually presents a summary of the Internal Audit
fi ndings, recommendations, and implementation progress.
Internal Audit also implements the annual risk evaluation
process and the internal control and risk management review
questionnaire process with the individual businesses, before
their presentation to the Board. During 2021, alongside
its assistance in overseas locations, making best use of
videoconferencing technology, the co-source partner has been
asked to expand its remit to include internal audits in certain
functional areas within the UK, including IT implementation
and fi nance, where the partner’s specialist skills will
complement the Group’s Internal Audit function.
Risk Committee
The Board also operates a Risk Committee, which meets
quarterly and is attended by the Executive Directors and
the heads of the functional teams. Each of the functional
teams provides a report at each Risk Committee meeting
which identifi es any matters in their functional area which
relates to the Group’s principal risks and uncertainties,
or to the individual trading companies’ risk registers. The
minutes of the Risk Committee are reported to the Board,
and any key issues raised are discussed at meetings of
the Board. The main responsibilities of the Risk Committee
are: to keep under review the effectiveness of the Group’s
overall risk management framework and processes and
ensure corrective action is taken where necessary; to
make recommendations to the Board/Audit Committee
with respect to the appropriate risk appetite for the Group;
to review the principal and emerging risks that the Group
is willing to take across all major activities, taking into
account the risk appetite, the long-term strategy of the
Group and the interests of its stakeholders (shareholders,
employees, customers/suppliers, the environment and
local communities impacted by the Group’s activities); to
review reports from the functional leads on risks that their
teams are encountering in their interactions with the trading
companies; to review reports from the trading companies
James Fisher and Sons plc Annual report and accounts 2020
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Principal risks and uncertainties
Principal risks and uncertainties (continued)
on their principal risks and mitigating activities, as well as
any emerging risks; and to ensure that a robust assessment
of the principal and emerging risks facing the Group has
been undertaken annually by reference to risk registers from
trading companies and functions. Through the Executive
Directors and the Group General Counsel and Company
Secretary, the Risk Committee presents to the Board its
annual assessment of the principal and emerging risks of
the Group, taking into account the existing principal risks of
the trading companies, and those tracked by the functional
teams, as well as presenting the emerging macro risks, and
those emerging risks identifi ed by the trading companies,
the impact of which could potentially develop to impact the
Group as a whole. This enables the Board to carry out its
own robust assessment of the principal and emerging risks
of the Group as a whole. The results of that assessment,
including risk management and mitigating activities, are set
out on pages 44 to 48.
During 2020, the Board realigned the terms of reference of
the Risk Committee to bring improvements to the reporting
of risk information to the Board and Audit Committee, which
supports the Board in determining the nature and extent of
the principal risks it is willing to take in achieving its strategic
objectives, and in monitoring the effectiveness of the
Company’s risk management and internal control systems.
Risk management systems
The key features of the Group’s risk management systems
used to identify and monitor material risks are as follows:
• A risk evaluation process commences in the operating
companies with an annual exercise to identify the signifi cant
operational and fi nancial risks facing the business. Each
trading business is required to maintain an up-to-date risk
register, which identifi es key risks, assigns each a “risk
score” based on the likelihood of the identifi ed risk arising
and the potential impact on the business of an adverse
outcome, both before and after mitigation measures are
taken. The risks and their respective risk scores before and
after mitigation are reviewed at business level.
• To support this process, each trading company
managing director completes an internal control and risk
management review questionnaire on an annual basis,
which is a robust self-assessment of operational controls
and compliance with Group policies, applicable laws and
regulations relating to their business. This ensures that
managing directors identify risks and relevant mitigating
strategies, and have in place adequate control systems to
identify, mitigate and report any weaknesses that require
management attention.
• The risk registers and annual reviews are reviewed
by Internal Audit, the Risk Committee and the Board.
They are used twice a year by the Board to help to
determine the Group’s principal and emerging risks and
uncertainties, their potential impacts, how they are being
managed and/or mitigated, and any change in the nature
of the risk. Internal Audit uses them to defi ne its areas of
focus for the forthcoming period.
Business reporting and performance
reviews
The Group operates an annual budgeting process and produces
quarterly forecasts which are reviewed and approved by the
Board. Monthly results are compared with budget and prior
year, and individual business reviews are conducted quarterly,
which include a review of fi nancial results. The businesses also
compile a three-year strategic plan. The Executive Directors hold
quarterly board meetings with each business unit to discuss
strategy, fi nancial results and forecasts, business needs and the
management of risks facing the business.
Regulatory compliance policies
Whistleblowing
As part of its internal control procedures, the Group maintains
a whistleblowing policy which (i) encourages the workforce
to report any suspected wrongdoing as soon as possible, in
the knowledge that their concerns will be taken seriously and
investigated as appropriate, (ii) provides staff with guidance
as to how to raise those concerns, and (iii) reassures staff that
they should be able to raise genuine concerns without fear
of reprisals, even if they turn out to be mistaken. The policy
covers any suspicions of criminal activity, failure to comply
with any legal obligation, miscarriages of justice, danger to
health and safety, damage to the environment, bribery under
our anti -bribery and corruption policy, facilitating tax evasion,
fi nancial fraud or mismanagement, and breach of our internal
policies and procedures including our Code of ethics. The
policy is designed to ensure that any employee who raises a
genuine concern is protected. Any concerns can be raised in
the fi rst instance with the Group Finance Director or the Group
General Counsel and Company Secretary in confi dence. The
Board has overall responsibility for the policy, its application to
individual concerns raised under the policy and for reviewing
and approving the effectiveness of actions proposed in
response to concerns raised under the policy.
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carefully assesses the performance and prospects of each
business regarding entering new markets and geographies,
current and expected growth rates, prospective new projects
and the timing of such projects and the robustness of
individual business performance.
The Group’s three-year plan overlays a number of
assumptions and sensitivities which are reviewed by the
Board; this includes a review of whether additional bank
facilities will be required and available in the plan period,
as well as a robust assessment of the likely downside
sensitivities aligned to the principal and emerging risks
facing the Group as set out on pages 44 to 48, and the
potential impact of those sensitivities on its business model,
future performance, solvency and liquidity over the period,
and taking into account the potential mitigating actions,
and the effectiveness of the Group’s risk management and
control systems, as well as current risk appetite. Sensitivities
considered included the diverse nature of the markets and
geographies in which the Group’s businesses operate, and
their ability to react quickly to change.
Based on their assessment of the Group’s prospects and
viability, and in accordance with Provision 31 of the Code,
the Directors confi rm they have a reasonable expectation
that the Group will be able to continue to operate and
to meet its liabilities, as they fall due, for the period to
31 December 2023.
Anti-bribery and corruption
The Board is committed to ensuring the highest standards in
all of the Group’s business dealings and condemns corruption
in all its forms. The Group has a formal anti-bribery and
corruption statement and policy and does not tolerate or
condone corruption or bribery in any of the Group’s business
dealings. This policy has been implemented throughout
the Group and is supported by a Group-wide training and
awareness programme and regular compliance reviews
through Internal Audit. This policy is reviewed annually by the
Board and is available on the Group’s website.
Modern slavery
The Board has a zero-tolerance approach to any form of
modern slavery and is committed to acting in an ethical
manner and with integrity and transparency in our Group’s
business dealings. The Group has a formal slavery and human
traffi cking statement and policy which outlines the steps taken
by the Group to ensure that slavery and human traffi cking is
not taking place within any part of the Group’s business or
within the Group’s supply chains. Both the statement and the
policy are available on the Group’s website.
Viability statement
The Directors have assessed the Group’s viability over a three-
year period ending 31 December 2023. The Directors have
determined that this is the most relevant time period because it
is consistent with the Group’s three-year outlook in its planning
process whereby the Board reviews the Group’s strategy and
its detailed three-year plan. This is reviewed and considered
in light of the Group’s current position and prospects together
with factors that might affect the three-year plan. The Board
Our Strategic report on pages 1 to 51 was approved by the Board on 10 March 2021.
Eoghan O’Lionaird
Chief Executive Offi cer
10 March 2021
James Fisher and Sons plc Annual report and accounts 2020
51
Corporate governance report
Corporate governance report
Dear Shareholders
Strategic review
This has been one of the most demanding years that the
Company has faced in its 173 -year history.
UK Corporate Governance Code
The Board understands that good corporate governance
is an important element in helping to build a successful
business in a sustainable manner. The UK Corporate
Governance Code 2018, public ly available at www.frc.org.uk
(the Code) applied to the Company, and this report explains
how the Company has applied the Principles set out in the
Code. During the year ended 31 December 2020 (and up to
the date of this report), the Company has complied with the
relevant provisions of the UK Corporate Governance Code
2018, except in two instances, where our approach has
differed.
Firstly, as outlined in the Chairman’s statement in the 2019
Annual Report, by the time of the Company’s AGM in May
2021, I will have served as a Director for a period of 10 years.
Whilst the Code recommends that Non-Executive Directors
should not serve on a board for more than nine years, the
Board requested that I continued to serve as Chairman whilst
the Senior Independent Non-Executive Director commenced
a search for a new Non-Executive Chairman. This was on the
basis that my knowledge and experience of the Company
would be of benefi t to the CEO appointed on 1 October 2019
and to avoid a change of CEO and Chairman in a relatively
short timescale. As announced on 25 January 2021, and
as described in more detail in the Nominations Committee
report on pages 63 to 65, Angus Cockburn will join the
Board as independent Non-Executive Director and Chairman
on 1 May 2021 and I will step down from my role as Non-
Executive Director and Chairman the previous day.
Secondly, while the Code recommends that Executive
Director pension provisions should be aligned with the
workforce, as outlined on page 74 of the Directors’
remuneration report, changes to the remuneration policy
have been proposed for both new appointments and
incumbent Directors in respect of aligning pension provision
to workforce levels by the end of 2022, in accordance with
institutional investor guidelines. Eoghan O’Lionaird’s pension
provision of 7.5% of salary on joining the Company refl ected
the mid-point pension provision across the Group. Stuart
Kilpatrick’s pension provision will step down to 7.5% of
salary from 1 January 2023 without compensation.
The Code provides that a board should establish a
company’s purpose and values as well as its strategy, and
that its directors should lead by example and promote the
desired culture. Throughout 2020, the Company has been
undertaking a detailed strategic review, including how the
Company delivers for and engages with its stakeholders,
and to review and re-establish the Group’s purpose and
values. More details of that review are set out in the Chief
Executive’s review on pages 6 to 11, and the Board is
committed to embedding sustainability and the interest of its
fi ve key stakeholders into day -to -day decision-making and
making them central to delivering the Group strategy.
Engagement with stakeholders
The Code highlights the importance of effective engagement
with shareholders and other stakeholders. The Group’s key
stakeholders and their differing perspectives are identifi ed
and taken into account, not only as part of the Board’s
strategy discussions, but also in our project assessments
and in our other Board conversations. These discussions,
assessments and conversations focus not only on delivering
increased value for shareholders, but also assess the
impacts of our decisions and strategies on the Group’s
wider stakeholders. The Board recognises the importance
of regular, open and constructive dialogue with shareholders
and other stakeholders and this has long been a key aspect
of our culture and of our decision making. More information
about how we engage with our stakeholders as part of our
Board activities is set out on page 56 and how we do so as a
Group is highlighted on page s 26 to 40.
Managing risk
We constantly strive to make sure that our approach to risk
management is effective, extending beyond fi nancial risk to a
wider range of operational risks. There is a full report on our
activities in this area in our Principal risks and uncertainties
report on page s 43 to 51. Uncertainty continues following
Brexit and the Board maintains its watching brief, although
the Board’s assessment remains that the overall risk to the
Group from Brexit remains low.
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Board diversity
We remain committed to ensuring that the Board is balanced,
with the Directors having a broad range of knowledge, skills
and experience. Diversity is a matter which we consider
constantly, our diversity policy is available on the Group
website and sets out our aims to ensure an appropriate mix of
skills and experience as well as gender and ethnic diversity.
More details in relation to diversity can be found in the
Nominations Committee report on page s 63 to 65.
Board effectiveness review
In the 2019 Annual Report and Accounts, I provided the
action plan agreed by the Board following the 2018 externally-
facilitated evaluation of the Board. We completed all of the
agreed actions in 2019, apart from those with a longer-
term outlook, which have been the focus for 2020. Those
have now been put into action with the strategic review,
and the establishment of the Group’s refreshed purpose
and values. Also in 2020 we carried out an internal review
of how the Board and its Committees function, and to
provide recommendations for ways to improve their overall
effectiveness. Details of the process, outcomes and actions
are described on page 61.
Malcolm Paul Chairman
10 March 2021
Corporate governance report
This report is structured around the sections
of the Code:
1 Board leadership and company
purpose
Details about the Company’s purpose, culture
and values are set out on page 56
The key activities of the Board during the year
and key priorities for 2021 are summarised on
page s 57 to 58
2 Division of responsibilities
An explanation of our governance structure is
set out on page 59
3 Composition, succession and
evaluation
Details of this year’s Board evaluation is set out
on page s 60 to 61
Report from the Chairman of the Nominations
Committee is set out on pages 63 to 65
4 Audit, risk and internal control
Report from the Chairman of the Audit
Committee is set out on pages 66 to 71
5 Remuneration
Report from the Chairman of the Remuneration
Committee is set out on pages 72 to 87
Details of the Directors’ remuneration policy for
2021 is set out on pages 75 to 79
James Fisher and Sons plc Annual report and accounts 2020
53
Corporate governance report
Board of Directors
Chairman
Executive Directors
Malcolm
Paul
Chairman of the Board and
Nominations Committee +
Appointment:
Malcolm was appointed to the
Board in February 2011 and was
appointed Chairman in May 2018.
Key strengths and experience:
• Extensive business leadership
Eoghan
O’Lionaird
Stuart
Kilpatrick
Chief Executive Offi cer
Group Finance Director
Appointment:
Appointment:
Eoghan joined the Group as an
Executive Director of the Board
in September 2019, and was
appointed Chief Executive Offi cer
on 1 October 2019.
Key strengths and experience:
experience.
• Strong leadership skills.
• Long-term track record of
• Clear strategic mindset.
value.
Malcolm is a fellow of the Institute
of Chartered Accountants in
England and Wales and was
a founder and former Finance
Director of WSP Group plc
between 1987 and 2009. Prior to
that Malcolm was a principal at
the corporate fi nance boutique
Financial Decisions and an equity
partner at Longcrofts, Chartered
Accountants.
External appointments:
Chairman of Anthesis Consulting
Group, a private equity backed
global sustainability consultancy.
• Extensive international
experience.
• Commercial and business
management.
Eoghan joined from Spectris
plc where he was Business
Group Director of the Materials
Analysis and Test & Measurement
segments from February 2014
through June 2019, having
previously been President of the
Leica Microsystems division of
Danaher Corporation in Germany.
Prior to that, he spent eleven
years at Royal Philips Electronics,
latterly as CEO of the Respironics
Sleep business unit in the USA.
He started his career with Mitsui
Kinzoku where he held a number
of engineering, commercial and
general management positions in
Japan, the US and Thailand.
External appointments:
None
54
James Fisher and Sons plc Annual report and accounts 2020
Stuart was appointed to the Board
as Group Finance Director in
December 2010.
Key strengths and experience:
• Strong fi nancial and
commercial background.
• Broad experience as fi nance
director with international and
diverse listed companies.
Stuart is a member of the Institute
of Chartered Accountants of
England and Wales and qualifi ed
with BDO Binder Hamlyn. He was
formerly Group Finance Director
of Empresaria Group plc, and he
previously held senior fi nance
roles with Vodafone Group plc,
Charles Baynes plc and Elementis
Group plc.
External appointments:
None
Directorships
during the
year
Fergus Graham
resigned from
the Board on
20 March 2020.
Key
* Audit
Committee
# Remuneration
Committee
+ Nominations
Committee
Independent Non-Executive Directors
Corporate governance report
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Aedamar
Comiskey
Justin
Atkinson
Michael
Salter
Senior Independent Non-
Executive Director and
Chair of the Remuneration
Committee *#+
Appointment:
Aedamar was appointed to
the Board in November 2014.
She was appointed chair of the
Remuneration Committee in May
2018 and Senior Independent Non-
Executive Director in March 2019.
Independent Non-Executive
Director and Chairman of the
Audit Committee *#+
Independent Non-Executive
Director *#+
Appointment:
Justin was appointed to the
Board in February 2018 and was
appointed chairman of the Audit
Committee in May 2018.
Key strengths and experience:
• Signifi cant operational and
Appointment:
Michael was appointed to the
Board in August 2013.
Key strengths and experience:
• Signifi cant operational and
strategic delivery experience
through a number of senior
management roles.
Key strengths and experience:
fi nancial experience through
his previous and current roles.
• In-depth knowledge of oil and
gas and marine industries.
Michael was formerly Chief
Operating Offi cer at Abbot Group
plc and earlier in his career, CEO
of Smedvig Limited and Vice
President and General Manager
of Bawden Drilling UK Ltd and
is a Chartered Engineer, Fellow
of the Institution of Mechanical
Engineers, and a Member of the
Institute of Marine Engineering and
Technology.
External appointments:
None
• Extensive global business
• Substantial experience on
experience.
• In-depth knowledge of legal,
regulatory and governance
issues for listed companies.
Aedamar is the Global Head of
Corporate and a member of the
Executive Committee at Linklaters
LLP, where she has been a
partner since 2001. Aedamar
was previously the Senior Board
Member on the fi rm’s Partnership
Board, its governance body.
Aedamar specialises in mergers
and acquisitions, joint ventures
and fundraisings, and is the lead
relationship partner for many of
the fi rm’s FTSE clients.
External appointments:
Linklaters LLP and Trustee of
Tommy’s.
boards of listed companies
in both executive and non-
executive roles.
Justin was formerly Chief Executive
Offi cer of Keller Group plc between
April 2004 and May 2015, having
previously held the position of
Group Finance Director and Chief
Operating Offi cer. Justin was a
fi nancial manager at Reuters plc,
and trained and qualifi ed as a
chartered accountant at Deloitte
Haskins & Sells.
External appointments:
Chairman of Forterra plc; Senior
Independent Non-Executive
Director of Kier Group plc; and a
member of the Audit Committee of
the National Trust.
Inken
Braunschmidt
Independent Non-Executive
Director and the Non-
Executive Director for
Employee Engagement *#+
Appointment:
Inken was appointed to the Board
on 1 March 2019.
Key strengths and experience:
• Strategy development.
• Digital innovation.
• Diversity & Inclusion.
• Signifi cant operational
experience through her
previous and current roles.
Inken is Chief Innovation and
Digital Offi cer and member of the
Executive Board at Halma plc.
Prior to joining Halma plc in 2017,
Inken spent 13 years at RWE
AG, the German energy giant
and its renewables subsidiary
innogy SE, where she held various
international leadership roles
focusing particularly on strategy,
innovation, digital transformation
and change management. Inken
studied Innovation & Technology
at Kiel University and has a PhD in
Technology Management. Inken is
committee member of the Royal
Academy of Engineering Enterprise
Hub.
External appointments:
None
James Fisher and Sons plc Annual report and accounts 2020
55
Corporate governance report
Corporate governance report (continued)
Engaging with stakeholders
The stakeholder voice is brought into the boardroom
throughout the annual cycle through information provided
by the Executive Directors (as well as representatives from
the Group’s businesses and functions who are invited to
present to the Board), and also by direct engagement with
stakeholders themselves. On page s 26 to 40 of our Strategic
report, we set out our principal stakeholders, how we engage
with them, the issues which are important to them and how
we respond. The relevance of each stakeholder group may
increase or decrease depending on the matter or issue in
question, so the Board seeks to consider the needs and
priorities of each stakeholder group during its discussions
and as part of its decision making.
Board activities during the year
The Non-Executive Directors were expected in 2020 to
make visits to businesses in the Group to meet employees
and to enhance their knowledge of operations, including
the services and products and how they are provided to
our customers and to strengthen their contribution to Board
debate. Due to the restrictions imposed as a result of the
global pandemic, Board members have not been able to
make physical visits to Group premises. Instead, employee
engagement activities have been moved online, with
operating managing directors and functional heads asked to
attend certain Board and Committee meetings. In particular,
the Board’s review of strategy involved presentations from
each of the Group’s operating management teams in an in-
depth analysis of individual strategic plans and application
of the Group purpose. The Non-Executive Directors also
received presentations from management on key strategic
plans, including relating to individual businesses and markets,
as well as from the Group Head of Human Resources.
Board leadership and company
purpose
Board focus in 2020
Through the course of 2020 the Board has, at the same
time as the regular cycle of annual reporting and planning
processes, focused on a few strategically important areas:
• Covid-19: at the start of the pandemic, the Board
established its priorities: to keep our people safe; preserve
as many jobs as possible, and protect the interests of the
company and its stakeholders.
• Corporate purpose: the Board has reassessed and
redefi ned the Group’s corporate purpose during the course
of 2020, which defi nes how the Group sustainably creates
value for all its stakeholders. More details can be found on
p age 12.
• Strategy: the Board has revisited the Group’s strategy to
create a plan for sustainable growth in shareholder value for
the future. We plan to update shareholders later in 2021.
Purpose, culture and values
The Board recognises the importance of its role in building
a sustainable business by setting the tone of James Fisher’s
culture and embedding it throughout the Group. Our core
values and our Code of ethics (the behaviours we expect)
underpin everything that we do and set out the type of
organisation we want to be. Everyone who works for and with
us is asked to strive to comply with these.
The Executive Directors have a critical role in setting the tone
of our organisation and demonstrating our valued behaviours.
Various indicators are used to provide insight into our culture,
including employee engagement and health and safety. We
regularly assess the state of our culture, through activities
such as compliance reviews and we address behaviour that
falls short of our expectations. Following the review of the
Group’s corporate purpose and our values, the Board tasked
the senior leadership to embed the purpose and values
into each of their businesses and the Board monitored the
success through the employee engagement survey.
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Key activities of the Board during the year and key priorities for 2021:
Topic
Key activities and discussions in 2020
Risk management
framework
Key priorities for 2021
Strategy
• Reviewed and approved the corporate
• Financial risk.
• Project delivery.
• Operating in emerging
markets.
• Pandemic risk.
• Climate change.
strategy, assessing stakeholder alignment
and interests.
• Reviewed and restated corporate purpose
and valued behaviours.
• Reviewed and approved acquisitions.
• Reviewed and approved major capital
investments.
• Reviewed impairment to vessels and
goodwill.
• Oversaw response to pandemic.
• Reviewed fi nancial key performance
indicators (KPIs).
• Considered and approved the Group’s
dividend policy.
• Approve the corporate strategy and keep
under review by reference to stakeholder
interests.
• Embed new corporate purpose and
valued behaviours.
• Consider acquisitions and determine
appropriate course of action.
• Consider further capital investments.
• Maintain readiness to respond to
pandemic changes.
• Keep fi nancial KPIs under review.
• Keep the Group’s dividend policy under
review.
Risk and risk
management
Governance
• Responded quickly to Covid-19
• Health and safety.
• Continue to monitor the impacts and
• Project delivery.
• Operating in emerging
markets.
• Contractual risk.
• Pandemic risk.
developments in relation to the Covid-19
pandemic.
• Review key risks and ensure that the
Group continues to develop and embed
best practice for risk management.
• Continue to monitor the impact of
developments related to Brexit.
• Continue to monitor compliance with the
key Group policies.
• Recruitment and retention
of key staff.
• Ensure that the Company continues to
develop and embed best practice in
responsible business behaviour.
• Maintain and enhance the Group’s
culture and values and key policies and
procedures.
• Continue to strengthen internal controls
and reporting.
• Further understanding and planning
actions in response to new regulations
over the period.
pandemic, with actions taken to protect
the safety and wellbeing of the workforce
and to protect the Company.
• Carried out a robust assessment of
principal key risks, monitored and
reviewed the internal controls process,
and assessed the Group risk profi le
(see the Principal risks and uncertainties
section starting on page 43 for more
detail).
• Reviewed the potential impact of Brexit on
the business.
• Monitored compliance with key Group
policies.
• Continued to focus on the composition,
balance and effectiveness of the Board,
in particular in relation to the process to
appoint a new Chairman.
• Reviewed the key operational roles and
identifi ed gaps in experience needed to
deliver the strategy.
• Reinforced compliance with Code of
ethics, a document which sets out
the Group’s culture and values, all in
accordance with the principles of good
corporate governance.
• Engaged with institutional shareholders,
investors and other stakeholders
throughout the year.
• Separate Non-Executive Director sessions
held with the Chairman to discuss
leadership and other Board matters.
• Reviewed and approved the 2020 Annual
Report and Accounts.
• Reviewed recommendations from the
designated Non-Executive Director for
employee engagement.
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Corporate governance report
Corporate governance report (continued)
Stakeholder
Key activities and discussions in 2020
Organisational
capacity
Board
development
• Monitored health and safety performance
across the Group. Regular Board updates
received on actions improving health and
safety.
• Health and safety governance and
reporting reviewed and enhanced.
• Reviewed the governance framework and
continued training and awareness drives
for key policies.
• Supported by the Nominations
Committee, monitored senior executive
talent management and development
plans with succession planning for all key
positions in mind.
• Approved new employee strategy.
• Continued to focus on the composition,
balance and effectiveness of the Board.
Reviewed Board composition, diversity,
and discussed and acted on the
recommendations of the Nominations
Committee.
• Undertook an internal evaluation of the
Board, its Committees and individual
Directors, and developed an action plan.
Risk management
framework
• Health and safety
environment.
• Contractual risk.
• Recruitment and retention
of key staff.
Key priorities for 2021
• Continue to monitor senior executive
talent management and development
plans to provide succession for all key
positions.
• Continue to enhance the diversity across
the Group.
• Continue to hold meetings with people
in the senior talent pipeline to further
improve information fl ow.
• Monitor key initiatives under employee
strategy.
• Recruitment and retention
• Enhance the Board’s strategic
of key staff.
understanding of key markets as the
Group continues to grow.
• Increase number of Board visits to
promote understanding of markets and
the business development opportunities
they offer, and to promote employee
engagement with Board.
• Annual internal evaluation of Board and
Committee performance.
Board meetings
The Board and Board Committees held a number of
scheduled meetings in 2020 and individual attendance is set
out in the table on page 60. Additional unscheduled meetings
were held as and when required, for example in response to
the Covid-19 pandemic
To enable the Board to discharge its duties, the Chairman
ensures that all Directors receive accurate, timely and clear
information on all relevant matters in advance of the Board
meetings, including comprehensive fi nancial and business
reports covering the Group’s principal activities. All Directors
received papers for all meetings and had the opportunity to
comment in advance of meetings they were unable to attend.
Should Directors judge it necessary to seek independent
legal advice about the performance of their duties with
the Company, they are entitled to do so at the Company’s
expense. Directors also have access to the advice and services
of the Group General Counsel and Company Secretary.
The Group General Counsel and Company Secretary is
responsible for advising the Board, through the Chairman,
on all governance matters and for ensuring that Board
procedures are followed, and applicable rules and regulations
are complied with. The Group General Counsel and Company
Secretary also advises the Directors on any important
changes in legislation, regulation and best practice.
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Division of responsibilities
The Board
Meets regularly, with six scheduled meetings during the year.
Corporate governance report
Chaired by Malcolm Paul
The Board is responsible for providing effective leadership to the Group. The Board is responsible for steering the Group’s purpose, culture and values, for setting the
Group’s strategic priorities and overseeing their delivery in a way that enables sustainable long-term growth, while maintaining a balanced approach to risk within a
framework of effective controls. It has a schedule of key matters which are reserved for its own decision-making, which is reviewed annually and approved by the Board.
Chairman
Senior Independent
Non-Executive Director
Non-Executive
Directors
Non-Executive
Director for Employee
Engagement
Executive
Directors
• Leads the Board, sets the
agenda and promotes a
culture of open debate
between Executive and
Non-Executive Directors.
• Regularly meets with the
Chief Executive Offi cer,
the other Executive
Directors and other senior
management to stay
informed.
• Ensures effective
communication with our
shareholders.
• Provides a sounding board to
the Chairman and appraises
his performance.
• Meets with Directors to
review the Chairman’s
performance. This review
is then shared with the
Chairman.
• Acts as intermediary for other
Directors, if needed.
• Available to respond to
shareholder concerns when
contact through the normal
channels is inappropriate.
• Contribute to developing
our strategy.
• Scrutinise and
constructively challenge
the performance of
management in the
execution of our strategy.
• Responsible for representing
the voice of our colleagues
in the boardroom.
• Provides a regular platform
for the independent element
of the Board to have direct
conversations with the
employees, individually
and in group settings, to
gain insights into their
experiences, concerns and
perspectives, and to better
understand whether the
cultural change is already
underway.
• Responsible for
management of the Group
as a whole.
• Delivers strategic objectives
within the Board’s stated
risk appetite.
• Responsible for
management of Group
fi nances and records.
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Audit Committee
Remuneration Committee
Chaired by Malcolm Paul
Meets at least once a year.
Chaired by Justin Atkinson
Chaired by Aedamar Comiskey
Meets a minimum of three times a year.
Meets at least once a year.
Reviews the structure, size and composition of the
Board (including skills, knowledge, diversity and
experience) and recommends changes, succession
planning for Directors and senior executives.
Identifi es and nominates candidates for approval to
the Board, to fi ll vacancies when they arise.
The Nominations Committee report on pages 63 to 65
describes in detail the Committee’s role and activities.
Assists the Board in its oversight and monitoring
of fi nancial reporting, reviews the Group’s
internal fi nancial controls and systems for risk
management and internal controls and assesses
independence and objectivity of external auditor.
Agrees the remuneration policy for Executive
Directors and other senior executives; reviews
the appropriateness and relevance of the Group’s
remuneration policy; and ensures that the provisions
of the Code relating to remuneration are fulfi lled.
The Audit Committee report on pages 66 to 71
describes in detail the Committee’s role and
activities.
The Directors’ remuneration report on pages 72 to 87
describes in detail the Committee’s role and activities.
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Special Purposes Board Committee
Disclosure Committee
Consisting of the Chairman and the Executive Directors
Meets according to business requirements.
Empowered, under written terms of reference, to take actions relating to the
affairs of the Company in the normal course of business and of a routine nature,
subject to such limits as the Board in its discretion determines.
Consisting of the Chairman, the Executive Directors and the Group
General Counsel and Company Secretary
Meets when necessary.
Oversees the Company’s compliance with its disclosure obligations.
Group Health and Safety Committee
Group Sustainability Committee
Group Risk Committee
Chaired by Eoghan O’Lionaird
Chaired by Eoghan O’Lionaird
Chaired by Eoghan O’Lionaird
Meets on a quarterly basis.
Meets on a regular basis.
Meets on a quarterly basis.
Discusses all health and safety issues including
incidents, mitigating actions and training
requirements and reports recordable safety
incidents to the Board.
Identifi es, monitors and coordinates the Group’s
sustainability commitments, working with
sustainability “champions” from each trading
business.
Identifi es and monitors operational risks
throughout the Group, supports the internal
control and risk management strategy and policy.
Executive Team
Chaired by Eoghan O’Lionaird
Consisting of the Chief Executive Offi cer, Group Finance Director, Head of Corporate Development, Group General Counsel and Company Secretary, Group Head of
Human Resources, Group Business Development Director and Group Financial Controller.
Meets monthly.
Responsible for supporting the Executive Directors in the exercise of their delegated authority from the Board and the day-to-day operation of the Group.
Operating Divisions
Day-to-day business delivery.
Corporate Functions
Day-to-day business delivery.
Executive Directors meet on at least a quarterly basis and have monthly
performance management calls with managing directors of principal businesses.
Executive Directors and heads of corporate functions meet at the Risk
Committee on a quarterly basis.
James Fisher and Sons plc Annual report and accounts 2020
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Corporate governance report
Corporate governance report (continued)
Board and Committee scheduled meetings attendance
Total number of scheduled meetings during 2020
Executive Directors
Stuart Kilpatrick
Eoghan O’Lionaird
Non-Executive Directors
Malcolm Paul
Aedamar Comiskey
Michael Salter
Justin Atkinson
Inken Braunschmidt
Former Directors
Fergus Graham1
Board
Audit
Committee
Remuneration
Committee
Nominations
Committee
7
7
7
7
7
7
7
7
2
3
N/A
N/A
3
3
3
3
3
5
N/A
N/A
5
5
5
5
5
4
N/A
N/A
4
4
4
4
4
N/A
N/A
N/A
1 Fergus Graham resigned from the Board on 20 March 2020
Composition, succession and evaluation
Details about the current composition of the Board are set
out in the biographies of the Director on pages 54 to 55.
Board diversity
The Board fully understands the importance of diversity in
creating a successful and sustainable business. The Board
is committed to increasing diversity in its widest sense,
including gender, ethnicity, diversity of thought, tenure, age,
experience, skills, geographical expertise, educational and
professional background.
In its Board diversity policy, the Board set its own target of
having two women on the Board, which, as at the date of this
report, has been met. However, the Board acknowledges the
recommendations made by the Hampton-Alexander review
including its target of 33% representation of women on
boards by the end of 2020 and will keep this under review.
The Board targets having a Director from an ethnic minority
background by 2024 . As at the date of this report the Board
has no Directors from an ethnic minority background.
The Executive comprises seven individuals, two of whom are
women.
Board evaluation
At the end of each year, the Board undertakes an annual
evaluation of its own performance and that of the
Remuneration, Nominations and Audit Committees and the
Chairman against the framework of Board effectiveness
produced by the FRC.
The 2020 performance evaluations were designed to assist
the Board in identifying strengths and weaknesses and areas
for further improving performance and required each Director
to complete in confi dence a detailed questionnaire relating to
key aspects of Board performance, and performance of the
Board’s principal Committees. The review included an analysis
of the Board’s and Committees’ performance in key areas
including corporate governance, structure and procedures,
strategy, and effectiveness, risk management and control and
communications with shareholders and other stakeholders.
The results of the evaluation were collated and reported to
the Board via the Chairman with recommendations for further
consideration and action as appropriate.
The 2020 review concluded that the Board functions well as
a unit and provides a good balance of support and challenge
to management. With the last externally-facilitated Board
evaluation conducted in 2018, the Board will be conducting a
similar process in 2021, led by the new Chairman.
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The annual review of individual Directors’ performance was
conducted internally. The Chairman’s performance was
reviewed by the other Non-Executive Directors led by the
Senior Independent Non-Executive Director and taking into
account the views of the Executive Directors. The performance
of the Executive Directors was reviewed by the Non-Executive
Directors with the Chairman in attendance. The Chairman and
the Executive Directors reviewed the performance of each
of the other Non-Executive Directors. The Board considers
that each Director continues to contribute effectively and to
demonstrate commitment to the role.
The schedule and summary of fi ndings for Board evaluation is set out below:
Board expertise
Board composition
Board training and development
Progress against 2019 actions
Progress against 2019 actions
Progress against 2019 actions
The Directors continued to build their
knowledge of the Company’s business. To
enable the Board to do this, two full days
were dedicated to a strategic review, with
operational management teams invited to
present to the Board.
Angus Cockburn will be appointed as
Chairman with effect from 1 May 2021,
replacing Malcolm Paul who steps down
on 30 April 2021.
It was recognised that Board members
would benefi t from more opportunities
to take part in site visits and be offered
more one-to-one interactions with senior
executives.
Although arranged site visits had to be
cancelled due to Covid-19, the Board
had increased interaction with senior
management teams via videoconferencing.
This year’s fi ndings
This year’s fi ndings
This year’s fi ndings
Following the work undertaken in last year’s
evaluation, the Board positively rated its
understanding of the Company’s business.
However, as the business continues to
evolve it was recognised that there would
be merit in increased Board discussion in
relation to strategy and markets.
The Board’s composition was positively
rated as part of this year’s evaluation.
The new Chairman’s appointment
to the Board is considered to bring
complimentary skills and experience.
The Board remains intent on ensuring its
composition has the diversity and skills
required to be effective.
The Board induction programme was valued
by Directors. The deep dives and in depth
strategy sessions with senior management
were rated as excellent.
As for 2020, it was acknowledged that
more NED site visits and management
presentations at the Board would be
benefi cial.
Action for 2021
Action for 2021
Action for 2021
With Board meetings at operational sites
postponed due to Covid-19, the Board in
2021 is considering ways for Non-Executive
Directors to further enhance their knowledge
of the business and keep updated on
developments. Site visits will be made when
possible. In the meantime individual MDs
are being asked to present to the Board on
their business, strategy, including initiatives
to further the interests of all stakeholder
groups.
The Board will be considering opportunities
to use its natural life-cycle to address the
identifi ed skills gaps to ensure that the
Board’s composition is diverse and aligned
with the Company’s strategic goals.
Efforts will be made to ensure all Directors
are provided with relevant on-going training
and that they receive the support they need
to remain effective in their role. Postponed
in 2020 due to Covid-19, more NED site
visits are being arranged, along with Board
meetings at operational sites.
James Fisher and Sons plc Annual report and accounts 2020
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Corporate governance report
Corporate governance report (continued)
Training and development
On-going training and development for Directors is
available as appropriate and is reviewed and agreed with
the Chairman annually. Specifi c and tailored updates were
provided by external advisers and management to the Audit,
Nominations and Remuneration Committees. Key themes
included trends and changing disclosure requirements
regarding fi nancial and narrative reporting, accounting and
auditing standards and remuneration developments. During
the year the Board also received reports from the Group
General Counsel and Company Secretary on compliance,
as well as current legal and governance issues. The Board
is confi dent that all its members have the knowledge, ability
and experience to perform the functions required of a
director of a listed company.
Upon appointment to the Board, Directors undertake an
induction programme, receiving a broad range of information
about the Group tailored to their previous experience.
This includes information on the operational performance
and business of the Group and details of Group strategy,
corporate governance and Board procedures. Assisted by
the Group General Counsel and Company Secretary, the
Chairman has responsibility for these induction programmes,
and also for the Board’s training and professional
development.
Audit, risk and internal controls
The Board is responsible for determining the nature and
extent of the principal risks it is willing to take in achieving
its strategic objectives and for ensuring that the Company
maintains sound risk management and internal control
procedures. More information in relation to those principal
risks, the Group’s approach to mitigating them, and the risk
management and internal control procedures within the
Group are set out in the Strategic report on pages 43 to 51 .
On behalf of the Board, the Audit Committee monitors the
Group’s risk management and internal control process and
reviews its effectiveness on an on-going basis. This is part
of an established process, in accordance with the Code and
the Financial Reporting Council’s (FRC) associated Guidance
on Risk Management, Internal Control and Related Financial
and Business Reporting, for the identifi cation, evaluation and
management of the signifi cant risks facing the Group, which
operates and is reviewed continually throughout the year.
The Group’s internal control systems are designed to provide
the Board with reasonable assurance as to the effective and
effi cient operation of the Group and to ensure the quality
of internal and external reporting and compliance with all
applicable laws and regulations. However, there are inherent
limitations in any system of internal control and accordingly
even the most effective system can provide only reasonable
and not absolute assurance.
As part of its internal control procedures, the Group maintains
policies and processes for whistleblowing, anti-bribery and
corruption and to uphold its zero-tolerance approach to any
form of modern slavery. More information in relation to those
policies are included in the principal risks and uncertainties
section of the Strategic report on pages 43 to 51 and in the
non-fi nancial information statement on pages 41 and 42.
The Board has carried out a robust assessment of the
overall effectiveness of the Group’s system of internal
controls and risk management procedures; and of the
principal risks facing the Group, including those that would
threaten its business model, future performance, solvency
or liquidity; and of emerging risks. This included a process
of self-certifi cation by the management teams of each
trading business in which they were asked to confi rm
that their businesses have complied with Group policies
and procedures. Details of the report on the review of the
effectiveness of the risk management and internal control
systems is included in the principal risks and uncertainties
section of the Strategic report on pages 43 to 51.
In addition, it involved reviewing the results of the work of the
Group’s internal audit function and the risk and management
processes identifi ed above.
Financial and business reporting
The Board considers that the Annual Report and Accounts
taken as a whole present a fair, balanced and understandable
assessment of the Group and provides the information
necessary for shareholders to assess the Group’s position
and performance, business model and strategy. More
information about how this assessment was made is set out
in the Audit Committee report on page s 66 to 71.
The going concern assessment is set out in the Directors’
report on page 88; the viability statement is set out in the
principal risks section of the Strategic report on page 51;
and the Strategic report on pages 12 to 13 sets out an
explanation of the Company’s business model and the
strategy for delivering the Company’s objectives.
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Nominations Committee report
The Nominations Committee reviews the leadership and
succession needs of the Company and ensures that
appropriate procedures are in place for nominating, training
and evaluating Directors.
Overall, our objective is to ensure that the Board is balanced,
with the Directors having a broad range of knowledge, skills
and experience. We recognise the benefi ts of a diverse
senior leadership team, including diversity of gender, social
background and ethnicity which are designed to ensure the
team work together effectively for the benefi t of the Company
as a whole.
2020 under review
In March 2020 the Company announced that Fergus Graham
had stepped down from the Board and from his role as
Marine Support Division – Director.
The Committee has continued its programme of planning for
succession and diversity at Board and senior management
levels. In particular, the Senior Independent Non-Executive
Director led the process for the successful appointment of
Angus Cockburn as Non-Executive Chair in succession to
Malcolm Paul who will be retiring from the Board on 30 April
2021.
We are also focused on aligning the needs of the Group
at Board and senior management levels to meet the
recommendations of the Hampton-Alexander Review and
Parker Report. Although we have made progress through the
year, this remains at the forefront of the Committee’s agenda.
During the year under review the Nominations Committee’s
priorities were:
• to scope the key skills, experience and requirements
for succession planning for the Board, in particular the
succession planning for the role of Non-Executive Chair;
• to keep under review succession planning at the Executive
Director level and to support succession planning at senior
management levels; and
• to monitor the Group’s progress towards increasing the
relative number of women in senior management positions.
Appointments to the Board and
succession planning
The Committee leads the process for Board appointments
and makes recommendations to the Board. Appointments
are made on merit, against objective criteria, with due regard
to the benefi ts of diversity on the Board, including gender
and ethnicity. The Committee adopts a formal, rigorous and
transparent procedure for the appointment of new Directors to
the Board, working with a number of independent executive
search consultants, none of which have any connection to the
Company or any individual director, other than in assisting and
facilitating in the search for senior management.
During 2020, the Nominations Committee conducted a
search for a new Non-Executive Chair, led by the Senior
Independent Non-Executive Director, Aedamar Comiskey, who
was supported by the external search fi rm Korn Ferry. On the
instruction of the Committee, Korn Ferry focused on diversity
in its broadest sense in identifying candidates for the role,
resulting in a shortlist with 50% female representation.
Membership
Malcolm Paul - Chair of the Nominations Committee
Michael Salter
Aedamar Comiskey
Justin Atkinson
Inken Braunschmidt
Since
2011
2013
2015
2018
2019
Key objectives
Reviewing the composition of the Board and succession planning.
Key responsibilities:
• To regularly review the structure, size and composition of
the Board (including skills, knowledge, independence and
experience) and recommend changes .
• Succession planning for Directors and senior executives of
both the Company and the operating businesses.
• Identifying and nominating for approval to the Board,
candidates for Board positions.
The terms of reference are available on the Group’s website.
Meets at least once a year. During 2020 the Nominations
Committee met 4 times.
James Fisher and Sons plc Annual report and accounts 2020
James Fisher and Sons plc Annual report and accounts 2020
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Nominations Committee report (continued)
The Nominations Committee
agreed a detailed candidate profi le
setting out the capabilities and
experience required.
The process to appoint the new
Non-Executive Chair was led by the
Senior Independent Non-Executive
Director, with Korn Ferry appointed
to facilitate the process.
The Nominations Committee as
a whole was closely involved in
identifying and agreeing a shortlist
of candidates.
The current Chairman excused
himself from all discussions and
decision-making in relation to the
appointment.
The Senior Independent Non-
Executive Director considered a full
list of candidates with Korn Ferry.
The full list was shared with the
Nominations Committee. A diverse
shortlist of candidates to be invited
for interview was agreed.
Following initial interviews with the
Senior Independent Non-Executive
Director and a further review
with the Executive Directors and
Nominations Committee members,
the number of candidates was
reduced.
The Executive Directors, remaining
Nominations Committee members
and the Group General Counsel
and Company Secretary met with
the shortlisted candidate.
Following the interviews, each
person who had met with
the shortlisted candidates
provided feedback to the Senior
Independent Non-Executive
Director.
The Nominations Committee
discussed the relative merits
of each candidate and agreed
that Angus Cockburn should
be proposed to the Board for
appointment as Non-Executive
Chairman.
The Board approved his
appointment as an Non-Executive
Chairman, to take effect on
1 May 2021.
The above graphic sets out the how the process was
undertaken by the Nominations Committee which led to an
announcement on 25 January 2021 that Angus Cockburn
will join the Board as Chair and Non-Executive Director with
effect from 1 May 2021. It was felt that the experience gained
in Angus’ external roles would broaden and deepen the
knowledge and experience of the Directors collectively, which
in turn benefi ts the Company.
Board composition and diversity
There were seven Directors on the Board as at 31
December 2020, comprising the Non-Executive Chairman,
Chief Executive Offi cer, Group Finance Director and four
independent Non- Executive Directors. The names and
biographical details of the members of the Board are set out
on pages 54 and 55.
Time commitments
We keep under review the time commitments of the Directors
to ensure that they have suffi cient time to discharge
their duties effectively. As part of the process of Angus
Cockburn’s appointment to the Board, we assessed the time
commitments required by his other roles, as well as noting
the signifi cant executive and non-executive experience that
he would bring to the Board.
The majority of the Board are independent Non-Executive
Directors. The Company judged the Chairman to be
independent at the time of his appointment, and considers all
other Non-Executive Directors to be independent under the
terms of the Code.
Board diversity
Non-Executive Board tenure
Board skills matrix
Female
6-9 years
Male
3-6 years
0-3 years
Operations
Engineering
Strategy
Marine
Legal/
Governance
Finance
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The Nominations Committee unanimously recommends the
re-election of each of the Directors at the AGM scheduled
for 29 April 2021, noting that Malcolm Paul will only serve
until 30 April 2021, with the appointment of Angus Cockburn
effective from 1 May 2021. In making this recommendation
the Board members have evaluated each Director in
terms of their performance, their commitment to the role
and their capacity to discharge their responsibilities in an
effective manner given their other time commitments and
responsibilities.
I believe the Board functions effectively and effi ciently and
is appropriate for a Group of our size. The Board carries out
an internal Board evaluation each year, and details of the
2020 evaluations are set out on page s 60 to 61. The Board
considers that each Director demonstrates the knowledge,
ability and experience required to perform the functions of a
director of a listed company and is of the calibre necessary
to support and develop the Company’s long-term strategy
and success. The Board also considers that no individual
or small group of individuals dominates discussions or the
decision-making process.
Diversity is a matter we consider constantly to ensure we
benefi t from the right balance of skills, range of experience,
thought leadership and knowledge. That balance is derived
from effective diversity which the Board considers to be
an important factor in its own composition and throughout
the Group. Diversity arises from a number of potential
sources, including in respect of gender, ethnicity age,
cultural background, religious belief, sexual orientation
or disability. The Board’s intention is to maintain diversity
in all its senses in its own constitution, and to encourage
the same throughout the organisation. While being aware
of the Hampton-Alexander Review’s revised targets, the
Company has two women on the Board representing 29%
of Directors, and we acknowledge the requirement to
work towards the Parker Report target on ethnic diversity
however, we will continue to recommend appointments
to the Board based on merit and the individual skills and
experience that each candidate would bring. The Board’s
diversity policy, which is always kept under review, is
available on the Group website and sets out our aim to
ensure an appropriate mix of skills, experience, age and
knowledge, as well as gender and ethnic diversity.
The Chief Executive Offi cer chairs a senior leadership
executive team of seven people, with women representing
29% of the team. Apart from creating a forum to bring
together a range of specialist skills and experience it also
acts as a platform for our succession strategy into the
future. Within the wider leadership team, women represent
42% of those reporting to members of the Executive
team, and fi ll two of the four leading roles in our principal
operating divisions.
The Board remains committed to ensuring that all our
employees have an equal chance of developing their
careers within our business. We have created an internal
Group diversity policy encouraging our employees to realise
their full potential in an environment of trust, honesty and
respect. A series of diversity and inclusion initiatives have
been launched during 2020. These initiatives are aimed
at increasing diversity across the Group, recognising
the challenging backdrop of just 12% of the engineering
workforce in the UK being women with professional
engineering qualifi cations and only 8% of engineers and
technicians coming from a black, Asian and minority ethnic
background.
During 2020, due to the pandemic, the UK Government
took the decision to suspend enforcement of the gender
pay gap deadlines for this reporting year, and announced
that there was no expectation on employers to report the
gender pay gap data. Relevant companies within the Group
intend to resume their reporting in 2021, including the
voluntary Group level report, which will be included in the
2021 report.
More information about our employees, the Group’s
employment policies, and the Group’s commitment to equal
opportunities and diversity can be found on page s 29 to 31
and page 89 .
Malcolm Paul Chairman of the Nominations Committee
10 March 2021
James Fisher and Sons plc Annual report and accounts 2020
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Audit Committee report
Audit Committee report
Dear Shareholders
I am pleased to present the report of the Audit Committee for
the year ended 31 December 2020.
The Audit Committee and the work it performs are of
fundamental importance to the Board in discharging its
responsibility for oversight and monitoring of fi nancial
reporting, risk management and internal control. As chairman
of the Audit Committee it is my responsibility to ensure that
the Audit Committee fulfi ls its responsibilities in a rigorous
and effective manner.
2020 has been a challenging year for the Group as a result
of the impacts of the Covid-19 pandemic, including on the
working conditions that all of our employees and specialist
advisers have had to adapt to and in making best use of
videoconferencing technology. I’d like to acknowledge the
efforts of the Group’s fi nance team and our external auditors
in responding resiliently to those challenges. To account for
the challenges of the pandemic, the Company took the early
decision to push our reporting timetable back by one week.
The Audit Committee remains focused on ensuring
compliance with the UK Corporate Governance Code
2018 (the Code) and is committed to ensuring the highest
standards of corporate governance. In line with the Code,
this report seeks to focus on specifi c aspects considered
by the Audit Committee during the year and aims to provide
assurance to our shareholders that the control environment
of the Group is being properly supervised and monitored.
I am satisfi ed that the Audit Committee is properly
constituted with written terms of reference, which include all
matters referred to in the Code and is provided with good
quality information to allow proper consideration to be given
to topics under review. I am also satisfi ed that meetings
are scheduled to allow suffi cient time for discussion and
to ensure that all matters are considered fully. The Audit
Committee’s terms of reference are available on our website.
Of particular importance is the requirement to ensure
that the Group’s fi nancial reporting is fair, balanced and
understandable. We therefore review all the Group’s fi nancial
reports before publication, including where necessary
alternative performance measures, and we are satisfi ed that
they provide a fair, balanced and understandable assessment
of the Group’s position and performance.
This year the Audit Committee has focused on reviewing the
Group’s systems of risk management and internal controls as
the Group continues to grow and increase in complexity, as
well as ensuring the integrity of the Group’s public fi nancial
reporting. 2020 has seen a focus on reviewing the integrity of
our systems and processes in light of the alternative working
conditions to which our employees have had to adapt. In
relation to the UK’s departure from the EU, our businesses
have adapted well and the Group has to date not felt any
material impact, although we continue to keep this under
review. Our view remains that the UK’s departure will not
have a material impact on the Group given the relatively
small amount of relevant cross border transactions.
Membership
Justin Atkinson, chairman of the Audit Committee
Michael Salter
Aedamar Comiskey
Inken Braunschmidt
Since
2018
2013
2014
2019
Key objectives
To monitor the integrity of the Group’s reporting process and
fi nancial management and to ensure that risks are carefully
identifi ed and assessed and that sound systems of risk
management and internal controls are in place.
Key responsibilities:
• The accounting principles, policies and practices adopted in
the Group’s accounts.
• Reviewing external fi nancial reporting and associated
announcements.
• Managing the appointment, independence, effectiveness and
remuneration of the Group’s external auditor, including the
policy on the award of non-audit services.
• Initiating and supervising a competitive tender process for the
external audit when next required.
• The resourcing, plans and effectiveness of Internal Audit.
• The adequacy and effectiveness of the internal control
environment.
• The Group’s risk management processes and performance.
• The establishment and oversight of fraud prevention
arrangements.
• The provision of advice to the Board on whether the Annual
Report and Accounts, when taken as a whole, is fair,
balanced and understandable and provides all the necessary
information for shareholders to assess the Company’s position,
performance, business model and strategy.
Met three times during the year.
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Audit Committee composition
The Board is satisfi ed that as chair of the Audit Committee,
Justin Atkinson has signifi cant and relevant fi nancial
experience being a chartered accountant who formerly served
as fi nance director of a FTSE 250 company, and also serves
as a member of the audit committee of another UK listed
company. He has been attend ing audit committee meetings
for over 20 years. The members of the Audit Committee
collectively have broad fi nancial, commercial, professional
and technical experience and as a whole are considered to
have competence relevant to the sectors in which the Group
operates. Audit Committee attendance is shown on page 60.
Details of the Audit Committee’s specifi c responsibilities
and how it exercises those responsibilities are set out in the
remainder of this report. The Board and the members of
the Audit Committee separately evaluate the performance
of the Audit Committee each year and, although the
Committee continues to look for continuous improvement, are
satisfi ed that the Audit Committee discharges its duties and
responsibilities in accordance with its terms of reference.
Audit Committee meetings
The Audit Committee had three scheduled meetings during the
year in February, August and November, on dates to coincide
with the fi nancial reporting cycle. In addition to the Audit
Committee members, the Chairman, Chief Executive Offi cer,
Group Finance Director, Group General Counsel and Company
Secretary, the internal auditor, the Group fi nancial controller and
other senior members of the fi nance team attended parts of
each meeting by invitation, together with representatives of the
external auditor, including the reporting partner.
At each scheduled meeting the Audit Committee provides
the opportunity to discuss matters privately with the external
auditor and the internal auditor. In addition, the chairman
of the Audit Committee holds regular meetings with the
reporting partner of external auditor, KPMG LLP (KPMG) to
discuss matters related to the Group.
The fi rst meeting in February 2020 considered the accounting,
fi nancial control and audit issues reported by KPMG that
fl owed from their audit work and reviewed the fi nancial
statements and specifi c disclosures, including the viability and
going concern statements, for recommendation to the Board.
In addition to standard agenda items, the February meeting
also received evaluations of the external and internal audit
process and reviewed the procedures and outputs for the
identifi cation, assessment and reporting of risk.
Audit Committee report
The August meeting received a review by KPMG of the Half
Year results and considered the accounting, fi nancial control
and audit issues arising to enable the Audit Committee
to review the Interim Statement and recommend it to the
Board. The August meeting also reviewed the planning
memorandum for the annual audit, including proposed scope
and key risks, together with an indication of the proposed
audit fee, which was subject to subsequent agreement.
The November meeting considered a detailed report from
internal audit on their work for the year, approved the internal
audit programme for 2021, considered a report from the
KPMG updating the audit plan and strategy for 2021 and
an overview of various reviews of the audit profession, as
well as consideration of the plan and documentation for
the internal evaluation of the Audit Committee, the external
auditor and internal audit.
Financial reporting
The Audit Committee’s primary responsibility in relation to the
Group’s fi nancial reporting is to review and challenge where
necessary, with both senior management and the external
auditor, the appropriateness of the Group’s Interim Statement
and Annual Report and Accounts, with particular focus on:
• whether suitable accounting policies have been adopted
and properly applied;
• the clarity of disclosures and compliance with fi nancial
reporting standards and relevant fi nancial and governance
reporting requirements; and
• whether management has made appropriate estimates
and judgements in material areas or where there has been
discussion with or issues raised by the external auditor;
and whether the Annual Report and Accounts taken as a
whole is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
To facilitate its fi nancial reporting responsibility, the Audit
Committee received reports from KPMG at each of the
scheduled Audit Committee meetings.
James Fisher and Sons plc Annual report and accounts 2020
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Audit Committee report
Audit Committee report (continued)
Fair, balanced and understandable
Goodwill valuation
In making its assessment the Board has taken into account
its own knowledge of the Group, the markets in which the
Group operates, its strategy and performance in the year, a
review of content of the Annual Report and Accounts and
other periodic fi nancial statements and announcements,
together with the recommendation from this Audit
Committee. Key considerations include ensuring that there
was consistency between the accounts and the narrative
provided in the front half of the Annual Report and Accounts,
and that there was an appropriate balance between the
reporting of weaknesses, diffi culties and challenges (in
particular with reference to the Group’s principal risks and
uncertainties, as set out on page s 43 to 51), as well as
successes, in an open and honest manner.
Signifi cant issues and accounting
judgements
The Audit Committee has a primary responsibility to review
the integrity of the Annual Report and Accounts and the
Interim Statement of the Company, which includes the review
and discussion of papers prepared by management and
takes account of the views of the external auditor. The key
areas reviewed in the 2020 fi nancial year are as follows:
APMs and separately disclosed items
The Committee gave careful consideration to the judgements
made in the disclosure of alternative performance
measures as set out in note 2, and of separately disclosed
items set out in note 5. In particular, the Committee
sought to ensure that the treatment followed consistent
principles and that reporting in the accounts is suitably
clear and understandable. The Committee considered
the appropriateness of items included within separately
disclosed items and concluded that the judgements made
are appropriate.
Vessel valuation
The Audit Committee considered the Group’s carrying
value of the Groups vessels, in particular in respect of
two dive support vessels within Marine Support. Despite
current market conditions meaning there is little external
evidence of recent similar vessel sales, the Committee
reviewed management’s estimate of fair market value,
which was made with reference to third party valuations
and management experience, and is based on an orderly
transaction between market participants. The Committee
considered management’s valuation and resulting
impairment of £31.6m to be reasonable and appropriate.
The Audit Committee considered the Group’s carrying value
of goodwill and impairment reviews based on underlying
assumptions, together with the achievability of long-term
forecasts and the discount rates applied to forecast cash
fl ows. Senior management provided detailed analysis to
determine the sensitivity of the outcome to changes in key
assumptions and we are satisfi ed that the judgements made
are both reasonable and appropriate.
Operations in overseas jurisdictions with
uncertain legislation
Due to the diverse nature of the territories in which the
Group operates often with local partners, there is an inherent
commercial and fi nancial risk arising from operating in
these locations. This is particularly prominent in the Group’s
operations in emerging markets which continue to expand,
due to a potentially more uncertain legislative, political and
regulatory environment. The Audit Committee received
regular updates on the operational and fi nancial performance
of the Group’s business operations in these territories
together with the assessment of areas where specifi c
judgements have been necessary.
Revenue recognition and contract disputes
The estimation of contract margin and the level of revenue and
profi t to recognise in a single accounting period require the
exercise of management judgement. In addition the Group has
a number of projects where payments of amounts invoiced or
considered due under of the contract have yet to be paid. The
Committee reviewed key estimates and judgements applied in
determining the fi nancial status of the more signifi cant projects.
The Audit Committee considered the matters set out above
and how they were tested and reviewed, including the
judgements and disclosures and representations made.
Going concern
The Audit Committee reviewed the appropriateness of
the going concern assumption on page 88 in preparing
the fi nancial statements. This included a review of papers
prepared by senior management in relation to the Group’s
internal budgets, forecasts of future performance, available
fi nancing facilities and facility headroom. Taking account of
the impact of the Covid-19 pandemic and other possible
changes that may impact trading performance as well as
other factors that might affect availability, we expect the
Group to maintain the appropriate headroom under its
borrowing facilities for the forthcoming year. We are satisfi ed
that the going concern basis of preparation continues to be
appropriate in preparing the fi nancial statements.
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Viability statement
Anti-bribery and corruption
The Audit Committee reviewed the Company’s viability
statement set out on page 51 and in particular took
care to understand the analysis which was prepared by
management, and supports the Board’s view that the
Company will be able to continue in operation and meet
its liabilities as they fall due over the period assessed. The
analysis included a review of the Group’s three-year plan
which overlays a number of assumptions and sensitivities,
including the need for and availability of additional bank
facilities, an assessment of the likely downside sensitivities
aligned to the Group’s principal risks, and the potential
impact of those sensitivities on its business model, future
performance, solvency and liquidity over the period, and
taking into account the potential mitigating actions, and the
effectiveness of the Group’s risk management and control
systems, as well as current risk appetite. Sensitivities
considered included the diverse nature of the markets and
geographies in which the Group’s businesses operate, and
their ability to react quickly to change.
Risk management and internal
controls
The Board has overall responsibility for the Group’s risk
management and internal control systems, including fi nancial,
operational and compliance controls. The Audit Committee
is responsible for monitoring and reviewing the effectiveness
of these systems and the Group’s internal audit function.
The Board received regular reports throughout the year
from the Group Risk Committee and we have reviewed the
Group’s systems of risk management and internal controls,
including fi nancial, operational and compliance controls, and
have concluded that the systems are sound and effective.
Reports on material internal control failings are referred to
the Audit Committee for review and oversight to ensure that
appropriate and timely actions are identifi ed and completed.
During the year there were no material instances of internal
control failure brought to the attention of the Audit Committee.
A more detailed summary of the Group’s risk management
and internal control systems is set out in the principal risks
and uncertainties section on p ages 43 to 51, along with a
description of some of the actions taken and planned to bring
improvements to those controls.
We have an established anti-bribery and corruption policy
aimed at ensuring adherence to the associated legal and
regulatory requirements. The policy includes sections in
relation to:
• the Group’s zero tolerance approach to payment of bribes.
• the reasonableness and proportionality of offering or
receipt of gifts or hospitality.
• the appointment and management of third parties who
are engaged to assist with our sales and marketing
activities, including approval via procedures which include
appropriate internal and external due diligence and
authorisation. The Group tracks its agent relationships and
reports them back to the Board on a regular basis.
• the Group’s condemnation of facilitation payments.
The Group has anti-bribery and corruption training in place
which is provided on induction, and each business maintains
a training log for its people which is reported back to the
Audit Committee via internal audit twice annually.
External audit performance
The Audit Committee continually assesses the performance
of the external auditor, KPMG, from the initial planning stage
when they receive and discuss the audit plan and proposed
strategy, approach, objectives, signifi cant risk areas and
other areas of focus, drawing on input from the Group’s
senior management, until conclusion of the audit. The
Audit Committee conducts annually a formal assessment
of the external auditor’s performance based on its own
experience and that of the Group’s senior management. This
process includes the use of questionnaires which focus on
the quality and ability of the audit teams, the robustness
of the audit process and the quality of communication
and governance, including the independence of the audit
fi rm. The results of the review are considered by the Audit
Committee and discussed with KPMG who provide input on
the preparedness of the Group’s own fi nance teams and the
conclusions are reported to and discussed by the Board.
For the 2020 audit, the Audit Committee considered that the
performance of KPMG, including their interaction with the
Company, senior management and the Audit Committee,
was good. The Audit Committee was also satisfi ed that
KPMG provided an effective audit and remain independent
and objective.
James Fisher and Sons plc Annual report and accounts 2020
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Audit Committee report
Audit Committee report (continued)
KPMG were re-appointed external auditor of the Company
in 2017 with a new audit reporting partner Mike Barradell
following a competitive tender process given that KPMG
were fi rst appointed to audit the Company in 2008. 2021
will be Mike’s last fi nancial year as audit partner for the
Company, and he will introduce potential replacements to
the Company during the year. Details of the external auditor’s
remuneration for 2020 are set out in note 4 on page 112. In
2020, there has been an increase of 14% in audit fees from
the prior year as a result of the challenges faced by KPMG in
undertaking their work remotely .
The Company has complied throughout the fi nancial
year under review, and up to the date of this report,
with the provisions of the Statutory Audit Services for
Large Companies Market Investigation (Mandatory Use
of Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014.
Non-audit services
The Audit Committee accepts that certain non-prohibited
work is best undertaken by the external auditor and
to safeguard the external auditor’s objectivity and
independence the Audit Committee has a policy on
engagement of the external auditor for non-audit services,
which includes a requirement for Audit Committee approval
if the permitted services exceed a threshold of £50,000.
The Audit Committee reviews the policy annually and
recommends it to the Board for approval. In accordance
with EU Audit Regulations and standards published by the
FRC in June 2016, the Audit Committee has not engaged the
external auditor on matters restricted by those Regulations
and standards, and fees from permitted work (including
the Half Year report) have been pre-approved by the Audit
Committee. KPMG were not instructed to carry out any
prohibited non-audit services during 2020.
KPMG provided the following non-audit services to the
Group during 2020, all of which were approved by the Audit
Committee:
• under the Norwegian Companies Act KPMG provided an
assurance service on the control and review procedures
over the tax submissions. The work does not result in any
accounting judgements and the fee for this service was
£3,000.
• KPMG provided attestation services to Scan Tech A S in
relation to their application for Norwegian government
support. The fee amounted to £4,000.
• KPMG carried out the Group’s half year review for the
period ended 30 June 2020. The fee amounted to £75,000.
Internal audit
The Audit Committee is responsible for reviewing the work
carried out by the internal audit department which considers,
reviews and reports on key commercial, fi nancial and control
risks across the Group. The internal audit function undertake
their work in accordance with an annual programme
approved by the Audit Committee. The scope of each
internal audit review is agreed by the Audit Committee in
consultation with the internal auditor to ensure that key areas
for each business are addressed.
In 2020, as a result of the Covid-19 pandemic, there were
fewer internal audits undertaken compared to 2019. In total
ten internal audits were undertaken (2019: 14), all of which
were in the UK. No internal audits were carried out overseas
by our co-source partner PwC due to Covid-19 restrictions.
Reports in relation to the internal audits carried out were
presented to the Audit Committee for review and shared with
senior managers for action, as well as being provided to the
external auditor for information. There were no fi ndings in
the internal audit reports which were of signifi cant concern.
The internal auditor is responsible to the Audit Committee
for ensuring that all required actions are followed up and
completed in a timely manner.
Following the fi nal 2020 review, the Audit Committee
recommended and the Board concluded that the Group’s
internal audit process was appropriate and effective despite
the travel restrictions and other temporary issues faced
by the team in 2020 as a result of the Covid-19 pandemic.
The effectiveness of the Group’s internal audit function is
continually reviewed, including an annual formal review
undertaken by the Board and the Audit Committee, with the
benefi t of feedback from Group businesses and functions
which have been subject to internal audit during the year.
FRC correspondence
During the year, the FRC wrote to the Company in relation
to certain matters in the 2019 Annual Report and Accounts.
The principal matters raised related to the accounting
for the Group’s investment in Murjan Al-Sharq for Marine
Contracting LLC, and disclosures in relation to provisions
and contingent liabilities. The FRC also highlighted for
consideration our presentation of certain other items in the
fi nancial statements.
Following our response to this matter, the FRC acknowledged
our explanations and closed their enquiries on the basis that
we would provide enhanced disclosure in relation to the points
raised where material, which we have included in the 2020
Annual Report and Accounts.
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James Fisher and Sons plc Annual report and accounts 2020
The FRC’s review was based on the Annual Report and
Accounts and did not benefi t from detailed knowledge of the
business or an understanding of the underlying transactions
entered into. It was, however, conducted by staff of the
FRC who have an understanding of the relevant legal and
accounting framework. The review carried out by the FRC
provides no assurance that the Annual Report and Accounts
were correct in all material respects; the FRC’s role is not to
verify the information provided but to consider compliance
with reporting requirements.
Conclusion
The Audit Committee operates in an open manner, has clear
and concise channels of communication with the Board and,
should it be necessary, I would be available to meet with
investors. I will also be available to answer any questions at
the AGM.
Justin Atkinson Chairman of the Audit Committee
10 March 2021
Audit Committee report
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James Fisher and Sons plc Annual report and accounts 2020
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Directors’ remuneration report
Directors’ remuneration report
• Agreeing the award levels and performance targets for the
2020 LTIP awards; and
• Agreeing the Chairman’s fee and Executive Directors’ base
salaries to apply from 1 January 2021.
Membership
Aedamar Comiskey, chairman of the Remuneration
Committee since May 2018
Justin Atkinson
Michael Salter
Inken Braunschmidt
Since
2014
2018
2013
2019
Key objectives
The Committee’s objectives are to have a fair, equitable and
competitive total reward package that supports our vision; and
to ensure the rewards are performance-based and encourage
long-term shareholder value creation and are straightforward to
communicate and operate.
Key responsibilities:
• Designing the remuneration policy.
• Implementing the remuneration policy.
• Ensuring the competitiveness of reward.
• Designing the incentive plans.
• Setting incentive targets and determining award levels.
• Overseeing all share awards across the Group.
The Committee meets at least three times a year.
Annual statement
Introduction by Aedamar Comiskey, Chair of the
Remuneration Committee
On behalf of the Board, and the Remuneration Committee
(the Committee), I am pleased to present the Directors’
remuneration report for the year ended 31 December 2020.
This report is comprised of two parts, namely:
• Remuneration policy report – which provides a summary
of the remuneration policy for which shareholder approval
was originally obtained at the 2018 AGM and which will
be resubmitted for shareholder approval at the 2021
AGM. While the Committee is not proposing to make
material changes to the Policy, a number of updates have
been proposed in respect of pensions, post-cessation
shareholding guidelines and malus/clawback provisions to
refl ect developments in corporate governance; and
• Annual report on remuneration – which sets out payments
and awards made to the Directors and details the link
between Company performance and remuneration for 2020,
and how the remuneration policy will operate for 2021.
Accordingly, at our 2021 AGM, there will be the: (i) normal
annual advisory vote on our Directors’ remuneration report;
and (ii) vote to approve our new Directors’ remuneration
policy, which will apply to all payments to be made to
Directors from the date of the 2021 AGM and which (unless
altered with shareholders’ approval) will apply for a period
of three years. In addition, shareholders will be asked to
approve the rules of the 2021 Long Term Incentive Plan (the
LTIP) given that the existing LTIP will shortly reach the end of
its shareholder approved life.
Work of the Committee during 2020
The Committee addressed the following main activities
during the year, having due regard to the impact of Covid-19
on the Group:
• Agreeing the performance against the targets for the 2019
annual bonus awards;
• Setting the targets for the 2020 annual bonus;
• Agreeing the performance against the targets for the 2017
LTIP awards and determining vesting levels;
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In addition, the Committee has sought to ensure that the
current and proposed Policy and practices are consistent
with the six factors set out in Provision 40 of the 2018 UK
Corporate Governance Code:
met in respect of 2020 (30% of the annual bonus), the
Committee determined that no bonus should be payable
in light of the fi nancial targets (70% of the annual bonus)
being missed; and
• Clarity – The current and proposed Policy is understood
by our senior executive team and we have sought to
articulate it clearly to our shareholders and representative
bodies (both on an on-going basis and during consultation
when changes are being made).
• Simplicity – The Committee is mindful of the need to
avoid overly complex remuneration structures which can
be misunderstood and deliver unintended outcomes.
Therefore, a key objective of the Committee is to ensure
that our executive remuneration policies and practices are
straightforward to communicate and operate.
• The Remuneration Committee delayed and then reduced
the 2020 LTIP award levels by around 15% to refl ect the
prevailing share price. Rather than use the prevailing share
price to calculate the relevant number of shares under
award, the (higher) average share price between 1 January
2020 and 30 June 2020 was used.
Pay and performance in 2020
James Fisher encountered a diffi cult year in 2020. The key
performance measures for the 2020 fi nancial year were as
follows:
• Risk – Our policy has been designed to ensure that
• Underlying profi t before tax £31.5m (2019: £58.5m); and
inappropriate risk-taking is discouraged and will not be
rewarded via: (i) the balanced use of both short (annual
bonuses) and longer term incentive plans (LTIPs), which
employ a blend of fi nancial, non-fi nancial and shareholder
return targets; (ii) the signifi cant role played by equity in our
incentive plans; and (iii) malus/clawback provisions.
• Predictability – Our incentive plans are subject to
individual caps, with our share plans also subject to market
standard dilution limits.
• Proportionality – There is a clear link between
individual awards, delivery of strategy and our long-term
performance. In addition, the signifi cant role played by
incentive/‘at-risk’ pay, together with the structure of the
Executive Directors’ service contracts, ensures that poor
performance is not rewarded.
• Alignment to culture – Our executive pay policies are
aligned to culture through the use of metrics in both the
annual bonus and LTIP that measure how we perform
against our KPIs.
Discretion and response to Covid-19
Given the impact of Covid-19 on the Group:
• Directors’ salaries/fees were reduced by 20% for three
months from 1 April 2020;
• Payment of the 2019 annual bonus awards were deferred
until the second half of the fi nancial year;
• Negative discretion was applied in respect of the 2020
annual bonus - while the personal objectives were partially
• Underlying diluted earnings per share 47.9p (2019: 92.8p).
Executive Directors’ bonus potential for 2020 was capped
at 100% of salary for 2020 with 70% based on meeting the
Group’s fi nancial objectives and 30% based on individual
achievement and personal objectives. However, as a result of
the Group’s fi nancial targets for the year ended 31 December
2020 being missed, the Remuneration Committee concluded
that it would not be appropriate to award any annual bonus to
the Executive Directors with respect to 2020 notwithstanding
that the personal objectives were partially met.
Awards under the LTIP granted in 2018 are due to vest on 6
April 2021. However, as a result of failing to hit the threshold
earnings per share (EPS) and total shareholder return (TSR)
targets, no LTIP awards are expected to vest.
Further detail of the targets and achievement against them is
set out on pages 80 to 82.
Stakeholder feedback
The Committee takes an active interest in stakeholder views
on our executive remuneration policy and its operation and
is particularly mindful of the concerns of shareholders. At
the 2020 AGM both the annual statement and Annual report
on remuneration were supported by a signifi cant majority of
shareholders. In advance of the 2021 AGM, the Committee
has consulted with the Company’s major shareholders and
the main representative groups in relation to the proposed
changes to the Company’s remuneration policy, and the vast
majority of feedback received was supportive.
James Fisher and Sons plc Annual report and accounts 2020
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Directors’ remuneration report
Directors’ remuneration report (continued)
Remuneration policy for 2021
2021 remuneration
The current remuneration policy was originally approved
by shareholders at the 2018 AGM. As such, as the policy is
nearing the end of its three year life, it will be resubmitted
for shareholder approval at the 2021 AGM. The Committee
is comfortable that the Policy remains fi t for purpose and
aligned to our strategy, and we are therefore only proposing
to make a limited number of changes to refl ect developments
in corporate governance as follows:
• The existing policy has been amended for both new
appointments and incumbent Directors in respect of
aligning pension provision to workforce levels;
• A formal post cessation of employment shareholding
guideline has been introduced, such that Executive
Directors will be required to retain shares in value equal
to 200% of salary (or actual shares held, if lower) for two
years post cessation of employment, albeit own shares
purchased and any shares held in respect of awards
granted before the 2021 AGM will be excluded from the
calculations; and
• Malus and clawback provisions in respect of the bonus,
deferred bonus and new LTIP have been expanded
to cover insolvency , corporate failure and reputational
damage.
A summary of the proposed approach to the implementation
of the remuneration policy is as follows:
• The base salaries of Eoghan O’Lionaird and Stuart
Kilpatrick remain unchanged at £530,000 and £350,000
respectively;
• Eoghan O’Lionaird and Stuart Kilpatrick will continue
to receive 7.5% of salary and 1 3% of salary pension
contributions respectively. Stuart Kilpatrick’s pension
contributions will decrease to 7.5% of salary from
1 January 2023 without compensation;
• Annual bonus potential for Eoghan O’Lionaird and Stuart
Kilpatrick will continue to be 100% of salary. Performance
metrics and weightings for 2021 will be similar to those
operated for 2020 ; and
• In respect of 2021 LTIP awards for Executive Directors,
award levels will be made as normal after the
announcement of the 2020 preliminary results (up to the
normal maximum of 125% of salary). 70% of awards will
be based on EPS and 30% of awards will be based on
relative Total Shareholder Return targets as in prior years.
While the Committee has set “cross cycle” EPS growth
targets for previous awards, including for the 2020 LTIP
awards despite the impact of Covid-19 meaning that these
targets are unlikely to be met, the Committee will increase
the normal percentage growth range for the 2021 LTIP
awards to refl ect that the 2020 EPS is expected to be a
low base year. While these targets had not been agreed
at the time of signing this report, they will be formalised
prior to grant and disclosed in the RNS issued immediately
following the grant date.
With effect from 1 January 2021, the fees payable to the
Chairman and Non-Executive Directors remained the same.
I hope you will join me in supporting the remuneration-related
resolutions at the AGM on 29 April 2021.
Aedamar Comiskey
Chair of the Remuneration Committee
10 March 2021
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Directors’ remuneration report
Remuneration policy report
Overview of Directors’ remuneration policy
James Fisher and Sons plc operates in a competitive
international environment. To continue to compete
successfully, the Committee considers that it is essential
that the level of remuneration and benefi ts achieves the
objective of attracting, retaining, motivating and rewarding the
necessary high calibre individuals at all levels of the business.
The Company therefore sets out to provide competitive
remuneration to all of its employees, appropriate to the
business environment in those countries in which it operates.
The remuneration strategy is designed not only to align with
the Company’s fundamental values of honesty, integrity
and fairness, but also to support the Company’s corporate
strategy, as a signifi cant contributor to competitive advantage.
A cohesive reward structure with a timely pay review
process, consistently applied to all employees, with links
to corporate performance is seen as critical in ensuring all
employees can associate with, and are focused on, the
attainment of the Company’s strategic goals. Accordingly,
the remuneration package for the Executive Directors is
normally reviewed annually. Where an Executive Director’s
responsibilities change during the course of a year, the
Committee will consider whether a review is appropriate,
outside of the annual process.
Executive remuneration reviews are based upon the following
principles:
• total rewards should be set at appropriate levels to refl ect
the competitive market in which the Company operates,
and to provide a fair and attractive remuneration package;
• reward elements should be designed to reinforce the link
between performance and reward. The majority of the total
remuneration package should be linked to the achievement
of appropriate performance targets; and
• Executive Directors’ incentives should be aligned with the
interests of shareholders. This is achieved through setting
performance targets to reward increase in shareholder
value and through the Committee’s policy to encourage
shareholding by Executive Directors.
How the Directors’ remuneration policy relates
to the wider Group
The remuneration policy set out within this report provides
an overview of the structure that operates for the Executive
Directors in the Group. Employees below Executive level
have a lower proportion of their total remuneration made up
of incentive-based remuneration, with remuneration driven
by market comparators and the impact of the role of the
employee in question. Long-term incentives are reserved for
those judged as having the greatest potential to infl uence
the Group’s earnings growth and share price performance.
The Remuneration Committee considers pay and conditions
across the workforce when reviewing and setting the
Executive Director remuneration policy. The Committee does
not currently consult with employees on this matter, although
engagement with the workforce in respect of remuneration
will be considered as part of the Board’s wider employee
engagement initiatives.
How shareholders’ views are taken into account
The Committee takes an active interest in stakeholder views
on our executive remuneration policy and its operation, and
is particularly mindful of the concerns of shareholders. At
the 2020 AGM both the annual statement and Annual report
on remuneration were supported by a signifi cant majority of
shareholders. In advance of the 2021 AGM, the Committee
has consulted with the Company’s major shareholders and
the main representative groups in relation to the proposed
changes to the Company’s remuneration policy, and the vast
majority of feedback received was supportive.
Directors’ remuneration policy
The table below summarises the components of reward
for Executive Directors of the Company that will be put
forward for shareholder approval at the 2021 AGM. The
main changes from the remuneration policy approved by
shareholders at the 2018 AGM are as follows:
• The existing policy has been amended for both new
appointments and incumbent Directors in respect of
aligning pension provision to workforce levels by the end of
2022, in accordance with institutional investor guidelines;
• A formal post cessation of employment shareholding
guideline has been introduced such that Executive
Directors will be required to retain shares in value equal
to 200% of salary (or actual shares held, if lower) for two
years post cessation of employment, albeit own shares
purchased and any shares held in respect of awards
granted before the 2021 AGM will be excluded from the
calculations; and
• Malus and clawback provisions in respect of the bonus,
deferred bonus and LTIP have been expanded to cover
insolvency/corporate failure and reputational damage.
James Fisher and Sons plc Annual report and accounts 2020
75
Directors’ remuneration report
Directors’ remuneration report (continued)
Element
Salary
Purpose & link to
strategy
Designed to attract,
retain, motivate and
reward the necessary
high calibre individuals to
the Board.
Pensions
To offer competitive
retirement benefits.
Benefi ts
To offer competitive
benefits.
Annual
bonus
To incentivise and reward
the Executive Directors to
deliver annual financial
and operational targets.
LTIP
To align the interests of
the Executive Directors
with the Group’s long-
term performance,
strategy and the interests
of shareholders.
Performance
targets
Not applicable.
Operation
Maximum
Base salaries are a fixed annual sum
normally effective 1 January and
payable monthly in cash.
Salaries are reviewed each year,
normally effective 1 January and
recognising the individual’s
performance and experience,
developments in the relevant
employment market and having
regard to the Group’s performance
as well as comparing each Executive
Director’s base salary to market
data.
No prescribed maximum salary or
salary increase. Salaries are set
for each Executive Director within
a range around the market
median for similar positions in
appropriate comparator
companies. The Committee is
also guided by the general
increase for the employee
population although increases
may be higher or lower than this
to recognise, for example, an
increase in the scale, scope or
responsibility of an individual and/
or performance.
Executive Directors are eligible to
join the Group’s defined contribution
scheme, receive a company
contribution into a personal pension
scheme or be paid a cash
supplement in lieu of pension.
Provision of a company car or cash
alternative, life assurance and
healthcare insurance. Other benefits
may be provided where appropriate.
These benefits do not form part of
pensionable earnings.
Payable on the achievement of
financial and personal objectives
and non-pensionable.
The first 70% is payable in cash.
Bonus in excess of 70% of basic
salary is subject to deferral into
shares, with awards vesting after
three years, subject to normal good/
bad leaver provisions, but no further
performance targets.
Dividend equivalent payments may
be awarded (in cash or shares).
Malus and clawback provisions
operate.
Annual grant of share awards.
Non -pensionable.
A two-year post-vesting holding
period applies to awards granted to
Executive Directors.
Dividend equivalent payments may
be awarded (in cash or shares).
Malus and clawback provisions
operate.
Workforce aligned on or before
1 January 2023.
Not applicable.
No prescribed maximum.
Not applicable.
Up to 100% of base salary.
Up to 200% of base salary.
Awards above 125% will be
subject to stretch targets.
Majority of the bonus
potential is based on
a financial target
derived from the
annual plan; Minority
of the bonus potential
is based on individual
achievement and
personal objectives.
Sliding scale targets
linked to financial,
share price and/or
strategic metrics.
No more than 25% of
an award vests at
threshold, increasing
to 100% vesting at
maximum.
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Element
Purpose & link to
strategy
Operation
Maximum
Performance
targets
Share
ownership
To ensure alignment
between the interests of
Executive Directors and
shareholders.
Executive Directors are required to
retain half of the shares vesting after
tax under the LTIP until the
guidelines are met.
Post cessation guidelines apply to
share awards granted following the
2021 AGM. In determining the
relevant number of shares to be
retained post cessation, shares
acquired from own purchases and
share awards granted prior to the
2021 AGM will not be counted.
In employment:
Not applicable.
200% of base salary for all
Executive Directors.
Post cessation:
100% of the “in employment”
requirement, until the second
anniversary of cessation (or the
actual shareholding if the
guideline has not been met at
cessation).
To encourage share
ownership and align the
interests of all-employees
and shareholders.
An all-employee share plan.
As per prevailing HMRC limits.
Not applicable.
To provide fees to reflect
the time commitment and
responsibilities of each
role in line with those
provided by similarly sized
companies.
Fixed annual fee, paid monthly in
cash reviewed annually; Committee
determines the Chairman’s fees. The
Chairman and Executive Directors
determine fees for the other
Non-Executive Directors.
No prescribed maximum fee or
fee increase, although fees are
limited by the Company’s Articles
of Association. The Board/
Committee is guided by market
rates, time commitments and
responsibility levels.
Not applicable.
Sharesave
Non-
Executive
Directors
Notes:
(1)
(2)
(3)
(4)
The choice of the performance metrics applicable to the annual bonus refl ect the Committee’s belief that any incentive compensation should be appropriately
challenging and tied to the delivery of both fi nancial and personal objectives;
LTIP performance conditions are selected based on the delivery of long-term returns to shareholders and the Group’s fi nancial growth and are consistent
with the Company’s strategy. Where operated: (i) TSR performance is monitored by an independent advisor; and (ii) EPS growth is derived from the audited
fi nancial statements;
The Committee operates its share plans in accordance with the plan rules and the Listing Rules and the Committee, consistent with market practice, retains
discretion over a number of areas relating to the operation and administration of the plans (e.g. treatment of awards for leavers, change of control, adjustments
to performance targets);
The Committee retains the right to exercise discretion to override formulaic outcomes and ensure that the level of bonus or share awards payable is
appropriate. It may use its discretion to adjust outcomes to ensure that any payments made refl ect overall Company performance and stakeholder experiences
more generally. Where exercised, the rationale for this discretion will be fully disclosed to shareholders in the relevant Directors’ remuneration report.
( 5) Consistent with HMRC legislation, the all-employee arrangement does not have performance conditions; and
( 6)
In approving the Directors’ remuneration policy, authority is given to the Company to honour any past commitments entered into with current or former
Directors including the vesting of share awards granted in the past.
Malus and clawback provisions
Malus and clawback provisions operate in respect of the annual bonus (cash and deferred shares) and LTIP awards, with
Committee discretion to apply them in the event of a material misstatement in the Company’s fi nancial results, miscalculation,
serious reputational damage to the Company, in the event it is discovered that the participant committed serious misconduct
that could have warranted summary dismissal or a corporate failure/insolvency.
The Committee may decide to operate the malus and clawback provisions within a three-year period commencing on the date
that the cash part of any annual bonus is paid (for cash and deferred share bonus awards), and within a three-year period of
any LTIP vesting date.
James Fisher and Sons plc Annual report and accounts 2020
77
Directors’ remuneration report
Directors’ remuneration report (continued)
0
0
0
’
£
£2,250
£2,000
£1,750
£1,500
£1,250
£1,000
£750
£500
£250
£0
£2,117
16%
31%
£1,785
37%
30%
25%
£1,189
28%
22%
£593
£1,414
15%
£1,195
36%
31%
30%
25%
£801
27%
22%
£408
100%
50%
33%
28%
100%
51%
34%
29%
Minimum
On-target
Maximum
Maximum with
share price growth
Minimum
On-target
Maximum
Maximum with
share price growth
Chief Executive Officer
Group Finance Director
Share price growth
Long-term incentive
Annual bonus
Fixed pay
Approach to recruitment
Loss of offi ce
New Executive Directors will be appointed on remuneration
packages with the same structure and elements set out in
the Directors’ remuneration policy table. On-going incentive
pay/share-based awards will be limited to:
• Maximum annual bonus of 100% of salary; and
• Up to 200% of salary LTIP award .
For external appointments, the Committee may offer
additional cash or share-based elements to replace deferred
or incentive pay forfeited by an executive when leaving a
previous employer. It would seek to ensure, where possible,
that these awards would be consistent with awards forfeited
in terms of vesting periods, expected value and performance
conditions. Shareholders will be informed of any such
payments as soon as practicable following the appointment.
For an internal appointment, any variable pay element
awarded in respect of the prior role may be allowed to pay
out according to its original terms. In addition, any other on-
going remuneration obligations existing prior to appointment
may continue, provided that they are put to shareholders for
approval at the earliest opportunity.
For external and internal appointments, the Committee may
agree that the Company will meet certain relocation and
incidental expenses as appropriate.
The Committee has considered remuneration for Executive
Directors leaving the Company and is committed to applying
a consistent and equitable approach to ensure the Company
is equitable but pays no more than necessary. The loss
of offi ce policy is in line with market practice and will be
dependent on whether deemed a ‘good leaver’ or ‘bad
leaver’. The ‘good leaver’ policy includes:
• payment in lieu of notice equal to one year’s basic salary
or, if termination is part way through the notice period, the
amount of salary relating to any unexpired notice to the
date of termination. There is an obligation on Directors to
mitigate any loss which they may suffer if the Company
terminates their service contract;
• bonus payments for the period worked may be made,
subject to the original performance targets, at the
discretion of the Committee. Any such payments would be
made on the normal payment date;
• vesting of share scheme awards is not automatic and the
Committee retains the discretion to prevent awards from
lapsing depending on the circumstances of the departure
and the best interests of the Company. For a ‘good leaver’:
(i) deferred bonus awards will normally vest in full at the
normal vesting date (although may vest earlier, including
at cessation); and (ii) LTIP awards will normally vest at the
normal vesting date (although may vest earlier, including at
cessation) subject to performance against the performance
targets and LTIP awards will normally be pro-rated. ‘ good
leaver’ reasons are death, injury, illness or disability,
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redundancy, retirement, transfer of business resulting in
cessation of the individual’s employment within the Group
and any other reason at the Committee’s discretion. No
compensation is paid for summary dismissal, save for any
statutory entitlements;
• Executive Directors will also be entitled to a payment in
respect of accrued but untaken annual holiday entitlements
on termination ; and
• Legal fees and outplacement support may be paid by the
Company where appropriate.
Service contracts
It is the Board’s policy that Executive Directors are employed
on contracts subject to no more than 12 months’ notice from
either side. The Board recognises however that it may be
necessary in the case of new executive appointments to offer
an initial longer notice period, which would subsequently
reduce to 12 months after the expiry of the initial period. The
service agreements do not have a fi xed term. If it becomes
necessary to consider termination of a service contract,
the Committee will have regard to all the circumstances
of the case, including mitigation, when determining any
compensation to be paid. Details of the current service
contracts are as follows:
Eoghan O’Lionaird
1 September 2019
12 months
Stuart Kilpatrick
1 July 2010
12 months
Contract date
Notice period
The Executive Directors are permitted to serve as non-
executive directors of other companies, provided the
appointment is fi rst approved by the Remuneration and
Nominations Committees. Directors are allowed to retain
their fees from such appointments. During 2020, the
Executive Directors held no external appointments.
Non-Executive Directors do not have service contracts but
have a letter of appointment setting out their terms and
conditions. Non-Executive Directors are appointed each year
for up to 12 months and are entitled to one month’s prior
written notice of early termination for which no compensation
is payable. Details of the letters for the currently appointed
Non-Executive Directors are set out below:
Date of
appointment
Letter of
appointment
Malcolm Paul
1 February 2011
1 January 2021
Aedamar Comiskey
1 November 2014
1 January 2021
Michael Salter
Justin Atkinson
1 August 2013
1 January 2021
1 February 2018
1 January 2021
Inken Braunschmidt
1 March 2019
1 January 2021
As announced on 25 January 2021, Angus Cockburn will join
the Board as Chairman and Non-Executive Director with effect
from 1 May 2021. The terms of Angus’ letter of appointment
are consistent with those for the current Non -Executive
Directors. The date of Angus’ letter of appointment is
22 January 2021 and the date of his appointment will be
1 May 2021.
Annual report on remuneration
Remuneration Committee
The Committee members have no personal fi nancial interest
other than as shareholders, in the matters to be decided.
They have no confl icts of interest arising from cross-
directorships with the Executive Directors, nor from being
involved in the day-to-day business of the Company.
The Committee operates under clear written terms of
reference and confi rms that its constitution and operation
comply with the applicable provisions of the UK Corporate
Governance Code (prevailing at the date this report is signed)
in relation to Directors’ remuneration policy and practice
and that it has applied the Code throughout the year. The
Committee’s terms of reference include:
• to determine and agree with the Board the framework and
policy for Executive Directors and senior managers;
• to review the appropriateness and relevance of the
remuneration policy;
• to agree the measures and targets for any performance
related bonus and share schemes of the Executive
Directors;
• to determine within the terms of the policy the total
individual remuneration package of the Executive Directors
and selected senior management immediately below
Board; and
• to review senior management pay remuneration and
workforce remuneration policies and practice.
James Fisher and Sons plc Annual report and accounts 2020
79
Directors’ remuneration report
Directors’ remuneration report (continued)
Advisers to the Remuneration Committee
Non-Executive Directors
In undertaking its responsibilities, the Committee seeks
independent external advice as necessary. To this end, FIT
Remuneration Consultants LLP (FIT) acted as the principal
external advisers to the Committee during the fi nancial year.
The Committee is comfortable that the FIT team provide
independent remuneration advice to the Committee and
do not have any other connections with the Company that
may impair their independence. FIT is a founding member
and signatory of the Code of Conduct for Remuneration
Consultants, details of which can be found at www.
remunerationconsultantsgroup.com.
During the year, FIT provided independent advice on a wide
range of remuneration matters including the remuneration
policy review and the Board changes. FIT provides no other
services to the Company. The fees paid to FIT in respect of
work carried out for the year under review were £37,066 .
Total remuneration of the Executive Directors (audited)
For 2021, the Non-Executive Directors’ fees are set out
below, all of which are payable in cash.
Chairman*
Other Non-Executive Director fees:
2021
£
2020
£
210,125
210,125
Basic fee
54,632
54,632
Additional fee for the chair of Audit Committee
12,000
12,000
Additional fee for the chair of Remuneration
Committee
8,000
8,000
Additional fee for the Senior Independent Director
8,000
8,000
* The Chairman’s fee indicated in the table is the annual fee payable to
Malcolm Paul. As announced by the Company on 2 5 January 2021, Malcolm
Paul will step down as Non-Executive Chairman of the Company, and will be
replaced by Angus Cockburn on the same annual fee .
Base salary(2)
Benefits(3)
Pension(4)
Bonus in cash
Bonus in deferred shares
Total short-term remuneration
LTIP – performance
LTIP – share appreciation
Dividend equivalents
LTIP – total(5)
Other
Total remuneration
Total fixed remuneration
Total variable remuneration
Eoghan O’Lionaird
Stuart Kilpatrick
Fergus Graham(1)
2020
£000
464
23
35
-
-
522
-
-
-
-
-
522
522
-
2019
£000
177
9
3
-
-
189
-
-
-
-
346(6)
535
535
-
2020
£000
333
12
39
-
-
384
-
-
-
-
-
384
384
-
2019
£000
318
11
38
86
-
453
221
47
12
280
-
733
367
366
2020
£000
62
2
7
-
-
71
-
-
-
-
-
71
71
-
2019
£000
282
10
28
48
-
368
47
10
3
60
-
428
320
108
(1)
(2)
The amounts disclosed above for 2020 refl ect the period until Fergus Graham stepped down from the Board with effect from 20 March 2020 . He continues to
be paid until cessation of employment on 19 March 2021, subject to mitigation. More details can be found on p age 82.
Eoghan O’Lionaird’s salary (£530,000) was reduced by 50% and Stuart Kilpatrick’s salary (£350,000) was reduced by 20%, in each case for three months from
1 April 2020, and not repaid.
(3) Benefi ts comprised a cash allowance in lieu of car and medical insurance.
(4) Pension contributions may be paid into personal pension plans, the Company pension scheme or taken as a separate cash allowance, subject to income tax.
(5)
The value presented for the 2018 LTIP awards (vesting in April 2021 based on three-year EPS performance to 31 December 2020 and TSR performance to 4
April 2021) is based on an estimated value at vesting. The 2017 LTIP values (vested in April 2020 based on three-year EPS performance to 31 December 2019
and TSR performance to April 2020) were estimates last year, using a share price based on the three-month average share price to 31 December 2019. The
table above has been restated for the actual pre-tax value of these awards (based on the share price calculated in accordance with prevailing tax legislation)
and the value of dividend equivalents as at vesting on 6 April 2020.
(6)
Eoghan O’Lionaird received an award from the Company in connection with his relocation expenses and in respect of amounts forfeited from leaving his
previous employer. More details were set out in the 2019 report.
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Directors’ remuneration report
Annual bonus awards for 2020 (audited)
The maximum annual bonus for Executive Directors was 100% of base salary, with 70% based on fi nancial objectives (note 1
below) and 30% based on individual achievement and personal objectives (note 2 below). The fi rst 70% of any bonus award
is paid in cash and the balance is awarded in shares and deferred for three years (with dividend equivalents and malus and
clawback provisions applying). No bonus was awarded to Eoghan O’Lionaird or Stuart Kilpatrick with respect to 2020, as set
out below.
Fergus Graham left the Company with effect from 20 March 2020, and ceased to be entitled to a bonus with respect to 2020.
Details of the actual performance against the targets are as follows:
Note 1 – Financial objectives (70% of maximum):
Performance measure
Adjusted profit before tax target
Actual performance
Performance target
Minimum threshold £62m
Maximum £67m
£31.5m
Assessment against targets
Threshold starts at 0% and increases to 100% of this
element of the bonus at maximum target performance.
0% of this part of the bonus achieved 0% of salary.
Note 2 – Personal objectives (30% of maximum):
Eoghan O’Lionaird
Objectives
1 Lead and deliver the Group’s strategic review
2 Develop management structure including succession planning
3 Set, communicate and lead key management priorities
4 Deliver balanced growth both organically and by acquisitions
5 Lead the Group sustainability initiative
Total
Stuart Kilpatrick
Objectives
1 Lead financial reporting to shareholders and management, and oversee financial risk management
2 Oversee internal audit
3 Support the Group’s strategic review
4 Work with senior managers to ensure good working relations
5 Deliver defined financial actions
Total
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Weighting
(% of salary)
6 %
6 %
6 %
6 %
6 %
30%
Weighting
(% of salary)
6 %
6 %
6 %
6 %
6 %
30%
As the actual performance of the Group did not meet the minimum threshold of underlying profi t before tax fi gure of £62.0m ,
the fi nancial target was not achieved and the Remuneration Committee did not consider that it would be appropriate to award
any part of the 2020 bonus to the Executive Directors based on their personal objectives. Therefore no formal assessment of
these targets has been disclosed. The Executive Directors’ personal objectives have been reset for 2021 and will be disclosed
in the 2021 report.
Vesting of 2018 LTIP awards (audited)
The LTIP values included in the table below relate to awards granted on 4 April 2018 which vest on 6 April 2021 dependent on
EPS and TSR performance. EPS is measured over the three-year period ended 31 December 2020 while TSR is measured over
the three-year period from 4 April 2018. Therefore the fi gures set out below for the LTIP vesting are indicative, based on an
estimate of TSR as at 6 February 2021.
James Fisher and Sons plc Annual report and accounts 2020
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Directors’ remuneration report
Directors’ remuneration report (continued)
Under the EPS performance target (70% of awards) which uses a sliding scale, 25% of this part of an award vests where
growth of diluted earnings per share of RPI plus 9% is achieved over the three-year performance period, increasing pro-rata to
full vesting where growth of RPI plus 18% is achieved.
Performance target
Underlying diluted EPS
Base EPS
81.4
EPS
at year end
47.9
EPS
growth
Threshold
RPI +9%
Maximum
RPI +18%
-
14.8%
23.8%
Vesting
%
0%
Under the TSR performance target (30% of awards) which uses a sliding scale, 25% of this part of an award vests for median
TSR increasing pro-rata to full vesting for upper quartile TSR, measured against the constituents of the FTSE 250 excluding
investment trusts. The estimated three-year performance based on TSR calculations to 6 February 2021 is as follows:
Performance target
TSR v FTSE 250 (excluding investment trusts)
Median TSR
Upper Quartile
TSR
James Fisher
TSR
-2%
+30%
-32.5%
Vesting %
0%
As a result of EPS and TSR performance, no LTIP share awards are expected to vest on 6 April 202 1 .
LTIP awards granted in 2020 (audited)
Eoghan O’Lionaird
Stuart Kilpatrick
Proportion
of salary
Maximum
shares awarded
Share price
at date of grant(1)
Exercise price
at grant
125%
125%
42,307
27,938
1,565.9p
1,565.9p
-
-
1)
Recognising the prevailing share price, which has been impacted by Covid-19 and market conditions more generally, the Remuneration Committee agreed to set the
price based on which the LTIPs were granted as the average share price between 1 January 2020 and 30 June 2020. This effectively reduced the value of the LTIP
grants by c.15%. The reduction of LTIP award levels in connection with Covid-19 is in addition to the 20% salary reduction for the three months from 1 April 2020 .
Vesting of the 2020 LTIP award is subject to achievement of performance targets over a three-year period with 70% of the
award based on EPS targets and 30% based on TSR targets. EPS target performance is measured over the three-year period
ending on 31 December 2022. The EPS element of the award vests if EPS growth at least equals the RPI increase over the
period plus 9%. At the threshold level, 25% of the EPS element of the award will vest. Full vesting is achieved if EPS growth is
greater than or equal to 18% in excess of the RPI increase over the vesting period. The TSR element of the award is subject to
the Company’s TSR performance relative to the FTSE 250 index excluding investment trusts, over the three-year period from 6
April 2020. If at the end of the period the Company ranks in the upper quartile, all of the TSR element of the award will vest. If
the ranking is at median level, 25% of TSR element of the award will vest. No element of the TSR part of the award will vest for
performance below the median. For intermediate ranking, a proportionate part of each award will vest reducing on a straight-
line basis. Any part of the award that does not vest at the end of a performance period will lapse immediately.
Deferred bonus awards granted in 2020 in respect of 2019 annual bonus (audited)
No deferred bonus awards were granted in 2020 in respect of the 2019 annual bonus as a result of the bonus awards being
less than 70% of salary threshold required to trigger the threshold.
Payments for loss of offi ce (audited)
As announced on 20 March 2020, Fergus Graham stepped down from the Board and left the Company with effect from 19
March 2020. Details of the arrangements in respect of remuneration are as follows:
• contractual entitlement to salary (based on salary of £281,875) and benefi ts during a period of garden leave, which continues
until his anticipated cessation of employment on 19 March 2021, subject to mitigation.
• £47,919 in respect of his annual bonus for the year ended 31 December 2019.
• In respect of outstanding share awards: (ii) the 2018 deferred bonus awards will continue vest at the normal vesting date;
and (ii) unvested LTIP awards will vest on their normal vesting dates, subject to time prorating and performance conditions.
Dividend equivalents may be credited to the extent that awards vest.
• The Company paid £4,500 plus VAT in respect of legal fees and £30,000 in respect of outplacement support.
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Payments to former Directors (audited)
As previously disclosed, Nick Henry retired from the Board of the Company with effect from 1 October 2019. He remained
employed by the Company until 31 March 2020 in order to achieve a smooth and effective transition of responsibilities to
Eoghan O’Lionaird . As set out in last year’s Directors’ remuneration report, he received a total salary of £96,000 in respect of
this period. Mr Henry received no further payment in lieu of notice or any other termination payments. In addition to the above,
21,372 shares vested on 6 April 2020, including dividend equivalents, in respect of his 2017 LTIP awards.
CEO pay ratio (unaudited)
The data shows how the CEO’s single fi gure remuneration for 2020 compares to equivalent single fi gure remuneration for full-
time equivalent UK employees, on a Group basis, ranked at the 25th, 50th and 75th percentile.
2020
2019
Method
Option A
Option A
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
19 : 1
28 : 1
14 : 1
19 : 1
9 : 1
13 : 1
No components of pay and benefi ts have been omitted for the purpose of the above calculations. As in 2019, Option A was
selected given that this method of calculation was considered to be the most robust approach in respect of gathering the
required data for 2020.
2020
2019
Salary
Total pay and benefits
25th percentile
Median
75th percentile
25th percentile
Median
75th percentile
£24,000
£24,480
£33,127
£34,150
£50,000
£52,000
£27,000
£25,459
£37,500
£36,541
£58,963
£55,240
Aligning pay with performance (unaudited)
The following graph shows the total shareholder return compared to the FTSE 250 and the FTSE Small Cap indices excluding
investment trusts:
Growth in the value of £100 holding over ten years
)
d
e
s
a
b
e
r
(
)
£
(
e
u
a
V
l
600
500
400
300
200
100
0
31 Dec 10
31 Dec 11
31 Dec 12
31 Dec 13
31 Dec 14
31 Dec 15
31 Dec 16
31 Dec 17
31 Dec 18
31 Dec 19
31 Dec 20
James Fisher and Sons plc
FTSE 250
FTSE SmallCap
This graph shows the value, by 31 December 2020, of £100 invested in the Company on 31 December 2010, compared with
the value of £100 invested in the FTSE 250 and FTSE SmallCap indices on the same date. The other points plotted are the
values at intervening fi nancial year-ends.
Source: Thomson Reuters
James Fisher and Sons plc Annual report and accounts 2020
83
Directors’ remuneration report
Directors’ remuneration report (continued)
Remuneration of CEO compared with growth in underlying diluted earnings per share
Eoghan O’Lionaird
Nick Henry
Tim Harris
2020
2019
2019
2018
2017
2016
2015
2014
2013
2012
2011
Annual change - underlying diluted
EPS (pence)
Salary, pensions and benefits (£000)
Annual performance bonus (£000)
Short-term remuneration (£000)
Share schemes (£000)
CEO total remuneration (£000)
Actual bonus as a percentage
of maximum
LTIP vesting as a percentage
of maximum
ESOS vesting as a percentage of
maximum
(52%)
522
-
-
-
522
-
-
-
4%
189
-
189
-
189
-
-
-
4%
421
35
456
418
874
14%
526
448
1,010
889
1,899
7%
512
392
904
109
1,013
11%
492
429
921
183
1,104
(7%)
492
97
589
318
907
13%
471
287
758
728
1,486
18%
439
263
702
691
1,393
15%
355
210
565
781
1,346
16%
399
268
667
534
1,201
17%
91%
88% 100%
23% 100% 100% 100%
100%
59% 100%
15%
47% 100% 100% 100% 100%
100%
-
-
-
45%
-
100% 100% 100%
40%
Percentage change in remuneration (unaudited)
The table below shows the percentage change in salary or fees, benefi ts and annual bonus earned between the year ended 31
December 2019 and the year ended 31 December 2020 for the Board, compared to the average earnings of all of the Group’s
other UK employees. The Committee chose the Group’s UK employees for pay comparison given that this is considered to be
the most meaningful comparator group.
Base
salary/fee
Benefits
Annual bonus
Executive Directors
Eoghan O’Lionaird
Stuart Kilpatrick
Non-Executive Directors
Malcolm Paul
Aedamar Comiskey
Michael Salter
Justin Atkinson
Inken Braunschmidt
Employee population
* Inken Braunschmidt joined the Board in March 2019 so there is no full year comparison .
Relative importance of remuneration (unaudited)
Total employee remuneration
Total dividends paid
(12%)
5%
(3%)
(3%)
(1%)
(3%)
N/A*
5%
2020
£m
133.7
4.0
-
1%
N/A
N/A
N/A
N/A
N/A
N/A
2019
£m
149.2
16.4
N/A
(100%)
N/A
N/A
N/A
N/A
N/A
(19%)
Change
£m
(1 5.5)
(12.4)
84
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Interests in shares (audited)
The interests of Directors and their connected persons in ordinary shares as at 31 December 2020, including any interests in
share options and shares provisionally awarded under the LTIP and the 2005 Employee Share Option Scheme (ESOS) are as
follows:
Malcolm Paul
Eoghan O’Lionaird
Stuart Kilpatrick
Justin Atkinson
Beneficial
number
Unvested LTIP
number
13,000
13, 341
74,851
3,150
-
42,307
74,191
-
Unvested
deferred
bonus shares
Vested but
unexercised share
options ESOS
number
Exercised
during the year
number
At
31 December
2019
number
-
-
6,901
-
-
-
37,153
-
-
-
-
-
13,000
7,283
47,859
3,150
(1) The unvested LTIP awards are subject to performance conditions. The unvested deferred bonus share awards are not subject to performance conditions;
(2) Between 31 December 2020 and 10 March 2021, there were no changes to the Directors’ shareholdings;
(3) No Director has an interest in the preference shares of the Company, or in the shares of any subsidiary or associated undertaking;
(4) The Directors’ interests stated above include any shares held by their connected persons; and
(5) Aedamar Comiskey, Michael Salter and Inken Braunschmidt had no interests in ordinary shares as at 31 December 2020.
Against the 200% of salary guideline and based on the share price and prevailing base salary levels as at 31 December 2020,
Eoghan O’Lionaird held shares equivalent to 27% of his base salary and Stuart Kilpatrick held shares equivalent to 213% of his
base salary.
Executive Directors’ interest in options over shares (audited)
Stuart Kilpatrick
Total
At 31 December
2020
number
32,274
4,879
37,153
Exercise
price
Date from which
exercisable
567p
1,409p
09.04.15
10.04.17
Expiry
date
09.03.22
10.04.24
All options relate to the ESOS. The 2005 ESOS expired in April 2015 and was not renewed. The last awards were made on 10
April 2014. Options over 32,808 (2019: nil) shares were exercised by Stuart Kilpatrick during the year and gains were made of
£204,504 (2019: £nil). As at 10 March 2021, being the last practical date prior to the publication of this report, there were no
changes to Directors’ options under the ESOS.
James Fisher and Sons plc Annual report and accounts 2020
85
Directors’ remuneration report
Directors’ remuneration report (continued)
Executive Directors’ interest in share awards (audited)
1 January
2020
Granted
during year
number
Vested
during year
number
Lapsed
during year
number
31 December
2020
Vesting
date
Eoghan O’Lionaird
LTIP
Sharesave1
Stuart Kilpatrick
Fergus Graham2
Total
LTIP
LTIP
LTIP
LTIP
Deferred Bonus
Deferred Bonus
Deferred Bonus
Sharesave1
LTIP
LTIP
LTIP
Deferred Bonus
-
-
-
23,292
25,669
20,584
-
5,355
3,527
3,374
-
81,801
4,457
22,770
18,260
2,993
48,480
130,281
42,307
2,935
45,242
-
-
-
27,938
-
-
-
2,935
30,873
-
-
-
-
-
76,115
-
-
-
(23,292)
-
-
-
(5,355)
-
-
-
(28,647)
(4,457)
-
-
-
(4,457)
(33,104)
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,186)
(12,173)
-
(14,359)
(14,359)
42,307
24 July 2023
2,935 1 December 2025
45,242
6 April 2020
-
6 April 2021
25,669
6 April 2022
20,584
24 July 2023
27,938
9 March 2020
-
4 April 2021
3,527
2 April 2022
3,374
2,935 1 December 2025
84,027
-
20,584
6,087
2,993
29,664
158,933
6 April 2020
6 April 2021
6 April 2022
2 April 2022
(1)
Eoghan O’Lionaird and Stuart Kilpatrick were granted options under the fi ve year all employee Sharesave scheme granted on 21 October 2020. The options
will mature on 1 December 2025, at which point the participant may elect to receive shares or the cash saved.
(2) The interests in shares for Fergus Graham are included, although he stepped down from the Board with effect from 20 March 2020.
A two-year holding period applies to awards granted after the 2018 AGM. The schemes above are not tax-advantaged for
HM Revenue and Customs purposes. As at 10 March 2021, being the last practical date prior to the publication of this report,
there were no changes to the Executive Directors’ interest in LTIP and Deferred Bonus Share awards.
Sourcing of shares and dilution
The Remuneration Committee has regard to the limits on dilution advised by the Investment Association and contained in the
relevant share plan rules and reviews the number of shares committed and headroom available under share incentive schemes
in accordance with these dilution limits.
On vesting, the awards of shares under the LTIP are satisfi ed by the shares held by the James Fisher and Sons plc Employee
Share Trust (Trust). During the year the Trust purchased 50,000 ordinary shares on the open market (2019: 50,000) and at
31 December 2020 the Trust held 9,227 ordinary shares (2019: 510).
Share price during the fi nancial year
The middle market price of one ordinary share in the Company during the fi nancial year ranged from 737p to 2,050p and at
31 December 2020 was 947p.
Non-Executive Directors’ remuneration
Total fees
Malcolm Paul
Aedamar Comiskey1
David Moorhouse2
Michael Salter
Justin Atkinson3
Inken Braunschmidt4
2020
£000
199
60
-
52
63
52
2019
£000
205
61
10
53
65
44
(1)
The fees include payment in respect of (i) Chair of the Remuneration Committee fee of £8,000 per annum and (ii) Senior Independent Non-Executive Director
fee of £8,000 per annum.
(2) David Moorhouse stepped down from the Board on 28 February 2019.
(3) The fees include a payment in respect of Chairman of the Audit Committee fee of £12,000.
(4) The Non-Executive Directors’ fees were reduced by 20% for three months from 1 April 2020.
86
James Fisher and Sons plc Annual report and accounts 2020
Directors’ remuneration report
Shareholder voting (unaudited)
The Company is committed to on-going shareholder dialogue and takes an active interest in voting outcomes. Where there
are substantial votes against resolutions including in relation to Directors’ remuneration, the Company seeks to understand
the reasons for any such vote and will report any actions in response to it. Due to government restrictions in response to
Covid-19, the Company was not able to hold its AGM in Barrow -in -Furness as originally planned, and it was instead held at
the Company’s London offi ce, with only shareholder-directors present. Voting at the 2020 AGM was therefore by proxy. The
following table refl ects the valid proxy voting instructions received for the 2020 AGM in respect of the Directors’ remuneration
report for the year ended 31 December 2019 and the remuneration policy voted upon at the 2018 AGM:
For
Against
Total votes cast (excluding withheld votes)
Total votes withheld
Total votes cast (including withheld votes)
Directors’ remuneration report
(2020 AGM)
Remuneration policy
(2018 AGM)
Total number
of votes
26,256,596
1,628,025
27,884,621
1,104,884
28,989,505
% of
votes cast
Total number
of votes
94.2%
5.8%
40,478,854
872,992
41,351,846
20,723
41,372,569
% of
votes cast
97.9%
2.1%
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Implementation of the remuneration policy for 2021 (unaudited)
With effect from 1 January 2021, Eoghan O’Lionaird’s base salary remained at £530,000, and Stuart Kilpatrick’s base salary
remained at £350,000.
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The maximum bonus opportunity continues to be set at 100% of base salary. The proposed fi nancial target levels have been
set to be challenging and appropriately demanding. 70% of the annual bonus will be determined by adjusted profi t before tax
targets and 30% by personal objectives. The targets are commercially sensitive but disclosure of the targets and performance
against targets will be set out in the 2021 Directors’ remuneration report.
Awards under the LTIP will be granted to Eoghan O’Lionaird and Stuart Kilpatrick with 70% of the award based on EPS growth
targets and 30% based on relative TSR targets. The number of shares under award will represent a maximum 125% of base
salary.
The performance period for the EPS element of the award will run for three years ending 31 December 2023. While the
Committee has set “cross cycle” EPS growth targets for previous awards, including for the 2020 LTIP awards despite the
impact of Covid-19 meaning that these targets are unlikely to be met, the Committee will increase the normal percentage
growth range for the 2021 LTIP awards to refl ect that the 2020 EPS is expected to be a low base year. While these targets
had not been agreed at the time of signing this report, they will be formalised prior to grant and disclosed in the RNS issued
immediately following the grant date.
For the TSR element, performance will be measured over three years against the constituents of the FTSE 250 excluding
investment trusts , with full vesting if the Company ranks in the upper quartile and 25% of the TSR element vesting for ranking
median with straight-line vesting in between.
Aedamar Comiskey
Chair of the Remuneration Committee
10 March 2021
James Fisher and Sons plc Annual report and accounts 2020
87
Directors’ report
Directors’ report
Additional information and statutory disclosures
This section contains additional information which the
Directors are required by law and regulation to include within
the Annual Report and Accounts. The Directors’ report
comprises this section as well as the rest of the Governance
section (from pages 52 to 91) and those sections of the
Strategic report or fi nancial statements as referenced below.
We have chosen, in accordance with the Act, to include
certain information in our Strategic report or fi nancial
statements that would otherwise be required to be disclosed
in the Directors’ report. This is as follows:
performance, confi rm that the Group should be able to
operate within the level of its current banking facilities.
The Group uses cash fl ow forecasts derived from budgets,
forecasts and medium-term planning to identify headroom
under the covenant tests. After making enquiries, and
having evaluated the on-going trading of the businesses,
the Directors have a reasonable expectation that the Group
has adequate resources to continue to operate for a period
considered to be at least 12 months from the date of this
report. Accordingly, the Directors consider it appropriate to
continue to adopt the going concern basis of accounting in
preparing the Annual Report and Accounts.
Subject matter
Location
Page
Likely future developments in the
business
Strategic report
7 - 8
Research and development
Strategic report
37
Employee involvement/
engagement
Relationships with suppliers,
customers and others
Strategic report
29 - 31
Strategic report
35 - 36
Greenhouse gas emissions
Strategic report
37 - 40
Dividends
An interim dividend of 8.0p per share (2019: 11.3p) was paid
by the Company on 6 November 2020. Given the current
level of uncertainty due to Covid-19 and in view of the
disappointing performance in Marine Support, the Board
is not recommending a fi nal dividend for the year ended
31 December 2020. Accordingly, the total dividend for the year
is 8.0p per share (2019: 11.3p).
Use of fi nancial instruments
Note 28
131
Share capital
The Directors’ report and Strategic report comprise the
‘management reports’ for the purposes of compliance
with Financial Services Authority’s Disclosure Guidance
and Transparency Rules ( DTR ) 4.1.8R and the Directors’
report fulfi ls the requirements of the Corporate Governance
Statement for the purposes of DTR 7.
Going concern
The Group’s business activities, together with the factors
likely to affect its future development, the fi nancial position
of the Group and a description of the principal risks and
uncertainties are set out in the Strategic report on pages 43
to 51. The Group’s primary sources of funding are bilateral
revolving credit facilities with a core group of banks, which
totalled £300m at 31 December 2020 (2019: £250m).
Compliance with banking covenants is tested half yearly
for the ratio of net debt: earnings before interest, tax,
depreciation and amortisation (Ebitda) and interest cover. No
breaches in covenants occurred during the year.
The Group meets its day-to-day working capital
requirements through operating cash fl ows, with borrowings
in place to fund acquisitions and capital expenditure. The
Group had £120.2m (2019: £41.7m) of undrawn committed
facilities as at 31 December 2020. The Group’s forecasts and
projections, taking account of reasonable changes in trading
Details of the share capital of the Company and the shares held
by the Company’s Employee Share Trust, including the rights
and obligations attaching to the shares are set out in note 29 on
page 137. The rights and obligations attaching to the shares are
set out in the Company’s Articles of Association (Articles). There
are no specifi c requirements on the size of a holding nor on the
transfer of shares, both of which are governed by the general
provisions of the Articles and prevailing legislation. The Directors
are not aware of any agreements between the holders of the
Company’s shares that may result in restrictions on the transfer
of securities or on voting rights. No person has any special rights
of control over the Company’s share capital. Where shares are
held on behalf of the Company’s employee benefi t trust, the
trustees have discretion to vote on any shares as they see fi t and
have not waived their right to receive dividends.
At the 2020 AGM, the Company was given authority to
purchase up to 2,516,704 of its ordinary shares until the date
of its next AGM. No purchases were made during the year
and up to the date of this report by the Company.
The Company has one class of ordinary share and one class
of preference share. As at 31 December 2020, 50,368,780
ordinary shares of 25p each have been issued, are fully
paid up and are listed on the London Stock Exchange and
100,000 cumulative preference shares of £1 each have been
issued and fully paid up.
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James Fisher and Sons plc Annual report and accounts 2020
Directors’ report
In accordance with the UK Corporate Governance Code
2018 (Code), all Directors will offer themselves for re-election
at the forthcoming AGM .
Directors’ and offi cers’ liability insurance
The Company maintains an appropriate level of directors’
and offi cers’ liability insurance. Pursuant to the Company’s
Articles, the Company may indemnify the Directors of
the Company and its subsidiaries against liability to third
parties and against liability incurred in connection with the
Company’s activities as trustee of an occupational pension
scheme, to the extent permitted by the Companies Act 2006.
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Substantial shareholders
Information provided to the Company pursuant to the DTRs
is published on a Regulatory Information Service and on the
Company’s website. As at 31 December 20 20, the Company
had been notifi ed in accordance with Rule 5 of the DTRs, of
the following holdings of voting rights attached to the issued
Ordinary Share capital of the Company:
Trustees of the Sir John Fisher
Foundation*
Schroders plc
Standard Life Aberdeen plc
Investments
Montanaro Asset Management
Limited
Ordinary
%1
Nature of
holding
11,592,3602 22.975
4,970,246
9.887
Direct
Indirect
3,589,932
7.13
Indirect
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1,855,000
3.68
Direct
Directors’ confl ict of interest
* Mrs Diane Sara Meacock, Mr David Hart Jackson, Mr Michael John Shields
and Mr Daniel Purser Tindall.
1 The percentage of voting rights detailed above was calculated at the time of
the relevant disclosures made in accordance with Rule 5 of the DTRs.
2 An additional 1,032,274 Ordinary Shares are held on behalf of the Sir John
Fisher 1965 Settlement.
In the period from 31 December 2020 to the date of this
report, the Company received no further notifi cations of a
change in shareholding from the major shareholders.
Directors
The biographies of the current Board of Directors are set
out on pages 54 and 55. Changes in the composition of the
Board are provided in the Nominations Committee report on
page s 63 to 65.
Powers of Directors
The powers of the Directors are determined by the Company’s
Articles, the Companies Act 2006 and in certain circumstances
(including in relation to the issuing or buying back by the
Company of its shares) the authority given by the Company
in general meeting. The Directors will be seeking to renew the
authorities granted to them in prior years at the forthcoming
AGM. The Directors are authorised to issue and allot ordinary
shares, to disapply statutory pre-emption rights and to make
market purchases of the Company’s shares. Any shares
purchased may be cancelled or held as treasury shares.
Appointment and replacement
of Directors
The rules regarding the appointment and replacement of
Directors are determined by the Company’s Articles and
the Companies Act 2006. The Articles provide that at each
AGM every Director who has held offi ce on the date seven
days before the date of notice of the AGM shall retire from
offi ce and shall be eligible for re-election at the AGM.
Under the Companies Act 2006, a director must avoid a
situation where a direct or indirect confl ict of interest may
occur. The Board has adopted established procedures to
address the management of any potential or actual confl icts
of interest. A confl ict must be authorised in advance by the
Board and each authorisation is reviewed annually to check it
is appropriate for the relevant matter to remain authorised.
Employment of disabled persons
James Fisher is an equal opportunities employer and is fi rmly
committed to both the principle and realisation of equality.
The Group is committed to complying with all applicable
laws governing employment practices and to the prevention
of discrimination on the basis of any unlawful criteria.
In addition to complying with legislative requirements,
the Group strives to ensure that disabled employees are
treated fairly and that their training, career development and
promotion needs are met.
The Group recognises its responsibility to provide a safe
operating environment for all its employees. Our strong focus
on employee training, regulatory compliance and accident
reduction provides the support to allow accountability to
remain with local management who are best-placed to
ensure that their businesses comply with local laws and
regulations and specifi c needs on a day-to-day basis. The
review of health and safety performance is fi rst on the
agenda at each Board and business board meetings, and
remains a top priority for the Group.
We recognise that the success of our business depends on
our talented workforce. Employees throughout the Group
are encouraged to participate in training and development
programmes and to obtain professional qualifi cations
relevant to their roles.
James Fisher and Sons plc Annual report and accounts 2020
89
Directors’ report
Directors’ report (continued)
Additional information for shareholders
Information required by UK listing rule 9.8.4
The Articles may only be amended by a special resolution at a
general meeting of the shareholders.
No political donations were made during the year. Details of
the Group’s involvement in charitable initiatives in set out on
pages 27 and 28.
Details of Group subsidiaries can be found on pages 150 to
151. Companies within the Group have branches in Chile and
Mozambique.
The disclosures required by listing rule 9.8.4 and which form
part of the Directors’ report can be found at the locations
provided in the table below:
Subject matter
Location
Page
Arrangement under which the
directors waived salary or fees
Directors’ remuneration
report
73 and 80
Disclosure of information to the Auditor
Each Director in offi ce at the date of approval of this
Directors’ report confi rms that:
Signifi cant agreements – change
of control
There are a number of agreements that take effect after,
or terminate upon, a change of control of the Company,
such as commercial contracts. None of these are considered
to be signifi cant in terms of their likely impact on the business
as a whole apart from those set out below.
• so far as the Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware;
and
• the Director has taken all the steps that he/she ought to
have taken as a director to make him/herself aware of
any relevant audit information and to establish that the
Company’s auditor is aware of that information.
Annual General Meeting (AGM)
The AGM is to be held at 11.00am on 29 April 2021. Further
details will be provided in the Notice of AGM.
The Directors’ report was approved by the Board of Directors
and is signed on its behalf by:
Jim Marsh Group General Counsel and Company Secretary
10 March 2021
The Company is a guarantor of all of the Group’s bilateral
bank facilities which upon a change of control could be
withdrawn.
The Singapore Submarine Rescue Service Agreement made
between James Fisher Singapore Pte Ltd. and First Response
Marine Pte Ltd. dated 17 October 2008 may terminate upon a
change of control of the Company or James Fisher Singapore
Pte Ltd.
The rules of the Company’s LTIP, ESOS and Sharesave
schemes set out the consequences of a change of control on
the rights of participants under those schemes. Participants
are generally able to exercise their options on a change of
control, provided that the relevant performance conditions
have been satisfi ed.
There are no agreements between the Company and its
Directors or employees providing for compensation for loss of
offi ce or employment (whether through resignation, purported
redundancy or otherwise) that arise in the event of a change
of control of the Company.
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James Fisher and Sons plc Annual report and accounts 2020
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Statement of Directors’ responsibilities in respect of
the Annual Report and the Financial Statements
Directors responsibility statement
The Directors are responsible for preparing the Annual Report
and the Group and parent Company fi nancial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and
parent Company fi nancial statements for each fi nancial
year. Under that law they are required to prepare the Group
fi nancial statements in accordance with international
accounting standards in conformity with the requirements
of the Companies Act 2006 and applicable law and have
elected to prepare the parent company fi nancial statements
on the same basis. In addition the Group fi nancial statements
are required under the UK Disclosure and Transparency
Rules to be prepared in accordance with International
Financial Reporting Standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European
Union ( IFRSs as adopted by the EU ).
Under company law the Directors must not approve the
fi nancial statements unless they are satisfi ed that they give
a true and fair view of the state of affairs of the Group and
parent Company and of the Group’s profi t or loss for that
period. In preparing each of the Group and parent Company
fi nancial statements, the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable,
relevant and reliable;
• state whether they have been prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and, as regards
the group fi nancial statements, International Financial
Reporting Standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union ( IFRSs
as adopted by the EU );
• assess the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters
related to going concern; and
• use the going concern basis of accounting unless they
either intend to liquidate the Group or the parent Company
or to cease operations, or have no realistic alternative but
to do so.
The Directors are responsible for keeping adequate
accounting records that are suffi cient to show and explain
the parent Company’s transactions and disclose with
reasonable accuracy at any time the fi nancial position of the
parent Company and enable them to ensure that its fi nancial
statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is
necessary to enable the preparation of fi nancial statements
that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic report, Directors’ report,
Directors’ Remuneration report and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and fi nancial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of fi nancial statements
may differ from legislation in other jurisdictions.
Responsibility statement of the
Directors in respect of the annual
fi nancial report
Each of the Directors confi rms that to the best of his or her
knowledge:
• the fi nancial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, fi nancial position and profi t or
loss of the Company and the undertakings included in the
consolidation taken as a whole; and
• the Strategic report and Directors’ report includes a
fair review of the development and performance of
the business and the position of the issuer and the
undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties that they face.
The Directors consider the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders
to assess the Group’s position and performance, business
model and strategy.
Signed on behalf of the Board of Directors
E P O’Lionaird
S C Kilpatrick
Chief Executive Offi cer
Group Finance Director
10 March 2021
10 March 2021
James Fisher and Sons plc Annual report and accounts 2020
91
Independent auditor’s report
Independent auditor’s report
1 Our opinion is unmodifi ed
We have audited the fi nancial statements of James Fisher & Sons plc (“the Company”) for the year ended 31 December
2020 which comprise the Consolidated Income Statement, the Consolidated Statement of Other Comprehensive Income,
the Consolidated and Company Statement of Financial Position, the Consolidated and Company Cash Flow Statement, the
Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including
the accounting policies in note 1.
In our opinion:
• the fi nancial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at
31 December 2020 and of the Group’s loss for the year then ended;
• the Group fi nancial statements have been properly prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union;
• the parent Company fi nancial statements have been properly prepared in accordance with international accounting
standards in conformity with the requirements of, and as applied in accordance with the provisions of, the Companies Act
2006; and
• the fi nancial statements have been prepared in accordance with the requirements of the Companies Act 2006 and,
as regards the Group fi nancial statements, Article 4 of the IAS Regulation to the extent applicable.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We believe that the audit evidence we have obtained is a suffi cient and appropriate basis
for our opinion. Our audit opinion is consistent with our report to the audit committee.
We were fi rst appointed as auditor by the directors on 30 June 2008. The period of total uninterrupted engagement is for the
13 fi nancial years ended 31 December 2020. We have fulfi lled our ethical responsibilities under, and we remain independent of
the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest
entities.
2 Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most signifi cance in the audit of the fi nancial
statements and include the most signifi cant assessed risks of material misstatement (whether or not due to fraud) identifi ed
by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. We summarise below the key audit matters, in decreasing order of audit
signifi cance, in arriving at our audit opinion above, together with our key audit procedures to address those matters and, as
required for public interest entities, our results from those procedures. These matters were addressed, and our results are
based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the fi nancial statements as a
whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate
opinion on these matters.
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James Fisher and Sons plc Annual report and accounts 20 20
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Independent auditor’s report
Impairment of goodwill, £17.0m (2019: nil), carrying value £166.5m (2019: £185.5m) and Parent Company Investment in
subsidiaries, £40. 5m (2019: nil), carrying value £505.7m (2019: £495.5m) Risk vs 2019: ▲
Refer to page 68 (Audit Committee report), page 143 (accounting policy) and page 117 (fi nancial disclosures)
The risks:
Forecast based assessment
The recoverability of goodwill in the Group and Parent Company investment in subsidiaries is subjective due to the inherent
uncertainty involved in forecasting and discounting future cash fl ows, particularly in light of COVID-19’s impact on trading
performance in the current year leading to impairments being recognised, operational diffi culties and changes in the external
oil market, including climate risk.
We have isolated the risk of impairment to the following CGU’s as these have the lowest headroom within both the groups
discounted cashfl ow workings and our own sensitivities: Subtech, James Fisher Testing Services, James Fisher Marine
Services, DDS, James Fisher Offshore and Scantech AS.
The effect of these matters is that, as part of our risk assessment for audit planning purposes, we determined that the
recoverable amount of goodwill had a high degree of estimation uncertainty, with a potential range of reasonable outcomes
greater than our materiality for the fi nancial statements as a whole. The fi nancial statements (note 12) disclose the sensitivity
estimated by the Group.
Presentation appropriateness
Given the adverse impact of COVID-19 on the Group’s trading performance in the year, leading to impairments of goodwill
and the carrying amount of investments in subsidiaries being recognised, there is an increased risk regarding presentation of
costs as separately disclosed. Items excluded from adjusted profi t are not defi ned by IFRSs and therefore a policy decision is
required by the directors to identify such items and to maintain the comparability of results with previous years in accordance
with the Group’s accounting policy, and there is a risk of management bias. Failure to disclose clearly the nature and impact of
items excluded from adjusted profi t may distort the reader’s view of the fi nancial result in the year.
Our response: We performed the tests below rather than seeking to rely on any of the group’s controls because the nature of
the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described.
Our audit procedures included:
1. Historical comparisons: assessing the reasonableness of the budgets by considering the historical accuracy of previous
forecasts.
2. Our sector experience: assessing whether assumptions used, in particular those relating to forecast revenue growth, profi t
margins, and maintenance expenditure, including the effect of COVID-19 thereon, refl ect our knowledge of the business
and industries, including known or probable changes in the business environment. We assessed the appropriate inputs
building up these forecasts, drawing on historical data and our own research and sector experience. Inputs assessed
include terminal growth value, discount rate, and the period of cash fl ows included within the model.
3. Benchmarking assumptions: challenging the key inputs used in the impairment test, in particular discount rates,
by comparing them to externally derived data, including available sources for comparable companies.
4. Sensitivity analysis: performing breakeven analysis on the key assumptions noted above.
5. Applying judgement: assessing whether an understatement of goodwill impairment identifi ed through these procedures
was material.
6. Assessing transparency: assessing whether the Group’s disclosures about the sensitivity of the outcome of the
impairment assessment to changes in key assumptions refl ected the risks inherent in the valuation of goodwill and
investments, and assessing the Group’s presentation of impairment charges as separately disclosed and the related
disclosures for impairments in the narrative sections of the annual report in light of the ESMA guidance on the reporting
of Alternative Performance Measures and FRC guidance on COVID-19.
Our results: We found the Group goodwill and Parent Company investments in subsidiaries balance, the related impairment
charges, and the presentation thereof as separately disclosed, to be acceptable (2019: acceptable).
James Fisher and Sons plc Annual report and accounts 20 20
93
Independent auditor’s report
Independent auditor’s report (continued)
Impairment of vessels, £33.0m (2019: nil), carrying value £56.0m (2019: £95.1m) Risk vs 2019: New
Refer to page 68 (Audit Committee report), page 143 (accounting policy) and page 119 (fi nancial disclosures)
The risks:
Forecast based assessment
There has been underutilisation of certain vessels held in both the Marine Support and Tankship operating segments, driven
by a combination of factors, including operational diffi culties, the external oil market and the impact of COVID-19 . There is
therefore uncertainty around the long-term utilisation of these vessels, in particular the Dive Support Vessel’s (DSV’s) held
within the Marine Support operating segment. During the year, the Group identifi ed an impairment in relation to vessels.
This is considered to be one of the areas that had the greatest effect on our overall Group audit due to the inherent signifi cant
judgements involved in the vessel impairment test and due to their materiality in the context of the Group fi nancial statements.
The effect of these matters is that, as part of our risk assessment for audit planning purposes, we determined that the
recoverable amount of vessels had a high degree of estimation uncertainty, with a potential range of reasonable outcomes
greater than our materiality for the fi nancial statements as a whole.
Presentation appropriateness
Given the adverse impact of COVID-19 on the Group’s trading performance in the year, leading to asset impairments, there is
an increased risk regarding presentation of costs as separately disclosed. Items excluded from adjusted profi t are not defi ned
by IFRSs and therefore a policy decision is required by the directors to identify such items and to maintain the comparability of
results with previous years in accordance with the Group’s accounting policy, and there is a risk of management bias. Failure
to disclose clearly the nature and impact of items excluded from adjusted profi t may distort the reader’s view of the fi nancial
result in the year.
Our response: We performed the tests below rather than seeking to rely on any of the group’s controls because the nature of
the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described.
Our audit procedures included:
1. Valuation credentials: where external experts have been engaged by management, assessing the competence,
independence and integrity of these experts.
2. Benchmarking assumptions: challenging management and external experts on the key inputs used in the valuation
model and within valuation reports, where applicable, with reference to our sector experience and by comparing them to
externally derived data, including available sources for comparable companies and assets.
3. Sensitivity analysis: assessing the sensitivity of the valuation model to changes in key assumptions
4. Inspection and enquiry: performing inquiries with management to identify any vessels disposed of after the period end
for which the proceeds were less than the carrying value within the fi nancial statements. We made further inquiries on the
contracted use of DSV’s. We inspected evidence to support the opportunities being pursued and assessed the likelihood
that such opportunities being realised.
5. Applying judgement: assessing whether an overstatement of vessel impairment identifi ed through these procedures was
material.
6. Assessing transparency: assessing the appropriateness of the presentation of the impairment charges as separately
disclosed by assessing the Group’s presentation of impairment charges as separately disclosed and the related disclosures
for impairments in the narrative sections of the annual report in light of the ESMA guidance on the reporting of Alternative
Performance Measures and FRC guidance on COVID-19. We also assessed disclosures about the sensitivity of the
outcome of the vessel impairment assessment to changes in key assumptions refl ected the risks inherent in the valuation
of the vessels.
Our results: We found the resulting carrying amount of the Group vessels, the related impairment charge, and the presentation
thereof as separately disclosed, to be acceptable (2019: acceptable).
94
James Fisher and Sons plc Annual report and accounts 20 20
Independent auditor’s report
Revenue recognition and long-term contracts £518.2m (2019: £617.1m), Contract assets £62.4m (2019: £78.1m) and
Contract Liabilities £9.5m (2019: £16.6m) Risk vs 2019: ▲
Refer to page 146 (accounting policy) and pages 111 and 112 (fi nancial disclosures)
The risk: Subjective estimates
The contractual arrangements that underpin the measurement and recognition of revenue by the Group can be complex,
with subjective estimates involved in the assessment of current and future contract performance. In particular, where services
rendered are provided through long-term contracts and are not completed at the balance sheet date and output measures
cannot be estimated reliably, revenue is recognised in proportion to the measure of progress of the transaction measured by
reference to an input measure, such as physical progress, attributable man hours and costs incurred measured against the
expected outcome which leads to contract asset or liabilities at the period end. The measure of progress is estimated by the
Group and includes certain judgements as contracts may run over a number of accounting periods and include forecasts
in relation to future costs including labour and materials which are not yet known. In addition, contract modifi cations and
variable consideration can lead to uncertainty over the total contract price. The effect of these matters is that, as part of our
risk assessment, we determined that revenue recognition in relation to long-term contracts has a high degree of estimation
uncertainty, with a potential range of reasonable outcomes greater than our materiality for the fi nancial statements as a whole,
and possibly many times that amount. In conducting our fi nal audit work, we reassessed the degree of estimation uncertainty
to be less than that materiality.
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We consider the risk level to have increased when compared to the prior year as a result of contract delays primarily caused by
COVID-19 resulting in increased estimation uncertainty.
Our response: We performed the tests below rather than seeking to rely on any of the group’s controls because the nature of
the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described.
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Our audit procedures included:
1. Test of details: for long term contracts, selecting the contracts for substantive audit procedures based on qualitative
factors, such as commercial complexity and life of contract, and quantitative factors, such as fi nancial signifi cance and
profi tability that we considered to be indicative of risk. For the selected contracts, agreeing observable inputs used in
the calculations of costs incurred to date to be able to assess the stage of completion. Costs incurred are those such as
direct costs and labour charges; we agreed a sample of these to source data, including customer acceptance acts and
countersigned agreements. Our testing included agreeing the allocation of costs incurred to contracts, and assessing the
impact of delays to timetable and additional costs incurred as a result of COVID-19.
2. Historical comparisons: assessing the reliability of the Group’s forecasts of costs to complete by considering historical
accuracy of their forecasts on completed contracts.
3. Personnel enquiries: discussing with operational management for the sample above their expectations for contracts, and
comparing these to the forecasts used for the accounting.
4. Our sector experience: assessing, for the sample above, whether the subjective estimates made by the Group over the
measure of progress and estimates over cost to complete are consistent with our understanding of contract activities and
performance. This involved comparing assumptions such as the estimate over costs to complete to a variety of information
as appropriate, including correspondence with customers, historical outcomes and operational management views.
For contracts in the sample above that have signifi cant estimation in the total contract price due to contract modifi cations
and variable consideration, we assessed the assumptions made by the directors in light of the Group’s historical
experience on similar contracts and correspondence with customers.
5. Applying judgement: assessing whether an overstatement of revenue from long term contracts and contract assets
identifi ed through these procedures was material.
6. Assessing transparency: assessing the appropriateness of the Group’s disclosures in respect of revenue from long term
contracts, contract assets and liabilities.
Our results: We found revenue recognition from long term contracts, and contract assets and liabilities, to be acceptable
(2019: acceptable).
James Fisher and Sons plc Annual report and accounts 20 20
95
Independent auditor’s report
Independent auditor’s report (continued)
Group operations in overseas jurisdictions – fraud risk and compliance with laws and regulations, Risk vs 2019: ▲▼
Refer to page 68 (Audit Committee report), page 147 (accounting policies) and page 137 (fi nancial disclosures).
The risk:
Omitted exposures.
The Group is a multinational and has operations in a number of less developed markets, including countries in South America,
South East Asia, the Middle East and Africa. Operating in these territories presents increased operational and fi nancial
risks both due to the need to comply with potentially uncertain regulatory and legislative environments, including where
local regulations in those markets are different from laws and regulations that govern the Group as a whole. Breaches of
compliance, either through fraud or error, or inappropriate assumptions over provisioning for the uncertain legislation could
have a signifi cant effect on the results and fi nancial position of the Group and is one of the judgemental areas our audit is
focused on.
Our response: We performed the detailed tests below rather than seeking to rely on any of the group’s controls because
our knowledge of the design of these controls indicated that we would be unlikely to obtain the required evidence to support
reliance on controls.
Our audit procedures included:
1. Inspection and enquiry: considering the Group’s exposure to potential breaches of legislation by making appropriate
enquiry of the Group in relation to compliance with laws and regulations and the existence and status of any known or
suspected signifi cant legal matters.
2. Compliance data scrutiny: inspecting the biannual self-reporting by local management and testing a sample of reported
3rd party relationships against Group policy in relation to payments, the due diligence process prior to entering into the
relationship, and the completeness of listings at Group level in relation to these relationships. We inspected underlying
agreements as considered necessary.
3. Enquiry of lawyers: Where signifi cant or potential matters were identifi ed we made enquiries of the Group’s legal counsel
and legal representative, inspected any related correspondence and documentation, and challenged the Group on whether
the criteria for the recognition of a provision have been met.
4. Assessing transparency: assessing whether the Group’s contingent liability disclosures adequately disclose the potential
liabilities of the Group.
Our results: We considered the non recognition of provisions and contingent liability disclosures within the fi nancial
statements to be acceptable (2019: acceptable).
In the prior year we reported a key audit matter in respect of the impact of uncertainties due to the UK exiting the European
Union. Following the trade agreement between the UK and the EU, and the end of the EU-exit implementation period, the
nature of these uncertainties has changed. We continue to perform procedures over material assumptions in forward looking
assessments such as going concern and impairment tests however we no longer consider the effect of the UK’s departure
from the EU to be a separate key audit matter.
3 Our application of materiality and an overview of the scope of our audit
The materiality for the Group fi nancial statements as a whole was set at £2.3m (2019: £2.8m), determined with reference to
a benchmark of fi ve year average Group profi t before tax of £49.1m normalised to exclude separately disclosed items as
disclosed in note 5 (2019: £58.5m), of which it represents 4.7% (2019: 4.8%).
The materiality for the Parent company fi nancial statements as a whole was set at £0.7m (2019: £0.7m), determined with
reference to a benchmark of gross assets of £527.2m (2019: £539.2m), of which it represents 0.1% (2019: 0.1%).
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James Fisher and Sons plc Annual report and accounts 20 20
Independent auditor’s report
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in
individual account balances add up to a material amount across the fi nancial statements as a whole. Performance materiality
for the group and parent company was set at 65% (2019: 65%) of materiality for the fi nancial statements as a whole, which
equates to £1.5m (2019 : £1.8m) for the group and £0.5m for the parent (2019: £0.5m). We applied this percentage in our
determination of performance materiality based on the level of identifi ed misstatements during the prior period.
We agreed to report to the Audit Committee any corrected or uncorrected identifi ed misstatements exceeding £0.12m (2019:
£0.14m), in addition to other identifi ed misstatements that warranted reporting on qualitative grounds.
Of the Group’s 146 (2019: 146) reporting components, we subjected 17 (2019: 21) to full scope or specifi c procedures audits
for Group purposes.
We conducted reviews of fi nancial information (including enquiry) at a further 9 (2019: 8) non-signifi cant components to obtain
further coverage. These components were not individually fi nancially signifi cant enough to require an audit for Group reporting
purposes.
The components within the scope of our work accounted for the following percentages of the Group’s results:
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Number of
components
17 (2019: 21)
Group revenue
Group profi t
before tax
Group total assets
86% (2019: 83%)
76% (2019: 71%)
75% (2019: 73%)
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9 (2019: 8)
10% (2019: 8%)
6% (2019: 8%)
8% (2019: 7%)
Audits and specifi ed
procedures for group
reporting purposes
Reviews of fi nancial
information (including
enquiry)
Total
26 (2019: 29)
96% (2019: 91%)
82% (2019: 79%)
83% (2019: 80%)
The remaining 4% of total Group revenue, 18% of Group profi t before tax and 17% of total Group assets is represented by
120 reporting components, none of which individually represented more than 1% of any of total Group revenue, 3% of Group
profi t before tax and 2% total Group assets. For these residual components, we performed analysis at an aggregated Group
level to re-examine our assessment that there were no signifi cant risks of material misstatement within these.
The Group audit team instructed component auditors as to the signifi cant areas to be covered, including the relevant risks
detailed above and the information to be reported back. The Group audit team approved the component materialities, which
ranged from £0.1m to £1.25m (2019: £0.1m to £1.4m), having regard to the mix of size and risk profi le of the Group across the
components. The work on 15 (2019: 16) of the 26 (2019: 28) components was performed by component auditors and the rest,
including the audit of the Parent Company, was performed by the Group audit team.
Video and telephone conference meetings were held with all component auditors. At these meetings, the fi ndings reported to
the Group team were discussed in more detail, and any further work required by the Group team was then performed by the
component auditor.
For those items excluded from normalised group profi t before tax, the component teams performed procedures on items
relating to their components. The group team performed procedures on the remaining excluded items.
James Fisher and Sons plc Annual report and accounts 20 20
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Independent auditor’s report
Independent auditor’s report (continued)
4 Going concern
The directors have prepared the fi nancial statements on the going concern basis as they do not intend to liquidate the Group
or the Company or to cease their operations, and as they have concluded that the Group’s and the Company’s fi nancial
position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast
signifi cant doubt over their ability to continue as a going concern for at least a year from the date of approval of the fi nancial
statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general economic environment to identify the inherent risks to
its business model and analysed how those risks might affect the Group’s and Company’s fi nancial resources or ability to
continue operations over the going concern period. The risk that we considered most likely to adversely affect the Group’s and
Company’s available fi nancial resources and metrics relevant to debt covenants over this period was the signifi cant increase in
cost to deliver and delays to current and future contracts as a result of COVID-19.
We considered whether these risks could plausibly affect the liquidity or covenant compliance in the going concern period by
assessing the directors’ sensitivities over the level of available fi nancial resources and covenant thresholds indicated by the
Group’s fi nancial forecasts taking account of severe, but plausible, adverse effects that could arise from these risks individually
and collectively.
Our procedures also included:
1. Assessing key assumptions in the forecasts – critically assessing assumptions in base case and downside scenarios
relevant to liquidity and covenant metrics. This included assessing whether downside scenarios applied are mutually
consistent, using our assessment of the possible range of each key assumption and our knowledge of inter-dependencies,
and assessing the working capital assumptions inherent in the forecasts to actual recent experience and existing supplier/
customer arrangements.
2. Assessing the directors’ track record of forecast vs actual cash fl ows – comparing past budgets to actual results to
assess the directors’ track record of budgeting accurately.
3. Assessing the completeness and accuracy of the matters covered in the going concern disclosure – considering
whether the going concern disclosure in note 1 to the fi nancial statements gives a full and accurate description of the
directors’ assessment of going concern, including the identifi ed risks and related sensitivities.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis of accounting in the preparation of the fi nancial statements is
appropriate;
• we have not identifi ed, and concur with the directors’ assessment that there is not, a material uncertainty related to events or
conditions that, individually or collectively, may cast signifi cant doubt on the Group’s or Company’s ability to continue as a
going concern for the going concern period;
• we have nothing material to add or draw attention to in relation to the directors’ statement in note 1 to the fi nancial
statements on the use of the going concern basis of accounting with no material uncertainties that may cast signifi cant
doubt over the Group and Company’s use of that basis for the going concern period, and we found the going concern
disclosure in note 1 to be acceptable; and
• the related statement under the Listing Rules set out on page 51 is materially consistent with the fi nancial statements and
our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that
the Group or the Company will continue in operation.
98
James Fisher and Sons plc Annual report and accounts 20 20
Independent auditor’s report
5 Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
• Enquiring of directors, the audit committee, internal audit and inspection of policy documentation as to the Group’s high-
level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for
“whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
• Reading Board/audit committee/risk committee minutes.
• Considering remuneration incentive schemes and performance targets for directors.
We communicated identifi ed fraud risks throughout the audit team and remained alert to any indications of fraud throughout
the audit. This included communication from the group to full scope component audit teams of relevant fraud risks identifi ed at
the Group level and request to full scope component audit teams to report to the Group audit team any instances of fraud that
could give rise to a material misstatement at group.
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As required by auditing standards, and taking into account possible pressures to meet profi t targets and our overall knowledge
of the control environment, we perform procedures to address the risk of management override of controls and the risk of
fraudulent revenue recognition, the risk that Group and component management may be in a position to make inappropriate
accounting entries, and the risk of bias in accounting estimates and judgements such as provisions for contract disputes.
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We also identifi ed a fraud risk related to Group operations in overseas jurisdictions. This is in response to increased operational
and fi nancial risks both due to the need to comply with potentially uncertain regulatory and legislative environments where
local regulations in those markets are different from laws and regulations that govern the Group as a whole.
Further detail in respect of revenue recognition and Group operations in overseas jurisdictions is set out in the key audit matter
disclosures in section 2 of this report.
In determining the audit procedures we took into account the results of our evaluation and testing of the operating
effectiveness of the Group-wide fraud risk management controls.
We also performed procedures including:
• Identifying journal entries to test for all full scope components based on risk criteria and comparing the identifi ed entries to
supporting documentation. These included unexpected journals posted to cash accounts and separately disclosed fi nancial
statement captions.
• Evaluating the business purpose of signifi cant unusual transactions.
• Assessing signifi cant accounting estimates for bias.
Identifying and responding to risks of material misstatement due to non-compliance with laws and
regulations
We identifi ed areas of laws and regulations that could reasonably be expected to have a material effect on the fi nancial
statements from our general commercial and sector experience, through discussion with the directors and other management
(as required by auditing standards), from inspection of the Group’s regulatory and legal correspondence and discussed with
the directors and other management the policies and procedures regarding compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the
entity’s procedures for complying with regulatory requirements.
James Fisher and Sons plc Annual report and accounts 20 20
99
Independent auditor’s report
Independent auditor’s report (continued)
We communicated identifi ed laws and regulations throughout our team and remained alert to any indications of non-
compliance throughout the audit. This included communication from the group to full-scope component audit teams of
relevant laws and regulations identifi ed at the Group level, and a request for full scope component auditors to report to the
group team any instances of non-compliance with laws and regulations that could give rise to a material misstatement at
group.
The potential effect of these laws and regulations on the fi nancial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the fi nancial statements including fi nancial reporting
legislation (including related companies legislation), distributable profi ts legislation and taxation legislation and we assessed
the extent of compliance with these laws and regulations as part of our procedures on the related fi nancial statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a
material effect on amounts or disclosures in the fi nancial statements, for instance through the imposition of fi nes or litigation or
the loss of the Group’s license to operate. We identifi ed the following areas as those most likely to have such an effect: health
and safety, anti-bribery, employment law, and certain aspects of company legislation recognising the nature of the Group’s
activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations
to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore if a
breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that
breach.
Further detail in respect of Group operations in overseas jurisdictions is set out in the key audit matter disclosures in section 2
of this report.
In regard to health and safety matters discussed in the Strategic Report, we assessed disclosures against our understanding
from legal correspondence and inquiry with directors.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the fi nancial statements, even though we have properly planned and performed our audit in accordance
with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events
and transactions refl ected in the fi nancial statements, the less likely the inherently limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-
compliance with all laws and regulations.
6 We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report together with the fi nancial statements.
Our opinion on the fi nancial statements does not cover the other information and, accordingly, we do not express an audit
opinion or, except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our fi nancial statements audit
work, the information therein is materially misstated or inconsistent with the fi nancial statements or our audit knowledge.
Based solely on that work we have not identifi ed material misstatements in the other information.
100
James Fisher and Sons plc Annual report and accounts 20 20
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Independent auditor’s report
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identifi ed material misstatements in the strategic report and the directors’ report;
• in our opinion the information given in those reports for the fi nancial year is consistent with the fi nancial statements; and
• in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures
in respect of emerging and principal risks and the viability statement, and the fi nancial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
• the directors’ confi rmation within the viability statement that they have carried out a robust assessment of the emerging and
principal risks facing the Group, including those that would threaten its business model, future performance, solvency and
liquidity;
• the Principal Risks disclosures describing these risks and how emerging risks are identifi ed, and explaining how they are
being managed and mitigated; and
• the directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what
period they have done so and why they considered that period to be appropriate, and their statement as to whether they
have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related disclosures drawing attention to any necessary qualifi cations or
assumptions.
We are also required to review the viability statement set out on page 51 under the Listing Rules. Based on the above
procedures, we have concluded that the above disclosures are materially consistent with the fi nancial statements and our audit
knowledge.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our fi nancial statements
audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the absence of anything to report on these
statements is not a guarantee as to the Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ corporate
governance disclosures and the fi nancial statements and our audit knowledge.
James Fisher and Sons plc Annual report and accounts 20 20
101
Independent auditor’s report
Independent auditor’s report (continued)
Based on those procedures, we have concluded that each of the following is materially consistent with the fi nancial statements
and our audit knowledge:
• the directors’ statement that they consider that the annual report and fi nancial statements taken as a whole is fair,
balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position and
performance, business model and strategy;
• the section of the annual report describing the work of the Audit Committee, including the signifi cant issues that the audit
committee considered in relation to the fi nancial statements, and how these issues were addressed; and
• the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal
control systems.
We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the
provisions of the UK Corporate Governance Code specifi ed by the Listing Rules for our review. We have nothing to report in
this respect.
7 We have nothing to report on the other matters on which we are required
to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent Company fi nancial statements and the part of the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specifi ed by law are not made; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
8 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 91, the directors are responsible for: the preparation of the fi nancial
statements including being satisfi ed that they give a true and fair view; such internal control as they determine is necessary
to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error;
assessing the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the parent
Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the fi nancial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of the fi nancial
statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
102
James Fisher and Sons plc Annual report and accounts 20 20
Independent auditor’s report
9 The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006 and the terms of our engagement by the Company. 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 the further matters we are
required to state to them in accordance with the terms agreed with the Company, 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.
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Mike Barradell (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
Canary Wharf
London
E14 5GL
10 March 2021
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James Fisher and Sons plc Annual report and accounts 20 20
103
Financial statements
Consolidated income statement
for the year ended 31 December 2020
Year ended 31 December 2020
Year ended 31 December 2019
Before
separately
disclosed
items
£m
518.2
(380.6)
137.6
(98.7)
1.6
40.5
(9.0)
31.5
(7.2)
24.3
24.1
0.2
24.3
Separately
disclosed
items
£m
–
(43.2)
(43.2)
(40.8)
–
(84.0)
–
(84.0)
2.4
(81.6)
(81.6)
–
(81.6)
Notes
3
16
7
8
10
10
Total
£m
518.2
(423.8)
94.4
(139.5)
1.6
(43.5)
(9.0)
(52.5)
(4.8)
(57.3)
(57.5)
0.2
(57.3)
pence
(114.2)
(114. 2)
Before
separately
disclosed
items
£m
617.1
(432.4)
184.7
(119.2)
0.8
66.3
(7.8)
58.5
(11.6)
46.9
46.9
–
46.9
Separately
disclosed
items
£m
–
–
–
(10.7)
–
(10.7)
–
(10.7)
0.5
(10.2)
(10.2)
–
(10.2)
Total
£m
617.1
(432.4)
184.7
(129.9)
0.8
55.6
(7.8)
47.8
(11.1)
36.7
36.7
–
36.7
pence
73.1
72.7
Revenue
Cost of sales
Gross profit
Administrative expenses
Share of post-tax results of associates
Operating profit/(loss)
Net finance expense
Profit/(loss) before taxation
Income tax
Profit/(loss) for the year
Attributable to:
Owners of the Company
Non–controlling interests
(Loss)/e arnings per share
Basic
Diluted
Consolidated statement
of other comprehensive income
for the year ended 31 December 2020
(Loss)/profit for the year
Items that will not be classified to the income statement
Actuarial (loss)/gain in defined benefit pension schemes
Tax on items that will not be reclassified
Items that may be reclassified to the income statement
Exchange differences on foreign currency net investments
Effective portion of changes in fair value of cash flow hedges
Effective portion of changes in fair value of cash flow hedges in joint ventures
Net changes in fair value of cash flow hedges transferred to income statement
Deferred tax on items that may be reclassified
Total comprehensive income for the year
Attributable to:
Owners of the Company
Non-controlling interests
104
James Fisher and Sons plc Annual report and accounts 20 20
Year ended
31 December
2020
£m
Year ended
31 December
2019
£m
(57.3)
36.7
Notes
22
28
16
8
(9.3)
1. 1
(8.2)
(7.8)
0.6
(0.2)
(0.1)
1. 1
(6. 4)
(71.9)
(72.0)
0.1
(71.9)
2.2
0.6
2.8
(8.1)
2.3
(0.1)
(1.4)
(0.4)
(7.7)
31.8
31.8
-
31.8
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Consolidated and Company
statement of fi nancial position
as at 31 December 2020
Financial statements
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-use assets
Investment in joint ventures
Investments in subsidiaries
Other investments
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Provisions
Current tax
Borrowings
Lease liabilities
Net current assets
Total assets less current liabilities
Non-current liabilities
Other payables
Provisions
Retirement benefit obligations
Cumulative preference shares
Borrowings
Lease liabilities
Deferred tax liabilities
Net assets
Equity
Called up share capital
Share premium
Treasury shares
Other reserves
Retained earnings
Total shareholders equity
Non-controlling interests
Total equity
Group
Company
31 December
2020
£m
31 December
2019
£m
31 December
2020
£m
31 December
2019
£m
Notes
12
13
14
15
16
17
17
9
18
19
20
21
8
26
26
20
21
22
29
26
26
9
29
29
166.5
20.1
15 8.2
30.7
7.5
–
1.4
5.2
185.5
29.7
210.6
27.1
8.5
–
1.4
4.5
3 89.6
467.3
46.6
16 2.8
23.9
23 3.3
47.9
213.7
18.5
280.1
(14 0.1)
(158.0)
–
(7.6)
(10.6)
(7.2)
(16 5.5)
6 7.8
457.4
(3.6)
(1.6)
(10.3)
(0.1)
(178.8)
(25.3)
(1.8)
(221.5)
235.9
12.6
26.7
(0.2)
(16.5)
212.6
235.2
0.7
235.9
(0.7)
(10.5)
(11.3)
(8.9)
(189.4)
90.7
558.0
(4.8)
–
(5.8)
(0.1)
(207.3)
(21.3)
(4.7)
(244.0)
314.0
12.6
26.5
–
(10.6)
284.7
313.2
0.8
314.0
–
–
3.9
1.5
–
50 5.7
1.4
2.8
51 5.3
–
6.3
3.1
9.4
(10. 6)
(0.4)
(0.1)
(46.0)
(0.2)
(57. 3)
(4 7.9)
4 67.4
–
–
(9.5)
(0.1)
–
–
4.5
1.8
–
495.5
1.4
2.0
505.2
–
6.9
27.1
34.0
(10.6)
(0.4)
2.6
(11.0)
(0.3)
(19.7)
14.3
519.5
–
–
(3.7)
(0.1)
(178. 6)
(206.7)
(1.5)
–
(189. 7)
2 77.7
12.6
26.7
(0.2)
1.9
2 36. 7
2 77.7
–
2 77.7
(1.7)
–
(212.2)
307.3
12.6
26.5
–
0.9
267.3
307.3
–
307.3
The fi nancial statements were approved by the Board of Directors on 10 March 2021 and signed on its behalf by:
Stuart Kilpatrick
Group Finance Director
Company number 00211475
James Fisher and Sons plc Annual report and accounts 20 20
105
Financial statements
Consolidated and Company
cash fl ow statement
for the year ended 31 December 2020
(Loss)/profit before tax
Adjustments to reconcile (loss)/profit before tax to net cash flows
Depreciation and amortisation
Separately disclosed items (excluding amortisation)
5
Notes
Other non -cash items
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Defined benefit pension cash contributions less service cost
Cash generated from operations
Cash outflow from separately disclosed items
Income tax (payments)/receipts
Cash flow from operating activities
Investing activities
Dividends from joint venture undertakings
Proceeds from the disposal of a subsidiary
Proceeds from the disposal of property, plant and equipment
Finance income
Acquisition of subsidiaries, net of cash acquired
Net loans advanced to subsidiaries
Investment in joint ventures and other investments
Acquisition of property, plant and equipment
Development expenditure
Cash flows used in investing activities
Financing activities
Proceeds from the issue of share capital
Finance costs
Net purchase of own shares by Employee Share Ownership Trust
Notional purchase of own shares for LTIP vesting
Capital element of lease repayments
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Dividends paid to non-controlling interest
Cash flows (used in)/from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Net foreign exchange differences
Cash and cash equivalents at 31 December
*
Cash and cash equivalents restated for the year ended 31 December 2019 (note 26)
25
24
11
27
26
26
Group
Company
31 December
2020
£m
(52.5)
4 8.0
81.1
7.1
2.0
30.9
(1 3.4)
(4.8)
98.4
(3.9)
(7.9)
86.6
1.8
1.3
2.6
0.3
(7.9)
–
(0.5)
(17.5)
(2.9)
(22.8)
0.2
(7.0)
(0.9)
(1.0)
(13.0)
34.3
( 6 4.5)
(4.0)
(0.2)
(56. 1)
7. 7
7.5
(1.7)
13.5
31 December
2019
restated*
£m
47.8
43.1
7.6
6.4
(2.4)
(31.1)
12.2
(8.4)
75.2
(7.5)
(9.6)
58.1
1.7
–
2.2
0.3
(12.5)
–
(4.7)
(88.9)
(3.5)
(105.4)
–
(5.3)
(1.1)
(1.3)
(11.3)
106.6
( 32.2)
(16.4)
(2.0)
37.0
(10.3)
18.6
(0.8)
7.5
31 December
2020
£m
( 15.9)
1.1
41.7
(1.7)
–
1.8
0.2
(4.7)
22.5
(0.6)
0.9
22.8
–
–
–
11.6
–
(51.2)
–
(0.1)
–
(39.7)
0.2
(6.3)
(0.9)
(1.0)
(0.3)
–
(29.7)
(4.0)
–
( 42.0)
( 58.9)
16.1
(0.1)
(42.9)
31 December
2019
restated*
£m
55.2
1.2
3.7
(3.8)
–
(1.8)
1.2
(8.2)
47.5
–
(1.2)
46.3
–
–
–
8.3
–
(99.4)
–
(0.9)
–
(92.0)
–
(4.4)
(1.1)
(1.3)
(0.2)
85.3
–
(16.4)
–
61.9
16.2
(0.1)
–
16.1
106
James Fisher and Sons plc Annual report and accounts 20 20
Consolidated statement
of changes in equity
for the year ended 31 December 2020
Financial statements
Share
capital
£m
12.6
Share
premium
£m
25.9
–
–
–
–
–
–
–
–
–
–
–
–
12.6
–
–
–
–
–
–
–
–
–
–
–
12.6
–
–
–
–
–
–
–
–
–
–
0.6
–
26.5
–
–
–
–
–
–
–
–
–
0.2
–
26.7
At 1 January 2019
IFRIC 23 opening balance adjustments
Profit for the year
Other comprehensive income
Contributions by and distributions to owners:
Ordinary dividends paid
Non-controlling interest dividend waiver
Acquisition
Share based payments
Tax effect of share based payments
Purchase of shares by ESOT
Notional purchase of own shares
Arising on the issue of shares
Transfer
At 31 December 2019
Loss for the year
Other comprehensive income
Contributions by and distributions to owners:
Ordinary dividends paid
Dividend paid to non-controlling interest
Remeasurement of non-controlling
interest put option
Share based payments
Tax effect of share based payments
Purchase of shares by ESOT
Notional purchase of own shares
Arising on the issue of shares
Transfer
At 31 December 2020
Other reserve movements
Other reserves
At 1 January 2019
Other comprehensive income
Remeasurement of non -controlling interest put option
At 31 December 2019
Other comprehensive income
Remeasurement of non -controlling interest put option
At 31 December 2020
Retained
earnings
£m
Other
reserves
£m
Treasury
shares
£m
Total
share holders
equity
£m
Non-
controlling
interests
£m
(0.4)
305.0
267.8
(1.6)
36.7
2.2
(16.4)
(1.7)
–
0.9
0.2
–
(1.9)
–
(1.5)
284.7
(57.5)
(8.7)
(4.0)
–
–
0.1
(0.3)
–
(1.0)
–
(0.7)
(0.9)
–
–
(7.1)
–
–
(2.6)
–
–
–
–
–
–
(10.6)
–
(5.8)
–
–
(0.1)
–
–
–
–
–
–
212.6
(16.5)
–
–
–
–
–
–
–
–
(1.1)
–
–
1.5
–
–
–
–
–
–
–
–
(0.9)
–
–
0.7
(0.2)
(1.6)
36.7
(4.9)
(16.4)
(1.7)
(2.6)
0.9
0.2
(1.1)
(1.9)
0.6
–
313.2
(57.5)
(14.5)
(4.0)
–
(0.1)
0.1
(0.3)
(0.9)
(1.0)
0.2
–
S
t
r
a
t
e
g
c
r
e
p
o
r
t
i
G
o
v
e
r
n
a
n
c
e
i
F
n
a
n
c
a
i
l
s
t
a
t
e
m
e
n
t
s
Total
equity
£m
306.4
(1.6)
36.7
(4.9)
(18.4)
(0.9)
(2.0)
0.9
0.2
(1.1)
(1.9)
0.6
–
314.0
(57.3)
(14.6)
(4.0)
(0.2)
(0.1)
0.1
(0.3)
(0.9)
(1.0)
0.2
–
1.4
–
–
–
(2.0)
0.8
0.6
–
–
–
–
–
–
0.8
0.2
(0.1)
–
(0.2)
–
–
–
–
–
–
–
235.2
0.7
235.9
Translation
reserve
£m
Hedging
reserve
£m
Put option
liability
£m
0.3
(8.1)
–
(7.8)
(6.5)
–
(14.3)
(1.2)
1.0
–
(0.2)
0.7
–
0.5
–
–
(2.6)
(2.6)
–
(0.1)
(2.7)
Total
£m
(0.9)
(7.1)
(2.6)
(10.6)
(5.8)
(0.1)
(16.5)
James Fisher and Sons plc Annual report and accounts 20 20
107
Financial statements
Company statement
of changes in equity
for the year ended 31 December 2020
At 1 January 2019
Profit for the year
Other comprehensive income
Contributions by and distributions to owners:
Ordinary dividends paid
Share based compensation
Tax effect of share based compensation
Purchase of shares by ESOT
Notional purchase of own shares
Arising on the issue of shares
Transfer on disposal of shares
At 31 December 2019
Loss for the year
Other comprehensive income
Contributions by and distributions to owners:
Ordinary dividends paid
Share based compensation
Tax effect of share based compensation
Purchase of shares by ESOT
Notional purchase of own shares
Arising on the issue of shares
Transfer on disposal of shares
At 31 December 2020
Share
capital
£m
12.6
Share
premium
£m
25.9
–
–
–
–
–
–
–
–
–
12.6
–
–
–
–
–
–
–
–
–
12.6
–
–
–
–
–
–
–
0.6
–
26.5
–
–
–
–
–
–
–
0.2
–
26.7
Retained
earnings
£m
Hedging
reserves
£m
232.3
54.8
(1.1)
(16.4)
0.9
0.2
–
(1.9)
–
(1.5)
267.3
(1 5.9)
(8.8)
(4.0)
0.1
(0.3)
–
(1.0)
–
(0.7)
(0.5)
–
1.4
–
–
–
–
–
–
–
0.9
–
1.0
–
–
–
–
–
–
–
236.7
1.9
Treasury
shares
£m
(0.4)
–
–
–
–
–
(1.1)
–
–
1.5
–
–
–
–
–
–
(0.9)
–
–
0.7
(0.2)
Total
shareholders
equity
£m
269.9
54.8
0.3
(16.4)
0.9
0.2
(1.1)
(1.9)
0.6
–
307.3
(1 5.9)
(7.8)
(4.0)
0.1
(0.3)
(0.9)
(1.0)
0.2
–
277.7
108
James Fisher and Sons plc Annual report and accounts 20 20
S
t
r
a
t
e
g
c
r
e
p
o
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t
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n
a
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a
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a
i
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s
t
a
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m
e
n
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s
Notes to the fi nancial statements
Notes to the fi nancial statements
1 General information
James Fisher and Sons plc (the Company) is a public limited company registered and domiciled in England and Wales and listed on
the London Stock Exchange. The consolidated fi nancial statements comprise the fi nancial statements of the Company, its subsidiary
undertakings and its interest in associates and jointly controlled entities (together the Group), for the year ended 31 December 2020. The
Company’s shares are listed on the London Stock Exchange. The Company and consolidated fi nancial statements were approved for
publication by the Directors on 10 March 2021.
The Group and Company fi nancial statements have been prepared with international accounting standards in conformity with the
requirements of the Companies Act 2006 (Adopted IFRSs) and in addition the Group fi nancial statements are prepared in accordance with
international fi nancial reporting standards adopted pursuant to Regulation (EC) No.1606/2002 as it applies in the European Union.
The fi nancial statements are prepared on a going concern basis and on a historical cost basis, modifi ed to include revaluation to fair value
of certain fi nancial instruments. As permitted by section 408 of the Companies Act 2006, a separate income statement and related notes
for the holding company have not been presented in these fi nancial statements. The loss after taxation in the Company was £1 5.9m (2019:
£54.8m profi t). The Group and Company fi nancial statements are presented in Sterling and all values are rounded to the nearest million
pounds (£m) except when otherwise indicated.
The Directors have, at the time of approving these Financial Statements, a reasonable expectation that the Group and Company have
adequate resources to continue in operational existence for at least 12 months from this reporting date.
In light of the Covid-19 global pandemic experienced in 2020 and subsequent uncertainty, the Group has undertaken a detailed viability
review and taken appropriate mitigating actions to protect the business and liquidity. Operations have been impacted by travel restrictions,
supply chain logistics and actions to protect employees to ensure safe working conditions. The Group’s quick response to Covid-19
has mitigated some of the impact on fi nancial performance, however the potential impact of a post pandemic recession gives on-going
risk to future fi nancial performance. Liquidity is monitored through daily balance reporting, quarterly forecasting and 18 month cash fl ow
forecasting.
The Group had £120.2m of undrawn committed facilities at 31 December 2020 (2019: £41.7m) and increased committed facilities by
£50m in the year to £300m (2019: £250m). Revolving credit facilities of £70m are due for renewal within twelve months from the date of
this report, however the Directors have no indication that these will not be renewed and forecasts have been prepared which continue to
show headroom should they not be renewed. These facilities are linked to covenant compliance requirements, being a net debt to E bitda
ratio and interest cover. The Group ha s been in compliance with covenant requirements in the year, post year end, and are forecast to be
compliant for at least 12 months from the date of approval of these fi nancial statements. Post year end, as at the date of approval of the
fi nancial statements, the Group ha d approximately £115m of undrawn credit facilities available.
The Directors’ base case forecast refl ected fi nancial performance in the year ended 31 December 2020 and the associated impacts of
Cov id-19. There is limited impact to the Group and Company of the UK’s exit from the EU. A number of severe but plausible downside
scenarios were calculated compared to the base case forecast of profi t and cash fl ow to assess headroom against facilities for the next
12 months. Against these negative scenarios, which reduced operating profi t by £10m in 2021 and £20m in 2022, adjusted projections
showed no breach of covenants. Additional sensitivities which reduced cash receipts by £10m in 2021 and £20m in 2022 and delayed
project delivery reducing profi t by £10m in 2021 and £20m in 2022 and deferring debtor collection by £3m in 2021 and by £6m in 2022
were also run separately in combination with the severe but plausible downside and adjusted projections showed no breach of covenants.
Further mitigating actions could also be taken in such scenarios should it be required, including reducing capital expenditure, reducing
dividend payments and not carrying out any acquisitions.
Taking into account the level of cash and available facilities outlined above, the Directors consider that the Group and Company have
suffi cient funds to allow them to meet their liabilities as they fall due for at least 12 months from the date of approval of the fi nancial
statements, having undertaken a rigorous assessment of fi nancial forecasts and therefore continue to adopt the going concern basis of
accounting in preparing these Financial Statements.
The consolidated fi nancial statements and those of the Company have been prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006.
2
Alternative performance measures
The Group uses a number of alternative (non-Generally Accepted Accounting Practice (non-GAAP)) performance measures which are not
defi ned within IFRS. The Directors use these measures in order to assess the underlying operational performance of the Group and, as
such, these measures are important and should be considered alongside the IFRS measures. The adjustments are separately disclosed
and are usually items that are signifi cant in size or non-recurring in nature. The following non-GAAP measures are referred to in the Annual
Report and Accounts.
James Fisher and Sons plc Annual report and accounts 20 20
109
Notes to the fi nancial statements
2
Alternative performance measures continued
2.1 Underlying operating profi t and underlying profi t before taxation
Underlying operating profi t is defi ned as operating profi t before separately disclosed items, which comprise: acquisition related income
and expense (amortisation or impairment of acquired intangible assets, acquisition expenses, adjustments to contingent consideration),
the costs of a material restructuring, litigation, or asset impairment and the profi t or loss relating to the sale of businesses. As acquisition
related income and expense fl uctuates with activity and to provide a better comparison to businesses that are not acquisitive, the Directors
consider that these items should be separately disclosed to give a better understanding of operating performance. Underlying profi t before
taxation is defi ned as underlying operating profi t less net fi nance expense.
Operating (loss)/profit
Separately disclosed items before taxation
Underlying operating profit
Net finance expense
Underlying profit before taxation
2.2 Underlying earnings per share
2020
£m
(43.5)
84.0
40.5
(9.0)
31.5
2019
£m
55.6
10.7
66.3
(7.8)
58.5
Underlying earnings per share (EPS) is calculated as the total of underlying profi t before tax, less income tax, but excluding the tax impact
on separately disclosed items less profi t attributable to non-controlling interests, divided by the weighted average number of ordinary shares
in issue during the year. The Directors believe that underlying EPS provides a better understanding of the underlying earnings capability of
the Group. Underlying earnings per share is set out in note 10.
2.3 Capital employed and Return on Capital Employed (ROCE)
Capital employed is defi ned as net assets less right-of-use assets, less cash and short-term deposits and after adding back borrowings.
Average capital employed is adjusted for the timing of businesses acquired and after adding back cumulative amortisation of customer
relationships. Segmental ROCE is defi ned as the underlying operating profi t, divided by average capital employed. The key performance
indicator, Group post-tax ROCE, is defi ned as underlying operating profi t, less notional tax, calculated by multiplying the effective tax rate by
the underlying operating profi t, divided by average capital employed.
Net assets
Less right-of-use assets
Plus net borrowings
Capital employed
Underlying operating profit
Notional tax at the underlying effective tax rate
Average capital employed
Return on average capital employed
2.4 Cash conversion
2020
£m
235.9
(30.7)
198.1
403.3
40.5
(9.2)
31.3
467.6
6.7%
Cash conversion is defi ned as the ratio of operating cash fl ow to underlying operating profi t. Operating cash fl ow comprises:
Cash generated from operations
Dividends from joint venture undertakings
Capital element of lease repayments
Other
Operating cash flow
Underlying operating profit
Cash conversion
2.5 Underlying earnings before interest, tax, depreciation and amortisation (Ebitda)
Underlying Ebitda is defi ned as the underlying operating profi t before interest, tax, depreciation and amortisation.
Underlying operating profit
Depreciation and amortisation
Less: Deprecation on right-of-use assets
Amortisation of acquired intangibles (note 5)
Underlying Ebitda
110
James Fisher and Sons plc Annual report and accounts 20 20
2020
£m
98.4
1.8
(13.0)
0. 5
87. 7
40.5
21 7%
2020
£m
40.5
4 8.0
(10.9)
(2.9)
74.7
2019
£m
314.0
(27.1)
230.4
517.3
66.3
(13.1)
53.2
471.1
11.3%
2019
£m
75.2
1.7
(11.3)
0.2
65. 8
66.3
99%
2019
£m
66.3
43.1
(10.1)
(3.1)
96.2
2
Alternative performance measures continued
2.6 Underlying dividend cover
Underlying dividend cover is the ratio of underlying diluted earnings per share to the total dividend per share.
Notes to the fi nancial statements
Underlying earnings per share
Total dividends per share*
Underlying dividend cover (times)
* 2019 amended for interim dividend only as set out in note 11.
2.7 Underlying net borrowings
2020
pence
47.9
8.0
6.0
Underlying net borrowings is net borrowings as set out in note 27, excluding right-of-use operating leases. The Group’s banking
arrangements are based on underlying net borrowings.
Net borrowings ( note 2 7)
Less: right -of -use operating leases
2.8 Organic constant currency
2020
£m
198.1
(23.1)
175.0
S
t
r
a
t
e
g
c
r
e
p
o
r
t
i
G
o
v
e
r
n
a
n
c
e
2019
pence
92.8
11.3
8.2
2019
£m
230.4
(27.4)
203.0
Organic constant currency growth represents absolute growth, adjusted for current and prior year acquisitions and for constant currency.
Constant currency takes the non-sterling results of the prior year and re-translates them at the average exchange rate of the current year.
3
Segmental information
The Group has four operating segments reviewed by the Board: Marine Support, Specialist Technical, Offshore Oil and Tankships. Their
principal activities are set out in the Strategic report on pages 14 to 21. The Board assess the performance of the segments based on
underlying operating profi t, underlying operating margin and return on capital employed. It considers that this information is the most relevant
in evaluating the performance of its segments relative to other entities which operate in similar markets. In 2019, £5.5m of revenue and £0.6m
of operating loss formerly included within Specialist Technical and Offshore Oil was transferred to Marine Support to align with changes to the
operational and fi nancial reporting of the segments. Inter-segmental sales are made using prices determined on an arms length basis. Sector
assets exclude cash, short-term deposits and corporate assets that cannot reasonably be allocated to operating segments. Sector liabilities
exclude borrowings, retirement benefi t obligations and corporate liabilities that cannot reasonably be allocated to operating liabilities.
i
F
n
a
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c
a
i
l
s
t
a
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m
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t
s
Marine
Support
£m
Specialist
Technical
£m
Offshore Oil
£m
Tankships
£m
Corporate
£m
Year ended 31 December 2020
Segmental revenue
– point in time
– over time
Inter-segmental sales
Revenue
Underlying operating profit/(loss)
Separately disclosed items
Operating (loss)/profit
Net finance expense
Loss before tax
Income tax
Loss for the year
Assets and liabilities
Segmental assets
Investment in joint ventures
Total assets
Segmental liabilities
Other segmental information
Capital expenditure
Depreciation and amortisation
225.3
24.5
(0.4)
249.4
10.1
(79.6)
(69.5)
24 6.7
2. 1
2 48.8
(90.5)
158. 3
7.1
1 7.8
42.2
89. 2
(1.0)
130.4
14.0
(1.6)
12.4
156.0
3.0
159.0
(57.6)
101.4
1.9
6.7
80.1
–
(2.1)
78.0
11.2
(2.8)
8.4
139.4
2.4
141.8
(24.9)
116.9
5.4
12.7
–
60.4
–
60.4
8.0
–
8.0
53.5
–
53.5
(22.2)
31.3
3.1
10.5
Total
£m
347. 6
174.1
(3.5)
518.2
40.5
(84.0)
(43.5)
(9.0)
(52.5)
(4.8)
(57.3)
615 .4
7.5
62 2.9
(38 7.0)
235.9
–
–
–
–
(2.8)
–
(2.8)
19.8
–
19.8
(191.8)
(172.0)
–
0.3
17.5
4 8.0
Revenue disclosed in the income statement is comprised of goods and services of £398.9m (2019: £506.9m), equipment hire of £40.2m
(2019: £42.6m) and construction contract income of £79.1m (2019: £67.6m).
James Fisher and Sons plc Annual report and accounts 20 20
111
Notes to the fi nancial statements
3
Segmental information continued
Year ended 31 December 2019
Segmental revenue
– point in time
– over time
Inter-segmental sales
Revenue
Underlying operating profit/(loss)
Separately disclosed items
Operating profit
Net finance expense
Profit before tax
Income tax
Profit for the year
Assets and liabilities
Segmental assets
Investment in joint ventures
Total assets
Segmental liabilities
Other segmental information
Capital expenditure
Depreciation and amortisation
Geographic information
Marine
Support
£m
Specialist
Technical
£m
Offshore Oil
£m
Tankships
£m
Corporate
£m
276.3
35.6
(0.3)
311.6
24.5
(9.9)
14. 6
333.3
3.6
336.9
(102.0)
234.9
66.6
13.9
55.5
95.4
(1.5)
149.4
18.4
(0.3)
18.1
161.9
3.0
164. 9
(51.9)
113.0
4. 5
6.6
91.0
–
(2.8)
88.2
14.2
(0.5)
13.7
160.9
1.9
162.8
(28.5)
134.3
11.4
12.5
–
67.9
–
67.9
12.0
–
12.0
60.7
–
60.7
(28.9)
31.8
12.8
9.7
Total
£m
422.8
198.9
(4.6)
617.1
66.3
(10.7)
55.6
(7.8)
47.8
(11.1)
36.7
738.9
8.5
747.4
(433.4)
314.0
–
–
–
–
(2.8)
–
(2.8)
22.1
–
22.1
(222.1)
(200. 0)
–
0.4
95.3
43.1
Geographical revenue is determined by the location in which the product or service is provided. Where customers receive the product or
service in one geographical location for use or shipment to another, it is not practicable for the Group to identify this and the revenue is
attributed to the location of the initial shipment. The geographical allocation of segmental assets and liabilities is determined by the location
of the attributable business unit.
United Kingdom
2020
£m
2019
£m
Rest of Europe
2020
£m
2019
£m
Middle East,
Africa & Americas
2020
£m
2019
£m
Asia Pacific
Total
2020
£m
2019
£m
2020
£m
2019
£m
Revenue
Segmental revenue
– point in time
– over time
Inter-segmental sales
Group revenue
Segmental non -current assets
Segmental current assets
Segmental assets
Investment in joint ventures
Segmental liabilities
85.3
97.6
(1.7)
181.2
2 3 1.8
156.5
3 8 8.3
0.1
139.6
106.6
(4.6)
241.6
269.5
159.7
429.2
0.1
(3 09.6)
(343.6)
78.8
85.7
59.3
8.4
–
67.7
49.3
5.0
54.3
2.6
(9.1)
47.8
67. 7
10. 3
–
78.0
53.7
6.1
59. 8
2.1
(12.7)
49. 2
122.6
25.7
–
148.3
6 6.5
36.5
103.0
0. 2
(4 8.6)
54.6
133.1
37.0
–
170.1
98.9
73.2
172.1
1.5
(50.9)
122.7
80.4
42.4
(1.8)
121.0
34.5
35.3
69.8
4.6
(19.7)
54.7
82.4
45.0
–
127.4
36.6
41.1
77. 7
4.8
(26.1)
56. 4
347.6
174.1
(3.5)
518.2
38 2.1
233.3
61 5.4
7.5
(38 7.0)
235.9
4
Auditor’s remuneration
Auditor’s remuneration comprises the following:
Audit of the financial statements of the parent
Half year review
Local statutory audits of subsidiaries
Total fees payable to Group auditor
112
James Fisher and Sons plc Annual report and accounts 20 20
2020
£m
0.5
0.1
1.0
1.6
422. 8
19 8. 9
(4.6)
617.1
458.7
280.1
738.8
8.5
(433.3)
314.0
2019
£m
0.5
–
0.9
1.4
5
Separately disclosed items
In order for a better understanding of the underlying performance of the Group, certain items are disclosed separately (note 2). Separately
disclosed items are as follows:
Notes to the fi nancial statements
Acquisition related income and (expense):
Costs incurred in acquiring businesses
Amortisation of acquired intangibles (note 2)
Adjustment to provision for contingent consideration
Marine Support restructure
Disposal of businesses
Costs of material litigation
Impairment charges:
Intangible assets
Dive support vessels
Tangible fixed assets
Receivables
Separately disclosed items before taxation
Tax on separately disclosed items
2020
£m
(1.0)
(2.9)
–
(3.9)
(3.9)
(3.5)
–
(19.4)
(3 1.6)
(2.4)
(1 9.3)
(84.0)
2.4
(81.6)
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£m
(0.6)
(3.1)
3.5
(0.2)
–
–
(1.5)
–
–
(2.7)
(6.3)
(10.7)
0.5
(10.2)
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(i)
Acquisition related income and expense comprises costs incurred on the acquisition of businesses including external due diligence
costs, amortisation of acquired intangibles and any adjustment for contingent consideration. As set out in note 2, these items fl uctuate
with acquisition activity and are disclosed separately, to provide a better comparison to businesses that are not acquisitive.
(ii) Due to the deferral of subsea projects in oil and gas and renewables, a material restructure of marine support activities was completed
during the year. The charge of £3.9m relates to redundancy and notice costs in relation to 20 2 employees.
(iii) Disposal of businesses relates to the disposal in 2020 of JF Nuclear GmbH for proceeds of £1.6m which resulted in a loss of £1.2m.
The balance includes £2.0m in respect of the exchange of interests set out in note 16 and £0.3m relating to cost adjustments in respect
of businesses disposed of in previous years.
(iv) Impairment charges
(a) Intangible assets comprise goodwill of £17.0m (2019: £nil) and other intangible asset impairments of £2.4m (2019: £nil) in relation
to development expenditure and intellectual property where expected future cash fl ows no longer justify carrying value. The goodwill
impairment related to the Subtech (£10.0m) and James Fisher Testing Services (£7.0m) cash generating units.
(b) Dive support vessels: In 2019, the Group acquired two dive support vessels with the strategic aim of targeting the market of subsea
projects in the oil and gas sector in West Africa and the Middle East. The combination of changes in energy prices in the fi rst half
of 2020 and the onset of the global pandemic resulted in lower utilisation of these vessels than expected and has given rise to an
impairment charge of £31.6m (2019: £nil) based on their recoverable amount.
(c) the tangible fi xed asset impairment relates to certain assets in Marine Support and Offshore Oil where latest forecasts of future cash
fl ows in respect of these assets is less than carrying net book value.
(d) the impairment in respect of receivables relates to a number of projects commenced by the Group during 2019 where payment
for amounts invoiced or considered due under the contract have yet to be paid and the Board considers it appropriate to make
provision. As referred to in note 33, a number of these issues are subject to legal or contractual process and the outcome is
uncertain. In 2019, the impairment of £6.3m related to a receivable from an associated company.
(v) In 2019, separately disclosed items comprised an impairment on the investment in an associated company of £2.7m, in addition to the
impaired receivable referred to above. In addition to net acquisition related expenses of £0.2m, the Group incurred a £1.5m charge in
respect of a material litigation contract claim which was lost on appeal.
6 Group employee costs
(a) Staff costs including Directors’ remuneration were as follows:
Wages and salaries
Social security costs
Pension costs
Share based compensation
2020
£m
117.1
11.7
4.8
0.1
133.7
2019
£m
130.7
12.5
5.0
1.0
14 9.2
The average number of persons including Executive Directors employed by the Group was 2,680 (2019: 2,955), and 2,484 persons were
employed at 31 December 2020 (2019: 3,100 ).
James Fisher and Sons plc Annual report and accounts 20 20
113
Notes to the fi nancial statements
6 Group employee costs continued
The Directors’ remuneration and their interest in shares of the Company are set out in the Directors’ remuneration report on pages 80 to 87.
The amount charged against operating profi t in the year in respect of Director’s short-term remuneration was £1.0m (2019: £1.3m) in respect
of emoluments and £0.1m (2019: £0.1m) in respect of pension contributions to defi ned contribution schemes. The charge for share based
payments in respect of Directors was £0.1m (2019: £0.5m) and aggregate gains under the exercise of options was £0.2m (2019: £ nil).
(b) Compensation of key management to the Group
Short-term employee benefits
Share based payments
2020
£m
1.8
0.1
1.9
Key management personnel include the Board of Directors of the Company and other senior members of the management team.
7
Net fi nance expense
Finance income:
Interest receivable on short-term deposits
Finance expense:
Bank loans and overdrafts
Net interest on pension obligations
Unwind of discount on right-of-use lease liability
Unwind of discount on contingent consideration
Net finance expense
8
Taxation
(a) The tax charge is based on profi t for the year and comprises:
Current tax:
UK corporation tax
Overseas tax
Adjustment in respect of prior years:
UK corporation tax
Overseas tax
Total current tax
Deferred tax:
Origination and reversal of temporary differences:
Current year
UK corporation tax
Overseas tax
Prior year
UK corporation tax
Overseas tax
Total tax on profit for the year
2020
£m
0.2
(7.2)
(0.1)
(1.8)
(0.1)
(9.2)
(9.0)
2020
£m
(1.1)
(7.9)
2.7
(1.1)
(7.4)
1.9
1.1
(0.3)
(0.1)
(4.8)
2019
£m
2.0
0.5
2.5
2019
£m
0.3
(5.8)
(0.3)
(1.7)
(0.3)
(8.1)
(7.8)
2019
£m
(4.1)
(9.5)
0.5
1.0
(12.1)
0.8
1.0
(0.7)
(0.1)
(11.1)
The total tax charge in the income statement includes a further £0.1m (2019: £0.1m) which is stated within the share of post-tax results of
joint ventures.
(b) Tax included within other comprehensive income:
Current tax:
Foreign exchange losses on internal loans
Contributions to defined benefit pension schemes
Deferred tax:
Contributions to defined benefit pension schemes
Actuarial loss on defined benefit pension schemes
Relating to derivatives
2020
£m
1.1
–
0.9
0.3
(0.1)
2.2
2019
£m
0.6
1.1
–
(1.1)
(0.4)
0.2
In addition, deferred tax of £0.3m (2019: £0.3m) and no current tax (2019: £0.5m credit) was charged to the consolidated statement of
changes in equity in respect of share based payments.
114
James Fisher and Sons plc Annual report and accounts 20 20
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8
Taxation continued
(c) Reconciliation of effective tax rate
The Group falls under the UK tonnage tax regime on its tanker owning and operating activities and a charge is based on the net tonnage
of vessels operated. Profi ts for these activities are not subject to corporation tax. The tax on the Group’s profi t before tax differs from the
theoretical amount that would arise using the rate applicable under UK corporation tax rules as follows:
Notes to the fi nancial statements
(Loss)/profit before tax
Tax arising from interests in joint ventures
Tax on (loss)/profit at UK statutory tax rate of 19% (2019: 19%)
Tonnage tax relief on vessel activities
Expenses not deductible for tax purposes
Separately disclosed items
Other
(Over)/under provision in previous years:
Current tax
Deferred tax
Higher tax rates on overseas income
Research and development relief
Non-taxable income
Impact of change of rate
Movement on unrecognised deferred tax
2020
£m
(52.5)
0.1
(52.4)
(10.0)
(0.7)
3.6
0.3
(1.6)
0.4
2.0
(0.6)
–
0.5
11.0
4.9
2019
£m
47.8
0.1
47.9
9.1
(1.6)
2.3
0.4
(1.5)
0.8
3.2
(0.5)
(0.7)
0.1
(0.4)
11.2
The effective rate on the (loss)/profi t before income tax from continuing operations is (9.1%) (2019: 23.2%). The effective income tax
rate on the underlying profi t before tax is 22.8% (2019: 19.8%). Over provision in previous years arose due to the timing in which certain
transactions have been accounted for, rather than any correction. At 31 December 2020, the Group had unrecognised tax losses of
£30.3m (2019: £7.3m). Deferred tax assets are recognised in respect of these losses based on expected future recovery.
A UK corporation rate of 19% (effective 1 April 2020) was substantively enacted on 17 March 2020, reversing the previously enacted
reduction in the rate from 19% to 17%. This will increase the company’s future current tax charge accordingly. Deferred tax has been
calculated at 19% (2019: 17%).
In the 3 March 2021 Budget, it was announced that the UK tax rate will increase to 25% from 1 April 2023. This will have a consequential
effect on the Group’s future tax charge. If this rate change had been substantively enacted at the current balance sheet date the deferred
tax liability would have increased by £0.4m.
9
Deferred tax
Deferred tax at 31 December relates to the following:
Assets
Retirement benefits
Share based payments
Losses carried forward
Temporary differences
Offset against deferred tax liabilities
Liabilities
Property, plant and equipment
Intangible assets
Derivative financial instruments
Offset against deferred tax assets
Group
Company
2020
£m
2019
£m
2020
£m
2019
£m
1.4
0.1
7.2
2.4
11.1
( 5.9)
5.2
( 3.5)
(4.0)
(0. 2)
( 7.7)
5.9
(1.8)
1. 2
0.7
4.3
1.9
8.1
( 3.6)
4.5
(3.4)
(4.7)
(0.2)
( 8.3)
3.6
(4.7)
1.4
0.1
1.2
0.3
3.0
(0.2)
2.8
0.1
–
(0.3)
(0.2)
0.2
–
1.1
0.7
–
0.3
2.1
(0.1)
2.0
0.1
–
(0.2)
(0.1)
0.1
–
Deferred tax assets and liabilities included in the consolidated balance sheet have been stated according to the net exposures in each tax
jurisdiction.
James Fisher and Sons plc Annual report and accounts 20 20
115
Notes to the fi nancial statements
9
Deferred tax continued
The gross movement on the deferred income tax account is as follows:
Balance at 1 January
Charged to comprehensive income
Charged to equity
Credited to income statement
Exchange adjustments
Acquisitions
Balance at 31 December
Group
Company
2020
£m
(0.2)
1. 1
(0. 3)
2.6
0.2
–
3.4
2019
£m
2. 0
( 1.5)
(0.3)
1.0
(0.1)
(1.3)
(0.2)
2020
£m
2.0
1.4
(0.6)
–
–
–
2.8
At 31 December 2020, the Group has no deferred income tax liability (2019: £nil) in respect of taxes that would be payable on the
unremitted earnings of certain of the Company’s subsidiaries. No deferred income tax liability has been recognised in respect of this
temporary timing difference due to the foreign profi ts exemption, the availability of double taxation relief and the ability to control the
remittance of earnings.
Deferred tax credited to the income statement in the year end ed 31 December 2020 relates to the following:
Deferred tax assets
Deferred tax liabilities:
Property, plant and equipment
Intangible assets
Deferred income tax credit
10 Earnings per share
Group
2020
£m
(2.0)
0.1
(0.7)
(2.6)
2019
£m
2.9
(0.7)
(0.3)
0.1
–
–
2.0
2019
£m
(0.8)
0.3
(0.5)
(1.0)
Basic earnings per share is calculated by dividing the profi t attributable to shareholders by the weighted average number of ordinary
shares in issue during the year, after excluding 9,227 (2019: 510) ordinary shares held by the James Fisher and Sons plc Employee Share
Ownership Trust (ESOT), as treasury shares. Diluted earnings per share are calculated by dividing the net profi t attributable to shareholders
by the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into
ordinary shares.
At 31 December 2020, 386,317 options (2019: 44,809) were excluded from the diluted weighted average number of ordinary shares
calculation as their effect would be anti-dilutive. The average market value of the Company’s shares for purposes of calculating the dilutive
effect of share options was based on quoted market prices for the period during which the options were outstanding.
Weighted average number of shares
Basic weighted average number of shares
Potential exercise of share based payment schemes
Diluted weighted average number of shares
Underlying earnings per share
2020
Number of
shares
2019
Number of
shares
50,342,732
50,282,962
85,973
240,597
50,428,705
50,523,559
To provide a better understanding of the underlying performance of the Group, underlying earnings per share on continuing activities is
reported as an alternative performance measure (note 2).
Profit attributable to owners of the Company
Separately disclosed items
Tax on separately disclosed items
Underlying profit attributable to owners of the Company
Earnings per share
Basic earnings per share
Diluted earnings per share
Underlying basic earnings per share
Underlying diluted earnings per share
116
James Fisher and Sons plc Annual report and accounts 20 20
2020
£m
(57.5)
84.0
(2.4)
24.1
pence
(114.2)
(114. 2)
48.0
47.9
2019
£m
36.7
10.7
(0.5)
46.9
pence
73.1
72.7
93.2
92.8
11 Dividends paid and proposed
Equity dividends on ordinary shares declared and paid:
Final dividend for 2019
Interim dividend for 2020
Notes to the fi nancial statements
2020
pence per
share
2019
pence per
share
–
8.0
21.3
11.3
2020
£m
–
4.0
4.0
2019
£m
10.7
5.7
16.4
No fi nal dividend is proposed in respect of the year ended 31 December 2020. In 2019, a fi nal dividend of 23.4p per share was proposed
but subsequently cancelled to protect the liquidity of the Group due to uncertainty caused by the global coronavirus pandemic.
12 Goodwill
Group
At 1 January 2019
Acquisitions
Transfer
Exchange differences
At 31 December 2019
Impairment
Exchange differences
At 31 December 2020
Marine
Support
£m
Specialist
Technical
£m
Offshore
Oil
£m
77.9
15.3
(4.6)
(0.4)
88.2
(17.0)
(2.2)
69.0
40.8
0.3
–
(0.5)
40.6
–
0.2
40.8
42.4
–
5.3
(1.3)
46.4
–
–
46. 4
Tankships
£m
10.3
–
–
–
10.3
–
–
10.3
Total
£m
171.4
15.6
0.7
(2.2)
185.5
(17.0)
(2. 0)
166.5
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During the year, due to the combination of Covid-19 and a sharp decline in energy prices in the fi rst half which resulted in projects in our
subsea operations being deferred or cancelled, a decision was taken to restructure the Marine Support division. Based on the value in use
calculations set out below, impairments were identifi ed in respect of two CGU s within the division and charges of £10.0m and £7.0m have
been recognised respectively, resulting in a remaining recoverable value of £0.8m and £0.4m respectively for those CGUs based on their
value in use.
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A summary of the recoverable amount of all CGU s by sector, post impairment and discount rates used in respect of the CGU s are detailed
below.
Marine support
Specialist Technical
Offshore Oil
Tankships
Recoverable
amount
£m
2020
Discount rate
range
%
2019
Discount rate
range
%
266.0
6.3% to 10.0%
4.5% to 6.5%
191.2
154.2
69.6
7.8%
4.5% to 4.7%
7.3% to 8.2%
4.5% to 4.7%
5.8%
4.5%
The recoverable amount of these units has been assessed based on value in use calculations using cash projections based on fi ve-year
strategic plans which take into account the impact of climate change and are approved by the Board. For all CGU s a terminal value of cash
fl ows beyond that date have been calculated at a growth rate in line with management’s long-term expectations for the relevant market,
using a growth rate of 0.6%. The key assumptions used in the value in use calculations include gross margin, discount rate, infl ation of
overheads and payroll and growth rates.
Growth estimates are based on the levels achieved in current and historic periods adjusted for the expected impact of management actions
and the future development of the relevant market. Short-term growth rates of turnover are based on the fi ve-year strategic plan. Growth
rates vary depend ent on the market conditions in which the CGU operates and range between 1.0% and 15.0%. Direct costs are expected
to increase in line with revenue.
Sensitivity to impairment
Sensitivities carried out across all CGU’s included increasing the discount rate by 2.0% and reducing the terminal growth to zero and
reducing operating profi t by 25.0%. In all of the scenarios analysed headroom remained positive.
Four CGUs within the Marine Support division were identifi ed as having a higher risk of impairment. The sensitivities identifi ed that
the headroom is most sensitive to changes in the discount rate, which would need to be increased by 4.0% to give rise to a goodwill
impairment in respect of these CGUs, which is considered to be unlikely. For the two CGUs where an impairment charge has been
recognised, the sensitivities above showed additional impairments of £ 0.4m and £ 1.3m.
James Fisher and Sons plc Annual report and accounts 20 20
117
Notes to the fi nancial statements
12 Goodwill continued
No CGU s within the Specialist Technical division were identifi ed as having a high risk of impairment. In all the scenarios headroom remained
positive. The sensitivities identifi ed that the headroom is most sensitive to changes in the discount rate, which would need to be increased
by 20.0% to give rise to a goodwill impairment in these CGUs and this is not considered a reasonably possible change.
No CGU s within the Offshore Oil division were identifi ed as having a high risk of impairment. In all the scenarios headroom remained
positive. The sensitivities identifi ed that the headroom is most sensitive to changes in the discount rate, which would need to be increased
by 4.5% to give rise to a goodwill impairment in these CGUs and this is not considered a reasonably possible change .
No CGUs within the Tankships division were identifi ed as having a high risk of impairment. In all the scenarios headroom remained positive.
The sensitivities identifi ed that the headroom is most sensitive to changes in the discount rate, which would need to be increased by 34.0%
to give rise to a goodwill impairment in these CGUs and this is not considered a reasonably possible change.
13 Other intangible assets
Group
Cost:
At 1 January 2019
Additions
Acquisitions
Disposals
Exchange differences
At 31 December 2019
Additions
Acquisitions
Disposals
Exchange differences
At 31 December 2020
Amortisation:
At 1 January 2019
Charge for the period
Disposals
Exchange differences
At 31 December 2019
Charge for the period
Impairment
Disposals
Exchange differences
At 31 December 2020
Net book value at 31 December 2020
Net book value at 31 December 2019
Net book value at 31 December 2018
Development
costs
£m
Intellectual
property
£m
Customer
relationships
£m
24.7
3.9
–
–
(0.2)
28.4
2.9
0.7
(2.8)
–
29.2
10.3
3.3
–
–
13.6
3.7
1.8
(0.2)
(0.1)
18.8
10.4
14.8
14.4
8.6
1.7
0.2
–
(0.1)
10.4
–
–
(0.6)
–
9.8
2.5
1.2
–
–
3.7
1.5
0.6
(0.6)
–
5.2
4.6
6.7
6.1
14.6
–
5.5
(0.3)
(0.4)
19.4
–
–
–
(0.7)
18.7
9.0
2.6
(0.3)
(0.1)
11.2
2.4
–
–
–
13.6
5.1
8.2
5.6
Total
£m
47.9
5.6
5.7
(0.3)
(0.7)
58.2
2.9
0.7
(3.4)
(0.7)
57.7
21.8
7.1
(0.3)
(0.1)
28.5
7.6
2.4
(0.8)
(0. 1)
37.6
20.1
29.7
26.1
Customer relationships relate to items acquired through business combinations which are amortised over their estimated useful economic
life. Development costs relate to new products developed by the Group and intellectual property represents amounts purchased or acquired
relating to technology in the Group’s activities. Based on an assessment of the recoverable amount, an impairment charge of £2.4m has
been recognised in the year in respect of development costs and intellectual property (note 5).
Research and development costs charged to operating profit
2020
£m
0.1
2019
£m
0.2
118
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14 Property, plant and equipment
Group
Cost:
At 1 January 2019
Additions
Reclassifications
Acquisitions
Disposals
Exchange differences
At 31 December 2019
Additions
Reclassifications
Acquisitions
Disposals
Exchange differences
At 31 December 2020
Group
Depreciation:
At 1 January 2019
Provided during the year
Disposals
Exchange differences
At 31 December 2019
Provided during the year
Provision for impairment
Disposals
Exchange differences
At 31 December 2020
Net book value at 31 December 2020
Net book value at 31 December 2019
Net book value at 31 December 2018
Notes to the fi nancial statements
Assets
under
construction
£m
Freehold
& leasehold
property
£m
Vessels
£m
Plant &
equipment
£m
92.3
67.3
–
0.5
(5.9)
(0.1)
154.1
3.1
1.9
–
(19.9)
(1.3)
137.9
58.7
6.1
(5.7)
(0.1)
59.0
8. 9
3 3.0
(18.0)
(0.3)
8 2.6
5 5.3
95.1
33.6
4.8
5.4
(4.4)
–
–
–
5.8
5.9
( 6.9)
–
–
(0.7)
4.1
–
–
–
–
–
–
–
–
–
–
4.1
5.8
4.8
34.2
1.8
–
–
(0.1)
(0.4)
35.5
0.6
–
–
(0.2)
(0.2)
35.7
10.5
1.7
(0.1)
(0.1)
12.0
1.8
–
(0.2)
–
13.6
22.1
23. 5
23.7
199.0
17.9
4.4
1.9
(7.9)
(3.7)
211.6
6.6
4.6
0.1
(6.8)
(0.9)
21 5.2
115.7
18.2
(6.1)
(2.4)
125.4
18. 8
1.0
(6.0)
(0.7)
13 8.5
7 6.7
86.2
83.3
Total
£m
330. 3
92.4
–
2.4
(13.9)
(4.2)
407.0
16.2
(0.4)
0.1
(26.9)
(3.1)
392.9
184.9
26.0
(11.9)
(2.6)
196.4
2 9.5
3 4.0
(24.2)
(1.0)
23 4.7
15 8.2
210.6
145. 4
As a result of challenging market conditions and lower than expected utilisation, an impairment review was conducted which resulted in an
impairment charge of £31.6m being made against two dive support vessels within Marine Support (see note 5). The recoverable amount
was based on the fair value less costs of disposal for the vessels concerned. In addition, a £1.4m vessel impairment was booked.
Company
Cost:
At 1 January 2019
Additions
At 31 December 2019
Additions
At 31 December 2020
Depreciation:
At 1 January 2019
Provided during the year
At 31 December 2019
Provided during the year
At 31 December 2020
Net book value at 31 December 2020
Net book value at 31 December 2019
Net book value at 31 December 2018
Freehold &
leasehold
property
£m
Plant &
equipment
£m
Vessels
£m
9.8
0.5
10.3
0.2
10.5
6.8
0.5
7.3
0.5
7.8
2.7
3.0
3.0
2.3
–
2.3
–
2.3
1.4
0.1
1.5
0.1
1.6
0.7
0.8
0.9
3.1
0.4
3.5
–
3.5
2.5
0.3
2.8
0.2
3.0
0.5
0.7
0.6
Total
£m
15.2
0.9
16.1
0.2
16.3
10.7
0.9
11.6
0.8
12.4
3.9
4.5
4.5
James Fisher and Sons plc Annual report and accounts 20 20
119
Notes to the fi nancial statements
15 Right -of -use assets
Group
Cost:
At 1 January 2019
Additions
Acquisitions
Disposals
Exchange differences
At 31 December 2019
Additions
Disposals
Exchange differences
At 31 December 2020
Depreciation:
At 1 January 2019
Provided during the year
At 31 December 2019
Provided during the year
Disposals
Exchange differences
At 31 December 2020
Net book value at 31 December 2020
Net book value at 31 December 2019
Freehold &
leasehold
property
£m
Plant &
equipment
£m
Vessels
£m
13.1
0.5
–
–
–
13.6
10.9
–
(0.5)
24.0
–
5.6
5.6
6.1
–
–
11.7
12.3
8.0
21.0
2.2
–
(0.1)
(0.5)
22.6
3.1
(1.0)
(0.1)
24.6
–
4.1
4.1
4.3
(0.9)
0.1
7.6
17.0
18.5
0.6
0.2
0.1
–
–
0.9
1.3
(0.2)
–
2.0
–
0.3
0.3
0.5
(0.2)
–
0.6
1.4
0.6
Total
£m
34.7
2.9
0.1
(0.1)
(0.5)
37.1
15.3
(1.2)
(0.6)
50.6
–
10.0
10.0
10.9
(1.1)
0.1
19.9
30.7
27.1
The Company had right-of-use assets in respect of leasehold property with a cost of £2.1m (2019: £2.1m), accumulated depreciation of
£0.6m (2019: £0.3m). Depreciation charged in the year amounted to £0.3m (2019: £0.3m).
16
Investment in subsidiaries, associates and joint arrangements
Details of the Group’s joint ventures and associated undertakings are set out on page 151.
Investment in joint ventures
Loans to associate
Loans to associate relate to First Response Marine and further information is set out in note 3 1.
2020
£m
5.5
2.0
7.5
2019
£m
6.5
2.0
8.5
120
James Fisher and Sons plc Annual report and accounts 20 20
S
t
r
a
t
e
g
c
r
e
p
o
r
t
i
G
o
v
e
r
n
a
n
c
e
i
F
n
a
n
c
a
i
l
s
t
a
t
e
m
e
n
t
s
16
Investment in subsidiaries, associates and joint arrangements continued
The Group’s share of the assets, liabilities and trading results of joint ventures and associates, which are accounted for under the equity
accounting method, are as follows:
Notes to the fi nancial statements
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Revenue
Cost of sales
Administrative expenses
Profit from operations
Net finance income
Profit before tax
Tax
Profit after tax
Segmental analysis of profit after tax:
Marine Support
Specialist Technical
Movement on investment in joint ventures:
At 1 January
Acquisitions
Profit for the year
Transfer
Dividends received
Share of fair value losses on cash flow hedges
Impairment (note 5)
Exchange adjustments
At 31 December
2020
£m
11.7
21.3
(1.6)
(25. 9)
5.5
11.9
(9.4)
(0.9)
1.6
0.2
1.8
(0.2)
1.6
0.8
0.8
1.6
6.5
0.5
1.6
(1.1)
(1.8)
(0.2)
–
–
5.5
2019
£m
17.2
27.0
(11.0)
(26.7)
6.5
17.0
(14.1)
(2.2)
0.7
0.2
0.9
(0.1)
0.8
0.2
0.6
0.8
6.2
11.1
0.8
(0.7)
(1.7)
(0.1)
(9.0)
(0.1)
6.5
There are no capital commitments or contingent liabilities in respect of the Group’s interests in joint ventures.
On 17 September 2020, the Group received statutory approval for a transaction agreed and signed on 25 February 2020 to exchange
the Group’s 60% interest in Murjan Al-Sharq for Marine Contracting LLC (Murjan), which was accounted for as an associate with net book
value of £nil, for a 50% share in the legal entity Deep Sea Operation and Maintenance Company Limited (Deep Sea) in which the Group
previously held a 50% share. In addition, as part of the transaction the Group agreed to settle £0.8m of the liabilities of Murjan. The carrying
amount of the Group’s 50% investment in Deep Sea was £1.1m at the transaction date and this has been transferred from the investment
in joint ventures during the year. As Deep Sea is an entity that leases a number of vessels and does not have its own business process or
employees, the acquisition of the remaining 50% interest was accounted for as an asset purchase. The assets and liabilities of Deep Sea
included in the Group fi nancial statements as a result of the transaction are £9.2m right -of -use assets , £7.5m of lease liabilities, and £0.9m
of other payables. After taking account of an impairment of the original 50% Deep Sea investment of £0.9m, the transaction resulted in a
charge of £2.0m, included within disposal of businesses set out in separately disclosed items in note 5.
James Fisher and Sons plc Annual report and accounts 20 20
121
Notes to the fi nancial statements
17 Financial assets
Group
Other investments
Other investments of net book value £1.4m (2019: £1.4m) of the Group and Company are in unquoted entities, held at fair value and
subject to annual impairment review. They comprise a 17.2% (2019: 17.2%) equity interest in ordinary shares in SEML De Co-operation
Transmarche, an unlisted company incorporated in France, whose main activity is a port and ferry operator. In addition, the Group has a
50% interest in JFD Domeyer GmbH, a company incorporated in Germany which provides in-service support and aftermarket services to
the local customer base.
Company
Cost:
At 1 January 2019
Additions
Disposal
At 31 December 2019
Additions
Disposal
At 31 December 2020
Amount provided:
At 1 January 2019 and 31 December 2019
Provided in the year
At 31 December 2020
Net book value at 31 December 2020
Net book value at 31 December 2019
Subsidiary undertakings
Loans
£m
Total
£m
Shares
£m
144.6
–
(0.7)
143.9
–
(6.8)
137.1
0.4
–
0.4
136.7
143.5
255.9
96.1
–
352.0
57.5
–
409.5
–
40.5
40.5
369.0
352.0
400.5
96.1
(0.7)
495.9
57.5
(6.8)
546.6
0.4
40.5
40.9
505.7
495.5
The provision of £ 40.5m relates to the subsidiary where a vessel impairment has been made in the year following a value in use review. A
1% change in the discount rate would increase the impairment by £4m. In respect of the loans to subsidiaries, there is no material expected
credit loss.
A list of subsidiary undertakings is included on pages 150 to 151.
18
Inventories
Work in progress
Raw materials and consumables
Finished goods
Group
2019
£m
6.0
11.2
30.7
47.9
2020
£m
7.0
12.3
27.3
46.6
Inventories are stated net of impairment provisions of £4.2m (2019: £3.8m). The cost of inventories recognised as an expense was £81.8m
(2019: £87.5m).
19 Trade and other receivables
Trade receivables
Amounts owed by group undertakings
Amounts owed by joint venture undertakings
Other non-trade receivables
Contract assets
Prepayments
Group
Company
2020
£m
65.5
–
1.6
22.1
65.3
8.3
2019
£m
109.1
–
2.4
16.3
78.1
7.8
16 2.8
213.7
2020
£m
–
1.4
–
4.1
–
0.8
6.3
2019
£m
–
3.3
–
3.1
–
0.5
6.9
Of the above, other non-trade receivables of £0.8m (2019: £0.9m) are expected to be recovered in more than one year.
122
James Fisher and Sons plc Annual report and accounts 2020
20 Trade and other payables
Current liabilities
Trade payables
Amounts owed to group undertakings
Taxation and social security
Other payables
Accruals
Deferred consideration
Contract liabilities
Non-current liabilities
Other payables
Deferred consideration
2020
£m
43.7
–
12.3
11.7
59.7
–
12.7
14 0.1
2020
£m
1.9
1.7
3.6
Revenue recognised in the year of £13.4m was included in the contract liabilities at 31 December 2019.
21 Provisions
At 1 January 2019
Paid
Charged to income statement
At 31 December 2019
Paid
Charged to income statement
At 31 December 2020
Notes to the fi nancial statements
Group
Company
2019
£m
48.3
–
4.0
14.0
69.3
5.8
16.6
2020
£m
1.8
3.6
1.1
4. 1
–
–
–
2019
£m
1.1
5.0
0.4
0.5
3.6
–
–
158.0
10. 6
10.6
2019
£m
2.4
2.4
4.8
2020
£m
–
–
–
2019
£m
–
–
–
Group
£m
2.6
(2.2)
0.3
0.7
(0.1)
1.0
1.6
S
t
r
a
t
e
g
c
r
e
p
o
r
t
i
G
o
v
e
r
n
a
n
c
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F
n
a
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a
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l
s
t
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Provisions are in respect of warranties and are based on management’s assessment of the previous history of claims, expenses incurred
and an estimate of future obligations on goods supplied where a warranty has been provided to the customer. Provisions due within one
year were £nil (2019: £0.7m) and provisions due greater than one year were £1.6m (2019: £nil).
22 Retirement benefi t obligations
The Group and Company defi ned benefi t pension scheme obligations relate to the James Fisher and Sons plc Pension Fund for Shore staff
(Shore staff), the Merchant Navy Offi cers Pension Fund (MNOPF) and the Merchant Navy Ratings Pension Fund (MNRPF). The fi nancial
statements incorporate the latest full actuarial valuations of the schemes which have been updated to 31 December 2020 by qualifi ed
actuaries using assumptions set out in the table below. The Group’s obligations in respect of its pension schemes at 31 December 2020
were as follows:
Shore staff
MNOPF
MNRPF
Shore staff
Group
Company
2019
£m
(0.4)
(3.4)
(2.0)
(5.8)
2020
£m
(8.8)
(0.6)
(0.1)
(9.5)
2019
£m
(0.4)
(2.2)
(1.1)
(3.7)
2020
£m
(8.8)
(1.3)
(0.2)
(10.3)
The assets of this scheme are held in a separate trustee administered account and do not include any of the Group’s assets. The scheme
was closed to new members in October 2001 and closed to future accrual on 31 December 2010. The most recent actuarial valuation was
as at 31 July 2019. It is valued every three years following which defi cit contributions and the repayment period are subject to agreement
between the Company and the Trustees. Estimated contributions to the scheme in 2021 are £1.6m.
James Fisher and Sons plc Annual report and accounts 2020
123
Notes to the fi nancial statements
22 Retirement benefi t obligations continued
MNOPF
The MNOPF is an industry-wide pension scheme which is accounted for as a defi ned benefi t scheme. It is valued every three years and
defi cits have typically been funded over a ten year period. The most recent triennial actuarial valuation of the scheme was as at 31 March
2018 and no additional defi cit funding was requested by the Trustees. The respective share of the Group and Company in the net retirement
benefi t obligation of the MNOPF are 3.0% (2019: 3.0%) and 1.5% (2019: 1.5%) respectively. Disclosures relating to this scheme are based
on the allocation of the Group’s share of assets and liabilities. In accordance with IFRIC 14, the defi ned pension liability has been calculated
by adjusting the Company and Group’s share of the Scheme’s assets for the net present value of the agreed defi cit recovery contributions.
In accordance with IFRIC 14, the Group considers it does not have an unconditional right to a refund if the scheme is in surplus and
therefore has not recognised the pension surplus. The principal assumption reviewed by the Company’s actuaries, is the discount rate on
the scheme’s liabilities which was 1.25% (2018: 1.95%). Estimated contributions to this scheme in 2021 are £0.4m.
MNRPF
The MNRPF is an industry-wide pension scheme which is accounted for as a defi ned benefi t scheme. The most recent actuarial valuation
of the MNRPF was at 31 March 2017. In accordance with IFRIC 14, the defi ned pension liability has been calculated by adjusting the
Company and Group’s share of the scheme’s assets for the net present value of the defi cit recovery contributions. In accordance with IFRIC
14, the Group considers it does not have an unconditional right to a refund if the scheme is in surplus and therefore has not recognised
the pension surplus. The share of the Group and the Company in the net retirement benefi t obligation of the MNRPF are 2.19% and 0.79%
respectively. The principal assumption reviewed by the Company’s actuaries in the MNRPF valuation is the discount rate on the schemes
liabilities which was 1.25% (2018: 1.95%). Estimated contributions to this scheme are £0.2m in 2021.
Actuarial assumptions
The schemes’ assets are stated at their market values on the respective balance sheet dates. The overall expected rates of return on
assets refl ect the risk free rate of return plus an appropriate risk premium based on the nature of the relevant asset category. The principal
assumptions used in updating the latest valuations for each of the schemes were:
Inflation (%)
Rate of increase of pensions in payment – Shore staff (%)
Discount rate for scheme liabilities (%)
Expected rates of return on assets (%)
Post-retirement mortality: (years)
Shore staff scheme
Current pensioner at 65 male
Current pensioner at 65 female
Future pensioner at 65 male
Future pensioner at 65 female
2020
2.95
2.90
1.25
1.25
21.8
23.4
23.3
25.0
2019
3.00
2.95
1.95
1.95
20.3
22.2
21.3
23.3
The post-retirement mortality assumptions allow for the expected increase in longevity. The “current” disclosures above relate to
assumptions based on longevity (in years) following retirement at the balance sheet date, with “future” being that relating to a member who
is currently 45 years old.
The key sensitivities on the major schemes may be summarised as follows:
Key measure
Shore staff scheme
Discount rate
Rate of inflation
Rate of mortality
MNOPF
Discount rate
MNRPF
Discount rate
Change in
assumption
Change in
deficit
Decrease of 0.25%
Increase by 0.25%
Increase in life
expectancy of 1 year
Increase by 3.3%
Increase by 1.9%
Increase by 4.8%
Decrease of 0.25%
Increase by 0.01%
Decrease of 0.25%
Increase by 0.01%
In determining the discount rate, assumptions have been made in relation to corporate bond yields and the expected term of liabilities. As
noted above, a change in discount rate applied has a signifi cant impact on the value of liabilities.
124
James Fisher and Sons plc Annual report and accounts 2020
Notes to the fi nancial statements
22 Retirement benefi t obligations continued
(a) The assets and liabilities of the schemes at 31 December are:
A t 31 December 2020
Gilts/corporate bonds
Other investments
Cash or liquid assets
Fair value of scheme assets
Present value of scheme liabilities
Effect of asset ceiling
Net pension liabilities
A t 31 December 2019
Gilts/corporate bonds
Other investments
Cash or liquid assets
Fair value of scheme assets
Present value of scheme liabilities
Net pension liabilities
Group
Company
Shore
staff
£m
–
60.7
2.2
62.9
(71.7)
–
(8.8)
–
57.7
1.2
58.9
(59.3)
(0.4)
MNOPF
£m
MNRPF
£m
13.8
84.9
0.5
99.2
(92.8)
(7.7)
(1.3)
39.6
62.9
1.3
103.8
(107.2)
(3.4)
16.1
13.8
1.0
30.9
(28.5)
(2.6)
(0.2)
14.3
13.8
0.6
28.7
(30.7)
(2.0)
Total
£m
29.9
159.4
3.7
193.0
(193.0)
(10.3)
(10.3)
53.9
134.4
3.1
191.4
(197.2)
(5.8)
Shore
staff
£m
–
60.7
2.2
62.9
(71.7)
–
(8.8)
–
57.7
1.2
58.9
(59.3)
(0.4)
MNOPF
£m
MNRPF
£m
6.9
42.5
0.3
49.7
(46.5)
(3.8)
(0.6)
19.8
31.5
0.7
52.0
(54.2)
(2.2)
5.6
4.7
0.3
10.6
(9.8)
(0.9)
(0.1)
4.9
4.5
0.2
9.6
(10.7)
(1.1)
Total
£m
12.5
107.9
2.8
123.2
(128.0)
(4.7)
(9.5)
24.7
93.7
2.1
120.5
(124.2)
(3.7)
S
t
r
a
t
e
g
c
r
e
p
o
r
t
i
G
o
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a
n
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e
The MNRPF and MNOPF contributions paid by the Group are not refundable in any circumstances and the balance sheet liability refl ects an
adjustment for any agreed defi cit recovery contributions in excess of defi c i t determined using the Group’s assumptions. Other investments
in the Shore scheme comprise diversifi ed growth funds, liability driven investments, absolute return and private market funds.
(b) Expense recognised in the income statement
i
F
n
a
n
c
a
i
l
A t 31 December 2020
Expenses
Interest cost on benefit obligation
Return on scheme assets
A t 31 December 2019
Expenses
Interest cost on benefit obligation
Return on scheme assets
Group
Company
Shore
staff
£m
0.1
1.1
(1.1)
0.1
0.1
1.6
(1.5)
0.2
MNOPF
£m
MNRPF
£m
–
2.1
(2.0)
0.1
–
3.1
(3.0)
0.1
–
0.6
(0.6)
–
–
0.8
(0.7)
0.1
Total
£m
0.1
3.8
(3.7)
0.2
0.1
5.5
(5.2)
0.4
Shore
staff
£m
0.1
1.1
(1.1)
0.1
0.1
1.6
(1.5)
0.2
MNOPF
£m
MNRPF
£m
–
1.0
(1.0)
–
–
1.6
(1.5)
0.1
–
0.2
(0.2)
–
–
0.3
(0.3)
–
The actual return on the Shore staff plan assets is £6.8m (2019: £7.4m).
(c) Movements in the net defi ned benefi t liability
A t 1 January 2020
Expense recognised in the income statement
Contributions paid to scheme
Remeasurement gains and losses
A t 31 December 2020
A t 1 January 2019
Expense recognised in the income statement
Contributions paid to scheme
Remeasurement gains and losses
A t 31 December 2019
Group
Company
Shore
staff
£m
MNOPF
£m
MNRPF
£m
0.4
0.1
(1.2)
9.5
8.8
4.6
0.2
(1.6)
(2.8)
0.4
3.4
0.1
(2.0)
(0.2)
1.3
5.1
0.2
(1.9)
–
3.4
2.0
–
(1.8)
–
0.2
6.4
0.1
(5.1)
0.6
2.0
Total
£m
5.8
0.2
(5.0)
9.3
10.3
16.1
0.5
(8.6)
(2.2)
5.8
Shore
staff
£m
MNOPF
£m
MNRPF
£m
0.4
0.1
(1.2)
9.5
8.8
4.6
0.2
(1.6)
(2.8)
0.4
2.2
–
(1.9)
0.3
0.6
3.6
0.1
(1.5)
–
2.2
1.1
–
( 1.1)
0.1
0.1
2.3
–
(1.8)
0.6
1.1
s
t
a
t
e
m
e
n
t
s
Total
£m
0.1
2.3
(2.3)
0.1
0.1
3.5
(3.3)
0.3
Total
£m
3.7
0.1
(4.2)
9.9
9.5
10.5
0.3
(4.9)
(2.2)
3.7
James Fisher and Sons plc Annual report and accounts 2020
125
Notes to the fi nancial statements
22 Retirement benefi t obligations continued
(d) Changes in the present value of the defi ned benefi t obligation are analysed as follows:
Group
Company
MNOPF
£m
107.2
–
2.1
MNRPF
£m
30.7
–
0.6
(6.8)
1.6
A t 1 January 2020
Expenses
Interest cost
Remeasurement loss/(gain):
Actuarial loss/(gain) arising from scheme experience
Actuarial (gain)/loss arising from changes in
demographic assumptions
Actuarial loss arising from changes in financial
assumptions
Net benefits paid out
A t 31 December 2020
A t 1 January 2019
Expenses
Interest cost
Remeasurement (gain)/loss:
Actuarial (gain)/loss arising from changes in
demographic assumptions
Actuarial loss arising from changes in financial
assumptions
Net benefits paid out
A t 31 December 2019
Shore
staff
£m
59.3
0.1
1.1
4.1
4.0
6.6
(3.5)
71.7
57.9
0.1
1.6
(1.2)
4.9
(4.0)
59.3
–
–
(2.0)
100.5
108.8
–
3.1
(2.8)
–
(1.9)
107.2
Total
£m
197.2
0.1
3.8
(1.1)
4.0
6.6
(7.3)
203.3
198.0
0.1
5.5
Shore
staff
£m
59.3
0.1
1.1
4.1
4.0
6.6
(3.5)
71.7
57.9
0.1
1.6
MNOPF
£m
MNRPF
£m
54.2
–
1.0
10.7
–
0.2
(3.0)
0.5
–
–
(1.9)
50.3
56.1
–
1.6
–
–
(0.7)
10.7
10.9
–
0.3
–
–
(1.8)
31.1
31.3
–
0.8
3.7
(0.3)
(1.2)
(2.0)
1.3
–
(5.1)
30.7
4.9
(11.0)
197.2
4.9
(4.0)
59.3
–
(1.5)
54.2
–
(1.8)
10.7
(e) Changes in the fair value of the plan assets are analysed as follows:
A t 1 January 2020
Return on scheme assets recorded in interest
Remeasurement loss/(gain):
Return on plan assets excluding interest income
Contributions by employer
Net benefits paid out
A t 31 December 2020
A t 1 January 2019
Return on scheme assets recorded in interest
Remeasurement loss/(gain):
Return on plan assets excluding interest income
Contributions by employer
Net benefits paid out
A t 31 December 2019
(f) History of experience gains and losses
Shore staff
Fair value of scheme assets
Defined benefit obligation
Deficit in scheme
Remeasurement gain/(loss):
Return on plan assets excluding interest income
Remeasurement gain/(loss) on scheme liabilities
MNOPF
Group
Fair value of scheme assets
Defined benefit obligation
Deficit in scheme
Group
Company
Shore
staff
£m
58.9
1.1
5.2
1.2
(3.5)
62.9
53.3
1.5
6.5
1.6
(4.0)
58.9
MNOPF
£m
103.8
2.0
(6.6)
2.0
(2.0)
99.2
103.7
3.0
(2.8)
1.9
(2.0)
103.8
MNRPF
£m
28.7
0.6
1.6
1.8
(1.8)
30.9
24.9
0.7
3.1
5.1
(5.1)
28.7
Total
£m
191.4
3.7
0.2
5.0
(7.3)
193.0
181.9
5.2
6.8
8.6
(11.1)
191.4
Shore
staff
£m
58.9
1.1
5.2
1.2
(3.5)
62.9
53.3
1.5
6.5
1.6
(4.0)
58.9
MNOPF
£m
MNRPF
£m
52.0
1.0
(3.3)
1.9
(1.9)
49.7
52.5
1.5
(2.0)
1.5
(1.5)
52.0
9.6
0.2
0.4
1.1
(0.7)
10.6
8.6
0.3
1.1
1.8
(2.2)
9.6
2020
£m
62.9
(71.7)
(8.8)
5.7
14.7
2020
£m
99.2
(100.5)
(1.3)
2019
£m
58.9
(59.3)
(0.4)
6.5
2.2
2019
£m
103.8
(107.2)
(3.4)
2018
£m
53.3
(57.9)
(4.6)
(1.7)
(0.3)
2018
£m
103.7
(108.8)
(5.1)
2017
£m
56.1
(61.9)
(5.8)
2.4
1.4
2017
£m
108.8
(115.6)
(6.8)
126
James Fisher and Sons plc Annual report and accounts 2020
Total
£m
124.2
0.1
2.3
1.6
4.0
6.6
(6.1)
132.7
124.9
0.1
3.5
(1.9)
4.9
(7.3)
124.2
Total
£m
120.5
2.3
2.3
4.2
(6.1)
123.2
114.4
3.3
5.6
4.9
(7.7)
120.5
2016
£m
54.2
(64.3)
(10.1)
6.5
–
2016
£m
104.0
(112.5)
(8.5)
22 Retirement benefi t obligations continued
MNOPF
Company
Fair value of scheme assets
Defined benefit obligation
Deficit in scheme
MNRPF
Group
Fair value of scheme assets
Defined benefit obligation
Deficit in scheme
MNRPF
Company
Fair value of scheme assets
Defined benefit obligation
Deficit in scheme
Notes to the fi nancial statements
2020
£m
49.7
(50.3)
(0.6)
2020
£m
30.9
(31.1)
(0.2)
2020
£m
10.6
(10.7)
(0.1)
2019
£m
52.0
(54.2)
(2.2)
2019
£m
28.7
(30.7)
(2.0)
2019
£m
9.6
(10.7)
(1.1)
2018
£m
52.5
(56.1)
(3.6)
2018
£m
24.9
(31.3)
(6.4)
2018
£m
8.6
(10.9)
(2.3)
2017
£m
55.0
(60.0)
(5.0)
2017
£m
29.2
(36.4)
(7.2)
2017
£m
10.2
(13.1)
(2.9)
2016
£m
49.0
(55.3)
(6.3)
2016
£m
27.8
(36.0)
(8.2)
2016
£m
9.7
(12.9)
(3.2)
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The cumulative amount of actuarial gains and losses relating to all schemes recognised since 1 January 2004 in the Group and Company
statement of comprehensive income is a loss of £58.5m (2019: £49.2m).
(g) Defi ned contribution schemes
The Group operates a number of defi ned contribution schemes. The pension charge for the year for these arrangements is equal to the
contributions paid and was £4.8m (2019: £5.0m). During the year the Company contributed £0.3m (2019: £0.3m) into defi ned contribution
schemes.
23 Share based payments
The Group operates a Long-Term Incentive Plan (LTIP) in respect of Executive Directors and certain senior employees and details are set
out in the Director’s remuneration report on pages 72 to 87. It also operates a Sharesave scheme (Sharesave) for eligible employees which
is HM Revenue and Customs approved.
Long-Term Incentive Plan (LTIP)
The Group recognised an expense in respect of equity-settled share based payments of £0.1m (2019: £0.9m) (Company £0.1m (2019:
£0.9m)) during the year. Conditional awards, in the form of options over shares or conditional rights to have shares transferred to certain
employees were granted under the LTIP scheme over 309,021 (2019: 304,784) ordinary shares of 25p each.
The weighted average exercise prices (WAEP) and movements in share options during the year are as follows:
Group
Outstanding at 1 January
Granted during the year
Forfeited during the year
Exercised
Outstanding at 31 December
Exercisable at 31 December
2020
Number
354,805
254,341
(69,687)
(89,561)
449,898
142,297
WAEP
£9.62
£10.22
£16.83
£4.51
£9.86
£6.33
2019
Number
435,553
49,065
(15,382)
(114,431)
354,805
231,668
WAEP
£8.06
£20.98
£17.10
£7.55
£9.62
£5.62
nil options
2020
Number
304,784
146,813
(81,485)
(61,091)
309,021
–
2019
Number
373,582
108,168
(38,811)
(138,155)
304,784
–
The weighted average share price at the date of exercise for the options exercised was £13.18 (2019: £19.96). For the share options
outstanding at 31 December 2020, the weighted average remaining contractual life is 2 years and 1 month (2019: 1 year and 6 months).
The weighted average fair value of options granted during the year was £6.45 (2019: £13.39). The range of exercise prices for options
outstanding at the end of the year was £5.22 – £20.98 (2019: £4.10 – £20.98).
Company
Outstanding at 1 January
Granted during the year
Forfeited during the year
Exercised
Outstanding at 31 December
Exercisable at 31 December
2020
Number
239,898
21,791
(5,852)
(89,561)
166,276
141,838
WAEP
£6.01
£10.22
£15.68
£4.51
£7.03
£6.30
2019
Number
315,882
2,325
(543)
(77,766)
239,898
231,527
WAEP
£5.83
£20.98
£20.98
£5.65
£6.01
£5.61
nil options
2020
Number
202,553
94,506
(58,878)
(41,740)
196,441
–
2019
Number
252,756
74,447
(34,818)
(89,832)
202,553
–
James Fisher and Sons plc Annual report and accounts 2020
127
Notes to the fi nancial statements
23 Share based payments continued
The weighted average share price at the date of exercise for the options exercised was £13.12 (2019: £20.22). For the share options
outstanding at 31 December 2020, the weighted average remaining contractual life is 1 year and 6 months (2019: 1 year and 6 months).
The weighted average fair value of options granted during the year was £9.26 (2019: £16.86). The range of exercise prices for options
outstanding at the end of the year was £5.22 – £20.98 (2019: £4.10 – £20.98). The fair value of share based payments has been estimated
using the Black-Scholes model for the Sharesave and the earnings per share element of the LTIP. The fair value of share based payments
relating to the total shareholder return element of the LTIP has been estimated using the Monte Carlo model.
The inputs to the models used to determine the valuations fell within the following ranges:
Dividend yield (%)
Expected life of option (years)
Share price at date of grant
Expected share price volatility (%)
Risk-free interest rate (%)
Sharesave
2020
1.6 %
3 – 7
2019
1.6 %
3 – 7
£12.18 – £12.66
£19.70 – £19.88
35. 0%
30. 0%
(0.1 3%) – (0.03%)
0.62% – 0.80%
All employees, subject to the discretion of the Remuneration Committee, may apply for share options under an employee save as you earn
plan which may from time to time be offered by the Company. An individual’s participation is limited so that the aggregate price payable
for shares under option at any time does not exceed the statutory limit. Options granted under the plans will normally be exercisable if the
employee remains in employment and any other conditions set by the Remuneration Committee have been satisfi ed. Options are normally
exercisable at the end of the related savings contract but early exercise is permitted in certain limited circumstances. The performance
period will not normally be less than three and a half years or greater than seven and a half years. Awards were made of 254,341 options
under this scheme on 21 October 2020.
24 Business combinations
Year ended 31 December 2020
On 12 March 2020, the Group acquired 100% of the share capital of Fathom Systems Group Limited (Fathom), for a total cash consideration
of £1.0m. Fathom is a leading supplier in the commercial diving industry for diver communications, gas analysis, diver monitoring and
integrated diving control systems. Costs of £0.2m were incurred in relation to the acquisition of Fathom.
The fair values of the assets and liabilities acquired are set out below:
Fathom
Intangible assets
Property, plant and equipment
Inventories
Trade and other receivables
Overdrafts
Trade and other payables
Fair value of net assets acquired
Cash consideration
There were no goodwill adjustments in the year (2019: £0.2m).
Cash flow in respect of business combinations
Cash paid
Overdrafts acquired
Acquisition of business net of overdrafts acquired
Deferred consideration paid
Acquisition costs paid
Contribution to Group results
Book
value
£m
0.8
0.1
0.4
0.4
(0.2)
(0.5)
1.0
1.0
£m
1.0
0.2
1.2
6.0
0.7
7.9
The businesses acquired during the period contributed £0.2m loss to the Group’s loss after tax and £1.3m of revenues. If these businesses
had been acquired at the start of the fi nancial year, the contribution to Group loss after tax would have been £0.3m loss with revenue of £1.7m.
128
James Fisher and Sons plc Annual report and accounts 2020
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Notes to the fi nancial statements
24 Business combinations continued
Year ended 31 December 2019
On 4 January 2019, the Group acquired the entire share capital of Martek Holdings Limited (Martek) for an initial cash consideration of
£9.0m, with potential further consideration of up to £1.0m subject to a profi t target for the year ending 28 February 2020. Martek was
founded near Rotherham, UK in 2000 and provides a range of innovative safety and calibration systems and products to the marine sector.
Martek, which joined the Marine Support division, further enhances the Group’s capability to offer innovative solutions to the marine sector
and provides a proven channel to market for the Group’s adjacent products and services.
On 7 August 2019, the Group acquired 60% of the share capital of Continental Participação E Administração Ltda., the holding company
of Serviços Marítimos Continental S.A. (together Continental ) for a total cash consideration of £7.5m, £4.9m payable on completion and
£2.6m payable in January 2022. Continental is an established air diving service provider to the offshore oil sector in Brazil, providing
inspection, repair and maintenance services to offshore oil terminals.
The fair values of the assets and liabilities acquired are set out below:
Martek
Intangible assets
Property, plant and equipment
Inventories
Trade and other receivables
Cash and short-term deposits
Trade and other payables
Interest bearing loans and borrowings
Deferred tax
Fair value of net assets acquired
Goodwill
Consideration:
Cash consideration
Deferred consideration
Contingent consideration
Continental
Intangible assets
Property, plant and equipment
Trade and other receivables
Cash and short-term deposits
Trade and other payables
Interest bearing loans and borrowings
Deferred tax
Fair value of net assets acquired
Non-controlling interest
Goodwill
Consideration:
Cash consideration
Deferred consideration
Cash fl ow in respect of business combinations
Cash paid
Cash and short -term deposits acquired
Acquisition of business net of cash acquired
Interest bearing borrowings acquired
Acquisition costs
Contribution to Group results
Book
value
£m
–
0.3
1.4
1.3
2.7
(2.8)
(0.5)
–
2.4
–
2.3
1.1
0.5
(3.3)
(1.3)
–
(0.7)
0.3
Fair
value
adjustments
£m
2.2
–
(0.2)
(0.2)
–
(0.5)
–
(0.4)
0.9
3.3
–
–
–
–
–
(1.1)
2.2
(0.9)
Martek
£m
10.2
(2.7)
7.5
0.4
0.1
8.0
Continental
£m
Other
£m
4.9
(0.5)
4.4
1.4
–
5.8
0.6
–
0.6
–
–
0.6
Total
£m
2.2
0.3
1.2
1.1
2.7
(3.3)
(0.5)
(0.4)
3.3
8.5
11.8
10.2
0.7
0.9
11.8
3.3
2.3
1.1
0.5
(3.3)
(1.3)
(1.1)
1.5
(0.6)
6.6
7.5
4.9
2.6
7.5
Total
£m
15.7
(3.2)
12.5
1.8
0.1
14.4
The business acquired during the period contributed £2.1m to the Group’s profi t after tax and £16.0m of revenues. If these businesses had
been acquired at the start of the fi nancial year, the contribution to Group profi t after tax would have been £2.4m with revenue of £20.3m.
James Fisher and Sons plc Annual report and accounts 2020
129
Notes to the fi nancial statements
25 Disposal of business
On 20 October 2020, the Group disposed of 80% shareholding in James Fisher Nuclear GmbH for cash consideration of £1.6m. The
assets and liabilities disposed were as follows:
Consideration received
Less net assets disposed:
Intangible assets
Trade and other receivables
Trade and other payables
Net assets disposed
Loss on disposal
Cash flow from the disposal of businesses
Cash received
Costs in relation to businesses sold in the prior year
26 Loans and borrowings
Current liabilities
Overdrafts
Bank loans
Lease liabilities
Non-current liabilities
Bank loans
Lease liabilities
Bank loans
Loans analysed by currency are repayable as follows:
As at 31 December 2020
Currency
Due within one year
Due between one and two years
Due between two and five years
As at 31 December 2019
Currency
Due within one year
Due between one and two years
Due between two and five years
GBP
11.0
18.8
167.1
196.9
Group
USD
–
–
20.8
20.8
BRL
0.3
0.6
–
0.9
2020
£m
10.4
0.2
7.2
17.8
2020
£m
178. 8
25.3
204. 1
GBP
10. 4
114.4
64.2
189. 0
Total
11.3
19.4
187.9
218.6
£m
1.6
(2.7)
(0.3)
0.2
(2.8)
(1.2)
1.6
(0.3)
1.3
2019
£m
11.0
–
0.3
11.3
2019
£m
206.7
1.7
208.4
Company
GBP
46.0
114.4
64.2
224.6
Total
11.0
18.8
187.9
217.7
Group
Company
2019
£m
11.0
0.3
8.9
20.2
2020
£m
46.0
–
0.2
46.2
Group
Company
2019
£m
207.3
21.3
228.6
Group
BRL
0.2
0.2
–
0.4
GBP
11.0
18.8
167.1
196.9
2020
£m
178. 6
1.5
180. 1
Total
10. 6
114.6
64.2
189. 4
Company
USD
–
–
20.8
20.8
The interest rates charged during the year ranged from 1.7% to 3.8% (2019: 1.7% to 4.0%). There were no loans secured against the
assets of the Group or Company in the current or prior period.
Cash and cash equivalents
Cash and cash equivalents have been restated at 31 December 2019 to include bank overdrafts repayable on demand as they form part of
the Group’s and Company’s cash management. The prior year cash fl ow statement has been restated accordingly. The Group cash and cash
equivalents fi gure as at 31 December 2019 has been reduced by £11.0m (1 January 2019: £nil) and the Company cash and cash equivalents
fi gure as at 31 December 2019 has been reduced by £11.0m (1 January 2019: £15.5m), with a corresponding increase of £11.0m in the cash
outfl ow from repayment of the borrowings in the Group cash fl ow statement and an increase of £4.5m in cash infl ows from proceeds from
borrowings in the Company cash fl ow statement.
For the purposes of the cash fl ow statement, cash and cash equivalents are:
Cash at bank and in hand
Overdrafts
130
James Fisher and Sons plc Annual report and accounts 2020
Group
Company
2020
£m
23.9
(10.4)
13.5
2019
£m
18.5
(11.0)
7.5
2020
£m
3.1
(46.0)
(42.9)
2019
£m
27.1
(11.0)
16.1
27 Reconciliation of net borrowings
Net debt comprises interest bearing loans and borrowings less cash and cash equivalents.
Notes to the fi nancial statements
Currency
Cash and cash equivalents
Debt due within one year
Debt due after one year
Lease liabilities
Net borrowings
Currency
Cash and cash equivalents
Debt due within one year
Debt due after one year
Lease liabilities
Net borrowings
31 December
2019
restated*
£m
7.5
(0.3)
(207.4)
(207.7)
(30.2)
(230.4)
Cash flow
£m
Other
non cash
£m
Exchange
movement
£m
31 December
2020
£m
7.7
0.1
30.1
30.2
13.0
50.9
–
–
(0.7)
(0.7)
( 15.4)
( 16.1)
(1.7)
–
(0.9)
(0.9)
0.1
(2.5)
31 December
2018
£m
Cash flow
£m
Other
non cash
£m
Exchange
movement
£m
18.6
(10.0)
(122.0)
(132.0)
(0.2)
(113.6)
(10.3)
9.7
(84.1)
(74.4)
11.3
(73.4)
–
–
(2.3)
(2.3)
(40.7)
(43.0)
(0.8)
–
1.0
1.0
(0.6)
(0.4)
13.5
(0.2)
(178.9)
(179.1)
(32.5)
(198.1)
31 December
2019
restated*
£m
7.5
(0.3)
(207.4)
(207.7)
(30.2)
(230.4)
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Cash and cash equivalents restated for the year ended 31 December 2019 (note 26).
28 Financial instruments
Capital management
The primary objective of the Group’s capital management policy is to maintain a strong credit rating and covenant ratios in order to be
able to support the continued growth of its trading businesses and to increase shareholder value. The Group meets its day-to-day working
capital requirements through operating cash fl ows, with borrowings in place to fund acquisitions and capital expenditure. At 31 December
2020, the Group had £120.2m (2019: £41.7m) of undrawn committed facilities.
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The Group is required under the terms of its loan agreements to maintain covenant ratios in respect of net debt to Ebitda and net interest
costs to underlying earnings before interest. The Group met its covenant ratios for the year ended 31 December 2020. The Directors have
prepared forecasts of the cash fl ows for the subsequent eighteen-month period which indicate that, taking into account the factors noted
above, the Group will meet its covenant requirements for this period. The total amount that it is able to borrow under existing revolving
credit facilities was increased by £50m to a maximum of £300m (2019: £250m).
The Group manages its capital structure so as to maintain investor, supplier and market confi dence and to provide returns to shareholders
that will support the future development of the business. Capital is monitored by measuring the underlying gearing ratio which is net
borrowings divided by capital. Net borrowings comprises interest bearing loans and borrowings less cash and cash equivalents. Capital
represents net equity attributable to the equity holders of the parent. Return on capital employed is also monitored. The Group’s dividend
policy is based on the expected growth in sustainable income streams after making provision for the retention of capital to invest in growth
and acquisitions. In evaluating growth investment opportunities the Group applies a hurdle rate of a 15% pre-tax return on capital invested.
Interest bearing loans and borrowings
Add Lease liabilities
Less cash and cash equivalents
Net borrowings
Equity attributable to the equity holders of the parent
Gearing ratio
Underlying net borrowings (note 2.7)
Underlying net gearing ratio
*
Refer to prior year adjustment (note 26).
The Group has exposure to the following fi nancial risks:
(a) Credit risk
2020
£m
1 79. 1
32.5
( 13.5)
198.1
235.2
84.2%
175.0
74.4%
2019
restated*
£m
2 07.7
30.2
( 7.5)
230.4
313.2
73.6%
203.0
64.8%
Credit risk is the risk of fi nancial loss to the Group if a customer or counterparty to a fi nancial instrument fails to meet its contractual
obligations. These arise principally from the Group’s receivables from customers and from cash balances held with fi nancial institutions. The
carrying amount of fi nancial assets represents the maximum credit exposure. There are no signifi cant concentrations of credit risk within
the Group. The Group’s exposure to credit risk is infl uenced mainly by the individual characteristics of each customer and the industry and
country in which each customer operates. The Group has a number of large customers including Government agencies in the UK and
overseas, major oil companies and other multinational corporations. The ten largest customers of the Group accounted for approximately
22% of Group revenue (2019: 26%). No customer accounted for more than 5% (2019: 4%) of Group revenue. New customers are subject
to creditworthiness checks and credit limits are subject to approval by senior management. Goods are sold subject to retention of title
clauses so that in the event of non-payment the Group may have a secured claim.
James Fisher and Sons plc Annual report and accounts 2020
131
Notes to the fi nancial statements
28 Financial instruments continued
The maximum exposure to credit risk at the reporting date was:
Receivables
Cash at bank and in hand
Interest rate swaps used for hedging:
Assets
Forward exchange contracts used for hedging:
Assets
Group
Company
2020
£m
15 4.5
23.9
2019
£m
206.0
18.5
–
0.4
3.2
18 1.6
1.6
226.5
2020
£m
5.5
3.1
–
3.2
11.8
2019
£m
4.9
27.1
0.4
1.6
34.0
Trade receivables are non-interest bearing and are generally on 30 to 60 days terms. At 31 December the value of trade debtors
outstanding was:
Not past due
Past due
Gross trade receivables are analysed:
Not yet due
Overdue 1 to 30 days
Overdue 31 to 60 days
Overdue 61 to 90 days
Overdue more than 90 days
The movement in the provision for impairment of trade receivables is as follows:
Balance at 1 January
On acquisition of subsidiaries
Provided in the year
Written off
Exchange differences
Group
2020
allowance
£m
–
(1 9.5)
(1 9.5)
2019
allowance
£m
–
(5.4)
(5.4)
gross
£m
47.5
67.0
114.5
Group
Company
2019
£m
47.5
26.1
11.8
7.8
21.3
114.5
2020
£m
2019
£m
–
–
–
–
–
–
–
–
–
–
–
–
Group
Company
2019
£m
3.4
0.2
1.8
–
–
5.4
2020
£m
2019
£m
–
–
–
–
–
–
–
–
–
–
–
–
gross
£m
3 8.7
46.3
8 5.0
2020
£m
38.7
14.2
7.6
3.8
20.7
85.0
2020
£m
5.4
–
1 7.0
(2.2)
(0.7)
1 9.5
The Group considers that the trade receivables that have not been provided against and are past due by more than 30 days are collectable
based on historic payment behaviour and extensive analysis of underlying customers’ credit ratings. Based on historic default rates, used to
inform our view of future expected credit losses, the Group believes that apart from the amounts included in the table above, no impairment
allowance is necessary in respect of trade receivables. The material balances over 90 days are in respect of specifi c contracts or markets
where the balance is considered recoverable, except to the extent that they are already provided, and there is no material impact on
expected credit losses.
Loss allowances for trade receivables and contract assets are measured at an amount equal to lifetime expected credit losses (ECL) based
on the simplifi ed approach. When determining whether the credit risk of a fi nancial asset has increased signifi cantly since initial recognition
and when estimating ECLs, the Group considers reasonable and supportable information (both qualitative and quantitative) that is relevant
and available without undue cost or effort. The Group assumes that the credit risk on a fi nancial asset has increased signifi cantly if it is more
than 90 days overdue.
In respect of contract assets the Group has not historically suffered signifi cant credit losses and does not have an expectation of such losses.
In the event of a contract issue, specifi c provision is made where appropriate and therefore no additional provisions have been made.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its fi nancial obligations as they fall due. The Group manages its cash
resources and borrowings to ensure that it will have suffi cient liquidity to meet its liabilities as they fall due but in a manner designed to
maximise the benefi t of those resources whilst ensuring the security of investment resources. The Group forecasts the profi le of its cash
requirements on a monthly basis and ensures that suffi cient facilities are available to meet peak requirements which occur at predictable
times in the year. The Group manages the maturity profi le of its borrowings by maintaining a regular dialogue with its lenders and ensuring
that it commences the renegotiation of facilities suffi ciently early to allow a comprehensive review of its requirements before completion.
132
James Fisher and Sons plc Annual report and accounts 2020
S
t
r
a
t
e
g
c
r
e
p
o
r
t
i
G
o
v
e
r
n
a
n
c
e
i
F
n
a
n
c
a
i
l
s
t
a
t
e
m
e
n
t
s
Notes to the fi nancial statements
28 Financial instruments continued
The Group’s revolving credit facilities extend over several accounting periods and fall due for renewal in different accounting periods
ensuring that the Group negotiations with individual lenders follow an orderly process which does not expose the Group to the possibility of
a signifi cant reduction in available facilities in any single period.
The following are the contractual maturities of fi nancial liabilities, including interest payments:
A t 31 December 2020
Carrying
amount
£m
Contrac tual
cash flows
£m
189. 3
32.5
14 3.7
(200.4)
(34.1)
(14 3.7)
Within
1 year
£m
(16.0)
(8.6)
(14 3.7)
1 - 2
years
£m
(118.6)
(6.7)
–
1.0
(0.9)
(0.5)
(0.4)
(3.2)
36 3.3
(38.6)
(41 7.7)
(38.4)
(20 7.2)
(0.2)
(125.9)
2 - 3
years
£m
3 - 4
years
£m
4 - 5
years
£m
Greater
than
5 years
£m
(25.4)
(5.9)
(40.4)
(4.3)
–
(3.3)
–
(5.3)
–
–
–
–
–
–
–
–
–
–
–
–
(31.3)
(44.7)
(3.3)
(5.3)
Group
Non-derivative financial liabilities
Unsecured bank loans and overdrafts
Lease liabilities
Trade and other payables
Derivative financial liabilities
Interest rate swaps used for hedging
Outflow on forward exchange contracts used
for hedging:
At 31 December 2019
Non-derivative financial liabilities
Unsecured bank loans and overdrafts
Lease liabilities
Trade and other payables
Derivative financial liabilities
Interest rate swaps used for hedging
(0.1)
0.2
0.1
Outflow on forward exchange contracts used
for hedging:
At 31 December 2020
(1.6)
398. 9
(53.8)
(473.6)
(53.8)
(232.2)
207.6
30.2
162.8
(224.8)
(32.4)
(162.8)
(6.1)
(9.6)
(162.8)
(25.5)
(6.0)
–
0.1
–
(161.8)
(4.5)
(0.8)
(3.9)
(30.6)
(2.5)
–
–
–
–
–
–
–
–
–
–
(6.0)
–
–
–
(31.4)
(166.3)
(4.7)
(33.1)
(6.0)
Company
Non-derivative financial liabilities
Carrying
amount
£m
Contrac tual
cash flows
£m
Unsecured bank loans and overdrafts
224. 6
(235.8)
Lease liabilities
Trade and other payables
Derivative financial liabilities
1.7
6.0
(2.1)
(6.0)
Within
1 year
£m
(51.6)
(0.4)
(6.0)
1 - 2
years
£m
(118.4)
(0.3)
–
Interest rate swaps used for hedging
1.0
(0.9)
(0.5)
(0.4)
Outflow on forward exchange contracts used
for hedging:
A t 31 December 2019
Non-derivative financial liabilities
(3.2)
230.1
(38.6)
(283.4)
(38.4)
(96.9)
(0.2)
(119.3)
2 - 3
years
£m
(25.4)
(0.3)
–
–
–
3 - 4
years
£m
(40.4)
(0.3)
–
–
–
4 - 5
years
£m
–
(0.3)
–
–
–
Greater
than
5 years
£m
–
(0.5)
–
–
–
(25.7)
(40.7)
(0.3)
(0.5)
Unsecured bank loans and overdrafts
217.7
(223.8)
Lease liabilities
Trade and other payables
Derivative financial liabilities
2.0
5.8
(2.6)
(5.8)
Interest rate swaps used for hedging
(0.1)
0.2
Outflow on forward exchange contracts used
for hedging:
(1.6)
223.8
(53.8)
(285.8)
(5.8)
(0.4)
(5.8)
0.1
(53.8)
(65.7)
(25.2)
(0.4)
–
0.1
–
(161.5)
(0.3)
(0.7)
(0.3)
(30.6)
(0.3)
–
–
–
–
–
–
–
–
–
–
(0.9)
–
–
–
(25.5)
(161.8)
(1.0)
(30.9)
(0.9)
(c) Foreign exchange risk
The Group is exposed to foreign currency risks on sales, purchases, cash and borrowings denominated in currencies other than Sterling.
These transactional exposures are mainly to movement in the US Dollar and the Euro. The Group uses forward exchange contracts to
hedge its transactional exposures. Most forward exchange contracts have maturities of less than one year after the balance sheet date.
Forward exchange contracts which qualify as effective cash fl ow hedges are stated at fair value. The principal translation exposures relate to
the US Dollar, Norwegian Kroner, Singapore Dollar, and Brazilian Real.
James Fisher and Sons plc Annual report and accounts 2020
133
Notes to the fi nancial statements
28 Financial instruments continued
The Group’s exposure to foreign currency transactional risk in its principal currencies was as follows based on notional amounts:
Trade receivables
Cash at bank and in hand
Unsecured bank loans
Trade payables
Gross balance sheet exposure
Forecast sales
Forecast purchases
Gross exposure
Forward exchange contracts
Net exposure
USD
m
28.3
6.9
–
(7.5)
27.7
166.0
(68.5)
125.2
(50.0)
75.2
31 December 2020
SGD
m
NOK
m
–
1.8
–
(8.3)
(6.5)
–
–
(6.5)
–
(6.5)
–
1.4
–
(0.2)
1.2
0.2
(0.6)
0.8
–
0.8
EUR
m
0.7
2.0
–
(2.6)
0.1
9.4
(16.0)
(6.5)
2.3
(4.2)
AUD
m
0.3
4.8
–
(0.1)
5.0
–
–
5.0
–
5.0
NGN
m
94.4
11.2
–
(21.1)
84.5
200.0
(50.0)
234.5
–
234.5
USD
m
46.8
12.2
(27.6)
(13.2)
18.2
129.3
(37.8)
109.7
(71.3)
38.4
31 December 2019
EUR
m
2.8
4.9
–
(2.8)
4.9
8.5
(16.4)
(3.0)
0.5
(2.5)
SEK
m
–
0.2
–
–
0.2
–
(36.0)
(35.8)
36.0
0.2
SGD
m
–
(1.0)
–
–
(1.0)
–
(2.1)
(3.1)
–
(3.1)
AUD
m
0.3
0.1
–
–
0.4
0.4
–
0.8
–
0.8
NGN
m
75.6
16.1
–
(5.7)
86.0
403.5
(100.9)
388.6
–
388.6
Changes in the level of exchange rates will have an impact on consolidated earnings. The following table shows the impact on earnings
of a 5% strengthening in the exchange rate in the Group’s key currencies against Sterling. The obverse movements would be of the same
magnitude. These amounts have been calculated by applying changes in exchange rates to the Group’s foreign currency profi ts and losses
and to fi nancial instruments denominated in foreign currency.
US Dollar
Other
2020
Income
statement
£m
(3.1)
(0.3)
(3.4)
Equity
£m
(4.0)
(0.3)
(4.3)
2019
Income
statement
£m
(3.2)
0.2
(3.0)
Equity
£m
(2.3)
(0.1)
(2.4)
Included within operating profi t are foreign currency gains of £0.1m (2019: loss of £1.8m).
(d) Interest rate risk
The Group uses interest rate swaps to convert interest rates on certain borrowings from fl oating rates to fi xed hedge exposure to
fl uctuations in interest rates. The interest rate profi le of the Group’s fi nancial assets and liabilities are set out in the table below:
Fixed rate instruments
Financial liabilities
Variable rate instruments
Financial assets
Financial liabilities
Group
Company
2020
£m
2019
£m
2020
£m
2019
£m
(0.1)
(0.1)
(0.1)
(0.1)
23.9
(17 8.9)
(155. 0)
18.5
(207.6)
(189.1)
3.1
(224. 6)
(221. 5)
27.1
(217.7)
(190.6)
Where hedging criteria are met the Group classifi es interest rate swaps as cash fl ow hedges and states them at fair value. Over the longer-
term permanent changes in interest rates would have an impact on consolidated earnings. At 31 December 2020, a one percent change in
the interest rate would have had the following impact:
Variable rate instruments
Interest rate swap
Cash flow sensitivity
(e) Fair values
2020
Income
statement
£m
(1.7)
0.8
(0.9)
2019
Income
statement
£m
(2.0)
0.8
(1.2)
There are no material differences between the book value of fi nancial assets and liabilities and their fair value other than set out below:
Group
Liabilities carried at amortised cost
Unsecured bank loans and overdrafts
Trade and other payables
Leases
Preference shares
134
James Fisher and Sons plc Annual report and accounts 2020
2020
2019
Notes
26
20
26
29
Carrying
value
£m
(189. 3)
(14 3.7)
(32.5)
(0.1)
(36 5.6)
Fair
value
£m
(182.4)
(14 3.7)
(32.5)
(0.1)
(3 58.7)
Carrying
value
£m
(207.6)
(162.8)
(30.2)
(0.1)
(400.7)
Fair
value
£m
(210.7)
(162.8)
(30.2)
(0.1)
(403.8)
S
t
r
a
t
e
g
c
r
e
p
o
r
t
i
G
o
v
e
r
n
a
n
c
e
i
F
n
a
n
c
a
i
l
s
t
a
t
e
m
e
n
t
s
28 Financial instruments continued
Company
Liabilities carried at amortised cost
Unsecured bank loans and overdrafts
Trade and other payables
Leases
Preference shares
Notes to the fi nancial statements
2020
Carrying
value
£m
Fair
value
£m
2019
Carrying
value
£m
Fair
value
£m
(224. 6)
(217.5)
(217.7)
(210.1)
(6.0)
(1.7)
(0.1)
(6.0)
(1.7)
(0.1)
(5.8)
(2.0)
(0.1)
(5.8)
(2.0)
(0.1)
(2 32.4)
(225.3)
(225.6)
(218.0)
Notes
26
20
26
29
Fair value has been determined by reference to the market value at the balance sheet date or by discounting the relevant cash fl ows using
current interest rates for similar instruments. The fair value of the fi nancial assets has been assessed by the Directors with reference to the
current prospects of the investments and associated risks.
Fair value hierarchy
The Group classifi es fair value measurement using a fair value hierarchy that refl ects the signifi cance of inputs used in making
measurements of fair value. The fair value hierarchy has the following levels:
(a) Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
(b) Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices); and
(c) Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Financial instruments carried at fair value as set out below:
Level 2
Level 3
Group
Financial assets measured at fair value
Forward exchange contracts – cash flow hedges
Interest rate swaps – cash flow hedges
Financial liabilities measured at fair value
Interest rate swaps – cash flow hedges
Contingent consideration
Financial liabilities not measured at fair value
Unsecured bank loans
Leases
Company
Financial assets measured at fair value
Forward exchange contracts – cash flow hedges
Interest rate swaps – cash flow hedges
Financial liabilities measured at fair value
Interest rate swaps – cash flow hedges
Financial liabilities not measured at fair value
Unsecured bank loans
2020
£m
3.2
–
3.2
(1.0)
–
(17 8.9)
(32.5)
(212. 4)
(209. 2)
2019
£m
1.6
0.4
2.0
(0.3)
–
(210.7)
(30.2)
(241.2)
(239.2)
2020
£m
2019
£m
–
–
–
–
–
–
–
–
–
2020
£m
3.2
–
3.2
–
–
–
–
(3.5)
–
–
(3.5)
(3.5)
2019
£m
1.6
0.4
2.0
Level 2
(1.0)
(0.3)
(217.5)
(218.5)
(215.3 )
(210.1)
(210.4)
(208.4)
There have been no transfers between categories during the period. The fair value of interest rate swap contracts and forward exchange
contracts are calculated by management based on external valuations received from the Group’s bankers and is based on forward
exchange rates and anticipated future interest yields respectively.
James Fisher and Sons plc Annual report and accounts 2020
135
Notes to the fi nancial statements
28 Financial instruments continued
Fair value hedges – Group and Company
At 31 December 2020 and 31 December 2019 the Group did not have any outstanding fair value hedges.
Cash fl ow hedges – Group and Company
Forward contracts and interest rate swaps are included within “trade and other payables/trade and other receivables” in the Statement of
fi nancial position; in “effective portion of changes in fair value of cash fl ow hedges” in the Consolidated statement of other comprehensive
income (OCI), and in “administrative expenses” within the Income statement.
At 31 December 2020, the Group and Company held forward currency contracts designated to hedge future commitments in US Dollars
and Euro. The terms of the contracts are as follows:
Sell
US$ 50m
Buy
Euro 2.3m
Maturity
January 2021 – December 2021
January 2021 – December 2021
Exchange
rate
Fair value
£m
1.26
1.10
3.2
–
At 31 December 2019, the Group and Company held forward currency contracts designated to hedge future commitments in US Dollars
and Swedish Krone. The terms of the contracts are as follows:
Sell
US$ 81.3m
Buy
Euro 0.5m
SEK 36.0m
Maturity
January 2020 – December 2020
January 2020 – December 2020
January 2020 – December 2020
Exchange
rate
Fair value
£m
1.30
1.18
12.23
1.5
–
–
The foreign exchange contracts have been negotiated to match the expected profi le of receipts. At 31 December 2020, these hedges were
assessed to be highly effective and an unrealised gain of £0.4m (2019: gain of £2.2m) relating to the hedging instruments is included in
equity.
In respect of the Forward contracts, a gain of £0.1m (2019: £1.4m gain) was recognised in the income statement and £1.7m gain
(2019: £2.3m gain) in the Consolidated statement of other comprehensive income relating to forward contracts.
Interest rate swaps
The Group and Company entered into interest rate swap contracts in respect of Sterling denominated debt to swap a variable rate liability
for a fi xed rate liability. These instruments have been allocated against the Group and Company debt in the tables shown above. Details of
the contracts and their fair values at 31 December are set out below:
Company
Sterling interest rate swaps
Amount
2020
£m
75.0
2019
£m
75.0
Maturity
Fixed rate
%
Fair value
2020
£m
30 October 2022
0.5% – 1.2%
(1.0)
Fair value
2019
£m
0.1
In respect of the Interest rate swaps, an expense of £0.2m (2019: income of £0.1m) was recognised in the Income Statement, and a loss of
£1.2m (2019: £1.3m) was recognised in the Consolidated statement of other comprehensive income.
(f) Market risk
The Group has the following derivative fi nancial instruments in the following line items in the statement of fi nancial position:
Current assets
Foreign currency forwards – cash flow hedges
Interest rate swaps – cash flow hedges
Total current derivative financial instrument assets
Current liabilities
Foreign currency forwards – cash flow hedges
Interest rate swaps – cash flow hedges
Total current derivative financial instrument liabilities
136
James Fisher and Sons plc Annual report and accounts 2020
Group
Company
2019
£m
1.6
0.4
2.0
2020
£m
3.2
–
3.2
Group
Company
2019
£m
(0.1)
(0.3)
(0.4)
2020
£m
–
(1.0)
(1.0)
2019
£m
1.6
0.4
2.0
2019
£m
(0.1)
(0.3)
(0.4)
2020
£m
3.2
–
3.2
2020
£m
–
(1.0)
(1.0)
29 Share capital
Allotted, called up and fully paid
In millions of shares
In issue at 1 January
Exercise of share options
In issue at 31 December
Issued share capital
Notes to the fi nancial statements
25p Ordinary shares
2020
2019
50.3
0.1
50.4
2020
£m
12.6
50.3
–
50.3
2019
£m
12.6
£1 Cumulative
Preference shares
2020
0.1
–
0.1
2020
£m
0.1
2019
0.1
–
0.1
2019
£m
0.1
The preference shareholders are entitled to receive 3.5% cumulatively per annum, payable in priority to any dividend on the ordinary shares.
The ordinary shareholders are entitled to receive dividends as declared from time to time by the Directors.
Shares all carry equal voting rights of one vote per share held. They also have the right to attend and speak at general meetings, exercise
voting rights and appoint proxies. Neither type of share is redeemable. In the event of a winding-up order the amount receivable in respect
of the cumulative preference shares is limited to their nominal value. The ordinary shareholders are entitled to an unlimited share of the
surplus after distribution to the cumulative preference shareholders.
Treasury shares
9,227 (2019: 510) ordinary shares of 25p
2020
£m
0.2
2019
£m
–
The Company has an established Employee Share Ownership Trust, the James Fisher and Sons plc Employee Share Ownership Trust, to
meet potential obligations under share option and long-term incentive schemes awarded to employees. The historic cost of these shares at
31 December 2020 was £0.2m (2019: £nil). The trust has not waived its right to receive dividends.
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In the year ended 31 December 2020, 34,670 (2019: 30,579) ordinary shares with an aggregate nominal value of £8,668 (2019: £7,645)
were issued to satisfy awards made under the Company’s Executive Share Option Scheme at an option prices of 410p and 522p (2019:
522p) per share giving rise to total consideration of £404,024 (2019: £383,250).
During the year the Trust purchased 50,000 (2019: 50,000) of its own shares in the market at an average cost per share of £17.82 (2019:
£21.08) and a total cost of £0.9m (2019: £1.1m).
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30 Commitments and contingencies
Capital commitments
At 31 December, capital commitments for which no provision has been made in these accounts amounted to:
Group
Company
2020
£m
–
2019
£m
1.3
2020
£m
–
2019
£m
–
Contingent liabilities
(a) In the ordinary course of the Company’s business, counter indemnities have been given to banks in respect of custom bonds, foreign
exchange commitments and bank guarantees.
(b) A Group VAT registration is operated by the Company and six Group undertakings in respect of which the Company is jointly and
severally liable for all amounts due to HM Revenue & Customs under the arrangement.
(c) A guarantee has been issued by the Group and Company to charter parties in respect of obligations of a subsidiary, James Fisher
Everard Limited, in respect of charters relating to nine vessels. The charters expire between 2021 and 2024.
(d) Subsidiaries of the Group have issued performance and payment guarantees to third parties with a total value of £48.2m (2019: £73.9m).
(e) The Group is liable for further contributions in the future to the MNOPF and MNRPF if additional actuarial defi cits arise or if other
employers liable for contributions are not able to pay their share. The Group and Company remains jointly and severally liable for any
future shortfall in recovery of the MNOPF defi cit.
(f) The Group has given an unlimited guarantee to the Singapore Navy in respect of the performance of First Response Marine Pte Ltd, its
Singapore joint venture, in relation to the provision of submarine rescue and related activities.
(g) In the normal course of business, the Company and certain subsidiaries have given parental and subsidiary guarantees in support of
loan and banking arrangements.
(h) The Company and its subsidiaries may be parties to legal proceedings and claims which arise in the ordinary course of business, and can
be material in value. Disclosure of contingent liabilities or appropriate provision has been made in these accounts where, in the opinion of the
Directors, liabilities may materialise. Other than provisions made against certain receivables and claims, described in note 33 (b) estimates,
there are no other signifi cant provisions and no individually signifi cant contingent liabilities that required specifi c disclosure .
James Fisher and Sons plc Annual report and accounts 2020
137
Notes to the fi nancial statements
31 Related party transactions
Transactions with related parties
FCM businesses
The Group has interests of between 40% and 50% in several joint ventures providing ship-to-ship transfer services in Northern Europe and
Asia through its wholly owned subsidiary, Fender Care Marine Services Limited.
First Response Marine
The Group holds through James Fisher Marine Services Limited (JFMS) a 50% interest in First Response Marine Pte Ltd (FRM). FRM
provides submarine rescue services to the Singapore government under a 20 year service contract which commenced in March 2009.
FRM subcontracts the provision of the submarine rescue service to James Fisher Singapore Pte Ltd. JFMS has also provided a loan to
FRM of £2.0m to support its day-to-day operations. The loan which is included in the Group balance sheet as part of the investment in joint
ventures is interest bearing and is repayable at the end of the project. Interest charged in the period amounted to £0.1m (2019: £0.1m).
Dividends received or receivable during the period included in the results of the Group are £0.5m (2019: £0.5m).
JFD Domeyer
The Group has a 50% stake in JFD Domeyer, an entity which provides in-service support and aftermarket services to customers in
Germany.
Pleat Mud Coolers AS
The Group has a 50.1% stake in Pleat Mud Coolers AS, an entity which supplies mud cooling systems to the offshore oil and gas market.
Wuhu Divex Diving Systems
The Group has a 49% stake in Wuhu Divex Diving Systems Ltd, an entity which manufactures advanced diving systems for the Chinese
market.
JF Technologies LLC
The Group has a 49% stake in James Fisher Technologies LLC, an entity which provides specialist design and engineering services
including the provision of remote control equipment to the North American nuclear decommissioning market.
Details of the transactions carried out with related parties are shown in the table below:
FCM businesses
First Response Marine
JFD Domeyer
Pleat Mud Coolers
Wuhu Divex Diving Systems
JF Technologies LLC
Services to
related
parties
£m
Sales to
related
parties
£m
Purchases
from related
parties
£m
Amounts
owed
by parties
£m
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
–
–
3.6
6.3
–
–
–
–
–
–
–
–
1.2
0.5
–
–
0.6
0.5
0.5
–
0.2
1.8
–
–
1.2
1.2
–
–
–
–
–
–
–
–
0.1
–
0.1
0.4
1.0
2.0
2.1
2.1
0.6
–
0.3
0.1
–
–
Amounts
owed
to parties
£m
0.7
0.8
–
–
–
–
–
–
–
–
–
–
Purchases from Murjan Al Sharq for Marine Contracting LLC were £nil (2019: £3.0m) and as set out in Note 16, this business was the
subject of a share exchange during 2020 and is no longer an associated company.
No allowance for expected credit losses (ECL) for bad debts has been made in respect of these balances (2019: £nil). No bad debts arose
during the period relating to these transactions (2019: £nil). All transactions with related parties are priced on an arms length basis on terms
equivalent to those provided to wholly external parties.
Company
The Company has entered into transactions with its subsidiary undertakings primarily in respect of the provision of accounting services,
fi nance and the provision of share options to employees of subsidiaries.
The amount outstanding from subsidiary undertakings to the Company at 31 December 2020 was £ 369.0m (2019: £352.0m). Amounts
owed to subsidiary undertakings by the Company at 31 December 2020 totalled £3.6m (2019: £5.0m).
The Company has had no expense in respect of bad or doubtful debts of subsidiary undertakings in the year (2019: £nil).
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Notes to the fi nancial statements
32 Signifi cant accounting policies
The principal accounting policies, which have been applied consistently throughout the year and the preceding year, are set out below.
32.1 Basis of preparation of the consolidated fi nancial statements
The results of subsidiaries are consolidated for the periods from or to the date on which control has passed. Control exists when the
Company controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investees and
has the ability to affect those returns through its power over the investee. Acquisitions are accounted for under the purchase method of
accounting from the acquisition date, which is the date on which control is passed to the Group. The fi nancial statements of subsidiaries are
prepared for the same reporting period as the Parent company, using consistent accounting policies. All intra-group balances, transactions,
income and expenses are eliminated in the consolidated fi nancial statements.
Payment for the future services from employees or former owners are expensed. Any payments to employees or former owners in respect
of the acquisition of the business are capitalised. This is carefully managed during the acquisition process so that former owners and/or
employees do not receive any incentive payments during an earn-out period.
Joint arrangements
A joint arrangement is an arrangement over which the Group and one or more third parties have joint control. These joint arrangements are
in turn classifi ed as:
•
Joint ventures whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its
liabilities; and
• Joint operations whereby the Group has rights to the assets and obligations for the liabilities relating to the arrangement.
Any investment in joint ventures is carried in the balance sheet at cost plus the Group’s post acquisition share in the change in net assets
of the joint ventures, less any impairment provision. The income statement refl ects the Group’s share of the post-tax result of the joint
ventures. The Group’s share of any changes recognised by the joint venture in other comprehensive income are also recognised in other
comprehensive income.
Non-controlling interests
Non-controlling interests represent the proportion of profi t or loss and net assets not held by the Group and are presented separately in the
income statement and in the consolidated statement of fi nancial position. Losses applicable to the non-controlling interests in a subsidiary
are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a defi cit balance.
Put options upon non-controlling interests are sometimes recognised arising from business combinations. An initial option price estimate is
recorded within payables and a corresponding entry made to other reserves.
On the acquisition of non-controlling interests, the difference between the consideration paid and the fair value of the share of net assets
acquired is recognised in equity. Changes to the carrying value of the Put option are similarly recorded within equity.
Company investments in subsidiaries and joint ventures
In its separate fi nancial statements the Company recognises its investments in subsidiaries and joint ventures at cost. Income is recognised
from these investments when its right to receive the dividend is established.
32.2 Foreign currency
Group
The fi nancial statements of subsidiary undertakings are prepared in their functional currency which is the currency of the primary economic
environment in which they operate. For the purpose of the consolidated fi nancial statements, the results and fi nancial position of each entity
are translated into UK Sterling, which is the Group’s presentational currency.
(i) Foreign currency transactions in functional currency
Transactions in currencies other than the entities functional currency are initially recorded at rates of exchange prevailing on the date of the
transaction. At each subsequent balance sheet date:
(i) Foreign currency monetary items are retranslated at rates prevailing on the balance sheet date and any exchange differences
recognised in the income statement;
(ii) Non-monetary items measured at historical cost are not retranslated; and
(iii) Non-monetary items measured at fair value are retranslated using exchange rates at the date the fair value was determined. Where a
gain or loss is recognised directly in equity, any exchange component is also recognised in equity and conversely where a gain or loss is
recognised in the income statement, any exchange component is recognised in the income statement.
James Fisher and Sons plc Annual report and accounts 2020
139
Notes to the fi nancial statements
32 Signifi cant accounting policies continued
(ii) Net investment in foreign operations
Exchange differences arising on monetary items forming part of the Group’s net investment in overseas subsidiary undertakings which
are denominated in the functional currency of the subsidiary undertaking are taken directly to the translation reserve and subsequently
recognised in the consolidated income statement on disposal of the net investment. Exchange differences on foreign currency borrowings
to the extent that they are used to provide an effective hedge against Group equity investments in foreign currency are taken directly to the
translation reserve.
(iii) Translation from functional currency to presentational currency
The assets and liabilities of operations, where the functional currency is different from the Group’s presentational currency are translated
at the period end exchange rates. Income and expenses are translated at the average exchange rate for the reporting period. All other
exchange differences on transactions in foreign currencies are recorded at the rate ruling at the date of the transaction.
Resulting exchange differences are recognised in the consolidated statement of other comprehensive income. Tax charges and credits
attributable to exchange differences included in the reserve are also dealt with in the translation reserve.
Company
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated
in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. Exchange differences arising on settlement of
monetary items or on the retranslation of monetary items at rates different from those at which they were initially recognised are taken to the
income statement.
All exchange differences on assets and liabilities denominated in foreign currencies are taken to the income statement, other than
investments in foreign operations and foreign currency borrowings used to hedge those investments, where exchange differences are taken
to the translation reserve.
32.3 Financial instruments
IFRS 9 Financial instruments became effective on 1 January 2018. This standard replaces IAS39 and introduced new requirements for
classifying and measuring fi nancial instruments and put in place a new hedge accounting model that is designed to be more closely
aligned with how entities undertake risk management activities when hedging fi nancial and non-fi nancial risk exposures. IFRS 9 has been
implemented prospectively from 1 January 2018 and the impact on the Group has not been material. The key areas of focus for the Group
under IFRS 9 are:
–
Expected credit losses being recognised on trade debtors and contract assets recognised under IFRS 15;
–
Hedge accounting and related hedge documentation; and
– Reclassifi cation of assets held for sale as Other Investments, with these being fair valued at each reporting period.
(a) Financial assets
Trade receivables and debt securities issued are initially recognised when they are originated. All other fi nancial assets and fi nancial liabilities
are initially recognised when the Group becomes a party to the contractual provisions of the instrument.
A fi nancial asset, other than a trade receivable without a signifi cant fi nancing component, or fi nancial liability is initially measured at fair value
plus transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a signifi cant fi nancing component is
initially measured at the transaction price.
Policy applicable from 1 January 2018
A fi nancial asset is measured at amortised cost if it is not designated as fair value through the profi t and loss account (FVTPL) and it is held
to collect contractual cash fl ows with contractual terms that give rise on specifi ed dates to cash fl ows that are solely payments of principal
and interest on the principal amount outstanding.
A debt investment is measured at fair value through other comprehensive income (FVOCI) if it is not designated as at FVTPL, and it is held
with the objective of collecting contractual cash fl ows and selling fi nancial assets with contractual terms that give rise on specifi ed dates to
cash fl ows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment not held for trading, the Group can irrevocably elect, on an investment by investment basis, to
present subsequent changes in the investment’s fair value in OCI.
All fi nancial assets not classifi ed as measured at amortised cost or FVOCI, as described above, including derivative fi nancial instruments are
measured at fair value through profi t and loss.
Financial assets at fair value through profi t and loss, including any interest or dividend income, are recognised in the profi t and loss.
Financial assets at amortised cost are valued using the effective interest method with the amortised cost reduced by any impairment losses,
with interest income, foreign exchange gains or losses, impairment and de-recognition gains or losses recognised in profi t or loss.
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Notes to the fi nancial statements
32 Signifi cant accounting policies continued
Debt investments are measured at fair value with interest income calculated using the effective interest method with any foreign exchange
gains and losses, or impairments, taken through the profi t and loss. Other net gains or losses, and those on de-recognition accumulated
through the OCI, are re-classifi ed in the profi t or loss.
Equity investments are measured at fair value with dividends recognised through the profi t and loss. Other net gains or losses, are
recognised in the OCI, and are never re-classifi ed in the profi t or loss.
(b) Financial liabilities
Financial liabilities are classifi ed as measured at amortised cost or FVTPL. A fi nancial liability is classifi ed as at FVTPL if it is classifi ed as held
for trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net
gains and losses, including any interest expense, are recognised in profi t or loss. Contingent consideration is considered to be a fi nancial
liability measured at FVTPL.
Other fi nancial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense, foreign
exchange gains and losses, and any gain or loss on de-recognition are recognised in profi t or loss.
(c) De-recognition
The Group de-recognises a fi nancial asset when the contractual rights to the cash fl ows from that asset expire, or it transfers the rights to
receive the contractual cash fl ows in a transaction in which substantially all of the risks and rewards of ownership of the fi nancial asset are
transferred.
The Group de-recognises a fi nancial liability when its contractual obligations are discharged or cancelled, or expire. On de-recognition of a
fi nancial liability, the difference between the carrying amount extinguished and the consideration paid is recognised in profi t or loss.
(d) Derivative fi nancial instruments and hedge accounting
The Group holds derivative fi nancial instruments to hedge its foreign currency and interest rate risk exposures. Derivatives are initially
measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally
recognised in profi t or loss. The Group designates certain derivatives as hedging instruments to hedge the variability in cash fl ows
associated with highly probable forecast transactions arising from changes in foreign exchange rates and interest rates and certain
derivatives and non -derivative fi nancial liabilities as hedges of foreign exchange risk on a net investment in a foreign operation.
At inception of designated hedging relationships, the Group documents the risk management objective and strategy for undertaking the
hedge and the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash fl ows of
the hedged item and hedging instrument are expected to offset each other.
The appropriate level of hedging is monitored by Group Treasury and the Group Board. As part of this review process the following are assessed:
•
the hedging effectiveness to determine that there is an economic relationship between the hedged item and the hedging instrument;
•
the hedge ratio; and
•
that the hedged item and instrument are not intentionally weighted to create hedge ineffectiveness.
Cash fl ow hedges
When a derivative is designated as a cash fl ow hedging instrument, the effective portion of changes in the fair value of the derivative is
recognised in OCI and accumulated in the hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognised
immediately in profi t or loss.
The Group designates only the change in fair value of the spot element of forward exchange contracts as the hedging instrument in cash
fl ow hedging relationships.
For all hedged forecast transactions, the amount accumulated in the hedging reserve is reclassifi ed to profi t or loss in the same period or
periods during which the hedged expected future cash fl ows affect profi t or loss.
Cash and short-term deposits included in the statement of fi nancial position comprise cash at bank and in hand and short-term deposits
with an original maturity of three months or less from the original acquisition date. Cash and cash equivalents included in the cash fl ow
statement comprise cash and short-term deposits, net of bank overdrafts.
If the hedged future cash fl ows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve and
the cost of hedging reserve are immediately reclassifi ed to profi t or loss.
Net investment hedges
When a derivative instrument or a non -derivative fi nancial liability is designated as the hedging instrument in a hedge of a net investment in a
foreign operation, the effective portion of, for a derivative, changes in the fair value of the hedging instrument or, for a non -derivative, foreign
exchange gains and losses is recognised in OCI and presented in the translation reserve within equity.
Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the non -derivative is
recognised immediately in profi t or loss. The amount recognised in OCI is reclassifi ed to profi t or loss as a reclassifi cation adjustment on
disposal of the foreign operation.
James Fisher and Sons plc Annual report and accounts 2020
141
Notes to the fi nancial statements
32 Signifi cant accounting policies continued
(e) Expected credit losses
IFRS 9 introduced a new model for the recognition of impairment losses - the Expected Credit Loss (ECL) model. ECL is the expected
value decrease in an asset. The expected credit loss model constitutes a change from the previous IAS 39 incurred loss model. The key
difference between incurred and expected is the requirement to consider forward looking scenarios. Credit risk is the risk of fi nancial loss
of the Group if a customer or counterparty to a fi nancial instrument fails to meet its contractual obligations, and arises principally from
the Group’s receivables from customers and investments in debt securities. The carrying amounts of fi nancial assets and contract assets
represent the maximum credit exposure.
32.4
Intangible assets
Intangible assets, excluding goodwill arising on a business combination, are stated at cost or fair value less any provision for impairment.
Intangible assets assessed as having fi nite lives are amortised over their estimated useful economic life and are assessed for impairment
whenever there is an indication that they are impaired. Amortisation charges are on a straight-line basis and recognised in the income
statement. Estimated useful lives are as follows:
Development costs
Intellectual property
Patents and licences
Other intangibles
5 years or over the expected period of product sales, if less
3 to 20 years
5 years or over the period of the licence, if less
5 years
(a) Goodwill arising on a business combination
Goodwill arising on the acquisition of a subsidiary represents the excess of the aggregate of the fair value of the consideration over the
aggregate fair value of the identifi able assets, liabilities and contingent liabilities acquired. Goodwill is initially recognised at cost and is
subsequently measured at cost less any accumulated impairment losses.
Costs related to an acquisition, other than those associated with the issue of debt or equity securities incurred in connection with a
business combination, are expensed to the income statement. The carrying value of goodwill is reviewed annually for impairment but more
regularly if events or changes in circumstances indicate that it may be impaired. When an impairment loss is recognised it is not reversed in
a subsequent accounting period, even if the circumstances which led to the impairment cease to exist.
(b) Acquired intangible assets
Intangible assets that are acquired as a result of a business combination including but not limited to customer relationships, supplier lists,
patents and technology and that can be separately measured at fair value on a reliable basis are recorded initially at fair value and amortised
over their expected useful life. Amortisation is expensed to the consolidated income statement.
32.5 Property, plant and equipment
Property, plant and equipment is stated at cost, less accumulated depreciation and any provision for impairment losses. Refi t costs relating
to vessels are capitalised when incurred and amortised over their estimated useful economic life of 30 months. Cost comprises expenditure
incurred during construction, delivery and modifi cation. Where a substantial period of time is required to bring an asset into use, attributable
fi nance costs are capitalised and included in the cost of the relevant asset.
Depreciation is provided to write off the cost of property, plant and equipment to their residual value in equal annual instalments over their
estimated useful lives, as follows:
Freehold property
Leasehold improvements
Plant and equipment
Vessels
40 years
25 years or the period of the lease, if shorter
Between 5 and 20 years
Between 10 and 25 years
No depreciation is charged on assets under construction.
Residual values of vessels are set initially at 20% of purchase cost or fair value at acquisition, which the Directors believe to be an
approximation of current residual values. Residual values and estimated remaining lives are reviewed annually by the Directors and adjusted
if appropriate to refl ect the relevant market conditions and expectations, obsolescence and normal wear and tear.
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Notes to the fi nancial statements
32 Signifi cant accounting policies continued
32.6
Impairment of tangible and intangible assets
At each reporting date the Group assesses whether there are any indications that an asset has been impaired. If any indication exists, an
estimate of the recoverable amount of the asset is made which is determined as the higher of its fair value less costs to sell and its value in
use. These calculations are determined for an individual asset unless that asset does not generate cash infl ows independently from other
assets, in which case its value is determined as part of that group of assets. To assess the value in use, estimated future cash fl ows relating
to the asset are discounted to their present value using a pre-tax discount rate that refl ects current market assessment of the time value of
money and risks specifi c to the asset. Where the carrying amount of the asset exceeds its recoverable amount, the asset is considered to
be impaired and is written down to its recoverable amount. Impairment losses are recognised in the income statement.
(a) Impairment of goodwill
Goodwill acquired in a business combination is allocated against the appropriate combination of business units deemed to obtain
advantage from the benefi ts acquired with the goodwill. These are designated as cash generating units (CGU). Impairment is then assessed
by comparing the recoverable amount of the relevant CGU with the carrying value of the CGU’s goodwill. Recoverable amount is measured
as the higher of the CGU’s fair value less cost to sell and the value in use. Where the recoverable amount of the CGU is less than its carrying
amount including goodwill, an impairment loss is recognised in the income statement. An impairment loss for goodwill is not reversed in a
subsequent period.
(b) Impairment of tangible and other intangible assets
If any indication of a potential impairment exists, the recoverable amount is estimated to determine the extent of any impairment loss.
Assets are grouped together for this purpose at the lowest level for which there are separately identifi able cash fl ows.
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(c) Research and development costs
Research expenditure is expensed in the income statement as incurred.
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Expenditure on development which represents the application of research to the development of new products or processes is capitalised
provided that specifi c projects are identifi able, technically feasible, and the Group has suffi cient resources to complete development. The
useful life of projects meeting the criteria for capitalisation is determined on a project by project basis. Capitalised development expenditure
is measured at cost and amortised over its expected useful life on a straight-line basis. Other development costs are recognised in the
income statement as incurred.
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If an event occurs after the recognition of an impairment that leads to a decrease in the amount of the impairment loss previously
recognised the impairment loss is reversed. The reversal is recognised in the income statement to the extent that the carrying value of the
asset does not exceed its amortised cost at the reversal date.
32.7
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product to its present
location and condition. Raw materials, consumables stores and fi nished goods for sale are stated at purchase cost on a fi rst in fi rst out
basis. Work in progress and fi nished goods are stated at the cost of direct materials and labour plus attributable overheads allocated on
a systematic basis based on a normal level of activity. Net realisable value is based on estimated selling price less the estimated costs of
completion and sale or disposal.
32.8 Taxation
Corporation tax is provided on taxable profi ts from activities not qualifying for tonnage tax relief and is recognised in the income statement
except to the extent that it relates to items recognised directly in equity or in other comprehensive income.
Current tax is the expected corporation tax payable or receivable in respect of the taxable profi t for the year using tax rates enacted or
substantively enacted at the balance sheet date, less any adjustments to tax payable or receivable in respect of previous years.
Deferred tax is recognised in respect of all temporary differences between the carrying amounts of assets and liabilities included in the
fi nancial statements and the amounts used for tax purposes, that will result in an obligation to pay more, a right to pay less or to receive
more tax, with the following exceptions:
–
–
No provision is made where a deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction
which is not a business combination that at the time of the transaction affect neither accounting nor taxable profi t; and
No provision is made for deferred tax that would arise on all taxable temporary differences associated with investments in subsidiaries
and interests in joint ventures where the timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised only to the extent that the Directors consider that it is probable that there will be suitable taxable profi ts
from which the future reversal of the underlying temporary differences and unused tax losses and credits can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which the asset is expected
to be realised or liability settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
James Fisher and Sons plc Annual report and accounts 2020
143
Notes to the fi nancial statements
32 Signifi cant accounting policies continued
Deferred tax arising on actuarial gains and losses relating to defi ned benefi t pension funds is recorded in other comprehensive income.
Where the cash contributions made to the schemes exceed the service costs recognised in the income statement the current tax arising is
recorded in other comprehensive income.
32.9 Leases
The Group leases land and buildings for some of its offi ces, warehouses and factory facilities. The length of these leases can typically run for
up to 25 years, with most less than 10 years. Some leases include an option to renew the lease for an additional period after the end of the
contract term. Some leases provide for additional rent payments that are based on changes in local price indices.
Some of the buildings contain extension options that are exercisable by the Group before the end of the non-cancellable contract period.
Where practicable, the Group includes extension options in new leases to provide operational fl exibility, that are exercisable by the Group
but not by the lessors. The Group assesses at lease commencement whether it is reasonably certain to exercise the extension option, and
then reassesses this in the event that there is a signifi cant event or change in circumstances within its control.
The Group also leases vessels, with lease terms typically of up to fi ve years and IT equipment and machinery, typically for a duration of less
than 10 years. The Group has applied IFRS 16 using the modifi ed retrospective approach.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains a lease if the contract
conveys the right to control the use of an identifi ed asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identifi ed asset, the Group uses the defi nition of a lease in IFRS 16.
At inception or on reassessment of a contract that contains a lease component, the Group allocated the consideration in the contract to each
lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the
Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying
asset or the site on which it is located less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the
Group uses it s incremental borrowing rates as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
• fi xed payments, including in-substance fi xed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index rate at the commencement date;
• amounts expected to be payable under a residual guarantee; and
•
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if
the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably
certain not to terminate early. The lease liability is measured at amortised cost using the effective interest method. It is re-measured when
there is a change in future lease payments arising from a change in an index or rate if there is a change in the Group’s estimate of the amount
expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase,
extension or termination option. When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use assets, or it is recorded in profi t or loss if the carrying amount of the right-of-use asset is reduced to zero.
The Group presents right-of-use assets and lease liabilities (within ‘borrowings’) in the statement of fi nancial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term
of 12 months or less at inception and leases of low-value assets, including IT equipment. The Group recognises the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.
When the Group acts as a lessor, it determines at lease inception whether each lease is a fi nance or an operating lease, making an overall
assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is
the case, then the lease is treated as a fi nance lease, otherwise as an operating lease.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and sub-lease separately, assessing the
classifi cation of the sub-lease with reference to the right-of-use asset arising from the head lease.
The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of
‘other income’.
144
James Fisher and Sons plc Annual report and accounts 2020
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Notes to the fi nancial statements
32 Signifi cant accounting policies continued
32.10 Pension plans
(i) Defi ned contribution schemes
Pre-determined contributions paid to a separate privately administered pension plan are recognised as an expense in the income statement
in the period in which they arise. Other than this contribution the Group has no further legal or constructive obligation to make further
contributions to the scheme.
(ii) Defi ned benefi t schemes
A defi ned benefi t scheme is a pension plan under which the amount of pension benefi t that an employee receives on retirement is defi ned
by reference to factors including age, years of service and compensation. The schemes are funded by payments determined by periodic
actuarial calculations agreed between the Group and the trustees of trustee-administered funds.
The cost of providing benefi ts is determined using the projected unit credit method, which attributes entitlement to benefi ts to the current
period (current service cost) and to current and prior periods (to determine the present value of the defi ned benefi t obligation). Current
service costs are recognised in the income statement in the current year. Past service costs are recognised in the income statement
immediately. When a settlement (which eliminates all obligations for benefi ts already accrued) or a curtailment (which reduces future
obligations as a result of a reduction in future entitlement) occurs, the obligation and related plan assets are re-measured using current
actuarial assumptions and any gain or loss is recognised in the income statement.
The interest element of the defi ned benefi t charge is determined by applying the discount rate to the net defi ned benefi t liability at the start
of the period and is recognised in the income statement. A liability is recognised in the statement of fi nancial position which represents
the present value of the defi ned benefi t obligations at the balance sheet date, less the fair value of the scheme assets and is calculated
separately for each scheme.
The defi ned benefi t obligations represent the estimated amount of future benefi ts that employees have earned in return for their services
in current and prior periods, discounted at a rate representing the yield on a high quality corporate bond at the balance sheet date,
denominated in the same currency as the obligations, and having the same terms to maturity as the related pension liability, applied to the
estimated future cash outfl ows arising from these obligations. When the calculation results in a benefi t to the Group, the recognised asset is
limited to the total of any unrecognised past service costs and the present value of economic benefi ts available from any future refunds from
the plan or reductions in future contributions to the plan.
Actuarial gains and losses on experience adjustments and changes in actuarial assumptions are recognised in the statement of other
comprehensive income.
32.11 Share based payments
Executive savings related share option schemes are operated under which options are granted to employees of the Group. An expense
is recognised in the income statement with a corresponding credit to equity in respect of the fair value of employee services rendered in
exchange for options granted, which is determined by the fair value of the option at the date of grant. The amount is expensed over a
specifi ed period until the options can be exercised (the vesting period).
The fair value of an option is determined by the use of mathematical modelling techniques, including the Black-Scholes option pricing model
and the Binomial model. Non-market vesting conditions (such as profi tability and growth targets) are excluded from the fair value calculation
but included in assumptions about the number of options that are expected to become exercisable.
An estimate is made of the number of options that are expected to become exercisable at each balance sheet date. Any adjustments
to the original estimates are recognised in the income statement (and equity) over the remaining vesting period with any element of any
adjustments relating to prior periods recognised in the current period. No expense is recognised for awards that do not ultimately vest
except for awards where vesting is conditional upon a market condition (such as total shareholder return of the Group relative to an index).
These are treated as vested irrespective of whether or not the market condition is satisfi ed, provided that all other performance conditions
are satisfi ed.
In addition to failure by the employee to exercise an option in accordance with the exercise period allowed by the scheme, an award
made to an employee under a share option scheme is deemed to lapse when either the scheme is cancelled by the Company, or when an
employee, who continues to qualify for membership of a scheme, ceases to pay contributions to that scheme. In these circumstances the
full remaining unexpired cost of the award is expensed in the period in which the option lapses.
Where the exercise of options is satisfi ed by the issue of shares by the Company the nominal value of any shares issued from the exercise
of options is credited to share capital with the balance of the proceeds received, net of transaction costs, credited to share premium.
32.12 Short-term employee benefi ts
The Group recognises a liability and an expense for short-term employee benefi ts, including bonuses, only when contractually or
constructively obliged.
James Fisher and Sons plc Annual report and accounts 2020
145
Notes to the fi nancial statements
32 Signifi cant accounting policies continued
32.13 Share capital and reserves
Ordinary shares are classifi ed as equity. Costs attributable to the issue of new shares are deducted from equity from the proceeds.
(a) Treasury shares
Shares issued by the Company which are held by the Company or its subsidiary entities (including the Employee Share Ownership Trust
(ESOT)), are designated as treasury shares. The cost of these shares is deducted from equity. No gains or losses are recognised on the
purchase, sale, cancellation or issue of treasury shares. Consideration paid or received is recognised directly in equity.
(b) Employee Share Ownership Plan (ESOP)
Company shares are held in an ESOP. The fi nance costs and administration costs relating to the ESOP are charged to the income
statement. Dividend income arising on own shares is excluded in arriving at profi t before taxation and deducted from aggregate dividends
paid.
The Group maintains the following reserves:
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of operations whose fi nancial statements
are denominated in foreign currencies as well as from the translation of liabilities that hedge the Company’s net investment in a foreign
subsidiary.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash fl ow hedging instruments related
to hedged transactions that have not yet occurred.
32.14 Revenue recognition
Revenue represents income derived from contracts for the provision of goods and services by the Company and its subsidiary undertakings
to customers in exchange for consideration in the ordinary course of the Group’s activities.
Performance obligations
Upon approval by the parties to a contract, the contract is assessed to identify each promise to transfer either a distinct good or service
or a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. Goods and
services are distinct and accounted for as separate performance obligations in the contract if the customer can benefi t from them either on
their own or together with other resources that are readily available to the customer and they are separately identifi able in the contract.
Transaction price
At the start of the contract, the total transaction price is estimated as the amount of consideration to which the Group expects to be entitled
in exchange for transferring the promised goods and services to the customer, excluding sales taxes. Variable consideration, such as price
escalation, is included based on the expected value or most likely amount only to the extent that it is highly probable that there will not be a
reversal in the amount of cumulative revenue recognised. The transaction price does not include estimates of consideration resulting from
contract modifi cations, such as change orders, until they have been approved by the parties to the contract. The total transaction price is
allocated to the performance obligations identifi ed in the contract in proportion to their relative stand-alone selling prices where appropriate.
Given the bespoke nature of many of the Group’s products and services, which are designed and/or manufactured under contract to the
customer’s individual specifi cations, there are typically no observable stand-alone selling prices. In such cases, stand-alone selling prices
are typically estimated based on expected costs plus contract margin consistent with the Group’s pricing principles.
Revenue and profi t recognition
Revenue is recognised as performance obligations are satisfi ed as control of the goods and services is transferred to the customer.
For each performance obligation within a contract, the Group determines whether it is satisfi ed over time or at a point in time. Performance
obligations are satisfi ed over time if one of the following criteria is satisfi ed:
–
the customer simultaneously receives and consumes the benefi ts provided by the Group’s performance as it performs;
–
the Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
–
the Group’s performance does not create an asset with an alternative use to the Group and it has an enforceable right to payment for
performance completed to date.
Point in time revenue includes services provided over periods of up to seven days.
Contracts that satisfy the over time criteria primarily occur in the Group’s Specialist Technical business, either because the customer
simultaneously receives and consumes the benefi ts provided by the Group’s performance as it performs (typically services or support
contracts) or the Group’s performance does not create an asset with an alternative use and it has an enforceable right to payment for
performance completed to date (typically production contracts).
146
James Fisher and Sons plc Annual report and accounts 2020
Notes to the fi nancial statements
32 Signifi cant accounting policies continued
For each performance obligation to be recognised over time, the Group typically recognises revenue using an input method, based on
costs incurred in the period. Revenue and attributable margin are calculated by reference to reliable estimates of transaction price and total
expected costs, after making suitable allowances for technical and other risks. Revenue and associated margin are therefore recognised
progressively as costs are incurred.
If the over time criteria for revenue recognition are not met, revenue is recognised at the point in time that control is transferred to the
customer, which is usually when legal title passes to the customer and the business has the right to payment, for example, on delivery.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately as an expense.
Bid costs
All pre-contract bidding costs which are incurred irrespective of whether the contract is awarded relating to the design, manufacture or
operation of assets or the provision of services are expensed when incurred.
Warranty costs
Provision is made for warranties offered with products where it is probable that an obligation to transfer economic benefi ts to the customer
in future will arise. This provision is based on management’s assessment of the previous history of claims and probability of future
obligations arising on a product by product basis. Provisions for warranty costs are set out in note 21.
Revenue – operating lease rental income. Revenue is measured at the fair value of consideration received or receivable, net of returns, trade
discounts and volume rebates. Revenue is recognised in the income statement on a straight- line basis over the period of the hire.
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32.15 Other investments
Other investments which are in unquoted entities are held at fair value and subject to an annual review. The Group elects on an asset by
asset basis whether fair value movements are posted to the income statement or directly to reserves.
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32.16 Intra-group fi nancial instruments
Where the Company enters into fi nancial guarantee contracts to guarantee the indebtness of other companies within the Group, the
Company considers these to be insurance arrangements and accounts for them as such. In this respect the Company treats the guarantee
contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the
guarantee.
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31.17 Government grants
During 2020, some employees across the Group were placed on furlough under the Coronavirus Jobs Retention Scheme. Furlough income
of £2.3m in relation to a maximum of 400 employees was recognised during the year and as such the Group has adopted IAS 20 in
accounting for this government income. The grant has been recognised as income and matched with the associated payroll costs over the
same period.
33 Signifi cant accounting judgements and estimates
In preparing these consolidated fi nancial statements, management has made judgements, estimates and assumptions that affect the
application of the Group’s accounting polici es and the reported amount of assets, liabilities, income and expenses. The outcome may differ
from these estimates.
Estimates and underlying assumptions are reviewed and revised on an on-going basis.
(a) Judgements
Information about judgements made in applying accounting policies that have the most signifi cant effects on the amounts recognised in the
consolidated fi nancial statements is included below:
Revenue
Revenue is set out in notes 3 and 32.14. Revenue is recognised as performance obligations are satisfi ed as control of the goods and
services are transferred to the customer. The timing of the performance obligations will vary depending on the terms of the sales agreement,
the evaluation of the specifi c risks associated with the performance of the contract (for example design, construction and testing) or
generally accepted practice where there are no specifi c arrangements in the contract. Areas of judgement relate to construction contract
accounting and specifi cally estimating the stage of completion and forecast outturn of the contract which are reliant on the knowledge and
expertise of project managers, engineers and other professionals.
Operating in overseas jurisdictions
The Group operates in emerging markets which increases contractual, operational and fi nancial risk with potentially uncertain or changing
regulatory and political environments. This is referred to in the Group’s principal risks and uncertainties on page 45 and in note 28. In
preparing the consolidated fi nancial statements the management form a judgement about the risk of exchange control regulations, political
stability, potential changes to tax regimes and operating environments.
James Fisher and Sons plc Annual report and accounts 2020
147
Notes to the fi nancial statements
33 Signifi cant accounting judgements and estimates continued
(b) Estimates
Impairment of goodwill
Goodwill, which is set out in note 12, of £166.5m (2019: £185.5m) is tested annually for any permanent impairment in accordance with
the accounting policy in note 32.6. The value in use of the Group’s cash generating units (CGU) requires assumptions about future levels
of demand, gross margins and cost infl ation. Inherent uncertainty involved in forecasting and discounting future cash fl ows is a key area
of judgement. If indicators of impairment exist the carrying value of goodwill is compared to its recoverable amount which represents the
higher of the net present value of the CGU’s forecast cash fl ow and its carrying value. The assessment also includes sensitivity analysis to
identify the range of outcomes and the validity of underlying assumptions. In the current year it is not expected that there is a risk of material
misstatement based on these assessments.
Business combinations
Business combinations are set out in note 24 and the Group makes an assessment of the fair values of the assets and liabilities arising in a
business combination and of any related contingent consideration. Judgement is applied in assessing appropriate fair values of the assets
and liabilities required, identifying any intangible assets of the acquired business and in estimating the likelihood of contingent targets being
achieved during the relevant period. The outcome of contingent consideration arrangements depends on a number of factors outside the
control of the business including, but not limited to competition, general economic conditions and the availability of resources within the
business to meet its obligations to its customers. The Group regularly assesses the likelihood of the targets being achieved during the
performance period and makes appropriate adjustments to the provision for contingent consideration through the income statement. The
Group uses a discounted cash fl ow analysis to assess the value of contingent consideration.
Income taxes
Taxation is set out in notes 8, 9 and 32.8. The Group is subject to income taxes in several jurisdictions. Signifi cant judgement is required
in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is
uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax risk issues based on estimates of
whether additional taxes will be due. Where the fi nal tax outcome of these matters is different from the amounts that were initially recorded,
such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.
The Group has entered the UK tonnage tax regime under which tax on its ship owning and operating activities is based on the net tonnage
of vessels operated. Income and profi ts outside this regime are taxed under normal tax rules. This means that it is necessary to make
estimates of the allocation of some income and expenses between tonnage and non-tonnage tax activities. These estimates are subject to
agreement with the relevant tax authorities and may be revised in future periods.
Tax provisions as at 31 December 2020 totalled £2.9m (2019: £3.1m). Of this amount, £0.6m relates to tax risks in overseas jurisdictions.
The risks do not relate to any individually material tax uncertainty instead a collection of risks around the Group. Whilst a range of outcomes
is reasonably possible, the extent of this range is diffi cult to defi ne due to the nature of the risks and the numerous Tax Authorities involved.
Provision for impairment of trade receivables
As detailed in Note 28, the Group has made doubtful debt provisions of £19.5m (2019: £5.4m) for certain of its receivables that are overdue
for more than 90 days, which at 31 December 2020 amounted to £20.7m (2019: £21.3m). Due to the period of time elapsed full recovery is
uncertain. In addition, some of these issues are subject to a contractual process of arbitration or standard legal process and may take some
time to resolve. Provisions refl ect current best estimates of the likely net proceeds that will be received but are subject to uncertainty where
the outcome may differ materially from current best estimates.
Insurance claims
At any point in time, the Group has a number of insurance claims awaiting resolution and make appropriate best estimates of recoverable
amounts. In April 2018, two vessels collided off the coast of Singapore which resulted in a gas splash which enveloped a vessel owned and
operated by the Group and resulted in severe engine damage. Whilst the Group’s fi nancial position refl ects a best estimate of the insurance
claim, the overall outcome is awaiting resolution between the two vessel owners and a 10% change in estimate would impact the income
statement by £0.2m.
Impairment of vessels
During the year, an impairment of £31.6m has been charged in respect of two vessels based on the recoverable amount which is the fair
market value of these assets. The fair market valuation was made with reference to third party valuations and management experience. This
fair market valuation is based on an orderly transaction between market participants. Due to current market conditions, there is little external
evidence of recent similar vessel sales and there is therefore a high degree of estimation in the valuation, with a change in valuation of 10%
increasing the impairment by £2.1m.
148
James Fisher and Sons plc Annual report and accounts 2020
Notes to the fi nancial statements
33 Signifi cant accounting judgements and estimates continued
(c) Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a signifi cant risk of resulting in a material adjustment to the carrying
amounts of assets and liabilities within the year ending 31 December 2020 is included in the following notes:
–
–
Note 9 - recognition of deferred tax assets, and the availability of future taxable profi t against which tax losses carried forward can be
used;
Notes 12 and 13 - impairment test of intangible assets and goodwill: key assumptions underlying recoverable amounts, including the
recoverability of development costs; and
–
Note 24 - Business combinations.
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James Fisher and Sons plc Annual report and accounts 2020
149
Subsidiaries and associated undertakings
Subsidiaries and associated undertakings
Subsidiary undertakings
The Group holds 100% of the share capital in the following undertakings unless otherwise stated.
Name of company
Marine Support
Fender Care Limited
Fender Care Marine Ltd
Fendercare Servicos Marinhos do
Brasil Ltda
Fendercare Australia Pty Ltd
Fender Care Marine (Asia Pacifi c)
Pte Ltd
Fender Care Marine Products (Asia
Pacifi c) Pte Limited
Fender Care (Changshu) Limited
Fender Care Marine (Gibraltar) Limited
Fender Care Marine Sohar LLC
James Fisher Marine Services Limited
James Fisher Maritime Deutschland
GmbH
Electricity Distribution Services Limited
EDS HV Management Limited
James Fisher Testing Services Limited
James Fisher NDT Limited
James Fisher Rumic Limited
James Fisher Testing Services (Ireland)
Limited
Strainstall UK Limited
Strainstall Middle East Limited
Strainstall Malaysia Sdn Bhd
Strainstall Singapore Pte Ltd
Subtech (Pty) Ltd
Subtech Norte Lda
Subtech Middle East Saudi Company
Subtech South Africa (Pty) Ltd
Subtech Marine (Pty) Limited
Subtech Diving & Marine Tanzania
Limited
Subtech Offshore
Namibia Subtech Diving and Marine
(Proprietary) Limited
Martek Marine Limited
Martek-Marine (Asia Pacifi c) Pte Ltd
Continental Participacao E
Administracao Ltda
Servicos Maritimos Continental S.A.
James Fisher MIMIC Limited
James Fisher Asset Information
Services Limited
Prolec Limited
Rotos 360 Limited
Maritime Engineers Pty Ltd
Maritime Engineers (Asia Pacifi c)
Pte Ltd
Mojo Maritime France
JF STS (Guernsey) Ltd
Hughes Marine Engineering Limited
Hughes Sub Surface Engineering
Limited
JCM Scotload Ltd
Osiris Marine Services Limited
Testconsult Limited
Deep Sea Operation & Maintenance
Co. Ltd
Group
percentage
of equity
capital
70%
*
90%
70%
60%
60%
Address
1
1
Avenida Feliciano Sodre 325, Centro, Niteroi, Rio De
Janeiro, CEP: 24030-012, Brazil
8D Sparks Road, Henderson WA 6166, Australia
6 Pioneer Place, 627705, Singapore
6 Pioneer Place, 627705, Singapore
Room 1211, Building 4, Huifeng Times Plaza, No 22
Huanghe Road, Changshu City, Jiangsu, 215500,
China
28 Irish Town, Gibraltar
Al Batinah Region, PO Box 37, Sohar, 327
1
Stadthausbrucke 8, 20355 Hamburg, Germany
1
1
1
1
1
Unit D, Zone 5, Clonminam Business Park, Portlaoise,
County Laois, Ireland
1
Vistra (Cayman), Grand Pavilion, Hibiscus Way, 802
West Bay Road, PO Box 31119, Grand Cayman, KY1-
1205, Cayman Islands
Ground Floor, 8, Lorong Universiti B, Section 16,
46350 Petaling Jaya Selangor Darul Ehsan, Malaysia
50 Raffl es Place, #06-00 Singapore Land Tower,
Singapore, 048623
Warehouse 1, 20 Rustic Close, Briardene, Durban,
4051, South Africa
Rua de Se no 114, Distrito Urbano 1, Bairro Central,
Maputo City, Mozambique
Offi ce 102, Al Jazira Building, Al Khobar, Saudi Arabia
Warehouse 1, 20 Rustic Close, Briardene, Durban,
4051, South Africa
PO Box 90757, Shop 48, Old Power Station Complex,
Armstrong Street, Windhoek, Namibia
The Slipway Road, Msasani Peninsula, Dar Es Salaam,
United Republic of Tanzania
Ocra (Mauritius) Limited, Level 2, Max City Building,
Remy Ollier Street, Port Louis, Mauritius
Shop 48, Second Floor, Old Power Station Complex,
Armstrong Street, Windhoek, Namibia
1
3 Church Street, #08-00, Samsung Hub, Singapore,
049483
Rua Tenente Celio, No.150, Bairro Granja Caveleiros,
Macae, State of Rio de Janeiro, 27.930-120, Brazil
Rua Tenente Celio, No.150, Bairro Granja Caveleiros,
Macae, State of Rio de Janeiro, 27.930-120, Brazil
1‘
1
1
1
23 Sparks Road, Henderson, WA 6166, Australia
1 North Bridge Road, #06-15, High Street Centre,
Singapore 179094
3 rue de France Comte, CS50311, Hauts de
Quimpcanpoix, 5103, Cherbourg, France
4th Floor, West Wing, Trafalgar Court, Admiral Park, St
Peter Port, Guernsey, GY1 2JA
1
1
***
1
1
1
Al Khobar City, PO Box 2716, Al Olaya, 34447, Saudi
Arabia
150150
James Fisher and Sons plc Annual report and accounts 2020
Name of company
Specialist Technical
JFD Limited
James Fisher Defence Limited
JFD Australia Pty Ltd
James Fisher Singapore Pte Ltd
JFD Singapore Pte Ltd
JFD Sweden AB
JFD Ortega B.V.
JFD South Africa (Pty) Limited
Cowan Manufacturing Pty Limited
James Fisher Defence Italy
James Fisher Defence North America
Limited
James Fisher Nuclear Limited
JF Nuclear Limited
High Technology Sources Limited
Divex Asia Pacifi c Pty Ltd
Divex FZE
Divex Limited
Fathom Systems Limited
Offshore Oil
RMSPumptools Limited
RMSPumptools FZE
Scan Tech AS
Scan Tech Personell AS
Scan Tech Produckt Personell AS
Scantech Offshore Limited
Scantech Offshore Pty Ltd
Scantech Offshore do Brasil Comercio E
Servicos Ltda
James Fisher Offshore Limited
James Fisher Offshore Malaysia
Sdn Bhd
James Fisher Marine Services
Malaysia Ltd
JF Singapore Holdings PTE Ltd
James Fisher Marine Services Middle
East Limited FZCO
James Fisher MFE Limited
James Fisher Subsea Excavation
Mexico S.A. de C.V.
James Fisher Personnel S.A. de C.V.
James Fisher Subsea Excavation Pte
Limited
James Fisher Subsea Excavation
Incorporated
James Fisher Ocean Team Limited
Buchan Technical Services Limited
Group
percentage
of equity
capital
Address
JFD, Westhill Industrial Estate, Enterprise Drive,
Westhill, Aberdeen, AB32 6TQ
1
BDO, 38 Station Street, Subiaco WA 6008, Australia
19 Loyang Lane, Singapore 508929
19 Loyang Lane, Singapore, 508929
Rindovagen, Rindo Vastra, 185 41 Vaxholm, Sweden
Vliegveldstraat 100, B515, Technology Base,
Enschede, Netherlands
c/o Mazars, Mazars House, Rialto Road, Grand
Moorings Precinct, Century City, Cape Town, SA 7441,
South Africa
BDO Tax (WA) Pty Ltd, ‘BDO’, 38 Station Street,
Subiaco, WA6008, Australia
Via Giulio Caccini, 100198, Rome, Italy
Suite 808, 1220 North Market Street, Wilmington DE
19801, United States
2
1
1
54 Bushland Ridge, Bibra Lake WA 6163, Australia
PO Box 261749, Jebel Ali Free Zone, Dubai, United
Arab Emirates
JFD, Westhill Industrial Estate, Enterprise Drive,
Westhill, Aberdeen, AB32 6TQ
2
*
1
1-153, THUB, Dubai Silicon Oasis, Dubai, United Arab
Emirates
Finnestadsvingen 23, 4029 Stavanger, Norway
Finnestadsvingen 23, 4029 Stavanger, Norway
Finnestadsvingen 23, 4029 Stavanger, Norway
1
23 Sparks Road, Henderson WA 6166, Australia
R 01 223, Lote 146 Quadra 02, Balneario das Garcas,
Rio das Ostras, 28.898-268, Brazil
2
Room A, Ground Floor, Lot 7, Block F, Saguking
Commercial Building Jalan Patau-Patau, 87000
Labuan FT, Malaysia
Level 1, Lot 7, Block F, Sanguking Commercial
Building Jalan Patau-Patau, 87000 Labuan FT,
Malaysia
9 Raffl es Place, #27-00 Republic Plaza, Singapore
048619
PO Box 371072, Dubai, United Arab Emirates
1
Gabriel Mancera 1041 Del Valle, Benito Juarez,
03100, Ciudad de Mexico, D.F., Mexico
Gabriel Mancera 1041 Del Valle, Benito Juarez,
03100, Ciudad de Mexico, D.F., Mexico
133 Cecil Street, #16-01, Keck Seng Tower,
Singapore, 069535
21559 Provincial Boulevard, Katy TX 77450, United
States
Suites 4404-10, 44/F, One Island East, 18 Westlands
Road, Taikoo Place, Hong Kong
1
60%
Fisher House, PO Box 4, Barrow-in-Furness, Cumbria, LA14 1HR
1
2 North Meadows, Oldmeldrum, Aberdeenshire, AB51 0GQ
*
held by the Parent Company (all other subsidiaries are held by an
intermediate subsidiary)
** consolidated as subsidiary undertakings
*** held by nominee shareholders
Subsidiaries and associated undertakings
Subsidiary undertakings – continued
Associated undertakings
Name of company
Tankships
James Fisher Everard Limited
F.T.Everard & Sons Limited
James Fisher (Shipping Services)
Limited
F.T. Everard Shipping Limited
James Fisher Crewing (CY) Limited
James Fisher (Crewing Services)
Limited
Cattedown Wharves Limited
James Fisher (Guernsey) Limited
Everard (Guernsey) Ltd
Scottish Navigation Company Limited
Onesimus Dorey (Shipowners) Ltd
Address
1
1
1
1
115 Griva Digeni, Trident Centre, Limassol, 3101,
Cyprus
1
1
4th Floor, West Wing, Trafalgar Court, Admiral Park, St
Peter Port, Guernsey, GY1 2JA
4th Floor, West Wing, Trafalgar Court, Admiral Park, St
Peter Port, Guernsey, GY1 2JA
2
4th Floor, West Wing, Trafalgar Court, Admiral Park, St
Peter Port, Guernsey, GY1 2JA
Group
percentage
of equity
capital
*
*
*
***
*
Holding Companies
EDS HV Group Limited
Fender Care Marine Solutions Limited
James Fisher (Aberdeen) Limited
James Fisher and Sons Nigeria Limited 7th Floor, 1 Kingsway Road, Falomo, Ikoyi, Lagos,
1
1
1
*
99%*
James Fisher Holdings UK Limited
James Fisher Hong Kong Limited
James Fisher Norway AS
James Fisher Nuclear Holdings Limited
James Fisher Properties Limited
James Fisher Servicos Empresariais
Ltda
James Fisher Subtech Group Limited
James Fisher Tankships Holdings
Limited
JF Australia Holding Pty Ltd
JF Overseas Ghana Limited
JF Overseas Limited
Martek Holdings Limited
Strainstall Group Limited
Subtech Group Holdings (Pty) Ltd
Lagos State, Nigeria
1
Level 17, Silvercord Tower 2, 30 Canton Road, Tsim
Sha Tsui, Kowloon, Hong Kong
Finnestadsvingen 23, 4029 Stavanger, Norway
1
2
Rua 01 No 223, Quadra 02, Lote 146-part, Balneario
das Garcas, Brazil
1
1
54 Bushland Ridge, Bibra Lake, WA 6163
The Octogon Building, 7th Floor Suite B701, Accra
Central, Accra, Ghana
1
1
1
20 Rustic Close, Briardene, KwaZulu-Natal, 4051,
South Africa
*
*
*
*
*
*
*
Group
percentage
of equity
capital
Address
Name of company
Marine Support
Fendercare Marine Ghana Limited 11 Aduemi Close, North Kaneshie, Accra,
Ghana
E-LOB Offi ce No. E-69G-20, PO Box 51602,
Hamriyah Free Zone - Sharjah, United Arab
Emirates
Fender Care Omega (Middle
East) FZC
Fender Care Marine LLC
Fender Care Benelux B.V.
Fender Care Middle East LLC
Fender Care Marine Services LLC G013, GH-1, Industrial City of Abu Dhabi
(ICAD-1), Mussafeh, PO Box 45628, Abu
Dhabi, United Arab Emirates
Fujairah Port, PO Box 5198, Fujairah, United
Arab Emirates
Plot 146/16, Emirates Industrial City, Sajja
Industrial Area, PO Box 25896, Sharjah, United
Arab Emirates
Torontostraat 20, 3197 KN , Rotterdam Botlek,
Netherlands
Suite 6.01, 6th Floor, Plaza See Hoy Chan
Jalan Raja Chulan, 50200, Kuala Lumpur,
Malaysia
JA 1104 - 1106, DLF Tower - A, Jasole District
Centre, New Delhi, 11044, India
Unit 4, Thembani House, 41 Brand Road,
Glenwood, Durban, 4001, South Africa
Plot 15, Block 110, Henry Ojogho Crescent,
Subtech Offshore Services Nigeria
Limited
Off Road 69, Lekki Phase 1, Lagos, Nigeria
Subtech Core Innovation (Pty) Ltd 20 Rustic Close, Briardene, KwaZulu-Natal,
Fendercare Marine Omega India
Private Limited
Fender Care Marine SA (Pty) Ltd
FC Viking Sdn.Bhd
4014, South Africa
Strainstall Middle East LLC
Strainstall Laboratories WLL
Strainstall Saudi Arabia Limited
Strainstall Testing Lab LLC
Nuclear Decommissioning Limited 3 Sovereign Square, Sovereign Street, Leeds,
LS1 4ER
PO Box 111007Jebel Ali Industrial Area 1,
Dubai, United Arab Emirates
PO Box 30124, Riyadh 11372, Saudi Arabia
PO Box 62579, Abu Dhabi, United Arab
Emirates
PO Box 2255, Offi ce #2, Property No.25, Tariq
Bin Ziyad Street, Al Ghanim, Doha, Qatar
34 Awolowo Road, Ikoyi, Lagos, Nigeria
Ruby House, 40A Hardwick Grange, Woolston,
Warrington, Cheshire, WA1 4RF
Unit D, Zone 5, Clonminan Industrial Estate,
Portlaoise, County Laois, Ireland
1
67 Rua Damiao de Gois, Alvalade, Borough,
District of Maianga, Ingombota Municipality,
Angola
James Fisher Angola UK Limited
James Fisher (Angola) Limitada
James Fisher Nigeria Limited
Eurotestconsult UK Limited
Eurotestconsult Limited
50%**
50%**
49%**
49%**
49%**
50%
49%
50%
49%**
49%**
49%
25%
49%**
49%**
49%
49%**
49%**
50%
50%
50%**
49% *, **
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Specialist Technical
First Response Marine Pte Ltd
James Fisher Technologies LLC
JFD Domeyer GmbH
Wuhu Divex Diving System
Limited
16 Benoi Road, 629889, Singapore
Units 1 and 2, 1234 Sherman Drive, Longmont
CO 80501, Colorado
Konsul-Smidt-Str. 15, 28217, Bremen,
Germany
No.58 Yongchang Road, Jiujiang District, Wuhu
City, Anhui Province, PR China
50%
49%
50%
49%
Fisher House, PO Box 4, Barrow-in-Furness, Cumbria, LA14 1HR
1
2 North Meadows, Oldmeldrum, Aberdeenshire, AB51 0GQ
*
held by the Parent Company (all other subsidiaries are held by an
intermediate subsidiary)
** consolidated as subsidiary undertakings
*** held by nominee shareholders
James Fisher and Sons plc Annual report and accounts 2020 151
Group fi nancial record
Group fi nancial record
For the fi ve years ended 31 December
Revenue
Marine Support
Specialist Technical
Offshore Oil
Tankships
Underlying operating profit
Marine Support
Specialist Technical
Offshore Oil
Tankships
Common costs
Net finance costs
Underlying profit before taxation
Separately disclosed items
(Loss)/profit before taxation
Taxation
(Loss)/profit after taxation
Intangible assets
Property, plant and equipment
Right-of-use assets
Investment in associates and joint ventures
Working capital
Contingent consideration
Pension obligations
Taxation
Capital employed
Net borrowings
Lease liabilities
Equity
Earnings per share
Basic
Diluted
Underlying basic
Underlying diluted
Dividends declared per share
Other key performance indicators
Operating margin (%)
Return on capital employed (post tax) (%)
Underlying net gearing (%)
Dividend cover (times)
2020
£m
249.4
130.4
78.0
60.4
518.2
10.1
14.0
11.2
8.0
(2.8)
40.5
(9.0)
31.5
(84.0)
(52.5)
(4.8)
(57.3)
186.6
15 8.2
30.7
8.9
6 5.8
(1.7)
(10.3)
(4.2)
434.0
175.0
23.1
235.9
434.0
pence
(114.2)
(114.2)
48.0
47.9
8.0
7.8%
6.7%
74.4%
6.0
2019
restated*
£m
2018
restated*
£m
2017
restated*
£m
2016
restated*
£m
311.6
149.4
88.2
67.9
617.1
24.5
18.4
14.2
12.0
(2.8)
66.3
(7.8)
58.5
(10.7)
47.8
(1 1.1)
3 6.7
215.2
210.6
27.1
9.9
106.3
(8.2)
(5.8)
(10.7)
544.4
203.0
27.4
314.0
544.4
274.3
156.5
70.0
60.7
561.5
26.8
21.4
6.8
9.9
(2.8)
62.1
(6.0)
56.1
(0.7)
55.4
(10.1)
45.3
197.5
145.4
–
9.6
96.3
(6.0)
(16.1)
(6.7)
420.0
113.6
–
306.4
420.0
235.6
146.0
60.7
57.0
499.3
25.3
19.2
3.2
8.8
(2.4)
54.1
(5.5)
48.6
(1.3)
47.3
(7.9)
39.4
199.2
132.5
–
9.4
109.5
(12.8)
(19.8)
(6.5)
411.5
132.5
–
279.0
411.5
200.8
148.1
61.6
55.5
466.0
19.8
20.3
5.0
8.2
(2.5)
50.8
(5.0)
45.8
(0.9)
44.9
(6.8)
38.1
180.5
131.0
–
7.8
86.3
(9.2)
(26.8)
(5.6)
364.0
105.7
–
258.3
364.0
pence
pence
pence
pence
73.1
72.7
93.2
92.8
11.3
10.7%
11.3%
64.8%
8.2
89.5
88.9
90.0
89.5
31.6
11.0%
12.2%
37.2%
2.5
77.5
76.9
79.3
78.7
28.7
10.8%
12.0%
47.7%
2.7
79.4
78.7
76.9
76.3
26.2
10.9%
13.0%
41.0%
2.9
* Segmental revenue and underlying operating profi t is restated for changes to segmental reporting as detailed in note 3.
152
James Fisher and Sons plc Annual report and accounts 2020
Investor information
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Brokers
Investec Bank (UK) Limited
30 Gresham Street
London EC2V 7QP
Jefferies International Limited
100 Bishopsgate
London EC 2N 4JL
Financial Calendar
29 April 2021
Annual General Meeting
7 September 2021*
Announcement of 2021 Half Year results
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Investor information
DBS Bank Ltd
London Branch
4th Floor
Paternoster House
65 St Paul’s Churchyard
London EC4M 8AB
Handelsbanken
First Floor East
Bridge Mills
Stramongate
Kendal LA9 4UB
HSBC UK Bank PLC
2nd Floor
4 Hardman Square
Spinningfields
Manchester M3 3EB
Lloyds Bank PLC
Lovell Park
1 Lovell Park Road
Leeds LS7 1DZ
Santander UK PLC
7th Floor
No 4 St Paul’s Square
Liverpool L3 9SJ
Merchant bankers
E C Hambro Rabben and Partners Ltd
32-33 St James’s Place
London SW1A 1NR
Company Secretary
Jim Marsh
Registered office
James Fisher and Sons plc
Fisher House, PO Box 4
Barrow-in-Furness
Cumbria LA14 1HR
Incorporated in England under
Company no. 211475
www.james-fi sher.com
Registrar
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
Auditor
KPMG LLP
1 St Peters Square
Manchester M2 3AE
Bankers
Bank of Ireland
4th Floor
Bow Bells House
1 Bread Street
London EC4M 9BE
Barclays Bank PLC
1st Floor
3 Hardman Street
Spinningfields
Manchester M3 3HF
Disclaimer
This Annual Report has been prepared for the members of the Company only. The Company, its Directors, employees and agents
do not accept or assume responsibility to any other person in connection with this document and any such responsibility or liability
is expressly disclaimed. This Annual Report contains certain forward-looking statements that are subject to future events including,
amongst other matters, the economic and business circumstances occurring from time to time in the countries and markets in which
the Group operates and the availability of fi nancing to the Group. As such the forward-looking statements involve risk and uncertainty.
Accordingly, whilst it is believed the expectations refl ected in these statements are reasonable at the date of publication of this Annual
Report they may be affected by a wide range of matters which could cause actual results to differ materially from those anticipated. The
forward-looking statements will not be updated during the year. Nothing in this Annual Report should be construed as a profi t forecast.
* provisional
James Fisher and Sons plc Annual report and accounts 2020
153
Designed by James Fisher Marketing. Typeset and printed by Perivan
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James Fisher and Sons plc
Annual report and accounts
This Report has been printed in the UK. Our printers are environmental
management system ISO 14001-accredited and Forest Stewardship
Council® (FSC®) chain of custody certified. This paper is environmentally
friendly ECF (elemental chlorine-free) and wood free with a high content
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If you have finished reading this Report and no longer wish to retain it,
please pass it on to other interested readers, return it to James Fisher
and Sons plc or dispose of it in your recycled paper waste. Thank you.
This Annual Report is available at www.james-fisher.com
James Fisher and Sons plc
T: +44 (0) 1229 615 400
F: +44 (0) 1229 836 761
E: enquiries@james-fisher.com
W: www.james-fisher.com
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