James Fisher & Sons plc Annual Report 2022

← All annual reports

FY2022 Annual Report · James Fisher & Sons plc

Loading PDF…

Annual Report 2022

HARNESSING
THE BLUE
ECONOMY

Energy

Defence

Marine

Strategic report

Annual Report 2022 – James Fisher and Sons plc

Welcome

We are a global group of
We are a global group of
marine engineering businesses.
marine engineering businesses.
Together, we enable seismic shifts
Together, we enable seismic shifts
in the way the world generates
in the way the world generates
power, protects natural resources
power, protects natural resources
and transports goods.
and transports goods.

Energy

Defence

Marine

In this Annual Report we report on the progress we made in
2022 in returning to sustainable, profitable growth.

Our Strategic
report
How our business performed in
delivering against our strategic
priorities in 2022.

Our Corporate
Governance report
How we are managed and take
decisions, including our report on
Directors’ remuneration.

Our Financial
statements
Detailed information on our finances,
as well as information for shareholders
and readers of this Annual Report.

See our Strategic report

from page 02

See our Corporate Governance

See our Financial statements

report from page 74

from page 116

Annual Report 2022 – James Fisher and Sons plcJames Fisher and Sons plc – Annual Report 2022

0101

Inside this report

02
04
06

STRATEGIC REPORT
We are James Fisher and Sons plc
At a glance
Chairman’s review
An interview with Jean Vernet,
Chief Executive Officer
08
Business model and strategy
10
Key performance indicators
12
Our markets
13
Chief Executive Officer’s review
14
Our divisions
18
Sustainability
26
– Governance
27
28
– Our sustainability strategy
– Engaging for value
30
– Alignment with sustainability frameworks 32
– Planet
34
– People
42
– Partnerships
52
Non-financial key performance indicators 56
Financial review
58
Principal risks and uncertainties
62
Viability statement
71
Non-financial information statement
72

GOVERNANCE
Governance at a glance
Chairman’s introduction to
corporate governance
Governance framework
Board of Directors
Corporate governance report
Nominations Committee report
Audit Committee report
Directors’ remuneration report
Directors’ report
Statement of Directors’ responsibilities

FINANCIAL STATEMENTS
Independent auditor’s report
Consolidated income statement
Consolidated statement of other
comprehensive income
Consolidated and Company statement
of financial position
Consolidated and Company cash
flow statement
Consolidated statement of changes
in equity
Company statement of changes
in equity
Notes to the financial statements
Subsidiaries and associated
undertakings
Group financial record
Investor information

76
78
80
82
86
89
94
111
115

116
126

127

128

129

130

131
132

192
196
197

OUR DIVISIONS
We have four reporting divisions
that bring together companies in
the Group that have complementary
products, services and areas of
expertise. Together, these divisions
serve the energy, defence and
marine markets.

OUR CULTURE
We encourage a culture of
innovation, creativity and
opportunity. We use the insight from
our engagement surveys to guide
the actions we take to ensure the
best people want to join, stay and
grow their careers with us.

MARKET PRESENCE
Our global footprint represents the
diverse range of customers and
markets we serve. Our network of
Group company facilities, partners,
agents and support bases means we
can deliver flexible, highly responsive
and localised support to our
customers, wherever they need it.

SUSTAINABILITY AT
OUR CORE
Sustainability is integral to
everything we do so it’s reflected
in our purpose. Our sustainability
strategy puts all our stakeholders
at the heart of what we do and
how we choose to work.

James Fisher and Sons plc – Annual Report 2022Strategic report0202

We are James Fisher and Sons plc

PIONEERING SAFE AND TRUSTED
SOLUTIONS TO COMPLEX PROBLEMS
IN HARSH ENVIRONMENTS TO CREATE
A SUSTAINABLE FUTURE.

2.2GW

of monitored and
managed offshore
substation assets

of the world’s Navies
are served by us

175

years working at sea

We are a responsible custodian of oil and gas service delivery and pioneer solutions for renewable energy. An essential and innovative provider of subsea security and defence in an increasingly fragmented and complex world. A long-standing UK ship operator.Strategic reportAnnual Report 2022 – James Fisher and Sons plc0303

Always guided by our values:

PIONEERING SPIRIT

We respond innovatively to our customers’
current and future needs. We think
creatively and challenge conventional
thinking.

INTEGRITY

We do the right thing. We treat others
as we’d like to be treated, listening
respectfully and speaking honestly.
We build relationships based on trust
and fairness.

ENERGY

We love what we do and take pride in our
work – delivering exceptional results for our
stakeholders. We are empowered to take
the right decisions quickly.

RESILIENCE

We are accountable and courageous, facing
into difficult situations. We are tenacious,
seeking feedback to learn and develop.

Strategic reportJames Fisher and Sons plc – Annual Report 20220404

At a glance

Guided by our purpose and valued behaviours, and inspired by the
unlimited possibilities of the marine environment, our family of businesses
enables seismic shifts in the way the world generates power, protects
natural resources and transports goods.

WHO WE ARE

WHAT WE DO

WHY IT MATTERS

Global trends are driving demand across
all three of our key markets.

Energy
2022 saw us enter a global energy crisis
of unprecedented depth and complexity,
exacerbated by Russia’s invasion of Ukraine.
Globally, we are navigating growing demand
for energy, reduced supply, and increasing
focus and investment in clean energy and
efficiency. As a Group we are well positioned
to play a responsible role in an evolving oil
and gas sector as well as having the expert
capabilities to support the accelerating
investment in offshore wind around the globe.

Defence
Driven by geopolitical tensions, the global
defence market is estimated to be growing
at a compound annual growth rate of 3–4%
(2021 to 2028). With an expertise in submarine
rescue and special operations, we play a
critical role in the provision and in-service
support of life support equipment which
ensures the safety of those who dedicate their
lives to protecting our maritime infrastructure.

Marine
As economic activity increased through 2022,
so did demand in the maritime transport
sector. We saw an increase in demand for
ship-to-ship transfers of LNG.

Read more on our key performance

indicators on page 12

* Excludes adjusting items.

James Fisher uses alternative performance measures (APMs)
to assess the underlying performance of the business. An
explanation of APMs is set out in Note 2 of the financial
statements and explanation and reconciliation.

James Fisher and Sons plc – Annual Report 2022Strategic report
06

Chairman’s review

The Company I joined in
2021 faced several strategic
and operational challenges.
It was a portfolio of diverse
businesses which lacked
either synergies or a common
Company purpose; it had
an overly leveraged Balance
Sheet, a complicated
organisational structure and
a lack of operational focus
and commercial control – all
of which had contributed to
the disappointing financial
performance over the past
couple of years. I am pleased
to report that early progress
has been made to address
these challenges with a new
leadership team in place
and progress on refinancing
our borrowing facilities to
provide a stable platform for
the Group.

Given our debt maturity profile, we had originally
planned to refinance later in 2023. However,
the technical restrictions and subsequent bank
waiver relating to parent company guarantees
on the disposal of James Fisher Nuclear
accelerated this process. As announced on
26 April 2023, we have agreed terms on a new,
secured, £210m revolving credit facility with our
existing lenders. Conditions to be completed
post-signing of the loan documentation relate
to finalising security and some inter-bank
arrangements. We anticipate that the refinancing
will complete over the coming weeks.

These recent developments have led to a
regrettable delay in the publication of our
Results and Annual Report for 2022 for which
we apologise. However, the business has
performed well during the first quarter of 2023
with revenue and profit above our internal
Budget and well ahead of the prior year.

Financial performance
After the three years, from 2019 to 2021, which
saw the Company’s underlying operating profit
fall by 58%, to £28m, 2022 was a year of
stabilisation.

Angus Cockburn

We entered 2023 as a more
streamlined company and with
a new senior management team.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc07

Revenues from our continuing operations grew
year-on-year by 8.1% to £478.1m, reflecting
growth in our Marine Support, Offshore Oil
and Tankships divisions, which was partially
offset by a disappointing year in our Specialist
Technical division. Underlying operating profit
from continuing operations is 5.7% below 2021
at £26.4m (2021: £28.0m) due to improved
profitability across Marine Services, Tankships
and Offshore Oil which was offset by significant
profit falls in our Defence and Nuclear businesses,
the latter of which is disclosed as a Discontinued
Operation. Operating margins from continuing
operations remained weak at 5.5% (2021: 6.3%)
and improving our operational performance
to increase margin is a key priority for the new
leadership team going forward.

As noted last year, the poor performance of
several past acquisitions has contributed to
an increase in debt levels and a long-term
decline in return on operating capital employed
(ROCE)*, which fell to 3.6% in 2021. In 2022,
ROCE improved to 3.9% which remains an
unsustainably low level long-term. As a result,
one of our priorities in 2022 was to dispose of
non-core assets and reduce the level of the
Group’s leverage. I am pleased to report that we
were successful in doing so. Three businesses
were sold in December 2022, being the Mimic
and Prolec businesses and the UK operations of
Strainstall; and, subsequent to the year end, the
Swordfish dive support vessel. All disposals were
from the Marine Support division. The business
sales in December raised £18.5m in proceeds,
helping to reduce our net bank borrowings at the
year end from £139.6m to £132.9m. The sale
of the Swordfish vessel has reduced net debt
further, by £20m, with these proceeds being
received in January 2023.

We have continued to streamline and focus our
portfolio and sold the Nuclear Decommissioning
business in March 2023. This disposal will not
reduce debt but will help the Company streamline
its activities to improve our focus on our chosen
end markets and will help to improve our
operating margin. This refocusing of the portfolio
will continue over the next couple of years.

I regret that, having not paid a dividend in 2021,
we were unable to pay an interim dividend
in 2022 and the Board is not recommending
the payment of a final dividend for the year. I
recognise the disappointment this will cause our
shareholders, and I am committed to rectifying
this, once circumstances permit.

A new CEO
Having joined the Company in 2019, Eoghan
O’Lionaird stepped down as Chief Executive
Officer (CEO) in early September and I would
like to thank him for having steered us through
a difficult period in the Company’s history – not
least including the challenges presented by the
COVID-19 pandemic.

* ROCE is an APM. An explanation and reconciliation of
APMs is set out in Note 2 of the financial statements.

His place as CEO was taken by Jean Vernet,
whom I am delighted to welcome to the Board.
Jean, who was most recently Chief Executive
Officer of Smiths Group’s largest division, John
Crane, is an internationally experienced business
leader with extensive energy sector knowledge
and experience. His background is ideally suited
to leading the turnaround of James Fisher and
then positioning the Company to prosper in
markets with growth potential where it has
competitive advantage. I am delighted to see the
injection of pace that Jean has brought and wish
him every success not only with addressing the
undoubted challenges that lie ahead but also
steering the Company towards expansion in
the future.

Reshaping the Company
Under Jean’s leadership, we have embarked
on reshaping the Company, to turn it from being
a collection of disparate businesses into a group
with a more coherent structure and purpose that
is able to realise the synergies inherent in being
part of James Fisher. This will take time and will
require major organisational and cultural change
over the coming years against a challenging
backdrop in terms of balance sheet and operating
environment. Pace is therefore critical and,
from 1 January 2023, the Company has been
reorganised into three new divisions which reflect
our customer verticals, namely Energy, Defence
and Maritime Transport. Each is now directed
by a divisional leader, two of whom have been
recruited externally. We believe this integration
will make our businesses more understandable to
customers and will enable us to capture operating
efficiencies. We are well placed to take advantage
of the energy transition, with businesses designed
to support the growth of offshore wind farms
and making traditional oil and gas operations
more sustainable – including through safe
decommissioning. We are world leaders in a
number of specialist areas of marine and deep
sea operations, both for defence and commercial
sector clients.

We now have a number of key priorities. First,
we have to turn around the Group’s financial
performance. Through improving profitability
and asset utilisation we will reduce net debt
and deliver a value enhancing return on capital
employed. Central to this is focusing the portfolio
on businesses with attractive end markets and
competitive advantage – which means divesting
businesses which fail to meet these criteria.
Secondly, we will continue to simplify and prioritise
the delivery of high quality products and services
to our customers, while capturing the synergistic
benefits of being part of James Fisher. Thirdly, we
must improve execution across the Group through
our business excellence programme, and finally
we will create a clearer strategy for recruiting and
developing talented employees. These actions
will enable us to build a strong platform for future
growth and allow our stakeholders to share in the
benefits after disappointing recent financial and
operational results.

We operate in some exciting growth markets
described by Gunter Pauli in his book, ‘The Blue
Economy’ as the “sustainable use of ocean
resources for economic growth, improved
livelihoods and jobs while preserving the health
of the ocean ecosystem”. Areas such as maritime
transport and offshore oil and gas are already well
established, while renewable energy in particular
offers new opportunities over the longer term.
We are already developing solutions to preserve
the health of the ocean ecosystem, for example,
our bubble curtain solution which protects sea life
from the acoustic impact of constructing offshore
windfarms.

Employees
In common with most businesses, James Fisher
is dependent on the capability and commitment
of its employees. We value our employees highly
– they are the lifeblood of the Company – and the
Board spends considerable time on Health and
Safety, employee wellbeing and following up the
results of the annual engagement survey. This
year, in the face of the global challenges posed
by increases in the cost of living, we also looked
to support the most vulnerable of our employees
with one-off payments, as well as weighting
annual pay increases towards those earning the
least. I am very grateful to all our employees for
their resilience in difficult times and appreciate
the hard work that is going into improving our
operational and financial performance.

Conclusion
James Fisher has experienced a challenging few
years is something of an understatement and
any turnaround of the scale we are undertaking
will take time and carries a degree of risk,
meaning there will likely be bumps along the
way. However, the energy and direction that the
new leadership team, under Jean Vernet, has
brought to the Company in only a few months
gives the Board confidence that the challenges
we face are being addressed at pace. We have
identified the strategic priorities and execution
is already underway. We entered 2023 as a
more streamlined company with a new senior
management team and a strategy for the
future based around “Focus, Simplification and
Delivery”. We have made progress in refinancing
our borrowing facilities to provide a stable financial
platform from which to execute our plans.

I am confident that what we are setting out
to achieve is right for James Fisher and its
stakeholders, reflecting its DNA as a 175-year-
old business built on the sea and its marine
environment. Implementing our strategy and
taking advantage of our position in a number
of the growing markets of the “Blue Economy”
should ensure a brighter future for James Fisher
in the years to come.

Angus Cockburn
Chairman

James Fisher and Sons plc – Annual Report 2022Strategic report08

An interview with Jean Vernet, Chief Executive Officer

Jean Vernet joined James Fisher as Chief Executive
Officer on 5 September 2022. Jean has considerable
experience working in global energy and technology
sectors. Prior to joining James Fisher, Jean was Chief
Executive Officer of Smiths Group’s largest division,
John Crane, driving growth across operations in over
50 countries.

Q. What was it that appealed to you about
James Fisher?

A few thoughts immediately captured my
imagination as soon as I engaged into
discussions for the role. What struck me first
was the passion our colleagues share for
the sea, with its unbound possibilities, and
the individual calling they have to make a
difference through their personal contribution.
Then, the towering legacy of a 175-year rich
history, through which James Fisher has
shown remarkable resilience, surviving so
many drastic economic transformations and
disruptive technology shifts, adapting to ‘the
next big thing’, embracing novel business
models and taking calculated risks to survive
and rebound after many crises.

It is quite an honour to take the helm of the
Company and having the chance to write the
next chapter of the fascinating story together,
driving James Fisher to its full potential. Talking
of chapters, the very first thing I did to learn
about James Fisher was to read, ‘Around the
Coast and Across the Seas – The Story of
James Fisher’ by Nigel Watson. It’s a wonderful
account of James Fisher’s history from 1847
to 1997. There are not many companies that
have their own history book!

Q. What’s been your highlight so far?

The employees of James Fisher are the
highlight. They have grit, determination and
a gripping passion for what they do. The
pioneering spirit we talk about in our valued
behaviours is innate and a culture trait that has
enabled us to adapt through change. They
have welcomed me to James Fisher and have
been incredibly generous with their time and
their knowledge. I don’t take this for granted,
and without it I would not have been able to
learn about the business.

Q. What did you focus on for your first
90 days?

I spent my first 90 days visiting as many sites
as I could around the globe and meeting
customers and partners. I manage by walking
around to see and hear what is going on; to
talk to those on ships and in workshops and
support offices is, for me, the only way to
understand and feel what a business is truly like.

Q. Has anything surprised you?

The depth of ‘guerrilla’ innovation going on
around the Group surprised me. It has the feel
of a start-up, but at scale; I expected to see
some level of innovation, but not as broadly
as I found. Also, everywhere I went, the teams
that were quite customer focused, engaging in
understanding their needs and giving their best
to serve in new and original ways; that often
translates into inspirational feats of innovation
and ingenuity. As a Group, if we can find some
ways to harness this innovating culture and
leverage it across broader markets, I can see
we’re going to unlock some incredible value.

FOCUS
SIMPLIFY
DELIVER

Q. What makes you excited about the
future for James Fisher?

I think James Fisher has many great
opportunities ahead across our three customer
verticals and that’s reflected in many sections
across this Annual Report. But, if I had to pick
just one, it would be the energy transition.
Because of the climate shift we are facing,
renewable energy will grow exponentially
to meet increasing energy demand. But,
renewables will not be enough. All energy
systems (oil, gas, natural gas, hydrogen, wind,
solar) are interconnected and we need them
all for some considerable future to meet the
demand, especially in emerging markets. The
key challenge is how do we best help any form
of energy going forward to be sustainable, by
being more efficient, less carbon intensive and
environmentally less invasive. James Fisher has
a lot to offer to the oil and gas and renewable
energy markets to help solve this critical global
challenge.

Q. How would you summarise your
approach to change at James Fisher?

Our priority is to regain credibility by delivering
on our commitments to stakeholders.

Our priorities in 2023 are to:

• Focus: we had already made a commitment

to rationalise our portfolio of businesses
and to be more ‘asset light’. Our plan is
to accelerate this. At the end of 2022 we
agreed the sale of three businesses and
our one remaining Dive Support Vessel.

• Simplify: we need to simplify all aspects in
the ways we are working, by bringing clarity
of purpose for the Company and making it
easier to comprehend – for ourselves, for
our customers and our stakeholders. We
will drive this change in our mindsets and
behaviours to ensure our actions deliver
against our words and intent.

• Deliver: we created a Business Excellence
function whose purpose is to transform
every aspect of our activities and the
ways we work, starting with senior
leadership, how we plan our strategy,
enhance customer focus, improve our core
processes, share and integrate knowledge,
and develop people. Over the next two
years, our priority will be to work towards
business excellence, with our immediate
priorities focused on safety and environment,
project management and employee
engagement.

Strategic reportAnnual Report 2022 – James Fisher and Sons plcJames Fisher has a lot to
offer to the oil and gas and
renewable energy markets
to help solve this critical
global challenge.

Jean Vernet
Chief Executive Officer

RECENT CAREER SUMMARY

2017 – 2022: Smiths Group plc
Chief Executive Officer, John Crane

2012 – 2017: Expro
International
Group Ltd
Chief Financial Officer

2010 – 2011: Grid Net Inc
Chief Financial Officer

2008 – 2010: FormFactor Inc
Chief Financial Officer

2007 – 2008: Rio Tinto Group
Director of Risk, Alcan

1996 – 2007: Schlumberger Ltd
Various financial and market-facing roles

Strategic reportJames Fisher and Sons plc – Annual Report 202210

Business model and strategy

STRATEGY
Our strategy is to focus on specific
market sectors where we have,
or can develop, a sustainable
competitive advantage. United by
our expertise as marine engineers,
we focus specifically on the energy,
defence and marine markets.

We intend to grow organically by leveraging
our existing skills, technology and asset
base in areas of specialist expertise and
through investment in people, working
capital, equipment, and a growing element
of intellectual property. We are evolving our
organisational structure to encourage the
delivery of internal synergies that support
the strategy and drive efficiencies. Our
organic growth will be supported by selective
acquisitions and partnerships that expand
our product or service offering, or extend
geographical coverage to strengthen our
value proposition.

We 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 specialist capabilities create further
possibilities to pursue adjacent market
sectors and exploit integration opportunities
to increase the value we create.

BUSINESS MODEL
Our strategic business model unites us through three key elements:

1. Our purpose and valued behaviours.

2. A sustainability strategy that puts our five core stakeholder groups at the centre

of our decision-making.

3. Our focus on specific market sectors (energy, defence and marine markets) where

we have, or can, develop a sustainable competitive advantage.

MARINE

ENE R G

ol d

Share h

PIO

plo

R
I

s
r

E
n
v

I
L

OUR PURPOSE

Local commu n i

t i e s

i
l

p
p
u
s
d
n

C ustomers a
T E G RITY

I N

E
C
N

DEFE

OUR CULTURE

WHY INVEST IN US

The key element at the heart of delivering
our strategy is, of course, our people.
Our customer-focused, entrepreneurial
culture encourages personal accountability
and development through understanding
customers’ needs, overcoming the unique
challenges of the environments in which we
operate and supporting development and
deployment of unique solutions focused on
value creation for all our stakeholders through
effective decision-making.

After a difficult few years, we are
seeking to deliver sustainable
value for our shareholders by
implementing a strategy focused on
simplifying and focusing the Group,
delivering growth, improved margins
and enhanced ROCE, while making
a positive impact.

Growing demand

Within each of our core markets there are
substantial opportunities for growth. The
disruption caused by Russia’s invasion of
Ukraine in 2022 has accelerated longer-term
trends, driving increased focus across the
globe on energy security, advancing the
energy transition and increasing investment
in defence. Our breadth of established
capabilities mean we are well positioned to
play a key role within traditional and new
energy markets, transportation of critical
supplies to smaller, regional hubs and keeping
subsea defence workers safe. We anticipate
additional opportunities to invest in less
mature markets where our long-standing
and proven experience can be applied.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc

DELIVERING IMPROVED
PERFORMANCE
Our goal is to enable a return to top quartile
sustainable profitable growth.

Our focus on operational excellence
requires that our businesses:

• are cash-generative

• have operating margins in excess

of 10%

• provide returns on capital employed

in excess of 15%

ROADMAP TO IMPROVED
PERFORMANCE

Focus
Rationalise our portfolio and be
‘asset light’.

Simplify
Make all aspects of how we work easier
to understand.

Deliver
Seek excellence in everything we do.

VALUE FOR OUR STAKEHOLDERS
We identify with five core stakeholder groups: shareholders, employees,
customers and suppliers, local communities and the environment. Their
needs guide us when we are making decisions relating to Planet, People
and Partnerships – the pillars of our Sustainability Strategy.

Planet
Transform and refocus
our business to ensure our
impact on the environment
is net positive, and that we
enable our stakeholders to
do the same.

Focus areas
• Portfolio choices

• Resource efficiency

• GHG emissions

People
Attract, develop, and retain a
high-performing workforce,
and enhance people’s lives
by ensuring equal access
to opportunities, providing
purposeful and safe work,
and promoting our core
values where we operate.

Partnerships
Leverage our deep industry
expertise and track record
for excellence to innovate
responsibly and deliver
consistent, value generating
results for our customers
and shareholders.

Focus areas
• Top talent

• Diversity and inclusion

• Health, safety and

security

Focus areas
• Innovation

• Customer engagement

• Governance

Established specialisms

Trusted, innovative partner

Performance focus

Our focus on solving difficult problems in
specialist business segments sets us apart
from potential competitors. Customers value
our unique assets, capabilities and skills of
our global network of businesses.

We are the primary fleet operator for the
delivery of petrol, diesel and heating fuels
to the ports of Britain and Ireland. We hold
leading positions across several markets
and geographies including in ship-to-ship
transfers, submarine rescue, high-voltage
engineering for offshore wind and subsea
unexploded ordnance removal.

Throughout our 175 years, we’ve reliably
demonstrated an ability to solve difficult
problems in the harshest of environments,
helping our customers navigate seismic shifts
in economic and political contexts. We are a
trustworthy partner with a reputation for safety,
environmental consciousness and efficiency.

We’re focused on actively managing our
portfolio, reducing leverage and deploying
a balanced capital allocation process,
improving and scaling commercial and
contracting capabilities and striving for
a world-class safety, risk and project
management culture.

We combine subject matter expertise and a
deep practical understanding of the reality
of working in our chosen markets. In 2022,
we’ve brought new innovations to market,
including taking delivery of our first dual fuel
vessels, playing a leading role in a consortia
that will build and charter dual hull SOVs,
designed to meet the challenge of offshore
wind farm construction and successfully
deploying a new well-abandonment
technology to support the safe and efficient
decommission of oil wells.

In 2022 we successfully completed the sale
of three businesses that were non-core to our
central purpose, vision and mission, as well
as selling our remaining dive support vessel.

We have made significant progress in 2022
to embed Lean disciplines and continuous
improvement principles. In one business,
delivery was 70% more likely to be on time
within six months of implementing Lean,
when compared to the preceding 12 months.

James Fisher and Sons plc – Annual Report 2022Strategic report12

Key performance indicators

Operating profit – continuing operations

(£m)

Return on operating capital employed*

(%)

£24.7m

£(20.7)m

£(43.5)m

2021

2020

2022

£24.7m

2019

2018

£55.6m

£61.4m

3.9%

3.6%

6.7%

2022

2021

2020

2019

2018

The Group’s 2022 and 2021 operating profit results exclude operating
losses from discontinued operations (2022: £4.2m; 2021: £nil).

11.3%

12.2%

Underlying operating profit* –
continuing operations

£26.4m

(£m)

Cash flow from operating activities

(£m)

£44.5m

2022

2021

2020

2019

2018

£26.4m

£28.0m

£40.5m

£66.3m

£62.1m

2022

2021

2020

2019

2018

£44.5m

£55.0m

£58.1m

£88.0m

£87.4m

The Group’s 2022 and 2021 underlying operating profit excludes
operating losses from discontinued operations. The inclusion of
discontinued operations would worsen the results to £19.1m in
2022 and £28.0m in 2021.

Underlying operating margin* –
continuing operations

(%)

Leverage*

(times)

5.5%

2022

2021

2020

2019

2018

2.7 times

5.5%

6.3%

7.8%

2022

2021

2020

2019

2018

10.7%

11.0%

2.7

2.9

2.8

2.7

1.9

Underlying operating profit including discontinued operations was
3.7% in 2022 and 5.7% in 2021.

* Underlying operating profit, Underlying operating profit margin, return
on operating capital employed and leverage are Alternative Performance
Measures (APMs) that are reconciled and defined in Note 2 to the financial
statements.

Non-financial KPIs are set out in the Sustainability Report by
reference to the priority areas. For any priority not currently
including a non-financial KPI, metrics and targets are under
development.

Read more about our non-financial KPIs on page 56

Strategic reportAnnual Report 2022 – James Fisher and Sons plc13

We have a global
team to meet
global challenges.
With teams based
in 18 countries
around the
world, our global
network can be
continuously
available to our
customers.

Our markets

Anticipating change to deliver innovation, operational
excellence and specialist engineering in global energy,
defence and marine markets.

OPPORTUNITIES
The necessity to achieve a reduced carbon
footprint is driving demand across a number
of areas that align with our specialism in
our three chosen markets. This includes
accelerating demand for low energy sources
(such as gas, nuclear and renewables); greater
regulation around information management; an
increasing need for remote asset management;
and requirements for basic resources that
now require greater investment in defence
capabilities.

GLOBAL TRENDS
The three global mega trends of climate
change and resource scarcity, shifting
global economic power and technological
breakthroughs continue to be our key market
drivers, reinforcing our decision to focus on the
core markets of energy, defence and marine.
These long-term trends present opportunities
for our stakeholders.

Climate change and resource
scarcity
Climate change consequences and the need
to cut emissions are driving a transition to
renewable energy whilst population growth
across developing markets is increasing
demand for resources. Additionally, 2022 saw
us enter our first global energy crisis, triggered
by Russia’s invasion of Ukraine.

Shifting global economic power
Economic growth within emerging markets
is stimulating increased energy consumption
whilst global political instability is escalating
defence concerns and amplifying economic
turbulence.

Technological breakthroughs
Technology is advancing exponentially, with
significant transformation in data automation
and visualisation. Effective and timely adoption
of innovative technology is increasingly viewed
as a prerequisite of successful differentiation.

James Fisher office locations

James Fisher and Sons plc – Annual Report 2022Strategic report14

Chief Executive Officer’s review

If the 175-year history
of James Fisher and
its distinguishing
characteristics – a love of
the sea and a pioneering
spirit – were the first
features that attracted
me to join the Company
in September 2022, my
confidence in the scale
of the opportunity for
the business has only
grown over the following
months.
I have found an organisation with genuine
expertise in complex and unconventional
facets of maritime life and businesses with
unique, creative capabilities which solve
customer problems and add value. I have also
found a company of passionate and energetic
people, resilient to pressure and adaptable to
changing circumstances.

I admired the ethos of one of the Company’s
early leaders, Sir John Fisher, who said that
in all of the years he had been in shipping, he
had ‘rarely known a time when there was not
a crisis of some sort’, but he believed there
was always a rapid recovery waiting around
the corner, provided preparations were made
during the crisis itself. Reading up on the
Company’s history, I was struck by the prompt
responsiveness of James Fisher’s management
to new challenges and opportunities, and
the Company’s traditional adherence to
financial prudence. I also discovered that on
the occasions that financial prudence was
forgotten, trouble soon emerged. It seemed
to me there are lessons from the past that
can be applied today.

Straightforward analysis
In my first 90 days as CEO, I concentrated
on getting to know employees at all levels
within the Group and analysing what needed
to be done to meet our commitments to
stakeholders on the financial, sustainability
and operational targets we had set ourselves.
The outcome of this analysis was surprisingly
straightforward:

• We had to re-adopt financial prudence by

divesting ourselves of non-core assets and
focusing on our areas of expertise;

• We had to restore the culture of leaders
being accountable for performance,
delivered against clear corporate
objectives; and

Jean Vernet

We have a brilliant culture of
ingenuity and technology, and a
mobile workforce with an appetite
for deploying globally… There is
everything to play for.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc15

• We had to build a simpler, united and
cohesive organisation from what had
become adjacent siloes.

I am pleased to report that we have already
made very good progress in all three respects.
We have been successful in divesting non-core
businesses, as well as selling significant fixed
assets, during the latter part of 2022 and into
early 2023. We made important changes at
senior management level across several of
our businesses, to improve profit and loss
(P&L) accountability, promoting energetic and
disciplined leaders from inside the organisation,
as well as bringing in new talent, who have
a demonstrable track record in achieving
operational targets. In order to simplify the
Company and make it more understandable
to customers, we are reorganising our
businesses and building more integrated
and effective teams.

One James Fisher
As a Group that has missed profit expectations
several times over the last few years, our focus
must be on rebuilding credibility, delivering
on expectations and, of course, achieving a
recovery in profitability. This means playing
to our strengths of being unconventional,
responsive and bold, and delivering operational
excellence. In terms of simplification, it means
that, rather than running a collection of 20 or
so businesses, we need a mindset of being
‘one James Fisher’. To underpin this, we have
set up a single, tight, cohesive, decision-driven
Executive Committee that concentrates on a
limited set of shared priorities to achieve results
for the whole Group.

We have also reorganised the Group from
1 January 2023 into three distinct divisions:
Energy, Defence, and Maritime Transport.
These divisions were chosen to align our
internal structure to the market opportunities
for the Group. The Energy division combines
the old Marine Support and Offshore Oil
divisions, minus Fendercare, which is added
to the Tankships division to create Maritime
Transport. JFD is the only component of the
Defence division.

Each division is led by new leaders, who
were appointed because of their commercial
acumen, their extensive industry experience
and their rigorous focus on operational
excellence. The divisional leaders sit on the
Executive Committee, and their priority is to
put the Group as a whole ahead of divisional
objectives.

An immediate outcome of working as
one company is the pooling of operating
resources internally. In addition, support
functions, such as finance, HR, IT and legal,
can be standardised and shared, eliminating
unnecessary duplication.

As one James Fisher, it is vital that we all speak
a common business language. Consequently,
the Lean Six Sigma operating principles that
have been in place in some parts of James
Fisher are now being rolled out across the
entire Group. Its purpose is to improve
performance by systematically removing waste
and reducing variation. We are embedding
‘black belts’– professionals with a deep
knowledge of Lean Six Sigma principles – in
each of the three divisions, complemented by
a larger number of ‘green belts’ with a very
good understanding of the system.

Relentless pursuit of targets
Armed with these tools and working to a
simpler set of common corporate objectives,
every business unit is now expected to pursue
the targets of an operating profit margin of at
least 10% and a return on capital employed
of at least 15%. Businesses that are already
achieving results beyond those metrics
will continue to receive support to grow.
Businesses meeting only one of those criteria
will be supported to fix their operating model
before they grow and businesses which are
struggling to meet either goal will have their
strategic merits and synergy value reviewed to
form an assessment of their long-term viability
within the Group.

Our immediate priorities in 2023 are to improve
health and safety at all levels, achieve better
project management standards, increase
diversity and drive stronger employee
engagement. At our heart, we are a service
company: giving employees the means to
realise their full potential is absolutely critical to
enabling us to make the changes we want and
need. Through over 100 interviews conducted
with employees in my first 90 days, I was
heartened to find our colleagues consistently
citing the impact of their individual contribution
as the main reason they joined James Fisher
and why they work for us now – to make a
difference to the Company and also to the
greater good. Our strategy is to invest and
build on that wonderful foundation to create
the James Fisher of the future.

Innovation
During my deep dive into the Group, I was
surprised and impressed by the innate spirit
of innovation that exists in virtually every
business. However, a lack of proper process
and insufficient co-ordination has caused us to
miss out on many of the market opportunities
available. This can be fixed and I am confident
that innovation will represent a significant
growth driver for us over the long-term.

Looking to the future, I am very positive about
the Group’s prospects, and not just because
of the potential from innovation. The markets
in which we operate are attractive.

We stand to benefit from the energy transition,
where we have a foot both in improving the
sustainability of oil and gas and in enabling the
exponential growth in renewables. In defence,
long-term demand is strong for the safety
critical life support equipment and services we
supply. The prospects for maritime transport
have been boosted by the increased trade in
liquefied natural gas, owing to the reduction
of Russian gas piped to Europe coupled with
an increased emphasis on energy security.

We have a brilliant culture of ingenuity and
technology, and a mobile workforce with an
appetite for deploying globally. That makes
us an employer of choice for engineers the
world over. Once we get our house in order
as I have described, consistently achieving the
highest standards of service delivery across
all geographies, there is everything to play for.

Outlook
In a macro-economic environment that remains
uncertain for 2023, we expect our industry
verticals to be robust. The outlook for oil and
gas short and mid cycle outlook is favourable.
This will be driven by strong exploration activity
across international markets, and particularly
in subsea, due to record global demand,
enhanced by the urgency for energy security.
Offshore wind will continue its unabated
secular growth to meet 10% of electricity
demand by 2040. Our ship-to-ship transfer
activities will continue to benefit from the
increased importance of liquefied natural gas
as a source of energy, and our coastal shipping
activity is well supported by a healthy demand.
Subsea deterrence is seeing an increased
focus in defence budgets, leading to an
acceleration of opportunities for our products
and services.

Our 2023 priority is to show significant
progress in our turn-around plan by
implementing the simplification of our divisional
structure, and by delivering on key change
management objectives. Our focus areas
are to improve safety, the predictability of
our forecasts by strengthening our end-to-
end commercial process; to accelerate cash
collection; and to show progress towards our
10% underlying operating profit margin and
15% ROCE targets across all of our business
units. In addition, we are implementing the first
steps of a five-year talent and people strategy
which will be measured through our employee
engagement. Our trading in Q1 2023 gives us
confidence in the outturn for the year.

James Fisher and Sons plc – Annual Report 2022Strategic report16

Chief Executive’s review cont.

The subsea business in Europe had a
challenging year. Having secured a seasonal
charter on a capable vessel to service diving
and related projects in the North Sea, a last-
minute cancellation by the customer resulted
in under utilisation of the vessel and a financial
loss in the region. On assessing the future
prospects for this business, and having regard
to a number of years of underachievement, an
impairment of £4.4m has been recognised in
respect of goodwill within adjusting items.

EDS, which provides high voltage cabling
services to the offshore wind industry
experienced significant business disruption due
to high turnover of staff in the first quarter of
the year as a result of competitor recruitment
activity. This resulted in an increase in operating
costs as the business sought to continue to
deliver on its customer commitments. The
business enters 2023 in a stronger position
and with a full complement of staff and under
new leadership.

There has been little tangible progress on
the major LNG project in Mozambique. We
conducted a site survey in Q4 2022 which
confirmed that there had been a significant
impact on work that had previously been
completed as a result of the disruption in 2021.
The project remains on hold and the Group is
ready to support re-mobilisation in due course.

Fendercare
The Fendercare Group delivered good revenue
growth in the year, increasing by 13.5% to
£88.4m (2021: £77.9m). However, operating
profit remained flat as good progress in the
products business was offset by a reduction
in margins from ship-to-ship transfer services.
The Asian business in particular saw pressure
from the under-utilisation of fixed cost
anchorages, with the team reducing the
number of these to mitigate this risk going
into 2023. Good progress was made with
ship-to-ship transfer services of LNG, with
increasing activity over the year as energy
security concerns around the world drove
greater demand. The business invested in
two additional LNG transfer kits during the
year and has retainer agreements in place
with key customers to cover peak demand
periods. The sale of related products, such
as fenders, buoys and anchors showed
stronger momentum during 2022. Recognising
the pressure on operating margins, a cost
restructuring exercise was completed
during the year, which is expected to deliver
annualised cost savings of £1.5m.

DDS
Revenue from the DDS businesses declined
from £23.3m to £21.6m, principally due to
Strainstall, which continued to experience
difficult market conditions for its load and
asset monitoring solutions. The UK business
of Strainstall and the Mimic and Prolec
businesses were sold in December 2022, in
two separate transactions, having contributed
£2.0m to the Group’s underlying operating
profit in 2022. The retained AIS business
made good operational progress, launching
an updated and improved version of its Digital
Twin technology and securing a number of new
installations.

Specialist Technical
Continuing operations
The JFD business experienced a very
challenging 12 months. Revenue reduced
by 16.4% to £68.1m (2021: £81.5m) and
underlying operating profit reduced to £0.6m
(2021: £10.0m). The division is at a low point
in its project business cycle, with a number of
large contracts substantially completing during
the year from a revenue and profit recognition
perspective. Cash milestones associated with
the final completion of two projects remain
outstanding, having been delayed principally by
lockdowns during 2022 in China. A long-term
service contract has experienced challenges
during the year, with the customer delaying
payments until a number of rectification
items were completed and a provision has
been recognised in respect of potential
future liabilities relating to local purchasing
commitments. The team has worked diligently
through this and although some work remains,
receipts of amounts owed during January and
February are positive evidence that the team is
delivering well.

Looking forward, the business was awarded
the third iteration of the NATO submarine
rescue service (NSRS) contract in December.
This contract, which commences in July 2023,
has a revenue opportunity of up to £63m
across a period of up to nine years. JFD has
successfully completed the first two iterations
of this contract. In total, the business has a
contracted order book of £245m, of which
c.£50m relates to 2023.

The forward-looking sales pipeline remains
strong, with c.£250m of well qualified
opportunities across its product portfolio.

Operating review
Marine Support
The Marine Support division, consisting of
Marine Contracting, Fendercare and Digital
and Data Services (DDS), provides products
and services to the marine and renewable
energy markets.

Marine Contracting principally provides subsea
services to both the oil and gas and offshore
wind markets; Fendercare provides essential
ship-to-ship transfer services and related
products; and DDS provides technology aimed
at enhancing efficiency and productivity across
a number of customer verticals.

As part of the Group’s portfolio rationalisation
strategy, three of the DDS businesses (being
the Mimic and Prolec businesses and the
UK operations of Strainstall) were sold in
December 2022, generating £18.5m in gross
proceeds and a profit on sale of £2.5m, which
is disclosed in the financial statements within
adjusting items. The Group has retained one
business of significance within DDS, Asset
Information Services (AIS), which provides
digital twin technology, principally to offshore
oil customers, that allows customers real-time
asset monitoring capabilities.

After a difficult 2021 for this division, when
revenue and underlying operating profit both
declined, it achieved revenue growth of
4.7% in 2022 and some positive progress on
profitability, although as a division it remains
below our 10% underlying operating profit
margin target. Underlying operating profit
improved to £7.9m, from £5.0m in 2021,
and an operating loss of £21.0m in 2021
has improved to an operating profit of £10.1m
in 2022.

Marine Contracting
The Marine Contracting businesses continued
its turnaround during 2022. Revenue increased
by 1.1% to £114.4m (2021: £113.1m) and
underlying operating losses narrowed to £1.1m
compared to £4.4m in 2021. The business
successfully completed a number of projects
during the year and operated the Swordfish
dive support vessel for the whole of 2022.
An agreement was reached to sell the
Swordfish in December for US$24.0m, with
cash proceeds received in January 2023.
As a result, the value of the vessel on the
Group’s balance sheet at 31 December 2022
was increased by £5.4m, reflecting the uplift
to market value and reversal of a previous
impairment of this vessel. This uplift has
been disclosed within adjusting items. The
Group has retained access to the Swordfish
vessel through a bareboat charter agreement
which runs until the end of Q3 2023, allowing
the business to service existing customer
commitments.

Strategic reportAnnual Report 2022 – James Fisher and Sons plcOffshore Oil
The Offshore Oil division continued its positive
momentum from 2021, achieving 23.5%
revenue growth to £106.6m (2021: £86.3m)
and 36.9% underlying operating profit growth
to £15.2m (2021: £11.1m).

All businesses within the division achieved
growth in the year, with RMSPumptools
delivering a particularly strong 42.7% growth in
revenue, resulting in a strong performance for
that business. High demand for its artificial lift
products, which extend the life of oil wells, has
continued into 2023, with a strong order book
to start the year.

The ScanTech businesses, which principally
provide well-testing services to the oil and gas
industry and bubble curtain services to the
offshore wind construction market achieved
17.9% revenue growth. The Group’s innovative
bubble curtain solutions, which provide a
‘wall of air’ to protect wildlife from the noise
of piling activity in offshore wind construction
projects delivered growth of 13.9% from £7.2m
to £8.2m. Demand for well-testing services
remained at high levels as the oil and gas
industry more broadly sought to minimise the
impact of the conflict in Ukraine on global
energy supplies.

James Fisher Offshore, which provides
equipment rentals to offshore operators and
decommissioning services to the oil and gas
industry continued to make positive progress.
Revenue from decommissioning projects in
2022 showed good growth to £11.7m from
£7.1m in 2021. We were pleased to complete
at the end of the year the first project with the
new Seabass technology, which was acquired
in 2021. Decommissioning remains an early
stage opportunity for the Group, but it is a
potentially significant market opportunity over
the longer term.

In 2021, adjusting items of £16.3m were
recognised in relation to goodwill impairment
(£13.9m) and receivables £1.9m. The Group
continues to pursue the recovery of the
receivables balance, which related to one
specific counterparty that is in a scheme of
arrangement process and is hopeful of a
resolution during 2023.

Change %

4.7

n/m

Change %

(16.4)

(94.0)

n/m

Change %

23.5

36.9

n/m

Change %

31.3

79.2

n/m

2021

214.5

5.0

(21.0)

2021

81.5

10.0

7.1

2021

86.3

11.1

(5.2)

2021

60.1

4.8

1.3

MARINE SUPPORT

Revenue (£m)

Underlying operating profit (£m)

Operating profit/(loss) (£m)

2022

224.5

7.9

10.1

SPECIALIST TECHNICAL (CONTINUING OPERATIONS)

Revenue (£m)

Underlying operating profit (£m)

Operating (loss)/profit (£m)

OFFSHORE OIL

Revenue (£m)

Underlying operating profit (£m)

Operating profit/(loss) (£m)

TANKSHIPS

Revenue (£m)

Underlying operating profit (£m)

Operating profit (£m)

2022

68.1

0.6

(2.6)

2022

106.6

15.2

14.7

2022

78.9

8.6

9.9

Tankships
The Tankships business has recovered well in
2022. The fleet has been highly utilised at an
average of 88% over the course of the year
(2021: 83%) and spot rates for shorter-term
charters have been high even when compared
to pre-pandemic rates. During 2022 34%
(2021: 23%) of the fleet was deployed on
short-term spot voyages, with 66% (2021:
77%) contracted to longer-term charters.

The delivery of our two new dual-fuel (marine
gasoil and LNG) vessels has now been
completed, with The Sir John Fisher delivered
in November 2022 and The Lady Maria Fisher
delivered in January 2023. Both have now
completed their first voyages and have joined
the UK-based fleet. These new vessels were
commissioned as part of our fleet renewal
strategy and replace two tankers that have
reached end of life. One was sold in 2022,
generating a £0.9m profit on sale and the
second is expected to be sold in 2023.

The recent recovery in the market has led to
a £0.3m reversal of an impairment recognised
in 2021 against the carrying value of this
second vessel. The profit on sale of £0.9m
and impairment reversal of £0.3m have been
shown as adjusting items in the year.

Cattedown Wharves, which serves the South-
West of England, performed well, with volumes
of cargoes flowing through the port in line with
pre-pandemic levels.

Discontinued operations
The results of JFN have been disclosed
as a Discontinued Operation and Held for
Sale in the 2022 financial statements. The
business was sold to Rcapital in March
2023. The Group retained several legacy
parent company guarantees supporting the
obligations of JFN (the “PCGs”). It generated
an underlying operating loss of £7.3m in the
year following challenges with its ongoing
projects. Included within adjusting items is a
further £13.3m loss, consisting of impairments
of goodwill (£8.1m), property, plant and
equipment (£3.9m) and anticipated costs
of disposal (£1.3m). An income tax credit of
£0.8m gives a total income statement charge
in respect of Discontinued Operations of
£19.8m in 2022 (2021: £0.1m).

Jean Vernet
Chief Executive Officer

James Fisher and Sons plc – Annual Report 2022Strategic report18

Our divisions

MARINE
SUPPORT

Strategic reportAnnual Report 2022 – James Fisher and Sons plc19

(£m)

£224.5m

£214.5m

£249.4m

£311.6m

(£m)

2022

£10.1m

2019

£14.9m

Revenue

£224.5m

2022

2021

2020

2019

Statutory operating profit/(loss)

£10.1m

£(69.5)m

£(21.0)m

2021

2020

Underlying operating profit*

(£m)

£7.9m

2022

£7.9m

2021

£5m

2020

2019

£10.1m

Return on capital employed

6.4%

2022

2021

2020

2019

6.4%

3.5%

5.0%

* Before adjusting items.

£24.5m

(%)

11.9%

Our Marine Support businesses
provide products, services and
solutions to the global marine market.
These are supplied to a range of end
market sectors including marine,
oil and gas, ports, construction and
renewables.

JF Subtech
JF Subtech provides specialist
subsea services in support
of construction, operations
and maintenance and
decommissioning activities for
the offshore wind, oil and gas and
marine markets globally. Demand
is driven by increased investment
in marine infrastructure, asset
management campaigns and
decommissioning of legacy assets.

JF Strainstall
JF Strainstall is a leading provider
of structural integrity monitoring
services and technologies.

Falling outside our core areas
of expertise we completed the
divestment of Strainstall’s UK
operations in December 2022 to
British Engineering Services.

Fendercare
Fendercare is a leading provider
of ship-to-ship transfers of oil
and liquefied natural gas. The
main market drivers are over-
supply, available storage capacity
and fluctuations in prices caused
by demand. Fendercare is also
a leading provider of mooring
and safety equipment to the
global marine industry to support
new-builds, conversions and
port infrastructure development
projects.

JF Renewables
JF Renewables supports the
global offshore wind market
through the provision of highly
specialist services employed
in site preparation, installation,
commissioning and operations
and maintenance phases.
Demand is driven by increased
investment in offshore wind with
increasing numbers of new sites
being constructed and operational
sites requiring support.

LNG GROWTH
In 2021 we invested in a market-leading liquefied natural gas
ship-to-ship system. As a result, in 2022 we were able to help
transfer LNG with a market value of over $850m.

Strategic reportJames Fisher and Sons plc – Annual Report 202220

Our divisions cont.

SPECIALIST
TECHNICAL

Strategic reportAnnual Report 2022 – James Fisher and Sons plc21

(£m)

£51.7m

£130.4m

£149.4m

(£m)

Revenue

£110.9m

2022
2022

2021
2021

2020

2019

£68.1m

£42.8m

£81.5m

Statutory operating profit/(loss)

£(23.2)m

£(20.6)m

2022 £(2.6)m

£(0.1)m

2021

£7.1m

£12.4m

2020

2019

Underlying operating profit*

£(6.7)m

£(7.3)m

2022 £0.6m

£(0.1)m

2021

£10.0m

£18.1m

(£m)

2020

2019

Return on capital employed

£14.0m

£18.4m

(%)

(7.4)%

2022

2021

2020

2019

* Before adjusting items.

9.8%

12.9%

16.7%

Our Specialist Technical businesses
supply diving equipment and services,
submarine rescue vessels and through-
life rescue services, special operation
swimmer delivery vehicles, saturation
diving systems and engineering
solutions to the international defence,
UK nuclear decommissioning and
commercial diving markets.

JFN
JFN provides engineered
decommissioning solutions and
remote handling equipment
to the nuclear industry as well
as calibration, servicing and
repair services for radiological
instrumentation. The market
drivers for JFN are the demand
for its products operable in
hazardous environments,
services and lifetime support
from the UK decommissioning
industry, radiological calibration
requirements and projects within
defence.

JFD
JFD is a world leader in fixed and
portable saturation diving systems
and related diving equipment.
Demand is largely driven by the
construction and replacement
of dive support vessels, which in
turn drives ancillary service and
product demand. Its end markets
are oil and gas and defence,
based on service, repair and
ongoing calibration requirements,
and projects requiring specialist
diving equipment.

JFD is also a leading provider
of submarine rescue services
with the ability to design, deliver
and operate submarine rescue
vehicles. The driver is the
tendering of defence projects for
provision of the equipment, which
can lead to longer-term contracts
to operate the service. The
business also provides swimmer
delivery vehicles to the special
operations markets.

LONG-TERM TRUSTED DEFENCE PARTNER
In 2022 JFD secured a five-year NATO submarine rescue system
contract renewal. The ‘Third In-Service Support’ (3ISS) contract,
worth £63m, sees JFD continuing to deliver safety critical operational
assurance services to the NATO Submarine Rescue System (NSRS).

Key

Discontinued
Continuing

Strategic reportJames Fisher and Sons plc – Annual Report 202222

Our divisions cont.

OFFSHORE
OIL

Strategic reportAnnual Report 2022 – James Fisher and Sons plc23

(£m)

£106.6m

Revenue

£106.6m

2022

2021

2020

2019

£86.3m

£78.0m

£88.2m

Statutory operating profit/(loss)

(£m)

£14.7m

£(5.2)m

2021

2022

2020

2019

Underlying operating profit*

£15.2m

2022

2021

2020

2019

Return on capital employed

£8.4m

£11.1m

£11.2m

14.9%

2022

2021

2020

2019

* Before adjusting items.

10.2%

8.9%

10.3%

£14.7m

£13.7m

(£m)

£15.2m

£11.1m

£14.2m

(%)

14.9%

Our Offshore Oil businesses supply a
range of services and equipment to
the global oil and gas and renewable
energy industries. This includes the
design and engineering of specialist
equipment and technology, platform
maintenance and modification, well
testing support, subsea operations
and maintenance services.

RMSPumptools
RMSPumptools is a world leader
in artificial lift specialist completion
technology and innovative
accessory tools for electrical
submersible pumps supplied
to the global downhole oil and
gas market. The driver for the
business is the need to improve
well productivity.

Fisher Offshore
Fisher Offshore provides
engineering solutions, equipment
and full project support for
offshore and subsea operations
in the oil and gas and marine
sectors. Its market driver is
maintenance, inspection and
repair demand, and subsea
pipeline and cable projects in
the oil and gas, renewables and
communication sectors with
a particular focus on offshore
decommissioning.

Scan Tech AS
Scan Tech AS is one of
Norway’s leading providers of
engineering, design, production,
maintenance, installation and
commissioning services in the oil
and gas, renewables and aqua
culture industries. Its equipment
is designed and certified to
NORSOK standards and supplied
to the Norwegian oil and gas
market for platform maintenance,
well testing and specific projects,
such as nanobubble oxygenation
to deliver better water quality and
fish welfare. The key driver for
the business is the operation and
maintenance spend on offshore
rigs in the Norwegian sector.

ScanTech Offshore
ScanTech Offshore is a leading
air and steam service provider
to the global energy industry.
Their specialised solutions
include environmental mitigation
equipment, air compressors,
steam generators, heat
suppression equipment and
qualified personnel for large
multinational oil service and major
marine contracting companies
in well testing and offshore wind
markets worldwide. The driver for
the business is the operation and
maintenance spend on offshore
rigs and the need to protect the
marine environment with noise
mitigation during offshore piling
operations and unexploded
ordnance (UXO) disposal.

DEMAND FOR TECHNOLOGY FOR RESPONSIBLE
WELL PRODUCTIVITY
Experts in artificial lift, RMSPumptools has seen its most successful
trading year since 2019 and opened a new facility in Al Khobar,
Kingdom of Saudi Arabia (KSA), to serve the Middle East oil and
gas market.

Strategic reportJames Fisher and Sons plc – Annual Report 202224

Our divisions cont.

TANKSHIPS

Strategic reportAnnual Report 2022 – James Fisher and Sons plc
Our Tankships division operates a
fleet of product and chemical tankers
which trade along the UK and northern
European coastline. Our vessels
carry clean petroleum products and
chemicals. The division also operates a
port in Plymouth, UK.

James Fisher Everard
(JFE)
James Fisher Everard (JFE)
distributes clean petroleum
products and chemicals around
the European coast and to
islands and ports with size
restricted access. It operates a
fleet of double-hulled product
and chemical tankers with
capacity ranging from 3,500mt
to 35,000mt. The business driver
is the level of consumption of
clean petroleum products (petrol,
diesel, gasoil and kerosene)
and chemical/biofuels in North
West Europe and the Caribbean
islands where we operate.
Products carried serve the marine,
transport, agriculture, aviation and
chemical industries.

Cattedown Wharves
The division operates Cattedown
Wharves, a port in Plymouth,
which provides berthing and
marine services to the oil
majors which own tank farms
in Plymouth. It also handles dry
cargoes such as animal feed
being imported into the South
West and clay being exported
from the region. The primary driver
for the business is the level of
consumption of clean oil products
within the South West region of
the UK.

James Fisher Shipping
Services (JFSS)
James Fisher Shipping Services
(JFSS) provides technical vessel
and crew management to the
James Fisher fleet of tankers,
as well as to the wider tanker,
research and specialised vessel
markets.

(£m)

£78.9m

Revenue

£78.9m

2022

2021

2020

2019

£60.1m

£60.4m

£67.9m

Statutory operating profit/(loss)

(£m)

£9.9m

2022

2021 £1.3m

2020

2019

£9.9m

£8.0m

Underlying operating profit*

£8.6m

2022

2021

2020

2019

£4.8m

£8.6m

£8.0m

Return on capital employed

26.8%

2022

2021

2020

2019

* Before adjusting items.

14.7%

26.8%

25.5%

£12.0m

(£m)

£12.0m

(%)

35.4%

DUAL FUEL TANKERS SUPPORT
ENVIRONMENTAL GOALS
In 2022 we took delivery of the first of two 6,000dwt LNG dual-fuel
chemical tankers that will be traded by James Fisher Everard (JFE)
alongside its existing fleet. The second vessel is expected in Q1 2023
and together they will replace two of our older conventionally-fueled
vessels of the fleet, with a capacity to provide a 45% reduction of
carbon emissions.

Strategic reportJames Fisher and Sons plc – Annual Report 202226

Sustainability

FOREWORD

We are a business that strives to
successfully solve complex and
difficult problems in some of the
harshest environments. Guided by
our valued behaviours, we do this
by engaging and empowering our
people to achieve.

At James Fisher we are committed to
ensuring that our business model creates
value for all our stakeholders; shareholders,
employees, customers and suppliers,
local communities in which we operate,
and the environment, in a socially and
environmentally responsible manner.

We are committed to carrying out business
fairly, honestly, and ethically across all our
business activities. In support of this we
aim to consider in all that we do, and report
on Environmental, Social, and corporate
Governance (ESG) factors.

Jean Vernet
Chief Executive Officer

In this section

SUSTAINABILITY
– Governance
27
– Our sustainability strategy
28
– Engaging for value
30
– Alignment with sustainability frameworks 32
Planet
– Portfolio choices
– Resource efficiency
– Greenhouse Gas (GHG) emissions

34
35
36

– Transition to net zero and

TCFD disclosures

People
– Top talent
– Equity, diversity and inclusion
– Health, safety and security
Partnerships
– Innovation
– Customer engagement
– Governance

42
46
50

52
53
54

Introduction
Last year we published our first
Sustainability Report as part of
our Annual Report and Accounts
2021. We talked about rising social
inequality, the energy transition,
climate change and other macro-
challenges facing the world today
resulting in sustainability and
profitability becoming intertwined.

Our sustainability strategy is a fundamental part
of our overall business model and is essential
to ensure our sustainable, profitable growth.

We are committed to:
• Investing in capabilities and technologies
to deliver a responsible energy transition

• Harnessing the potential of our pioneering

employees

• Being good citizens of our local communities

• Becoming a trusted partner for our

customers and suppliers

• Driving performance to improve returns for

shareholders

What sustainability means to James Fisher
• Delivering strong, profitable growth

• Building on our 175-year history

• Having a positive impact on all our

stakeholders

• A shared vision and aspiration for change

and doing better

For more details see our separate
2022 Annual Sustainability Report.

Strategic reportAnnual Report 2022 – James Fisher and Sons plcSustainability cont. / Governance

Meeting our targets and
commitments, and effective
management and tracking of our
ESG performance requires clearly
defined leadership and direction,
and strategic influence. Therefore
a robust and regularly reviewed
governance structure is essential.

During 2022 the Sustainability Committee
carried out a review of the sustainability
organisation and governance structure to
support our overarching sustainability and
climate change agenda. As a result, various
clarifications and changes to the executive
level committee were made in order that it
could be as effective as possible in curating
activities across our respective sustainability
areas of focus.

Sustainability Committee
Our Sustainability Committee, led by the
Chief Executive Officer, reports directly to the
Board of Directors and supports the Group’s
sustainability strategy activation across all our
operating companies.

Responsibilities
• Recommending to the Board sustainability/

ESG objectives and strategy for the
Group, having regard to the interests of its
stakeholders.

• Recommending to the Board non-financial

KPIs and targets.

• Successful execution of sustainability

strategy and KPIs throughout the Group.

• Ongoing oversight of implementation

of the individual stakeholder objectives
and strategies into operating companies,
through review of regular reports from the
stakeholder working groups.

• ESG Performance reporting both internally
and externally ensuring compliance where
regulated.

Stakeholder working groups
The Sustainability Committee is supported
by stakeholder working groups, each with
the mandate for identifying and driving best
practice initiatives for implementation by the
operating companies of the strategy and
sharing of information and recommendations
to the Committee.

Responsibilities
• Translate overarching sustainability

objectives and priorities into stakeholder-
focused objectives, KPIs and targets.

• Identify, recruit, and empower sustainability
champions within operating companies, to
drive roll-out of sustainability communication
and initiatives.

• Adopt common activity policies among
operating companies and locations and
assist in coordinating compliance to achieve
genuinely sustainable progression.

• Uphold responsible business practices,

develop and implement plans to conduct
Group operations more responsibly,
identifying opportunities to improve.

During 2023 the Group Business Excellence
(BEx) team will drive standardisation through
the Group’s internal processes. This will
provide an energetic implementation
framework to support our operating companies
in achieving their sustainability objectives,
reducing operating costs, and growing profit
through greater productivity and efficiency
in our systems and processes. Together,
the sustainability and BEx programmes will
provide a complete and dynamic solution for
the business with a shared set of focus areas,
objectives and KPIs, to drive:

• Improved teamwork and collaboration.

• Environmental, social, and economic

consideration embedded into day-to-day
practices.

• Improved and streamlined performance

tracking.

Sustainability
is how we go
about our work,
as a business
and individuals,
without negatively
impacting our
local communities,
the environment or
society as a whole.
When we get it
right, everybody
wins – today
and tomorrow.
A vibrant and
responsible
business is a great
place to work and
a company to be
proud of.

Jennifer Colquhoun
Group Sustainability Manager

• Arrange for periodic reviews of its own

• Clear, consistent, and transparent

performance and, at least annually, review its
constitution and terms of reference to ensure
it is operating at maximum effectiveness.

communication between programmes and
organisational levels.

• Delivery of our sustainability commitments.

James Fisher and Sons plc – Annual Report 2022Strategic report28

Sustainability cont. / Our sustainability strategy

Ambition with purpose
Underpinned by our purpose and valued behaviours, the three pillars of our sustainability strategy –
Planet, People, Partnership – reinforce each other and, together, support our business growth strategy.

In 2022 we implemented our sustainability strategy throughout the Group, launching all nine focus areas derived
from the materiality assessment completed in 2021.

PEOPLE
Improve the lives of our people
and those in the communities in which
we operate

OUR
STAKEHOLDERS

PLANET
Protect and restore
the environment

PARTNERSHIP
Innovate responsibly
and deliver consistent results
for our customers and
shareholders

Operating companies selected specific areas
of focus of critical relevance to their current
situation, in order to prioritise engagement
and impact. This work is foundational for the
Business Excellence team as they look to take
these best practices across the remainder
of the Group. The Group Sustainability
Committee, including stakeholder working
group leads provide a key support function
as sustainable measures are embedded into
‘business as usual’ activities, further ensuring
there is value in all we do.

The Company was working throughout
2022 to establish suitable targets for all focus
areas, and determining how to effectively
gather, measure, and monitor performance
data in support of these targets. Following a
strategic review under new leadership, this
work has continued. In areas where progress
has been slower than desired, we have set
internal targets for the implementation of
suitable frameworks, tracking methods and
processes in preparation for external target
setting in the medium-term.

Underpinned by our valued
behaviours

Pioneering spirit

Integrity

Energy

Resilience

Strategic reportAnnual Report 2022 – James Fisher and Sons plc

OUR STAKEHOLDERS
The sustainability strategy
brings all our stakeholders
into the heart of the Group
and informs how we actively
engage with them. Our strategic
objectives are aligned with the
interests of our stakeholders:

Shareholders
Consistently deliver attractive returns
for shareholders through delivery of
long-term strategic growth, leveraging
existing specialist skill base and creating
incremental value by expanding our
offerings and capabilities.

Employees
Engaging, investing in, and retaining our
people to create a sustainable business
with wellbeing at the heart of all we do.

Customers and suppliers
Establish trust-based relationships and
deliver on shared goals through developing
sustainable solutions and meeting the
needs of our customers now and long
into the future. Exceeding expectations
for health, safety, quality, and integrity and
supporting our customers and suppliers in
achieving their sustainability ambitions.

Local communities
See the communities in which we live and
work as an extension of our James Fisher
community. Strive to be good citizens and
support our people in the provision of local
community support and education while
ensuring local employment and sourcing
practices and investment is in place.

Environment
Advocate for restoring and preserving the
environment in all we do. Assess, quantify,
and manage the impact of our operations
on our planet, and how external factors
may affect the Groups performance
including investment, risks and returns
to the Company and shareholders.

Through our nine focus areas (which were
informed by a materiality assessment
conducted in 2021), we are advancing
action in the areas which are significant
to our stakeholders.

We continue to build and refine the key
metrics and KPIs upon which we will focus
disclosure across our principal ESG areas.

Our focus areas
Through our nine focus areas, informed by a materiality assessment
conducted in 2021, we are advancing action in the areas which are
significant to our stakeholders.

We continue to build and refine the key metrics and KPIs upon which we will focus disclosure
across our principal ESG areas, today these include targets for four of our nine focus areas.

FOCUS AREA

GOAL

Planet

Portfolio
choices

Resource
efficiency

Evolve our portfolio to serve the energy transition,
with focus on growing renewables, remediation
capabilities, and improving customers’ efficiency.

Increase energy efficiency and minimise material
waste through responsible consumption in
processes, re-use, recycle, repurpose.

Minimise waste and improve productivity in assets
and people by embedding circular economy and
Lean principles in our DNA.

PAGE
REFERENCE

Page 34

Page 35

GHG emissions Reduce our GHG emissions footprint by sourcing

Page 36

energy and fuels from low carbon sources and
investing in emissions abatement initiatives towards
a net zero future.

People

Top talent

Ensure talent is a strategic differentiator, through
focused recruitment, engagement, and training, and
by prioritising the health and wellbeing of our people
and those in the communities where we operate.

Page 42

Equity,
diversity and
inclusion

Promote a diverse and inclusive workplace by
recruiting where we work, enforcing pay parity,
and celebrating the uniqueness of individuals
and their communities.

Health, safety
and security

Prioritise the health, safety and security of our
employees, customers, suppliers and local
communities through a ‘goal zero’ approach, with
focus on education, engagement, advocacy, and
policy development.

Page 46

Page 50

Partnership

Innovation

Customer
engagement

Governance

Develop and champion creative solutions to
complex challenges through the integration and
smart application of our specialist domain expertise,
and in partnership with other players in the industry.

Page 52

Build stronger customer relationships to better
understand and resolve pain points and foster
collaboration towards value creation and shared
success.

Page 53

Commit to openness and accountability by living our
valued behaviours, ensuring appropriate business
policies, standards and controls are in place, and
improving transparency of our supply chain.

Page 54

James Fisher and Sons plc – Annual Report 2022Strategic report30

Sustainability cont. / Engaging for value

By partnering with our stakeholders,
understanding their challenges and
managing risks, we find solutions
for shared success, ensuring a
sustainable business to benefit all
our stakeholders.

The Board recognises it has a duty to act in the
best interest of the Company for the benefit of
its shareholders, as well as considering other
stakeholder interests.

In its decision-making, the Board considers all
relevant factors, including:

• How the decision would align with the

Group’s over-reaching purpose

• The likely short-, medium- and long-term

consequences of the decision

• The value created for our investors

• The enhancement of our performance

created by the decision

• The potential impacts on our people, local

communities, and environment of making the
decision

• The need to create strong, mutually beneficial

customer and supplier relationships

SHAREHOLDERS

EMPLOYEES

Why we engage
Shareholders provide financial liquidity
required for us to operate and are
beneficiaries in the value created by the
Group. We are committed to transparent
communication and engagement with them.

How the Board engages
• The Directors have regular meetings with
investors, principally through investor
roadshows, investor events and the AGM.

Why we engage
James Fisher must be an employer of
choice. Attracting, developing, and retaining
a high performing workforce and enhancing
the lives of our employees are critical
components of the Group’s sustainable
and profitable growth.

How the Board engages
• The Executive Directors have held

town hall meetings.

• The Chairman meets with the largest

• Inken Braunschmidt (designated

shareholders to discuss results and other
announcements.

• The Annual Report and Accounts and
the Group website set out the Group’s
strategy, progress against its strategy
and the Group’s activities.

How we supported during 2022
• The Board engaged with shareholders

• The Group’s commitment to business ethics

at the AGM.

• The Company completed a disposal
programme, aimed at improving
leverage.

• Following his appointment as CEO in
September 2022, Jean Vernet held
meetings with the Company’s largest
shareholders.

Key issues raised
• Operational and financial performance

• Strategy implementation

• Capital structure, liquidity and capital

allocation

• Risk management and controls

• ESG-related matters

• External factors which may impact our
decision-making and stakeholders

Section 172(1) statement
This section serves as our section 172(1)
statement explaining how the Directors have
had regard to the matters set out in section
172(1)(a) to (f) Companies Act 2006, when
performing their duty under section 172.

The Board aims to promote the success of the
Company for the benefit of its shareholders
as a whole, taking into account the long-term
consequences of its decisions while giving due
consideration to the interests of the Company’s
stakeholders (including employees, customers,
suppliers, shareholders, as well as the environment
and local communities which are impacted by our
operations), while also considering the importance
of maintaining our reputation for high standards
of business conduct. Examples of what that has
looked like in practice over the past year can be
found as follows:

Stakeholder:

Strategic report:

Shareholders
Employees
Customers/suppliers
Environment
Local communities

Page 30
Page 30
Page 31
Page 31
Page 31

Further information about how the Directors
have accounted for stakeholders in their
decision-making in 2022 is set out on pages
82 and 83 in the Corporate governance report.

Non-Executive Director) has undertaken
a number of engagement activities,
including being on the employee
engagement group. She reports back
to the Board on a regular basis.

• We have further enhanced the Group

exit survey and implemented an
employee equity, diversity and inclusion
annual survey with the support of Gallup,
providing valuable insights for the Board.

• The employee sharesave scheme

encourages employees’ involvement
in Company performance.

How we supported during 2022
• We have deepened engagement

understanding through ‘lunch and learns’
about our different businesses.

• We have extended mental health first aid
training and now have over 145 trainers,
of whom 33 are also trained in Suicide
First Aid trainers.

• We have continued our internship

programme, bringing fresh ideas and
energy into the businesses.

• We re-communicated our Employee

Assistance Programme to remind our
employees of the support available to
them including: maintaining a healthy
work/life balance; improving mental
wellbeing; family issues; financial
management and money issues.

• In November we provided a hardship
payment to all those earning below a
certain threshold, recognising the cost
of living challenges faced through the
winter of 2022-23.

Key issues raised
• Development and progression

• Collaboration

• Remuneration

• Recognition

• Diversity and inclusion

Strategic reportAnnual Report 2022 – James Fisher and Sons plc

CUSTOMERS AND SUPPLIERS

LOCAL COMMUNITIES

ENVIRONMENT

Why we engage
The Group’s success depends on a deep
understanding of the challenges our
customers face, and the complexities posed
by the environments in which they operate.
In doing so, and ensuring a resilient supply
chain, we can adapt solutions to address
our customers’ needs, both locally and
globally. Additionally, we are co-dependent in
our shared net zero and wider sustainability
commitments and ambitions.

How the Board engages
• The Board receives regular updates from
business Managing Directors on their
strategic priorities, their markets, and key
customers.

• Through the Sustainability Committee,

the Board receives updates on
performance throughout the Group to
engage with and support our customers
and suppliers.

• Where appropriate, our Executive

Directors and divisional Heads work with
major customers to ensure we develop
innovative products and services and/or
to find solutions to their problems.

How we supported during 2022
• Investment has continued into innovation

in products and services to meet
customer needs.

• We have been working to ensure that
the Group’s sustainability strategy
and supporting activities encompass
our customers’ own social value
and environmental ambitions and
requirements.

• We have re-developed our supplier Code
of Ethics to align with our sustainability
strategy and the changing macro factors
affecting our business.

• Through the supplier working group,

we are identifying synergies and other
benefits of procurement co-ordination
between Group businesses.

Key issues raised
• Innovation and problem solving

• High quality service

• Trusted relationships

• Social and environmental impacts

• Payment practices

Why we engage
Aligned with our purpose and valued
behaviours, we conduct business
responsibly and sustainably to ensure that
we support the local communities that are
impacted by our global operations.

How the Board engages
• Through the Sustainability Committee,
the Board receives updates on the
community integration performance
throughout the Group.

• The Board actively encourages and
supports employees to engage with
projects across the UK and internationally
to help make a positive impact,
either through charitable fundraising,
volunteering time, education, for
example STEM learning support and
event participation, or collection and
distribution of items to support those less
fortunate or in need.

How we supported during 2022
• We have continued to support

employees’ local community initiatives
and events through donation of time,
material, or provision of expertise for
example STEM event participation and
local internships.

• A local communities working group

was formed to provide information and
recommendations to the Sustainability
Committee, identifying, driving and
influencing best practice initiatives
for implementation by the operating
companies of the strategy.

Key issues raised
• Environmental and social impacts of our

operations

• Health and safety

• Supporting people in difficult times

Why we engage
Our ambition to be net zero by 2050 is the
central commitment of our environment
focus area. It is evident that our activities
are inextricably linked to the environmental
effects of climate change and the energy
transition, which will determine the future
success of James Fisher.

How the Board engages
• The Board receives regular updates and
recommendations from the Sustainability
Committee on all nine of our focus areas,
including the environment working group.

• The Board engages with shareholders

directly to understand their Environmental,
Social and Governance (ESG) priorities.

How we supported during 2022
• The sustainability strategy was

implemented across the business with
three of our nine focus areas forming
our ‘planet’ pillar.

• An ongoing portfolio management
programme is aimed at aligning the
composition of the Group with our
sustainability objectives, material issues,
and stated commitments.

• We made progress to implement the
recommendations set out by the Task
Force on Climate-Related Financial
Disclosures (TCFD) and reached a position
published in our comprehensive TCFD
report in our 2022 Annual Sustainability
Report. A summary of disclosures can be
found on page 38.

• The Group continued its reporting and
disclosures in accordance with the
Carbon Disclosure Project (CDP) with an
accomplished score in 2022, and the UK
SECR regulation.

Key issues raised
• Climate change

• Energy transition

• Strategy and implementation

• Financial performance

• Governance

James Fisher and Sons plc – Annual Report 2022Strategic report32

Sustainability cont. / Alignment with sustainability frameworks

Current framework
alignments
We are committed to providing
comprehensive public disclosure
on our Group-wide sustainability
performance which is tracked
using well established frameworks
and with a continual alertness
to changes in regulations and
reporting requirements.

Science Based Targets (SBTi)
In guiding efforts in modelling the Group’s
pathway to net zero, we have adopted the
Science Based Targets initiative (SBTi) criteria
as these provide companies with a clearly
defined path to reduce emissions in line with
the Paris Agreement goals. We aim to reduce
our emissions in alignment with the SBTi
guidance once the measurement of the full
breadth of our Scope 1, 2 and 3 emissions
has been completed.

SBTi in 2021 paused commitments from
fossil fuel sector companies, for which we
currently fall into the threshold however,
we have remained committed to the SBTi
framework and principles, and to continuing
to provide responsible stewardship of oil and
gas (O&G) service provision. O&G companies
are in a position to impact efforts to net
zero significantly and we are monitoring the
SBTi ‘Oil and Gas Sector Project’ and new
methodology in development for this sector.

Task Force on Climate-Related
Financial Disclosure (TCFD)
The Group is making its 2022 disclosure
in accordance with the Financial Conduct
Authority (FCA) Policy Statement 20/17 and
listing rule LR 9.8.6R(8), consistent with
the recommendations and recommended
disclosures and supporting guidance from
the Task Force on Climate-related Financial
Disclosures TCFD.

Carbon Disclosure Project (CDP)
The CDP reporting structure promotes visibility
and accountability in our management of
climate-related risks and opportunities. We
received an accomplished scoresheet in
2022, our third year responding to the climate
change questionnaire, for the reporting period
1 October 2020 to 30 September 2021. With
an overall score C, five of the 11 categories
scored higher than the previous year.

CDP SCORESHEET CURRENT AND PREVIOUS YEAR

2022

Business strategy, financial planning
& scenario analysis

Value chain
engagement

Targets

Scope 3
emissions
(incl. verification)

Scope 1 & 2
emissions
(incl. verification)

2021

Value chain
engagement

Targets

Emissions reduction
initiatives

Energy

Governance

Opportunity
disclosure

Risk management
process

Risk disclosure

Business strategy & financial planning

Emissions reduction
initiatives

Energy

Governance

Opportunity
disclosure

Scope 1 & 2
emissions

Risk management
process

Risk disclosure

Refer to our TCFD report within our online

2022 Annual Sustainability Report.

Scope 3
emissions

Strategic reportAnnual Report 2022 – James Fisher and Sons plc33

GHG and UN SDGs
Alignments also include Greenhouse Gas (GHG) Protocol and the UN Sustainable Development
Goals (SDGs), further information can be found in our online 2022 Annual Sustainability Report
page 14. Additionally Carbon Reporting (SECR) for which our 2022 disclosure can be found
in the Directors’ report on page 113).

CURRENT MEMBERSHIPS
We are proud to be a signatory
to the Powering Net Zero Pact
(PNZP).

Contributing to the UN Sustainable Development Goals

The PNZP brings together different
companies across all tiers of the power
sector – including civils, shipping,
renewables, electrical engineering, and
others – that are committed to a fair and
just transition to net zero carbon emissions.

An initiative, legacy of COP26, created by
11 founding partners – SSE, Balfour Beatty;
DEME Group; GE Renewables; Hitachi
Energy; NKT; RJ McLeod; Siemens Energy;
Siemens Gamesa; Subsea 7; and Vestas,
the pact provides:

• A common ambition for a

sustainable future

• Collaborative working within the

power sector

• Engagement and commitment at a

senior level

Read more about our planned alignments
and memberships in our online 2022 Annual
Sustainability Report page 15.

James Fisher and Sons plc – Annual Report 2022Strategic report34

Sustainability cont. / Planet

FOCUS AREAS
• Portfolio choices
• Resource efficiency
• GHG emissions

All businesses are
responsible for global
efforts in solving the
challenge of climate
change.
Our sustainability agenda is focused on
transforming and continually improving
our business and day-to-day practices
to ensure our impact on the environment
is net positive, and that we enable our
stakeholders to do the same.

We are a diverse set of companies
operating at the intersection of marine,
defence and energy markets. Our activities
are inextricably linked to environmental
considerations related to climate change
and the energy transition.

Portfolio choices
Evolving our portfolio to serve
the energy transition with focus
on growing renewables and
remediation capabilities.

Through 2022 we have continued to review
and act on our portfolio choices. In December
we sold three non-core businesses to new
owners focused on taking those enterprises
to their next level of performance.

Our focus is on the energy transition, defence,
and marine sectors. As renewables and
remediation activities continue to receive
investment and grow, their share of the overall
Group revenue will also grow. Oil and gas
activities have also seen a resurgence in 2022,
and the Group maintains a focus on supporting
these markets in a manner consistent with our
sustainability focus areas.

Having identified various opportunities
through the scenario analysis conducted this
year, (for details see our TCFD report, 2022
Annual Sustainability Report page 53), we
aim to ensure that these opportunities are
realised through continued consideration and
opportunity monitoring both at Group and
operating company level where appropriate.
Opportunities include:

• New service opportunities from low carbon
transitions and low carbon infrastructure.

• Increasing demand for services from
negative impacts of climate change.

• New service opportunities from negative

impacts of climate change (e.g.,
infrastructure at risk).

During 2023 we aim to:

1. Continue to deliver on re-focusing our

portfolio.

2. Invest in and deliver returns from renewables

and remediation activities, in particular
enhancing the intellectual property and
access to critical assets which underpin
our market positions.

3. Support our customers through their own

energy transition journey.

OFFSHORE WIND GROWTH –
TAIWAN

In 2022, James Fisher Renewables
(JFR) was awarded a multi-million-
pound contract to provide high
voltage (HV) specialist personnel
and HV safety management
services at the Formosa 2 offshore
wind farm in Taiwan.

The Formosa 2 offshore wind farm project
is being jointly developed by JERA,
Macquarie’s Green Investment Group (GIG)
and Swancor Renewable Energy. GIG is
supported by its portfolio company, Corio
Generation. Once complete, the project will
provide 376MW of renewable electricity to
approximately 380,000 households and will
bring Taiwan’s Ministry of Economic Affairs
another step closer to achieving its target
of 20% renewables generation by 2025.

It is a real privilege to
play such a crucial role
in the construction of
Formosa 2, supporting
at the start of Taiwan’s
journey within offshore
wind – this next phase
into O&M represents
an exciting opportunity
for this region, and we
are looking forward to
once more sharing our
knowledge and skills
with the team.

Matthew Paterson
APAC Operations Director

Strategic reportAnnual Report 2022 – James Fisher and Sons plcJAMES FISHER APPOINTS
RENEWABLES EXPERT IN NORTH
AMERICA

Amidst the backdrop of unique
regulatory challenges such as the
Jones Act and local content
requirements, the US is racing to
meet offshore wind energy targets
by 2030. The appointment of Barry
Craig as Vice President
Renewables will enable both
James Fisher Renewables and
Scan Tech to support the country’s
offshore wind growth ambitions by
driving the identification of key
strategic opportunities and local
partnerships, in a bid to help
accelerate the global energy
transition.

For Scan Tech, this follows significant
development of its existing product portfolio
for the US, with its focus on adhering
to the highest emissions standards for
swift, compliant deployment. At the same
time, James Fisher Renewables, which
has led the charge in construction and
development of over 17GW of offshore
wind installed capacity in under 14-years, is
primed to apply its supply chain expertise
‘across the pond’.

Resource efficiency
We aim to ensure our resources
are used in a sustainable manner,
that we protect the life systems
that support the planet’s natural
resources, and that our workforce
applies social values and
environmental awareness when
carrying out their day-to-day tasks.

Good progress is being made with the
deployment of a Lean operating system
throughout the business and is critical for
the new BEx team.

The Lean Operating System pilot conducted at
RMSpumptools, helped the business to deliver
its highest throughput and revenue ever in 2022.
All operating companies are now completing
their Lean strategy deployment for 2023, setting
clear goals for growth and action plans linked
to clear visual indicators. The Lean Operating
System will roll-out across all of our operating
companies in 2023. The focus is on reporting
accuracy and cash collection, with the Lean
methodology enabling the BEx teams to ensure
we deliver improvements in these areas.

Responsible consumption
We seek to maximise the use of energy and
materials through responsible consumption
in processes and systematic functional
management of all business operations.
We can enhance awareness for day-to-day
responsible practices through re-use, recycle,
repurpose engagement and campaigns. This
is all done with a long-term view of delivering
more with less than is required today.

Through energy efficiency auditing,
consumption monitoring, and the application
of three R’s principles (reduce, re-use, and
recycle) we aim to reduce material waste and
conserve natural resources throughout the
business. With a focus on energy efficient
solutions and initiatives highlighted through
quarterly monitoring of waste generated
in operations, reduction targets will be
implemented by the Group in 2023.

During 2023, supporting our net zero
commitment, we plan to combine Energy
Savings Opportunity Scheme (ESOS) phase 3
site audits and reports with the identification
of best practice solutions, initiatives, and
engagement/participation campaigns for
implementation across the Group.

Waste is connected to every one of the United
Nations’ SDGs, and minimising it is an integral
element of our sustainability strategy. During
2022 our focus has been improving our data
collection processes Group-wide, our tracking
methods, and on setting a baseline for material
waste generated in operations.

2023 will see use of the improved tracking
system and work towards Group-wide efforts
in reducing our material waste. Several
initiatives and campaigns are being explored to
ensure we utilise all available leverages in doing
so. For example:

• Energy efficiency in buildings, determining

areas for improvement through internal audit.

• Re-use and repurpose of stores packaging.

• Local community opportunities for the

repurposing of materials which have reached
the end of lifecycle within our business
(metals, and electronic equipment for
example).

METRICS AND TARGETS

The Group will track and report on energy
efficiency through our GHG emissions
Scope 1 and 2 GHG emissions target.
We will continue to evaluate and measure
Scope 3 emissions in line with the GHG
Protocol Standards.

Refer to Key Performance Indicators

page 56 for further details.

James Fisher and Sons plc – Annual Report 2022Strategic report
36

Sustainability cont. / Planet cont.

Greenhouse Gas (GHG) emissions
We are committed to minimising and possibly eliminating the detrimental
impact of greenhouse gas (GHG) emissions from our operational activities.
We also recognise the importance of helping our customers reach their
own net zero emissions targets.

James Fisher is committed to achieving net zero across our global operations by 2050.

From today, we are making a science-based commitment to achieve net zero greenhouse gas
(GHG) emissions by 2050. In this context, net-zero means reducing the Group’s Scope 1 and
2 GHG emissions to as close to zero as possible by 2050 and applying a residual strategy to
neutralise the residual emissions.

Further details can be found within our GHG emissions section below, and full details within

our TCFD disclosure report, part of our 2022 Annual Sustainability Report, which can be
accessed online www.james-fisher.com/our-approach/sustainability.

Many of the countries that we operate in, have made a commitment to significantly reduce or reach
net zero carbon emissions in line with the Paris Agreement. We recognise that the transition to a
net zero economy will affect certain sectors within which we operate and that it will take innovation,
technology change, and resources, both human and financial, to achieve a net zero ambition.

This is an undertaking we are passionate about and are pleased to be making our 2022 disclosure
in accordance with the Financial Conduct Authority (FCA) Policy Statement 20/17 and listing rule LR
9.8.6R(8), consistent with the 11 recommendations and supporting guidance from the Task Force
on Climate-related Financial Disclosures TCFD.

Summary of results below for our GHG emissions reporting year 1 October 2021 to
30 September 2022.

EMISSIONS TYPE/SCOPE (tCO2e)

In 2022 we moved from manual data
collection, assessment, and impact reporting
to an SAAS (Software as a service) solution,
an accredited CDP gold software partner.
This identified a significant emissions data
input error and minor variances due to different
conversion factors used, that required us to
re-calculate our GHG emissions for the
reporting year 2020-21.

Additionally, during this transition, it was
recommended that our baseline and impact
disclosures should be based on location-based
results, where previously, we reported using
market-based data.

The re-calculation resulted in the Group’s
scope 1 and 2 baseline reducing from
114, 374 tCO2e, to 84,711 tCO2e.

The Group’s GHG emissions impact
disclosures are based on location-based
results. We used verifiable activity data, namely
meter data and invoices, where reasonable
and practicable. Where verifiable data was
not available, estimates based on data from
previous comparable time periods were used.

Our greenhouse emissions were calculated
in accordance with the requirements of the
GHG Protocol: A Corporate Accounting and
Reporting Standard, revised edition.

7,906

3,367 1,582

18,071

29,505

76,684

855

1508

s
n
o
s
s
m
e

e
v
i
t
i
g
u
F

y
r
a
n
o
i
t
a
t
S

n
o
i
t
s
u
b
m
o
c

n
o
i
t
s
u
b
m
o
c
e

l
i

b
o
M

y
g
r
e
n
e

d
e
s
a
h
c
r
u
P

s
t
e
s
s
a

d
e
s
a
e

m
a
e
r
t
s
p
U

-
y
g
r
e
n
e
d
n
a

e
u
F

s
e
i
t
i
v
i
t
c
a
d
e
t
a
e
r

e
v
a
r
t

s
s
e
n
s
u
B

r
e
t
a
W

g
n
i
t
u
m
m
o
C

s
n
o
i
t
a
r
e
p
o

d
e
t
a
r
e
n
e
g

e
t
s
a
W

GHG emissions category

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

Key

Scope 1
Scope 2
Scope 3

A more detailed breakdown of our 2022 GHG emissions can be found in our 2022 Annual

Sustainability Report page 19, and within our TCFD report pages 58 to 60.

tCO2e % SPLIT 2022

43%

Total:
139,554
tCO2e

56%

Scope 1 (77,603 tCO2e)
Scope 2 (1,508 tCO2e)
Scope 3 (60,444 tCO2e)

Strategic reportAnnual Report 2022 – James Fisher and Sons plc

Carbon reduction efforts throughout the Group
In our day-to-day operations and buildings we have various initiatives that contribute to our
carbon reduction pathways. They include:

DELIVERY OF FIRST DUAL-FUEL
TANKERS

GROUP-LED INITIATIVES

OPERATING COMPANY INITIATIVES

Transitioning to one (renewable) energy
supplier in the UK: three businesses have
entered into a bespoke contract with others
to follow in line with contract renewals.

Utilisation of ESOS phase 3 audits outcomes
in 2023 to drive and promote efficiency and
reduction opportunities.

The Group’s BEx programme will improve
efficiency through greater productivity,
efficiency measures and streamlining of
our systems and global processes.

The Group is re-developing its business
travel policy guidance to ensure specific
considerations are made for example
necessity and means/class of travel.

In order to maintain and promote the good
habits which developed through the COVID-19
pandemic travel restrictions we have endorsed
ongoing working from home arrangements
which contributes to a reduction in GHG
emissions created through commuting, also
to wellbeing, engagement, and reduction in
travelling costs.

In 2022 the Group reviewed its employee
benefits taking into consideration our
sustainability areas of focus and in 2023 will
include the implementation of a salary sacrifice
scheme for electric vehicles.

We are looking into the use of Voltage
optimisers to reduce CO2 emissions and
energy costs, while prolonging the life and
reliability of all equipment.

JFD installed electric vehicle (EV) charge
points at two of its UK locations in 2022 and
plan to add further locations. Additionally they
are piloting EV fleet vehicles: the first two will
be delivered in 2023. Scan Tech AS Norway
has also installed EV charge points.

Reduce, re-use and recycle initiatives and
campaigns to promote innovative and
responsible behaviour have been introduced
throughout various operating companies.
This will be further enhanced by the Group
in 2023.

IT equipment at Scan Tech AS is collected
through a loop refund agreement meaning
the equipment is considered for re-use
and recycling.

Various operating companies are exploring
the use of window/door contact sensors,
where the heating system and/or HVAC
moves to standby whenever a window or
door is opened.

Initiatives such as energy efficient lighting,
energy efficient appliances and removing
single-use drinking containers are continuing
to be rolled out across our operating
companies.

Having maintained good practices
post-pandemic (utilisation of digital and
remote capabilities for example, as well as
inclusion of Group determined reduction
options within operating companies’
strategies and reduction plans for 2023),
we expect to see a significant acceleration
in new, innovative, and impactful carbon
reduction initiatives in 2023.

Further information, including vessels’ efficiencies, read our TCFD disclosure, pages 63 to 64

in our 2022 Annual Sustainability Report.

James Fisher’s second LNG dual-fuel tanker,
the Lady Maria Fisher, scheduled for sea
trials in January 2023 (successfully
completed at the time of report published)
will soon join its sister vessel, Sir John Fisher.

Sir John Fisher, the first of two LNG
dual-fuel tankers.

METRICS AND TARGETS

Summary of results can be found in our

non-financial key performance indicators
page 56 and detailed results can be found
within our TCFD report pages 58 to 62.

James Fisher and Sons plc – Annual Report 2022Strategic report
38

Sustainability cont. / Planet cont.

Transition to net zero
and TCFD disclosures
James Fisher is making its 2022
disclosure in accordance with
the Financial Conduct Authority
(FCA) Policy Statement 20/17 and
listing rule LR 9.8.6R(8), consistent
with the recommendations and
recommended disclosures and
supporting guidance from the Task
Force on Climate-related Financial
Disclosures TCFD.

We have provided a summary below including
status of full disclosure and where disclosures
can be found for each recommendation. In line
with Listing Rule 9.8.6R, we have published
the full TCFD disclosure within our 2022 Annual
Sustainability Report which encompasses
and provides greater detail on all sustainability
topics and performance. The Group’s Annual
Sustainability Report is, effective from reporting
year 2022, a separate, online report, consistent
with our responsible consumption efforts, and
is published alongside our Annual Report and
Accounts.

Providing the summary within our Annual Report and Accounts is consistent with our commitment
to put sustainability at the heart of the Group’s strategy.

You can read our full TCFD disclosure report in our 2022 Annual Sustainability Report

www.james-fisher.com/our-approach/sustainability. Contents and page numbers within
the 2022 Annual Sustainability Report are shown in the table below.

During 2022 the Group completed the identification, impact and reporting for climate-related
risks and opportunities, and how these map over the short-, medium-, and long-term. It has also
extended the metrics used by the Company to support the implementation of these.

Our understanding and management of climate-related risks and opportunities has been
enhanced through a detailed qualitative and quantitative scenario analysis exercise. We have
evaluated the results of this scenario analysis at multiple levels within the business, including
at Company Board-level, and are using them to influence our business strategy and financial
planning. We have also concluded the mapping of our emissions reduction pathways for
Scope 1 and Scope 2 emissions which demonstrate pathways to achieving the net zero ambition.

We make climate-related disclosures consistent with the TCFD recommendations and
recommended disclosures in this TCFD summary against:

• Governance (all recommended disclosures);

• Risk management (all recommended disclosures);

• Strategy (all recommended disclosures); and

• Metrics and targets (disclosures (a) and partial disclosures (b) and (c)).

For metrics and target (disclosures (a) and partial disclosures (b) and (c)), further work is underway to
establish our GHG emissions baseline for applicable Scope 3 categories, and subsequent Scope 3
target setting, monitoring and assurance to ensure full compliance in the future. This is being managed
at the Group level through our GHG emissions performance and disclosure, and Scope 3 expansion
activities. Further details can be found within the 2022 Annual Sustainability Report page 57.

TCFD recommended disclosures
GOVERNANCE
Disclose the organization’s
governance around climate-
related risks and opportunities.

STRATEGY
Disclose the actual and potential
impacts of climate-related risks and
opportunities on the organization’s
businesses, strategy, and financial
planning where such information
is material.

RISK MANAGEMENT
Disclose how the organization
identifies, assesses, and
manages climate-related risks.

METRICS AND TARGETS
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks
and opportunities where such
information is material.

a) Describe the board’s oversight
of climate-related risks and
opportunities.

b) Describe management’s role
in assessing and managing
climate-related risks and
opportunities.

Status: Disclosed

Page 43

Status: Disclosed
Pages 43 to 46

a) Describe the climate-related
risks and opportunities the
organization has identified over
the short, medium, and long
term.

b) Describe the impact of climate-
related risks and opportunities
on the organization’s
businesses, strategy, and
financial planning.

c) Describe the resilience of the

organization’s strategy, taking into
consideration different climate-
related scenarios, including a 2°C
or lower scenario.

Status: Disclosed

Page 46

Status: Disclosed
Pages 47 to 53

Status: Disclosed
Pages 51 to 53

a) Describe the organization’s

processes for identifying and
assessing climate-related risks.

b) Describe the organization’s
processes for managing climate-
related risks.

Status: Disclosed

Pages 43 to 45,

and page 55

Status: Disclosed

Page 54

a) Disclose the metrics used by the
organization to assess climate-
related risks and opportunities
in line with its strategy and risk
management process.

b) Disclose Scope 1, Scope 2
and, if appropriate, Scope
3 greenhouse gas (GHG)
emissions and the related risks.

c) Describe the targets used by the
organization to manage climate-
related risks and opportunities
and performance against targets.

Status: Disclosed
Pages 57 to 58

Status: Scope 1 and 2
emissions disclosed. Scope 3
emissions in process.
Pages 58 and 59

Status: Scope 1 and 2 climate
targets disclosed. Scope 3
targets in process.
Pages 60 to 65

c) Describe how processes for
identifying, assessing, and
managing climate-related
risks are integrated into the
organization’s overall risk
management.

Status: Disclosed

Page 56

Strategic reportAnnual Report 2022 – James Fisher and Sons plc39

Climate-related Governance
The Company’s Board of Directors (the Board) has ultimate responsibility for the Company’s climate change strategy and oversees progress
against climate-related targets. The Board has at least seven scheduled meetings per year and considers climate-related risks and opportunities
on a continuous basis, such as when deciding on the strategic direction of the Group, acquisitions and divestments, access to capital or deciding
on major capital expenditures.

The Board delegates day-to-day responsibility for the climate strategy to the Group CEO but is kept informed of climate-related issues via
management structures including the Risk Committee, the Sustainability Committee, the Audit Committee, and the Group Support Functional leads.
A summary of this Governance structure is provided in Figure 1. Further information of how these bodies work together to manage risk is provided
within the principal risks and uncertainties section of this report page 62, and with our 2022 TCFD report page 43 to 45.

Figure 1. Governance framework overview

The Board
Ultimately responsible for climate change strategy.
Retains an oversight role and receives regular reports.
Considers climate-related risks and opportunities when making strategic decisions.

Audit Committee
Monitors effectiveness
of company’s risk
management controls.

Chief Executive Officer
Delegated day-to-day
responsibility for climate
change strategy.

T
o
p
-
D
o
w
n
R
s
k
M
a
n
a
g
e
m
e
n
t

t
n
e
m
e
g
a
n
a
M
k
s
R
p
U
-
m
o
t
t
o
B

Internal Audit Function
Conducts audit
assurance for all risks
including climate risks.

Executive Committee
Support Executive
Directors in the exercise
of delegated authority,
including risk management.

Group Risk Committee
Meets quarterly, reviews
risks including climate-
related risks.

Sustainability Committee
Meets monthly, assesses
and manages climate risk
and opportunities.

Group Support Functions
Support the Group operating companies.
Each functional team reports to or is led by a member of the
Executive Committee.

Group Operating Companies
All manage their own risk register and report on principal risks
and mitigating activities to the Risk Committee.

Legend:

Board elected committee / office

CEO chaired committee

Operations and functions

Climate change is an important consideration in defining the strategic direction of our businesses. To this end, we have conducted a detailed
scenario-analysis exercise aligned to the TCFD recommendations with support from SLR Consulting, an external specialist consultancy.

We have begun incorporating scenario analysis into our risk management processes. This is beneficial in assessing the potential size of risks
(through a risk score) and the potential scope of those risks (through projecting that risk score across time horizons and climate scenarios).

James Fisher and Sons plc – Annual Report 2022Strategic report

Sustainability cont. / Planet cont.

Emissions reductions targets
The results of our reduction pathway modelling have been used to inform the
setting of emissions reduction targets for Scope 1 and 2 which are science-based,
measurable, realistic, and ambitious.

Scope 1 and 2 emissions targets
The Group has selected the absolute contraction approach. With this approach,
the Group is committing to an overall reduction in GHG emissions to the atmosphere
in the target year relative to the base year (e.g., reduce annual emissions by 38% by
2030, from 2021 levels).

The Group’s emissions reduction targets are based on the 1.5°C trajectory in line
with the goals of the Paris Agreement and requirements for setting a science-based
target (SBT). This is equivalent to an absolute reduction of approximately 4.2% per
annum. The 1.5°C trajectory represents the emission reductions required by the
Group to reach net zero by 2050 in order to contribute to international efforts
to limit global warming to 1.5°C above pre-industrial levels.

Scope 1 and 2 reduction targets

2025
-17%

2030
-38%

2050
Net zero

% reduction relative to the base year.

The energy intensity of our vessels will be measured internally, using the Carbon
Intensity Index to align with the International Maritime Organisation’s climate goals,
and in line with SBT guidance, will lead to absolute emission reductions which will
be reported on within the Annual Report and Accounts from 2023. We will track the
energy intensity across the business so that we understand the impact of growth
on our absolute targets. We are tracking two intensity indicators; the CO2e/FTE and
CO2e/£m revenue, and the MWh/FTE and MWh/£m revenue. We will report on these
year on year, using 2022 as our baseline.

A selection of the reduction opportunities identified through the Group’s reduction
pathway modelling is summarised below. All of which are viable reduction
opportunities for all three time periods, spanning all shipping companies.

For more details and to view our full 2022 TCFD disclosure

see our separate 2022 Annual Sustainability Report.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc41

VESSEL’S REDUCTION
OPTIONS (NOT LIMITED TO)

DESCRIPTION

Speed management

Draft displacement optimisation
in ballast

Fuel switch – MFO to MGO

Develop and implement a standard
operating procedure for slow steaming,
which considers expected time of arrival,
weather, currents, etc.

Develop and implement a standard
operating procedure for draft
displacement optimisation in ballast.
This includes training of the crew.

Develop and implement a green
procurement policy which includes a
requirement for vessels to switch from
marine fuel oil (MFO) to marine gas oil
(MGO) in all locations.

Fuel switch – MFO/MGO to biofuel Develop and implement a green

Auxiliary system optimisation

Air cavity lubrication
(medium-term, long-term)

Hybridisation – conventional
hybrid ship (medium-term,
long-term)

procurement policy which includes a
requirement for vessels to switch from
MFO/MGO to biofuel where biofuels are
readily available and increase in costs is
within the accepted pricing strategy.

Develop and implement a standard
operating procedure for optimising
the vessel's auxiliary systems, thereby
reducing fuel consumption and GHG
emissions. Procedure to include both
operational and technological options
for matching the auxiliary system to the
vessel's operating profile.

Develop and implement a green
procurement policy which includes a
requirement for new builds to include
air cavity lubrication where feasible.
The policy should also include a
requirement for chartering of vessels
with air cavity lubrication where feasible
in the long-term.

Develop and implement a green
procurement policy which includes a
requirement for new builds/chartered
vessels to include hybrid propulsion
system where feasible.

Despite vessels accounting for the vast majority of the Group’s carbon footprint, a
significant reduction in emissions out-with vessels, for example from fleet vehicles,
offices, and industrial facilities, is an important part of our net zero commitment.

Read more about our carbon reduction activities on page 37.

James Fisher and Sons plc – Annual Report 2022Strategic report42

Sustainability cont. / People

FOCUS AREAS
• Top talent
• Equity, diversity and inclusion
• Health, safety and security

Our employees are
our most important
assets and are critical
to the operation of our
business. United by
a common purpose
and shared valued
behaviours, their
pioneering spirit,
integrity, energy, and
resilience enable us to
create value for all our
stakeholders.
With James Fisher operations spread
across six continents, our people are
geographically dispersed and represent
a multitude of cultures. We will continue
to develop and build upon a culture
which allows them to use their skills and
to develop career paths for realising their
potential.

We are committed to ensuring that
sustainability is at the heart of everything
we do, and nothing is more important than
keeping our employees and service users
safe in all their activities.

Top talent

Engagement

Wellbeing

Talent
management

Key drivers for sustainability focus area top talent are; stakeholder working groups; engagement,
wellbeing, and talent management.

Top-down approach
We believe that managers must lead by example and be strong advocates
for our talent initiatives to be successful for both the business and our
people. Employee engagement and talent management are important for
both individuals and company performance, but unsustainable unless it
goes hand-in-hand with employee wellbeing.

EMPLOYEE EMPOWERMENT

We aim to build a foundation for success across the business by
empowering our people to grow and drive performance. We aim to ensure
our people are provided with experiences, through mentoring and
secondment opportunities and participation in activities which fall outside
their day-to-day roles and we believe this is crucial in retaining top talent.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc2022 was an exciting
year from a learning and
development perspective.
Forming new L&D
partnerships with Corndel,
Capita, Working Voice and
MTD training, will ensure
we can continue to provide
a suite of learning for all
employees to enable their
continuous growth in their
specified fields of expertise.
Supporting the growth and
development of our internal
talent is key…, this makes
James Fisher a very exciting
Company to work in.

Laura Porter TAP, cert
Learning and Development
Business Partner

Talent management
Change does not happen overnight, but small
changes in day-to-day behaviours can and
will lead to improvement. Through continual
consideration and demonstration of sustainable
practices, including talent management, we
are more likely to have aligned values with our
employees.

Following on from our ‘Leading in an Inclusive
World’ series in 2021, we are developing
a ‘Leading the Business programme’ (LTB).
Manager behaviour is pivotal to engagement,
wellbeing, and retaining top talent. Managers
therefore represent a vital lever for creating a
workforce that is both engaged and well.
A performance series has been developed
and delivered through virtual and digital
learning support, with focus on creating a
culture of performance conversations through
line manager and employee communication,
and objective setting for success.

A career development toolkit has been
launched to help employees own, design, and
drive their career progress, create opportunities
for career development benefiting both our
employees and the business, and create a
workforce that is pioneering, agile, and able
to respond to the ever-changing external
environment.

During 2023 we plan to develop training
further to:

• Help our leaders focus on what matters

• Help managers become better coaches

• Help our employees do their best work

Our 2023 priorities include:

• Identifying our high potential: We plan to
review our current processes and define
our key indicators with focus on simplifying
for our people whilst being effective for our
business needs.

• Retain our top talent: During 2022 we

identified a number of areas for improvement
and aim to design and implement these
during 2023.

• Employee development: We aim to further
enhance this area through onboarding,
continual learning and development,
performance management and talent
mobility.

CAREER DEVELOPMENT/
INTERNAL PROGRESSION

The size and diversity of our Group
presents vast opportunities for
career growth.

Employees from across the Company are
encouraged and supported to progress
their careers internally, with development
opportunities made available across the
breadth of the Group’s activities and
regions.

Sebastian (Seb) Scorrer, now Strategy and
Sales Analyst at EDS, is one example of an
employee who recently took advantage of
moving between operating companies and
specialisms in pursuit of his personal goals.

Explaining the drivers behind his decision to
adjust his career path and upskill, Seb said:

“The motivation behind the move was to

branch into renewables. As sustainability
is a part of my personal life, I wanted to
feel like I was ‘doing my bit’ in my work
life too. I also just felt like it was time for
a change, and it’s good that at James
Fisher we can move within the business
when that is the case.”

In making this decision and in the
experience he has subsequently had in his
new role, Seb feels he has received and
benefitted from a large amount of support:

“(I’ve had) Loads! A big one was EDS
encouraging me to get my GWOs –
these are safety qualifications that allow
me to go offshore/onsite…. I’ve also
been invited to/involved in a few senior
leadership team meetings which I really
enjoy. Just listening to how everyone
interacts and also getting a better all
rounded business knowledge has
helped.”

James Fisher and Sons plc – Annual Report 2022Strategic report44

Sustainability cont. / People cont.

Engagement
We believe engagement in the
Company's sustainability work
enhances employee job satisfaction,
providing employees with a sense
of belonging, drive, passion, and
purpose, and ultimately ensures
growth and long-term prosperity
for our people and the business.

During 2022 our engagement champions,
who act as representatives from throughout the
Group, have been fully trained and are actively
supporting their operating company managers
and local activities.

We are working to create a physical and
emotional connection that develops a shared
purpose, and commitment with our people.

FOGHORN: JAMES FISHER’S
EMPLOYEE ENGAGEMENT
SURVEY

A short, multiple-choice survey
administered independently
through Gallup, a global analytics
and advice firm and employee
engagement partner to the Group.

It’s like a self-fulfilling circle; the
more engaged your colleagues and
employees are, the more successful
the company. The more successful the
employees are, they develop further
and advance which further engages.

Inken Braunschmidt
Non-Executive Director for Employee Engagement

Following our 2021 engagement survey (the
results of which are reflected in our 2022
engagement and retention metrics), and results
analysis, the engagement working group
committed to, and achieved, the following key
objectives:

• Reduce voluntary turnover across the

Group. This was 1.5% for January 2022 and
reduced to 0.9% in December 2022.

• Monitor the Group retention rate (engaged
employees are less likely to leave).This rate
was maintained at around 98% from January
– November 2022. December retention rate
dropped to 94% due to the sale of Mimic,
Strainstall UK, and Prolec.

• Encourage a performance culture through

the giving and receiving of feedback.
Throughout 2022 the number of employees
giving feedback increased from 3.8%
to 8.3% (positive) and 1.1% to 2.3%
(constructive). Employees receiving
feedback increased from 8.2% to 16.1%
(positive) and 1.2% to 2.4% (constructive).

• Support line managers to interpret and

share their engagement survey results with
their teams, and to create and progress
action plans.

• Support the promotion of the accountability
index survey (May 2022) which maintains
the engagement momentum and gives an
indication of how a team may score in the
following annual engagement survey.

The survey and results analysis are cascaded
to our senior leadership teams. A number
of steps, personalised to each operating
company, are then outlined for action. Each
operating company has the flexibility to tailor
best solutions and improvement opportunities
for the business, with a directive on timelines
and progress reporting led by the Group.

INTERNAL COMMUNICATION
HUB LAUNCHED

JFN has taken active steps
to improve its internal
communications. During 2022
JFN launched an ‘Internal Comms
HUB’, bringing together internal
communications from across the
company into one central, easy to
access place. Its weekly Business
as Usual newsletter has evolved
into the main feature, making for
a more dynamic channel allowing
for more immediate publication
of news and announcements.

Strategic reportAnnual Report 2022 – James Fisher and Sons plcWellbeing
A renewed focus for the wellbeing
working group in 2022 provided a
preventative, culturally challenging
and sustainable approach to
delivering a physically and mentally
healthy workplace in which our
employees can thrive.

We identified ‘big picture’ topics and
developed a series of strategic areas of focus
which have an emphasis on preventative
measures which focus on the causes,
not just the symptoms:

• Awareness Training

• Campaigns

• Connectivity

• Mental health first aiders

• Planning/policy

Building on our commitment to train 50% of
the mental health first aid (MHFA) population
in suicide first aid (SFA), the first of our
sessions by our MHFA England training
provider commenced in August 2022. We
are proud to have SFAs in our business and
continue to build on the numbers into 2023
with a committed target as detailed in the Key
Performance Indicator section page 56.

The wellbeing intranet page was published in
2022 creating a hub for information, guidance,
working group news, contact information and
useful resources. The annual engagement
survey update incorporated the inclusion of
wellbeing specific question(s), and a campaign
calendar has been co-designed with Group
Marketing contributing to mental health
and wellbeing awareness and support, for
example World Suicide Prevention Day 2022,
stress awareness month, and Breast Cancer
Awareness Month.

SHARING THE MESSAGE OF
BREAST CANCER AWARENESS

October 2022 marked Breast
Cancer Awareness Month and we
took the opportunity to share the
support on offer to those affected
by cancer.

Several colleagues shared tips and
resources to help promote this topic
including Emma Holmes, Contracts
Manager at JF Subtech and head of the
Group’s wellbeing working group who
shared some great advice.

“Life can be busy and distracting, so
I signed up to CoppaFeel’s monthly text
alerts which remind me to check. I would
highly recommend visiting the website –
they have some great instructional videos
and leaflets which guide you through the
signs and symptoms of breast cancer,
and help you get to know your chest.”

On 30 September 2022, teams from James
Fisher and Sons plc, JFN and EDS HV
Group came together to assist Macmillan
Cancer Support by raising funds through
an organised Coffee Morning in Bamber
Bridge, UK.

METRICS AND TARGETS
In our 2021 Annual Report and Accounts
we reported our intention to set a target
and measure and report on our employee
engagement score. We are pleased to
confirm this has now been implemented.

Refer Key Performance Indicators page

56 for further details.

THIS IS A CONVERSATION
STARTER

The JFD teams at Bibra Lake and
Perth, Australia, have recently
taken up a new fun, bespoke
piece of PPE to wear on Fridays
in the office and after work in
public spaces.

Embellished with a multi-coloured pattern
on the lower torso, sleeves and collar, the
back of the PPE hosts an eye-catching
phrase – ‘This is a conversation starter’ –
to literally start a conversation around the
garment and the awareness around men’s
health it is trying to raise.

We are proud to see our teams across
the world coming together in honour of
supporting charitable causes.

BANDING TOGETHER FOR
MOVEMBER

Banding together for Movember
and men's health in November
2022, our colleagues at James
Fisher Everard (JFE) from our
Tankships Division, worked
together to raise awareness by
completing a distance of 60km
between them.

JFE are used to supporting the health and
safety of men and women onboard the
Group’s fleet of tankers. Similar to their
daily operations in this way, their charitable
work looks for an external way to continue
supporting the mental health and wellbeing
of others.

James Fisher and Sons plc – Annual Report 2022Strategic report46

Sustainability cont. / People cont.

Equity, diversity and
inclusion
There was significant progress
through 2022 due to improvements
made to our learning and
development, internal recruitment
documentation and exit interview
procedures that strengthen ED&I
throughout the employee lifecycle.

2022 saw the launch of our first annual ED&I
survey, developed in conjunction with Gallup.
Key findings from this survey were:

• People feeling like they can be themselves
at work and feeling that everyone is treated
fairly

• There are opportunities available to discuss

diversity more openly

• There is a strong correlation between our
local employee engagement, company
advocacy and ED&I scores

Additional activities during 2022 included
a review of learning and development and
internal recruitment documents to provide
greater diversity coverage, and the team
contributed to an overhaul of our exit and
new starter feedback processes.

The annual ED&I survey results helped to
determine the following key objectives for
2023:

• Increasing ED&I survey response rate

from 55%

• Building on our ED&I overall index score

of 4.03

We are implementing metrics to measure
and monitor response rates for the newly
implemented annual ED&I survey, and
performance in relation to diversity within
specific employee tiering bands for example
senior leadership teams, and female
attrition rates.

At James Fisher our commitment to
equality, diversity and inclusion extends
beyond our own workforce. We aim
to benefit and positively influence the
communities where we live and work
through proactive engagement,
employing local people, contributing to
local economies, and investing in local
supply chains.

In line with regulatory requirements, our gender pay gap information is listed below.

GENDER DIVERSITY METRICS, 2022 VS 2021

2022

2021

Gender diversity

Male

Female % Female

Male

Female % Female

Board Directors(1)

Executive Team(2)

Senior Managers(3)

Employees

Total

102

1,724

1,836

493

531

38%

29%

24%

22%

1,991

2,074

577

617

25%

33%

22%

23%

(1) In Q1 2022, we appointed Claire Hawkings to the Board, increasing the total of Main Board

Directors to eight and raising the % female metric up to 38%.

(2) Excludes Jean Vernet and Duncan Kennedy in calculation.

(3) Movement in % female metric is due to the extension of the Executive Team to include heads of

operating divisions.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc
47

REDRESSING THE BALANCE

In March 2022, Subtech South
Africa (Pty) Ltd completed a major
Broad-Based Black Economic
Empowerment (B-BBEE)
transaction, transferring a 51%
stake in the business to South
African black owned consortium,
Tacenda Consulting (Pty) Ltd
(100% black female owned) and
Thembani Shipping (Pty) Ltd.

South Africa introduced B-BBEE policy
in 2003 to redress the unjust effects
of the apartheid past. Aligned with the
goals of B-BBEE, James Fisher Subtech
has invested in, and is committed to the
socio-economic development of black
South Africans through employment,
management, and ownership opportunities
within Subtech South Africa.

This is a powerful
example of what can
be achieved through
meaningful Broad-
Based Black Economic
Empowerment.

Nomkhitha Mbele
Director at Subtech South Africa

James Fisher and Sons plc – Annual Report 2022Strategic report48

Sustainability cont. / People cont.

Behind the scenes
At James Fisher, community within the
workplace is the lifeblood of our business.
We want our employees to feel they are
working towards a greater goal as a source
of inspiration within themselves, their roles,
and their local communities day-to-day.

As part of continuing efforts to develop a
sustainable and inclusive culture throughout
the Group since launching our sustainability
strategy in 2022, our internal community
hub planned for launch in 2023 will be the
heart of ‘we are one’. The intention behind
the community hub is to bring our people
together, improve knowledge sharing,
increase personal employee connections,
improve productivity, and empower
employees of all backgrounds to share
their experiences.

In 2023 we will continue to:

• Work with local communities as

collaborators and partners in order to
strengthen existing partnerships

• Support STEM initiatives, promote education

in local schools and explore further
partnership opportunities

• Engage customers and suppliers on their
community development efforts, with the
intent to collaborate where possible

FUTURESTARS CHARITY

James Fisher is proud to support
Futurestars Charity in Ghana,
an education-through-sports
charity founded in 2018.

One of its latest projects has been the
refurbishment of Twedaase School.

The assistance the charity has rendered the
local community in Ghana is amazing, and
we are honoured to be part of the team!

SUPPORTING THE ARMED FORCES

Local community integration
Our objective is to be a good citizen and active
member of the community through:

• Encouraging our employees to engage and

make a difference

• Creating local employment and sourcing
opportunities within our communities

• Investing and engaging in people

development, wellbeing, training, and other
initiatives to enhance the lives of people in
the community

We have had an outstanding year in terms of
supporting our local communities and we are
exceptionally proud of the time and effort our
employees across the Group have dedicated
to this focus area.

Group-wide, we remain committed to
supporting local charities and organisations,
and for our employees to engage directly with
the people we are helping, in order to maximise
impact. As part of that commitment, the Group
is formalising its endorsement of one workday
allocation per employee, per annum, to
support their local community.

During 2022 we formed a communities
working group which has been actively working
in preparation for planned activities in 2023
which include:

• A comprehensive data gathering exercise

ensuring we are capturing all local
community efforts

• Development of an internal hub for

the James Fisher community including
discussion and collaboration forum

• Regional reviews to ensure global coverage

and determine where our operating
companies can join forces and support local
communities through collaboration

• Development of standardised guidance for
those looking to identify suitable charities/
organisations in their area

JFN PROUD TO SUPPORT SKILLS FAIR IN FEBRUARY 2022

Alongside various businesses, training
providers and national employers exhibiting
at the #Workingtonskillsfair, Mechanical
Design Engineer, Sophie Cullen, and EC&I
Design Manager, Duncan Oates, took time
out of their busy schedules to speak with
young people about their future aspirations
and to explore the potential career
opportunities available at JFN.

Various James Fisher companies have
committed to supporting the Armed Forces
community, demonstrated by their signing
of the Armed Forces Covenant. In alignment
with this pledge, the companies will
endeavour to uphold the key principles
of the Covenant in its business dealings.

Refer to our online 2022 Annual

Sustainability Report for further information
and examples.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc2022 COMMUNITY INITIATIVES
Spanning five countries
worldwide, 93 initiatives were
conducted in 2022 totalling
2334.5 people hours donated.

Split by theme (Hours donated)

Total number of
hours donated:
2,334.5

Charity (1,511.5)
Donation (3)
Fundraising (11)
Health and wellbeing (144)
Hobby (0)
Local business support (55)
Local community group (198)
School/education (396)
STEM (16)

Split by country (Number of initiatives)

Total number of
initiatives: 93

Australia (3)
Netherlands (1)
Singapore (1)
South Africa (14)
UK (74)

VOLUNTEERING AT WALKMILL COMMUNITY WOODLAND

Walkmill Woodland is a vital and much-loved green space for the
communities of Moresby near Whitehaven. The 36-hectare site is of
significant interest in terms of its heritage woodland and habitats, and its
social history and industrial archaeology.

‘A Wilder Walkmill’ project is funded by the National Lottery Heritage Fund and JFN have been
signing up volunteers to help with various activities.

• Tree/hedge planting

• Wildflower meadow sowing

• Footpath maintenance and repair, boardwalk and step construction

• Pond construction and maintenance

• Bridge construction

• Citizen science surveys – such as butterfly monitoring and wildflower identification

• Fence removal

METRICS AND TARGETS
In our 2021 Annual Report and Accounts we reported our intention to set a target and
measure and report on our community efforts. We are pleased to confirm this has now been
implemented.

Refer to the Key Performance Indicators page 56 for further details.

James Fisher and Sons plc – Annual Report 2022Strategic report50

Sustainability cont. / People cont.

Health, safety and
security
Our overarching goal remains to
maintain the health and safety of our
employees, contractors, suppliers,
and customers at all times.

The nature of our operations means that
we frequently face hazards and harsh
environments for which we are well prepared,
trained and equipped.

We want people, including those benefitting
from our products and services, to return safely
to their homes, families, and friends every day.

This is the inspiration for our “goal zero”
incidents vision. To embed the right mindset
and realise this vision, we will invest our efforts
in three areas: policy development, education,
and engagement.

The Group’s health, safety and security
priorities, objectives, and performance
monitoring are co-ordinated and governed by:

• The Health and Safety Committee: Chaired
by the CEO and comprising the Executive
Team, the Committee has oversight and
conducts quarterly reviews of the Group’s
health, safety, and security performance.

• The Safety Forum: Comprising the health
and safety leaders from each operating
company, the forum is responsible for
providing updates on health, safety and
security issues and events, sharing best
practices, and advising the Health and
Safety Committee on Group-wide initiatives
to improve performance.

THE DISTINGUISHED
GENTLEMAN’S RIDE
JFD Ortega are proud supporters
of the Distinguished Gentleman’s
Ride (DGR) which unites classic
and vintage style motorcycle riders
all over the world to raise funds
and awareness for prostate cancer
research and men’s mental health.

Health and safety training
2022 health and safety performance did show
an improvement on 2021 HSE performance
data. During 2022, there have been incidents
including high potential near misses and Lost
Time Injuries. The Group has appointed a
central HSEQ leader to improve the HSEQ
performance and adopt best practice
frameworks, processes, and standards
across the Group.

Executive leaders continue to increase the level
of awareness and focus on health and safety,
and the Group safety forum is successfully
sharing best practice, improving root cause
analysis, initiatives and lessons learned amongst
all stakeholders across the Group.

The Health, Safety and Security (HS&S) focus
area will be led through our BEx team from
2023. The safety forum supports a Group-wide
commitment to a positive, collaborative culture
that focuses on people empowerment while
developing and deploying business critical
standards, policies, procedures, and systems,
ensuring compliance through monitoring.

LOOK. THINK. ACT

From day 1 of employment
throughout the lifecycle of an
employee’s career the provision
of health and safety information
and training is paramount.

In 2022, we introduced a new enhanced
employee induction with stronger focus
on health and safety through engaging and
interactive learning. We continue to provide
several health and safety courses from
mandatory compliance modules to wider
health and safety issues, with all mandatory
courses repeated year-on-year to ensure
continued focus and adherence.

• Health and safety in the workplace

• See it, sort it, report it

• Fire safety awareness

• Driver safety awareness

• Slips and trips

• Personal protective equipment (PPE)

awareness

• Hazard identification and risk control

• And many more...

SAFETY OBSERVATION
AWARENESS TRAINING

During 2022 JFD launched a safety
observation awareness campaign which
included the introduction of a new digital
platform for safety observations with the
following benefits:

•

5
5

Increase safety awareness

Decreases anxiety or threat
of reporting errors

•

Provides additional means
of submitting feedback

Employees can now report safety
observations using the ‘fill out a card’
method, or the new digital, more
environmentally friendly, method.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc51

CANAL & RIVER TRUST
JF Subtech successfully
identified and replaced
defective anodes for the Canal
& River Trust with completion in
September 2022, ensuring the
longevity and safe operation of
the historic Went Aqueduct on
the Sheffield and South Yorkshire,
UK, navigation.

The challenge

• As the waterway had been affected by
unusual levels of rainfall, JF Subtech
topside workers had to carefully navigate
operating in tidal conditions close to the
waterline.

• As a result, extra precaution was
to be taken so as not to cause an
environmental hazard to wildlife as well
as other canal users.

The solution involved close liaison with the
Canal & River Trust locally to ensure that
the job was completed safely and to a high
standard. Environmental conditions were
carefully monitored to identify effective
work windows and the project successfully
completed in September 2022.

JF Subtech successfully completed a
subsea inspection, repair and maintenance
(IRM) contract for NEO Energy in 2022
on its floating production storage and
offloading (FPSO) vessel, Global Producer III
(GPIII), located in the Balloch field, Central
North Sea.

The contract saw the safe and efficient
execution of the FPSO’s IRM scope
and required JF Subtech to apply its
comprehensive experience of technically
complex project scopes in harsh
environments, utilising its air diving and
ROV expertise to undertake the operation
on the GPIII vessel’s hull, in accordance
with NEO Energy’s asset integrity program.

METRICS AND TARGETS

Refer to Key Performance Indicators on
page 56 for our 2022 metrics and targets
performance.

We continue to be a close partner
with the Canal & River Trust to
maintain the green-blue space,
accessibility and history of our
waterways.
Alex Ratcliffe
Assistant Project Manager, James Fisher Subtech

James Fisher and Sons plc – Annual Report 2022Strategic report52

Sustainability cont. / Partnerships

FOCUS AREAS
• Innovation
• Customer engagement
• Governance

In our 175-year history,
we have differentiated
ourselves through
innovation and
technology. We are
pioneers in our chosen
markets, emerging
as the global leader
in submarine rescue,
removal of offshore
unexploded ordnance
(UXO) and ship-to-ship
(STS) transfer.
We are uniquely positioned to support our
customers and suppliers through highly
skilled capabilities from product or service
design, installation, delivery and ongoing
maintenance.

Our culture of shared success means
that we seek out collaborations – with
customers, suppliers, and other industry
players – that align with our values and
contribute to our shared vision for a
sustainable future. We aim to build trust
with our partners through transparency,
compliance and by operating with the
highest standards of business ethics.

Innovation
Innovation is a key element for
sustainable growth enabling the
Group to meet our current customer
expectations and to optimise new
opportunities.

We are uniquely positioned to influence and
help our customers to share in the future of
our chosen markets with 175 years of expertise
spanning marine, nuclear, transportation, oil
and gas and renewable energy.

Our innovation goal is value creation – to
deliver tangible revenue gains and cost savings
for our customers while maintaining and
exceeding products and service quality. We
consistently strive to better understand market
challenges, articulating the value we can and
do create by:

• Tapping into the brain power and expertise
of our exceptionally talented workforce to
feed the innovation stream

• Partnering with customers and key

industry players to co-design, develop, and
commercialise cutting-edge solutions to
industry challenges

• Engaging our suppliers in co-design and to
ensure services are provided in accordance
with our valued behaviours and code of
conduct

Similarly, with opportunities identified through
the scenario analysis work in our market
areas, we aim to ensure that the opportunities
identified through our products and service
offerings are realised through continued
consideration and opportunity monitoring both
at Group and operating company level where
appropriate. Opportunities identified through
scenario analysis include:

• Development and/or expansion of low

emission goods and services

• Development of new products or services
through R&D (research and development)
and innovation

Further details on the opportunities
identified through scenario analysis can be
found in our TCFD disclosure on page 53.

Individual James Fisher operating companies
have applied their own unique methodologies
to the innovation process, driving cutting edge,
market defining solutions as in the examples
shown within this section.

During 2023 and 2024 we aim to develop and
roll-out a Group-wide process and framework
for innovation with a minimum of two
innovation projects fully reviewed in line with
the new process.

JF RENEWABLES
James Fisher Renewables (JF Renewables)
are working with Ho Lung Power
Engineering (HLPE) to provide planning,
reporting, engineering support/technical
review and skilled labour for cable
termination and testing (T&T) of Orsted’s
Greater Changhua wind farm in the
Taiwan Strait. This news follows the recent
announcement of the partnership between
JF Renewables and HLPE to strengthen
localisation in Taiwan.

James Fisher’s SEABASS

In 2021 we acquired Subsea Engenuity
Ltd to increase our decommissioning
capability with innovative well abandonment
technology to enable the seabed to be
returned to its natural state with no pollution
impact.

The technology – SEABASS – is a
revolutionary, single trip mechanically
locking system for the abandonment
of subsea wells. As well as meeting
global market criteria, it is designed to
deliver cost and time efficiencies and to
remove contaminants upon plugging to
allow the well site to return to its original
environmental state.

Despite significant supply chain challenges
due to the pandemic, SEABASS was
brought to market in 2022. In October,
in-depth simulation testing and in-house
and customer testing was successfully
completed. In December, a collaboration
with a major Oil and Gas operator
and Major North Sea vessel operation
was undertaken, with James Fisher
Decommissioning providing tools and
equipment for the abandonment of two
subsea wells in the central North Sea.

We are investing in further development
and in 2023 we expect the system to be
adaptable to other subsea well applications.
Additionally, new handling equipment and
methodology are being adapted to further
reduce operating time and increase safety
during operations.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc53

JAMES FISHER AND GRAIG LAUNCH AN INNOVATIVE SOV CONCEPT TO
TRANSFORM THE UK OFFSHORE WIND SUPPLY CHAIN

James Fisher and Graig Shipping PLC (Graig), a long-established UK
shipowner, unveiled a pioneering service operation vessel (SOV) design
concept in June 2022. The Ulstein Twin X-Stern SOV has been designed
to support the UK’s ambitious target of 50GW of offshore wind energy
generation by 2030.

Meeting developer demand
The innovative design is intended for series construction, meaning it reduces time and cost
to build while still allowing for configuration for owners and developers.

Lower GHG emissions
Because the vessels have two sterns, they are extremely manoeuvrable which reduces power
consumption. They are also future-fuel ready, designed for conversion to zero emissions when
technology has matured.

Better for seafarers
As larger turbines are installed further out at sea, vessels and crews will be travelling greater
distances and working for longer periods of time. The hull design results in reduced motion in
the water which makes it more comfortable for seafarers as well as contributing to the vessel’s
energy efficiency.

Customer engagement
With a network of world-wide
operators, partners, industry
experts and support bases, we
are well placed to support our
customers across the globe.

We excel in complex and time sensitive or
emergency response situations as well as in
the provision of bespoke solutions in high-
risk environments. We pioneer life preserving
solutions for our customers while ensuring
operator safety and security.

We build partnerships with customers and
key industry players to co-design, develop,
and commercialise cutting-edge solutions to
industry and customer challenges.

We have been working to ensure the Group’s
sustainability strategy and supporting activities
connect with our customers’ own social value
and environmental commitments. For example,
we are developing tools and guidance for the
Group’s operating companies which will help
embed best practice methods used in meeting
the needs of our customers, therefore, for
example, in alignment with the UK Government
Social Value Model.

With a renewed approach to customer
engagement following re-structuring which
took effect in January 2023, the Group’s BEx
programme will develop a standard process for
customer engagement to roll-out across the Group.

Customer engagement is integral to our
business. The initial focus is to transform
our customer feedback processes into a
standardised process with a consistently
tracked metric across the businesses.

We aim to gain a more accurate understanding
of our customers through increased
communication in order to support them in
meeting their own needs and objectives. For
example, we aim to better understand their:

• attitudes and behaviours or decision-making

processes

• challenges so we can better support them

through the identification of sustainable solutions

• decarbonisation agendas in order to provide

innovative products and services which
afford a positive impact for them

Through building on our customer relationships
and continuing to identify shared sustainability
goals we aim to support our customers in
meeting their own needs and objectives.

We will deploy Net Promoter Score (NPS)
as the KPI across the Group. Currently data
capture is inconsistent with limited measures
in place to support the feedback loops and
process improvements. This will be addressed
later in 2023, and we expect to be able to
report on this from 2024 onwards.

James Fisher and Sons plc – Annual Report 2022Strategic report54

Sustainability cont. / Partnerships cont.

Corporate governance
During 2022 the Sustainability Committee
has continued to embed into the Governance
protocols of the Group.

We are continuing our focus on supply
chain management in 2023 with the
appointment of our Group PMO (Project
Management Office) Director, the Group Head
of Supply Chain and divisional Head of Supply
Chain positions. The transformation team
driven by our BEx programme, will:

• Roll-out our supplier code of conduct

• Determine appropriate methods and

tools for developing mutually sustainable,
beneficial and collaborative supplier
partnerships that offer superior value whilst
attaining the highest standards aligned to
our Group values

• Work with the Group Sustainability

Committee to determine best approaches as
we expand the Group’s Scope 3 reporting
and establish shared environmental goals
with our suppliers

The value local suppliers can create is
epitomised in the example of a family-run
precision engineering and manufacturing
company based a short distance from our
Inchinnan facility in Scotland which was
identified by JFD’s research and development
team during a design project. The SME has
become an integral part of JFD’s supply chain
and has expanded significantly as a business
since 2015 through continued and significant
work opportunities. Often going above and
beyond and providing a solid alternative option
where a primary allocation supplier is unable to
support, this collaborative relationship, similar
to many of our valued suppliers, contributes
significantly to the resilience of our business.

Governance
Values and ethics
We believe that ethical leadership
and effective stewardship,
consistent with the valued
behaviours demanded of every
James Fisher employee, are
essential attributes for our success.

We believe that every James Fisher employee,
from the Board of Directors to the engineer at
the work site, must live and breathe our valued
behaviours – pioneering spirit, integrity, energy,
and resilience. We also expect our suppliers,
sub-contractors, and trusted partners to align
with and demonstrate these.

A solid Governance framework ensures
we continue to deliver value for all our
stakeholders while managing and minimising
our risk exposure.

Refer to page 62 for further information

on our principal risks.

Business ethics
Our business ethics commitments are
established in the Group’s Code of Ethics,
Anti-Bribery and Corruption Policy and Modern
Slavery Policy, which are reviewed on a
periodic basis to ensure they are current and
align with evolving challenges in the world,
whilst staying true to our core values and
principles. Clear expectations and obligations
are set out with our employees, partners,
suppliers, and customers in alignment with
these policies, and processes are in place
to monitor compliance. Several training
programmes and assurance processes
support our policies, and these are described
on pages 72 to 73.

Supply chain management
We expect our suppliers and sub-contractors
to adhere to our principles and to commit
to sustainable business principles and
practices generally. It is important to have
accountability and full disclosure on issues
such as human rights, health and safety,
product and service quality, and environmental
impacts. Our supplier onboarding process
includes a detailed questionnaire capturing
their governance processes, policies, and
commitments, and examines the credentials
of their own supply chains.

Supply chain resilience,
optimisation, and our local
communities
It is important to us that local start-up
businesses, entrepreneurs, small and medium-
sized enterprises (SMEs), voluntary and social
enterprises (VCSEs) have the same opportunity
to supply our operating companies.

We do not currently measure and monitor the
use of SMEs and others as described above
at Group level but plan to in 2023 and we are
looking at how our ERP, or alternative, systems
can support this.

We will continue to optimise cost through
common categorisation, spend allocation,
and supplier relationship management. For
example, we are realising new economies of
scale through Group-wide use of strategic
suppliers. A specific example of this, which
supports our focus on GHG emissions by
securing energy from low carbon sources, is
that we are in the process of transitioning to
one (renewable) energy supplier for our UK
based operating companies. So far, three of
our companies have signed up to the Group
contract with others pending on contract
completion with their current suppliers.

The expected level of service required
from our supply chains demands
supply chain resilience

In March 2022 James Fisher signed a
charter agreement with Go Marine Group
for the exclusive use of the Multi-purpose
Service Vessel, Go Electra, adding much
needed security for our customers amid
cost and supply chain crunches in the
industry.

The long-standing agreement will see
quicker response times and tailored health
and safety standards implemented, as
well as stabilised and reliable day rates
for customers. In addition, there will be
an increase in operational uptime, with a
consistent crew and shortened mobilisation
and demobilisation times between projects
resulting in boosted productivity and
reduced environmental impact due to fewer
overall transits to shore.

Putting sustainability and efficiency at
the forefront of decision making, James
Fisher selected the Go Electra following an
extensive vessel research and evaluation
process. The Go Electra was built in 2011
and measures around 80m in length
with Dynamic Positioning System (DP2)
capabilities, it has an onboard capacity
for 66 crew and passengers.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc55

Closing statement
Sustainability is a complex space;
it covers an array of environmental,
economic, and social issues, as well as a
large web of stakeholders, from investors,
regulators, and customers to employees.

Evolving to be the heart of everything we
do at James Fisher. We are working toward
sustainability becoming part of our DNA, our
culture, our everyday decision-making and
considerations. Why?

WE ARE PREDICTING OUR FUTURE
BY CREATING IT.

For more details see our separate
2022 Annual Sustainability Report.

James Fisher and Sons plc – Annual Report 2022Strategic report56

Non-financial key performance indicators

Through our nine focus areas we are
advancing action in the areas which
are significant to our stakeholders.
We continue to build and refine the
key metrics and KPIs upon which
we will focus disclosure across our
principal ESG areas.

Lost Time Incident Frequency (LTIF)*

0.51

2023

2022

2021

0.459

0.51

* LTIF = (Number of lost time injuries x 1,000,000)/(Total hours worked).

Key
Target
2022
2021

Base year
2021

Baseline
2.6

Employee Engagement Score (Gallup)

Total Recordable Injury Frequency (TRIF)*

2.65

3.95

2023

3.84

3.6

2022

2021

2.385

2.65

2.6

7.4

* TRIF = (Fatality + Lost Time Injury + Restricted Work Day Case + Medical

Treatment Case) x 1,000,000)/(Hours worked).

Base year
2021

Baseline
7.4

Hours spent supporting local community integration*

56%

2023

2022

2021 N/A

* (2hr per employee headcount).

Base year
2022

Baseline
56%

75%

56%

3.84

2023

2022

2021

Base year
2021

Baseline
3.6

Fatalities

2023

2022

2021

Base year
2021

Baseline
0

Strategic reportAnnual Report 2022 – James Fisher and Sons plc
57

Scope 1 and Scope 2 emissions (tCO2e)

79,110

2025

2022

2021

Base year
2021

Baseline
84,711

70,480

79,110

84,711

Scope 3 emissions – business travel (tCO2e)

7,906

2023

2022

2021 N/A

Base year
2022

Baseline
7,906

7,115.4

7,906

James Fisher and Sons plc – Annual Report 2022Strategic report58

Financial review

The rationalisation and
simplification of the portfolio
included the sale of three
businesses, agreement to
sell a significant fixed asset
and the Board’s commitment
to sell one further business.
All disposals are complete
as at the date of signing the
Annual Report and the net
proceeds have been used to
reduce Group indebtedness.
Post the end of the year we
have made good progress
in refinancing our borrowing
facilities to provide a more
stable platform for the future.

Duncan Kennedy

The Group made progress against
its strategic and financial objectives
during 2022, achieving growth in
revenue, operating profit and profit
before tax from its continuing
operations.

Strategic reportAnnual Report 2022 – James Fisher and Sons plcAdjusting items
The Group has recognised a net operating
loss of £1.7m in relation to adjusting items,
significantly reduced from £48.7m in 2021.

The Group sold three businesses, the
Swordfish dive support vessel and one
tanker during the year. Cash proceeds of
£18.5m were received prior to the end of
2022 in relation to the three businesses and
a profit on sale of £2.5m was achieved. Cash
proceeds of US$24.0m were received in
January 2023 in relation to the Swordfish. This
vessel was designated as Held for Sale in the
Group’s balance sheet in 2021 and 2022 and
accordingly the 2022 results include a £5.4m
reversal of impairment to reflect fair value
less costs to sell. The tanker sale generated
a £0.9m profit. In 2021, the Paladin dive
support vessel and two businesses were sold,
generating net cash proceeds of £20.8m and
a profit on disposal of £0.6m.

A non-cash goodwill impairment charge of
£4.4m has been recognised in the 2022
financial statements in relation to the Marine
Support division. In 2021, non-cash goodwill
and intangible asset impairments of £29.2m
were recognised. Impairment provisions of
£9.3m were also recognised against tangible
fixed assets in the 2021 results.

A restructuring programme within the
Fendercare and JFD businesses, completed
during 2022, resulted in £2.7m of restructuring
costs (2021: nil), of which £1.2m relates to
people costs and £1.5m to property costs.
The Group also recognised a £1.5m charge
in relation to its share (c.2%) of the obligations
under a defined benefit pension fund following
a settlement in relation to benefits payable by
the scheme to past members. £1.1m of debts
previously provided for were collected during
2022 (2021: £4.3m impairment loss) and we
continue to pursue other amounts for which
provisions have been made through legal
and commercial discussions. No costs were
incurred in relation to ongoing litigation and
disputes, compared to £3.1m in 2021. One
dispute was settled in the year, with settlement
proceeds covering the Group’s costs.

Continuing operations
The Group generated revenue of £478.1m
in 2022, an increase of 8.1% compared to
£442.4m in 2021. Divisional performance
was somewhat mixed, with Marine Support
(+4.7%), Offshore Oil (+23.5%) and Tankships
(+31.3%) all showing good growth, partially
offset by a more challenging year within
Specialist Technical (-16.4%) where JFD’s
business is at a low point in its large projects
business cycle.

Gross margin of 26.6% showed an
improvement of 320 bps over the 23.4%
achieved in 2021. This was principally due to
a number of adjusting charges in the 2021
financial statements not being repeated in
2022. Excluding these adjusting items, gross
margin is in line with 2021 despite the generally
higher inflationary environment. The Group
has commenced a Group-wide Business
Excellence programme aimed at simplifying
operations, consolidating common activities
across businesses (such as supply chain) and
delivering margin enhancements over time.

Total administrative expenses reduced from
£118.9m in 2021 to £104.4m in 2022. This
includes a significant reduction in adjusting
items to a £8.2m loss in 2022, from a loss of
£33.4m in 2021. A summary of all adjusting
items is included below. In 2021 a provision
of £7.3m was made against certain trade
receivables. In 2022 the group recognised
a £0.3m credit in relation to a net reversal of
impairments against trade receivables following
the receipt of some balances previously
provided for. Excluding adjusting items,
administrative expenses increased by 12.5%
to £96.2m (2021: £85.5m). This includes the
impact of salary increases awarded in January
2021 (average 3% across the Group, with
market levelling adjustments in addition) and
performance-related bonuses accrued at year
end to reward those businesses that achieved
their financial targets in 2022 (£2.0m vs £0.8m
in 2021).

The Group generated £24.7m in operating profit
in 2022, a £45.4m improvement compared to
the £20.7m operating loss in 2021. The majority
of the improvement was due to a significant
reduction in adjusting items and impairments
against trade receivables (+£47.0m), with
the balance of £1.4m (-5.7%) representing
a slight reduction from underlying business
performance. The Group’s underlying operating
profit margin reduced slightly to 5.5%.

Finance charges
The Group’s net finance charges increased
by £2.0m to £10.2m (2021: £8.2m).
Net bank interest payable increased from
£6.0m to £8.1m during the year as a result
of the Group’s higher leverage and interest
rate rises. Non-cash pension and lease liability
charges are broadly in line with 2021 at £2.1m
(2021: £2.2m).

The Group’s interest cover ratio*, which is
calculated by dividing underlying operating
profit by net finance charges (excluding IFRS
16 finance charges) is 3.5 times (2021: 5.4
times), which compares to banking covenants
that require the ratio to be greater than 3.0
times.

Taxation
The Group has recognised an overall net tax
debit in respect of continuing operations of
£5.5m in the year (2021: net tax credit of
£0.8m). The underlying tax charge for the
year is £4.3m (2021: £10.1m) representing an
underlying effective tax rate of 26.8% (2021:
51.2%). Compared to the UK Corporation Tax
rate of 19%, the following principal factors
have had an adverse impact in 2022:

• Higher effective tax rate in overseas

jurisdictions (+14pps)

• Losses incurred during 2021 but not

provided for as a deferred tax asset (+4pps)

• Prior year overprovision (-8pps)

Tax on adjusting items is a net charge of £0.8m
(2021: £10.9m credit). In 2021 this principally
related to the recognition of a deferred tax
asset in the UK on certain fixed assets that
were impaired in 2020.

* Interest Cover Ratio is an APM. An explanation
and reconciliation of APMs is set out in Note 2
of the financial statements.

James Fisher and Sons plc – Annual Report 2022Strategic report60

Financial review cont.

Discontinued operations
The Group’s JFN business, which provides
services to the UK nuclear decommissioning
market, was designated as Held for Sale at
31 December 2022 following the Board’s
decision to sell the business. The sale of
the business completed on 3 March 2023,
for proceeds of £3. The Group retained
several legacy parent company guarantees
supporting the obligations of JFN (the
“PCGs”). JFN’s financial performance during
2022 deteriorated, with revenue 17.2% lower
at £42.8m (2021: £51.7m) and significant
challenges with one project resulting in
additional costs and an operating loss of
£7.3m (2021: operating loss £0.1m). A loss
of £13.3m was recognised in relation to the
remeasurement of the business’ assets and
liabilities in line with IFRS 5 ‘Non-current
Assets Held for Sale’, primarily relating to the
impairment of goodwill (£8.1m), tangible fixed
assets (£3.9m) and costs to sell of £1.3m.

Dividend and EPS
The Board has not recommended dividends in
2022 or 2021 given the overall financial position
of the Group. The Board remains committed to
reintroducing a sustainable dividend policy at
the right time. Basic and diluted earnings per
share are a loss of 22.1 pence, compared to a
loss of 55.2 pence in 2021.

Cash flow and borrowings
The Group generated £44.5m (2021: £55.0m)
from operating activities. This includes the
impact of a £2.6m working capital outflow
as the Group built inventory to satisfy higher
demand for its products (£3.2m). Reductions
in debtors were broadly offset by reductions in
creditors. Tax payments were in line with last
year at £8.1m (2021: £7.9m).

Cash flows from investing activities generated
a £15.8m outflow (2021: £8.0m outflow). Net
cash proceeds from the sale of businesses
and assets in 2022 were £17.3m, compared
to £20.9m in 2021. Shortly after the balance
sheet date the Group collected US$24.0m from
the sale of the Swordfish dive support vessel.
This was balanced against the deployment of
£31.7m (2021: £28.2m) of capital expenditure.
The Board approved one significant capital
project in the year, being the investment in
24 newly designed, more energy efficient,
compressors to supplement the ScanTech
Offshore business and its bubble curtain offering
in particular, in total a £9.0m commitment
spread between 2022 and 2023. The
compressors have been delivered in Q1 2023
in anticipation of deployment during Q2 2023
on new projects in the US.

M&A activity in 2022 related to the payment
of deferred consideration on prior acquisitions,
principally the Continental business in Brazil.
M&A payments in 2021 were principally in
relation to the Subsea Engenuity acquisition.

Financing costs increased in the year from
£5.6m to £7.5m as interest rates increased
on variable rate borrowings and an interest rate
swap that had been placed in 2017 at ~0.7%
matured and was replaced with a new five-year
interest rate swap at ~2.3%.

The Group’s net debt, including all lease
liabilities, remained stable at £185.8m (2021:
£185.6m). Within this, the net bank borrowing
position improved by £6.8m to £132.9m
(2021: £139.6m).

Additional lease liabilities principally relate to a
new charter vessel in the Caribbean and the
renewal of seven existing leases within the
Tankships division (see table A).

The Group’s net debt for the purposes of
its banking covenants consists of net bank
borrowings, finance lease liabilities (on an
IAS 17 basis), and bonds and guarantees, as
summarised in table B. On a covenants basis,
net debt has reduced by £13.8m. The ratio of
net debt : EBITDA* has improved slightly to
2.7 times (2021: 2.9 times), which compares
to banking covenants requiring the ratio to be
less than 3.5 times (see table B).

Liquidity
The Group retained access to £247.5m of
borrowing facilities during 2022, unchanged
from 31 December 2021. In April 2023 the
Group agreed new borrowing facilities with its
lending banks of £210m with a maturity date of
March 2025, which provides the Group with a
stable financial platform from which to execute
its strategic plans. We expect to complete
final documentation and to satisfy remaining
conditions before the long stop date of 7 June
2023. The continued access to liquidity has
been included as a Group Principal Risk (see
page 63) due to the relatively short term nature
of the new facilities.

Balance sheet
The Group’s net assets increased by £7.7m
in the year to £218.3m (2021: £210.6m). The
loss for the year of £10.8m was offset by Other
comprehensive income of £18.1m, principally
in relation to foreign exchange movements
and hedging (£12.4m) and an actuarial gain
from the Group’s defined benefit pension fund
of £5.8m in the year (net of tax), and other
movements in reserves of £0.1m.

* Net debt: EBITDA is defined as leverage APM.
An explanation and reconciliation of APMs is set
out in Note 2 of the financial statements.

Non-current assets
Non-current assets reduced by £12.7m in
the year from £333.9m to £321.4m. Goodwill
reduced by £17.2m to £116.3m (31 December
2021: £133.5m) as a result of business disposals
(£7.1m), held for sale transfer in relation to the
JFN business of £8.1m, impairment charges of
£4.4m, offset by foreign exchange differences
of £2.4m. Intangible assets reduced to £8.2m
from £13.3m due to additions of £1.3m and
disposals/transfers with a net book value of
£1.2m offset by amortisation charges of £5.2m.

Within Property, Plant and Equipment the Group
invested £27.4m in additions. This was offset
by disposals with a net book value of £2.5m,
depreciation of £23.3m, the reclassification of
assets to Assets Held for Sale of £5.8m, a net
reversal of impairment charges of £0.7m and
foreign exchange differences of £2.4m.

Right-of-use assets increased by £10.5m,
principally as a result of movements in the
Group’s Tankships fleet. The Sir John Fisher
vessel, which is leased, was delivered to the
business in November 2022, resulting in the
inclusion of the associated right-of-use asset
and lease liability. Depreciation of £12.6m
against vessels was provided in the normal
course.

The Group has recognised a £5.5m asset in
relation to the Group’s Shore Staff defined
benefit pension scheme in accordance with
IFRIC14 following movements in actuarial
assumptions. The Group continues to make
deficit repair payments in line with agreed
profiles.

Current assets and current
liabilities
The Group’s net current assets reduced from
£91.5m at 31 December 2021 to £61.3m at
31 December 2022. There are a number of
common factors affecting the movements in
these balances, which are summarised in table
D. The current assets and liabilities of JFN
have been reclassified to Assets Held for Sale.
In addition, businesses sold in December 2022
resulted in the sale of the associated Balance
Sheet assets and liabilities.

Inventory increased by £0.8m to £49.8m (31
December 2021: £49.0m) due principally to
an increase in production levels to keep pace
with demand, offset by inventory sold as part of
the businesses disposed of in the year. Trade
and other receivables reduced from £153.3m
to £148.2m at 31 December 2022, again
reflecting the impact of businesses sold in the
year and the reclassification of JFN’s receivables
balances to Assets Held for Sale (£10.5m),
offset by an underlying increase relating to
higher revenues outstanding from Q4 trading.
A net charge to the Income Statement of £0.3m
was made in relation to impairment of trade
receivables, a significant improvement from the
£7.3m provided for in 2021.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc61

Balances of £8.4m (2021: £7.8m) that had
previously been provided for were cleared from
the debtors ledger as no recovery is expected.
These adjustments had no effect on the
Income Statement.

Within net current assets, the Group’s
cash, overdraft and borrowings were a net
liability of £13.8m (31 December 2021: net
asset of £34.4m). This reduction in the net
current asset position is principally due to the
inclusion of one revolving credit facility balance
(c.£45.5m drawn at 31 December 2022) within
current liabilities as the facility agreement
matures in October 2023 and no extension
has been agreed with the lender.

Trade and other payables, excluding
movements relating to reclassifications and
sales, remained broadly flat in the year.
Provisions due within one year increased by
£3.3m, reflecting increases in warranty and
foreign offset agreement provisions in the year.
Lease liabilities increased following the renewal
of property leases and additional vessel leases.

Assets held for sale increased from £10.7m to
£36.2m at 31 December 2022. The balance
relates to the Swordfish (£18.5m), which is
an increase of £7.7m in the year following
agreement having been reached to sell the
vessel in December 2022, JFN’s current assets
of £16.3m (£14.0m current assets and £2.3m
of fixed assets) and £1.5m relating to certain
assets in Singapore. Liabilities associated with
assets held for sale of £16.3m relate to JFN.

Non-current liabilities
Long-term bank borrowings reduced to
£121.8m (2021: £173.9m) during the year,
partly as a result of one revolving credit
facility being disclosed as a current liability
at 31 December 2022 as discussed above.
Net pension liabilities, as measured under IAS
19, reduced to £0.4m compared to £1.9m at
31 December 2021 in relation to the Group’s
portion of multi-employer schemes.

Financial reporting, looking
forward
The Group has implemented a new divisional
structure, effective 1 January 2023. The
Group’s businesses are being organised into
three divisions: Energy, Defence and Maritime
Transport. This change will be reflected in the
Group’s 2023 segmental reporting in line with
the requirements of IFRS 8. The Group will also
adopt IFRS 17 from 1 January 2023, the effect
of which is being finalised.

Duncan Kennedy
Chief Financial Officer

Table A

£m

Bank net borrowings

Finance leases (IAS 17 basis)

Right-of-use liabilities

Net debt

Table B

£m

Bank net borrowings

Finance leases (IAS 17 basis)

Bonds and guarantees

Net debt – covenants basis

EBITDA – covenants basis

Net debt : EBITDA

Table C

£m

No extensions

With extensions

2022

(132.9)

(6.9)

(46.0)

(185.8)

2022

(132.8)

(6.9)

(2.3)

(142.0)

52.6

2.7

2021

(139.6)

(7.8)

(38.2)

(185.6)

2021

(139.6)

(7.8)

(8.4)

(155.8)

54.3

2.9

Movement

6.7

0.9

(7.8)

(0.2)

Movement

6.8

0.9

6.1

13.8

(1.7)

(0.2)

2023

47.5

–

2024

200.0

87.5

2025

2026

–

30.0

130.0

Total

247.5

Table D

£m

Inventory

Trade
and other
receivables

Net cash
and other
borrowings

Trade
and other
payables

Provisions

Current tax

Lease
liabilities

Assets
held for
sale

Liabilities
associated
with assets
held for
sale

Net
current
assets

At 31
December
2021

Transfer
to Assets
Held for
Sale

Balances
sold as
part of
business
disposals

Held for sale
fixed asset
adjustments

49.0

(0.7)

(3.5)

153.3

(10.5)

(4.8)

34.4

(2.8)

(1.6)

(139.5)

13.7

(2.0)

(4.5)

(9.9)

–

0.3

2.2

10.7

14.0

–

(16.3)

3.0

–

0.4

–

11.5

–

Movement
excluding
disposals
and
transfers

At 31
December
2022

5.0

49.8

10.2

148.2

(43.8)

(13.8)

0.4

(3.3)

2.3

(122.4)

(5.3)

(1.9)

(5.9)

(13.2)

–

36.2

(16.3)

91.5

–

(6.5)

11.5

(35.2)

61.3

James Fisher and Sons plc – Annual Report 2022Strategic report62

Principal risks and uncertainties

Managing risk and enabling growth
The Group’s emerging and principal risks
The Group is subject to a combination of macro risks and business-specific risks. The Group’s risk management process (described in more detail
on page 70 below) provides the framework for risk management practices across all parts of the Group and seeks to ensure that business risks are
adequately identified, quantified and understood. The framework and accompanying risk management processes continue to evolve and improve
across the Group.

Changes in 2022
Following a review of the Group’s risk management framework in 2021 by PwC LLP, the Group has continued to implement improvements during
2022. The Executive Committee conducted a series of facilitated discussions on the Group’s key risks from a “bottom-up” basis. Each key risk
has been allocated an Executive Committee owner and a series of mitigating actions have been defined. Review of progress against the mitigating
actions is a standing agenda item once a quarter at Executive Committee meetings. These risks have been discussed at the Board and Audit
Committee meetings during 2022.

As a result of these reviews, two additional principal risks have been separately articulated due to their nearer-term nature, reflecting specific
situations that the Group is subject to and seeking to mitigate:

• Transformation risk – as articulated in the Chief Executive’s report (on pages 14 and 15) the Group is commencing a period of transformation, with
the aim of achieving a simplified, more efficient operating structure. This is a significant project that over a period of two to three years will affect
almost all areas of the Group’s operations. An Operational Excellence team has been established to lead the Group through this period of change,
which carries the inherent risk of distracting the business from its core business activities.

• Maintaining access to adequate funding – the Group has four revolving credit facilities with a total of six lending banks. Post year end the Group

has received commitment letters from its six lenders to enter into a single Revolving Credit Facility for £210m. The Group and lenders have agreed
a long-stop date of 7 June to complete the necessary next steps that will allow the new RCF to be drawn. The new facility has an expiry date of
31 March 2025. Given the relatively short-term nature of the new facility, this risk is being separately highlighted in this Annual Report. The Group’s
auditors draw attention to this risk in their audit report on page 117.

The Board is committed to continuous improvement in risk management and during 2022 has outsourced its internal audit function to PwC,
appointed a Head of Internal Controls and developed a comprehensive programme aimed at internal control improvements over the coming 24
months, with significant support from BDO. An additional governance body, the Investment Committee, has also been established during the year.
This is a sub-committee of the Executive Committee and has specific authority delegated to it by the Board. All investment decisions that require
Board approval will first be scrutinised by the Investment Committee before being presented to the Board.

1. NEW RISK: GROUP TRANSFORMATION PROGRAMME

Nature:

Potential impact:

Mitigation:

The Group is embarking on a period of
significant simplification and integration,
carrying the risk of disruption and/or
distraction to its core activities if not
managed well.

• The change management process may disrupt
core business delivery activities if roles and
responsibilities are not clear

• Staff may become distracted by the change

process

• An Operational Excellence team has been

established, with a clear remit

• Objectives have been set and cascaded

through the organisation to ensure priorities
are clear across the Group

• Executive Committee oversight and escalation

process has been established

Context:

The Group has operated a largely decentralised operating model for a number of years. The Executive Committee sees opportunity to improve
the efficient working of the Group by simplifying and integrating common functions. This is one of the Executive Committee’s and Board’s highest
priorities for 2023 but will involve a significant amount of change in both the operating model and supporting functional activities of the Group.
Strong project management and clarity on roles and responsibilities will be required to ensure that the delivery teams remain focused on the most
important identified tasks.

Movement:

This risk is being separately disclosed for the first time in 2022. The Board recognises that all change management programmes contain risk and
has made the management of this change process one of its highest priorities for 2023.

Opportunity:

The opportunity to simplify the Group’s operating model, integrating common functions such as Supply Chain, Project Management, Engineering,
Health and Safety is aimed at providing enhanced ways of working and operational efficiencies. It is also expected to support the simplification of
the Group’s legal entity structure and systems infrastructure.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc63

2. NEW RISK: MAINTAINING ACCESS TO ADEQUATE FUNDING

Nature:

Potential impact:

Mitigation:

The Group relies on external sources
of funding to ensure it has the financial
liquidity to fund its operations and future
growth, without which there is a risk to
the execution of the Group’s strategy.

• The Group may not have the liquidity required to

ensure that it remains a going concern

• Regular meetings are held with all lenders
to provide trading and operational updates

• Disposals of additional businesses may be

• Selection of third-party expert support to assist

required

with refinancing

• The Group’s reputation and ability to secure
competitive contracts with suppliers and
customers may be adversely impacted

• Ongoing dialogue with potential new lenders

• Refinancing commitment letters received from
the lenders and long form term sheet agreed
with expected completion by 7 June 2023

Context:

The Group has experienced three consecutive years of difficult trading conditions and financial results have been adversely impacted. The Group
has made good progress in refinancing its borrowing facilities post year-end, though lenders have required security for the first time. The new
facility matures in March 2025. Net debt as measured for the purposes of banking covenants has reduced in each of the last three years, however
the ratio of net debt to EBITDA (leverage) has remained above the Board’s target level of 1-1.5x. At 31 December 2022 leverage was 2.7x
(2021: 2.9x; 2020: 2.8x; 2019: 2.7x).

Movement:

This risk is being separately disclosed for the first time in 2022 due to the ongoing challenges of ensuring adequate liquidity at competitive pricing.

Opportunity:

The Group has taken the opportunity to simplify and right-size its borrowing facilities through to March 2025 to provide additional certainty to all
stakeholders.

3. HEALTH AND SAFETY RISK

Nature:

Potential impact:

Mitigation:

Group trading companies may
experience and 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

• Appointment of a Group Head of HSE as part
of the Operational Excellence team in January
2023

• Policy and training

• Group Health and Safety Committee

• Group safety forum

• Insurance

• Internal Audit

• Group-wide safety initiative

Context:

In 2022, there continue to be operational incidents, including a number of high potential near misses. Executive management continues to
increase the level of awareness and focus on HSE, including a new appointment of a Group Head of HSE from January 2023. The Group’s
activities in 2022 include the continuation of the Group safety forum, improving root cause analysis and sharing incident learnings amongst the
Group’s HSEQ specialists. The Group also commissioned an audit of its Group HSE policies and procedures as part of the annual Internal Audit
programme. As a result, the HSE team has a number of agreed actions to implement during 2023.

Movement:

No change. On balance the net risk has remained the same, and efforts to bring greater co-ordination, diligence and awareness in this area
are ongoing.

Opportunity:

Operating in competitive markets there is an increased opportunity to provide differentiation to our customers by our strong commitment to health
and safety, thereby building long-term trust.

James Fisher and Sons plc – Annual Report 2022Strategic report64

Principal risks and uncertainties cont.

4. 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
financial and reputational damage
by way of significant interruption to
business systems. Phishing could
result in financial and reputational
damage by way of theft or fraud.

• Further embedding of new Group-wide operating system

with enhanced security, alongside infrastructure and software
updates to existing systems

• Regular review of IT security issues, including penetration

testing

• Enhanced cyber awareness training and regular briefings

• Improved threat detection software and cyber phishing

testing across the Board and all employees

• Independent review of cyber security by a specialist third
party in 2022; inclusion in the 2023 Internal Audit cycle

Context:

The Group has continued to invest in cyber security and awareness during 2022, with improvements in cyber training and awareness, threat
detection software and phishing testing. A third-party review of the cyber security environment was conducted in 2022 by a specialist organisation
and recommended improvements have been implemented. The Board reviewed this principal risk in December 2022 and cyber security is
included in the Internal Audit plan approved by the Audit Committee for 2023. Despite the increased protections in place at the Group, the
external threat continues to increase.

Movement:

Increase. The Group is reliant on its systems in order to operate effectively and has continued to invest to enhance cyber resilience. The external
threat is continually adapting and increasing, notwithstanding the mitigating activities.

Opportunity:

Upgraded IT systems increase security, but also flexibility, facilitating secure working while travelling or from home.

5. OPERATING IN EMERGING MARKETS

Nature:

Potential impact:

Mitigation:

The Group operates in overseas
emerging markets and key growth
economies with fluctuating legislative
restrictions, embargoes, sanctions and
exchange controls, often undertaken
in association with local joint venture
partners.

Those operations may expose the
Group to increased risk of governance
and compliance issues. Any significant
failure to comply with laws or
regulations could lead to penalties
and other financial liabilities, as well
as reputational issues. Where there is
a jurisdictional requirement for local
investment or representation, the
Group’s ability to continue business
in that jurisdiction could be adversely
impacted from an ethical or legal
perspective.

• Corporate governance framework, including limits

of authority

• Risk tracking of JVs, agents and other third-party

relationships, including use of bespoke web-based
platform

• Policies and training

• Corporate structuring of relationships, using external local

legal advice

• Implementation of regional operating model during 2023

organising all of James Fisher’s product lines under
common leadership in each major operating territory

• Internal Audit programme includes overseas businesses
resourced with local audit team, to leverage advantages
of working in local language and consistent with local
law/regulation

Context:

Operating in developing markets remains a key part of our strategy. A gradual return to free travel following the relaxation of global travel
restrictions in response to COVID has allowed management to increase the frequency of their visits to overseas territories during the year.
The improvements in mitigating controls, along with an ongoing increase in Group awareness in this area, result in the net risk being unchanged.
During the course of 2023 the Group is intending to further enhance its operating model to consolidate all product lines in major operating
territories under common local leadership teams.

Movement:

No change. Commercial and financial controls, project management and risk management, along with increasing Group awareness in this area
continue to mitigate the risk.

Opportunity:

The Group’s ability to operate in emerging markets for global customers offers an increased opportunity to be differentiated from our competitors.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc65

6. 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 assets 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 market and

geographical diversity

• Focus on decommissioning of oil and gas
assets, increasing support of LNG and
renewables markets

• Initiatives to reduce the Group’s emissions

and other impacts on the environment

Context:

Energy markets remain a key source of Group revenue, including both the oil and gas and renewables industries. With the strategic focus of
the Group supporting the “energy transition”, from oil and gas to renewables, with increased investment in oil and gas decommissioning and
renewables markets, the Board continues to consider the impact of climate change on energy markets as one of the Group’s principal risks,
as well as one of the Group’s key strategic opportunities. The risk of climate change to the Group’s strategy is mitigated by the continuing
diversification of the Group into new markets which, aligned with focused strategic opportunities, targets the ongoing long-term sustainability
of the Group. The Board believes that the global market for renewable energy will continue to grow, and therefore sees the energy markets as
both a risk (long-term oil and gas, post decommissioning) and an opportunity (renewables).

Movement:

No change. The Group has built its strategic goals around sustainability, driven in part by the impacts of climate change on the Group and the
markets it serves.

Opportunity:

The Board believes that the global market for renewable energy will continue to grow, and therefore sees the energy markets as an opportunity.

7. CONTRACTUAL RISK

Nature:

Potential impact:

Mitigation:

The Group operates in markets where
larger project-based contractors may
seek to pass risk down the supply chain.

Through its growth and diversification into new
markets and geographies, the Group may be
exposed to increased contractual risks, which
could result in financial impact caused by late
payment, cost overruns, increased claims and
litigation, and/or exposure to non-UK legal
jurisdiction uncertainty.

• Internal contract management governance,

including policy and training

• Internal and external specialist legal support

• Appropriate balance of risk and reward in
contracts, based on Group principles

• Investment Committee and (if large enough)
plc Board review and approval of all major
bids/tenders

• Targeting increased contract

management skills

• Insurance

Context:

The Board and Executive Committee have increased oversight of significant contracts with the introduction of the Investment Committee during
2022. The purpose of the Investment Committee is to scrutinise all significant new contracts, some of which will also require plc Board approval.
There is continued use of internal and external legal support.

Movement:

No change. The Group is diversifying its operations to secure a more sustainable future for its energy businesses and that will bring its own
challenges whilst the Group adjusts to new customer expectations and industry developments.

Opportunity:

As the Group pursues its strategy, contracts become a key mechanism for managing risk and also enhancing engagement with our customers
and suppliers.

James Fisher and Sons plc – Annual Report 2022Strategic report66

Principal risks and uncertainties cont.

8. PROJECT DELIVERY

Nature:

Potential impact:

Mitigation:

Group businesses may fail to meet
customer expectations or contractual
requirements on project delivery.

This could cause significant adverse financial 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

• Salary benchmarking and role banding exercise

• Formation in early 2023 of an Operational

Excellence team within the Group, the remit
of which includes standardising and improving
the Group’s Project Delivery

Context:

The profile of the work undertaken by the businesses continues to shift more towards project work. Established mitigating processes include
targeting increased project delivery skillsets through external hire and training, ongoing development of project management best practice, and
building post-signature contract management into the project management skillset. We remain focused on improving outcomes and have formed
an Operational Excellence team at the start of 2023 to drive standardisation, simplification and process improvement.

Movement:

No change. There has been one high-profile project challenge within the James Fisher Nuclear business during 2022 which demonstrates the
need for continuous improvement. Elsewhere in the Group there have been a number of successfully delivered projects, particularly in the Marine
Contracting business, which has been on a journey of continuous improvement for the past three years.

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.

9. 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.

• Implementation of employee strategy

• Graduate recruitment

• Talent identification and management

• Management development programmes

• Appraisal process

• Training plans

• Remuneration incentives

• Succession planning

• Salary benchmarking and role banding exercise

Context:

Progress continues on implementation of the employee strategy to improve recruitment and retention. New senior management positions have
been filled during the course of 2022. Succession and recruitment have improved. Retention has been a challenge and remains a key focus,
particularly in a high inflation environment.

Movement:

Increase. The Group’s voluntary turnover rate has stabilised during 2022. Senior management changes have been implemented during the year
but the recruitment market for talent remains highly competitive.

Opportunity:

Improvements in recruitment and retention will strengthen our teams worldwide, as well as the ability to compete in our chosen markets.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc67

10. FINANCIAL RISK

Nature:

Potential impact:

Mitigation:

The Group is exposed to interest rate,
foreign exchange and credit risk. The
Group’s decentralised operating model
requires robust and effective financial
controls.

An increase in interest rates or change in
exchange rates or credit restriction would have
a financial impact on the Group. Poor financial
controls may impact adversely on reporting
accuracy or risk of fraud.

• Formalised Group internal controls and

accounting policy manuals

• Documented levels of delegated authority

for all operating companies

• Half-yearly self-certifications covering the

effectiveness of financial controls signed by
operating company Finance Directors

• Third party whistleblowing hotline available

to all employees (from mid-2022)

• Internal Audit reviews on a periodic basis for

all operating companies

• Internal controls improvement programme

• Non-syndicated banking relationships plus

3-bank RCF club

• Centralised finance function management

of Group net debt, and FX

• Forward currency contracts

• Interest rate swaps

Context:

The Group’s central internal controls and treasury functions continue to drive standards across the Group. During 2022 the Group has commenced
a project specifically aimed at improving internal controls, using a third party to support the Group’s Head of Internal Controls. The Treasury team
continues to implement the Group’s FX hedging policy and transacted a new interest rate swap during the year upon expiry of the existing hedge.
Recent increases in interest rates have increased the sensitivity of the Group’s results to its Interest Cover covenant (EBIT divided by Interest).

Movement:

Increase, due to current covenant compliance risk, albeit the Group remained in compliance with all banking covenants for 2022.

Opportunity:

The Group’s hedging policies are designed to provide certainty on cashflows. The internal controls improvement project is aimed at enhancing
efficiency as well as strengthening control.

James Fisher and Sons plc – Annual Report 2022Strategic report68

Principal risks and uncertainties cont.

11. PANDEMIC RISK

Nature:

Potential impact:

Mitigation:

The Group is a global business and has
been impacted by the COVID pandemic
during 2022. 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.

Context:

The current impact on the Group’s operations
created by the COVID pandemic may continue.
A future pandemic, or governmental response to
a potential virus spread may impact the Group’s
ability to provide services to its customers.

• Tracking and following Government restrictions

and recommendations

• Making office locations safe for work

• Home working where possible, supported
by improved IT services enabling better
communication

• COVID working group providing advice and

support to employees

• Enhanced employee assistance programme

• Encouraging vaccination where possible

The ongoing COVID pandemic has continued to impact the Group’s results, particularly in China during 2022 where local lockdowns adversely
impacted JFD’s ability to complete customer contracts and collect final payment milestones. Although the impact of the pandemic on 2022 was
not as severe as in 2020 and 2021, it remains a risk to the Group. From an internal operating perspective, the Group now has robust working
from home provisions and policies to govern safe working at sites where working at home is not possible. These controls, however, cannot totally
mitigate the business interruption should customers choose to delay or cancel projects.

Movement:

Decrease. The impact during 2022 was largely; limited to the JFD business.

Opportunity:

Through finding creative ways to continue to deliver for our customers through the pandemic, we are able to build further customer loyalty and
differentiate ourselves through our energy and resilience.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc69

Internal Audit’s findings are reported to the
individual management team, the Executive
management team, the functional heads,
and the chairman of the Audit Committee.
PwC attends all Audit Committee meetings
and presents a summary of the Internal
Audit findings, recommendations, and
implementation progress on an ongoing basis.
During 2022 Internal Audit performed 10
reviews on specific topics such as Business
Continuity Planning, Health and Safety,
Forecasting and Budgeting in addition to more
traditional internal controls-based audits at
businesses across the Group.

Risk Committee
The Company has a Risk Committee, which
meets quarterly and is attended by the
Executive Directors and the heads of the
functional teams. Each of the functional teams
provides a report at each Risk Committee
meeting which identifies any matters in their
functional area which relates to the Group’s
principal risks and uncertainties, or to the
individual trading companies’ risk registers.

The minutes of the Risk Committee are
reported to the Board, and any key issues
raised are discussed at meetings of the
Board. The main responsibilities of the Risk
Committee are: to keep under review the
effectiveness of the Group’s overall risk
management framework and processes
and ensure corrective action is taken where
necessary; to make recommendations to the
Board/Audit Committee with respect to the
appropriate risk appetite for the Group; to
review the principal and emerging risks that
the Group is willing to take across all major
activities, taking into account the risk appetite,
the long-term strategy of the Group and the
interests of its stakeholders (shareholders,
employees, customers/suppliers, the
environment and local communities impacted
by the Group’s activities); to review reports
from the functional leads on risks that their
teams are encountering in their interactions
with the trading companies; to review reports
from the trading companies on their principal
risks and mitigating activities, as well as any
emerging risks; and to ensure that a robust
assessment of the principal and emerging
risks facing the Group has been undertaken
annually by reference to risk registers from
trading companies and functions.

Emerging risks
Our risk management programme includes a
review of emerging risks. We define emerging
risks as those which take the form of a
systemic issue or business practice that has
either not previously been identified, has been
identified but has remained dormant, or has
yet to rise to an area of significant concern.
The Risk Committee is continuing to work on
improvements in this area and has specifically
discussed during the year, based on the
frequency with which businesses are reporting
risks in this areas, whether Transformation,
Funding, Competition and Supply Chain
risks are adequately included in the Group’s
Principal Risks. The Committee concluded that
both Transformation risk and the Group’s ability
to maintain access to adequate funding had
risen to the level of being considered principal
risks. The Committee further concluded that
the key aspects of each of Competition and
Supply Chain risk are adequately covered in
the Group’s current principal risks and that
neither should therefore be included specifically
as a key risk.

The impacts of the COVID pandemic since
2020 have created a heightened awareness
of new and emerging risks that could impact
the Group, its customers and suppliers – this
has come through in the trading company
reporting in relation to the pandemic, although
no specific individual “new” issues or business
practices have been identified; for example,
post-pandemic ways of working and longer-
term skill requirements may emerge as
workforce planning risks, closely associated
with risk in relation to the recruitment and
retention of key people. Furthermore, ongoing
scenario planning work in line with TCFD
guidelines is focusing in on the identification
and assessment of potential short to longer-
term emerging physical risks linked with
climate change, which are already captured
in part in the Group’s principal risks relating
to energy markets, although this will develop
in further directions once the analysis is
complete.

The ongoing development with respect to an
energy mix in transition continue to be at the
forefront of the Company’s risk management
and strategic planning, as renewable sources
produce more energy, and environmental
concerns lead to an increased focus on
the decommissioning of oil and gas assets.
Although the Company recognises that oil
and gas will remain part of the energy mix
for some time, we aim to provide services
for the benefit of the production, delivery and
decommissioning industries in a safe and
sustainable way, whilst we support the energy
transition to low carbon sources.

Risk governance framework
The Board is responsible for the management
of risk in the Group, supported by the Risk
Committee and the Group functions, including
internal audit. The internal control and risk
management framework is comprised of a
series of policies, processes, procedures and
organisational structures which are designed to
ensure that the level of risk to which the Group
is exposed is consistent with the Group’s risk
appetite and strategic objectives, as defined by
the Board.

The framework is overseen by the Risk
Committee which helps the businesses
with their risk management and reporting,
consolidates reporting, overlays the functional
and macro-economic view of risk and
reports to the Board on the management
and assessment of risk within the Group.
An assessment of the Company’s risk
management and internal control systems is
carried out annually by the Audit Committee
on behalf of the Board. The results of
that assessment are reported in the Audit
Committee report as set out on page 91 and
below. The focus for further improvements to
the framework are set out in more detail on
page 62.

Group functions
The Group’s trading companies are supported
by Group functions. Each functional head
reports to an Executive Director. The Board
retains an oversight role and receives regular
reports on key issues: on financial, tax and
treasury matters from the Chief Financial
Officer, on people and HR matters from the
Chief HR Officer, and on legal and regulatory
matters from the Group General Counsel.
The Board conducts a “deep dive” review into
the Group’s most potentially impactful principal
risks at most scheduled Board meetings. The
Board has a schedule of matters specifically
reserved to it for decision, designed to ensure
that it maintains full and effective control over
appropriate strategic, investment, financial,
organisational and compliance issues. This
schedule is subject to review by the Board on
an annual basis and was last updated on
13 December 2022.

Internal Auditt
The Group’s Internal Audit function was
outsourced to PwC, effective April 2022.
PwC has defined and undertaken regular
reviews of the individual businesses’ operations
and their systems of internal controls. They
make recommendations to improve controls
and follow 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.

James Fisher and Sons plc – Annual Report 2022Strategic reportAnti-bribery and corruption
The Board is committed to ensuring the
highest standards in all of the Group’s business
dealings and condemns corruption in all its
forms. The Group has a formal anti-bribery and
corruption statement and policy and does not
tolerate or condone corruption or bribery in any
of the Group’s business dealings. This policy
has been implemented throughout the Group
and is supported by a Group-wide training
programme (both online and in person),
delivered by the Group legal team and regular
compliance reviews through Internal Audit.
The Group’s auditors have also introduced
additional procedures as part of their audit for
the first time in 2022. The policy is reviewed
annually by the Board and is available on the
Group’s website. More detail is provided on
page 73.

Modern slavery
The Board has a zero-tolerance approach to
any form of modern slavery and is committed
to acting in an ethical manner and with integrity
and transparency in our Group’s business
dealings. The Group has a formal slavery
and human trafficking statement and policy
which outlines the steps taken by the Group
to ensure that slavery and human trafficking is
not taking place within any part of the Group’s
business or within the Group’s supply chains.
Both the statement and the policy are available
on the Group’s website. More detail is provided
on page 73.

Principal risks and uncertainties cont.

Through the Executive Directors and the
Group General Counsel, the Risk Committee
presents to the Board its annual assessment of
the principal and emerging risks of the Group,
taking into account the existing principal risks
of the trading companies, and those tracked
by the functional teams, as well as presenting
the emerging macro risks, and those emerging
risks identified by the trading companies, the
impact of which could potentially develop to
impact the Group as a whole. This enables
the Board to carry out its own robust
assessment of the principal and emerging risks
of the Group as a whole. The results of that
assessment, including risk management and
mitigating activities, are set out on page 84.

Risk management systems
The key features of the Group’s risk
management systems used to identify and
monitor material risks are as follows:

• Each operating business is required to

maintain an up-to-date risk register, which
identifies key and emerging risks, assigns
each a “risk score” based on the likelihood
of it arising, and the potential impact on
the business of an adverse outcome,
both before and after mitigation measures
are taken. Risk scores are established
by reference to a set of standard criteria
for each type of risk. The risks and their
respective risk scores before and after
mitigation are reviewed by each business
and discussed with the Executive Directors
at each quarterly operating board meeting.

• The risk registers are reviewed by Internal
Audit, the Risk Committee and the Board
twice a year, based on the process outlined
in the “Risk Committee” section above, with
the mid-year review focused on the material
changes to those risks.

• The risk registers are supported by an

internal control and risk management review
questionnaire, completed annually by each
trading company managing director. This
is a robust self-assessment of operational
controls and compliance with Group
policies, applicable laws and regulations
relating to their business. This ensures
that managing directors identify risks and
relevant mitigating strategies, and have in
place adequate control systems to identify,
mitigate and report any weaknesses that
require management attention.

• The risk registers are used twice a year
by the Board to help to determine the
Group’s principal and emerging risks and
uncertainties, their potential impacts, how
they are being managed and/or mitigated,
and any change in the nature of the risk.
Internal Audit uses them to define its areas
of focus for the forthcoming period.

Business reporting and performance
reviews
The Group operates an annual budgeting
process and produces formal, detailed
quarterly forecasts which are reviewed and
approved by the Board. In the intervening
months a high-level forecast is updated
to provide additional visibility on business
outlook. Monthly business performance
reviews are conducted at all businesses by the
Executive Directors, comparing performance
against agreed financial and KPI measures. In
addition to the annual budget, all businesses
prepare five-year strategic plans which are
consolidated and presented to the Board as a
Group five-year strategic plan. The Executive
Directors hold quarterly board meetings with
each business unit to discuss strategy, financial
results and forecasts, business needs and the
management of risks facing the business.

Regulatory compliance policies
Whistleblowing
As part of its internal control procedures, the
Group maintains a whistleblowing policy which:

• encourages the workforce to report any

suspected wrongdoing as soon as possible,
in the knowledge that their concerns will
be taken seriously and investigated as
appropriate;

• provides staff with guidance as to how to

raise those concerns; and

• reassures staff that they should be able
to raise genuine concerns without fear
of reprisals, even if they turn out to be
mistaken.

The policy covers any suspicions of criminal
activity, failure to comply with any legal
obligation, miscarriages of justice, danger to
health and safety, damage to the environment,
bribery under our anti-bribery and corruption
policy, facilitating tax evasion, financial fraud
or mismanagement, and breach of our internal
policies and procedures including our Code of
Ethics. The policy is designed to ensure that
any employee who raises a genuine concern is
protected. Any concerns can be raised in the
first instance with the Chief Financial Officer
or the Group General Counsel in confidence.
The Group has launched a new externally-
facilitated whistleblowing hotline in the first
quarter of 2022 providing a simple platform
for communication and management of
whistleblowing issues, in the many languages
used around the Group.

The Board has overall responsibility for the
policy, its application to individual concerns
raised under the policy and for reviewing
and approving the effectiveness of actions
proposed in response to concerns raised
under the policy.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc71

An additional downside scenario was
considered by modelling the potential
cumulative impact of an annual operating profit
reduction of 10% in 2023 and 25% for the rest
of the viability period, cash reduction of £20m
and 50pbs increase in interest rates. In this
scenario the Group remained viable assuming
successful completion of refinancing in 2023
and a subsequent refinancing before the
facilities expire in 2025.

It is considered unlikely that all of the risks
outlined above will arise at once. Whilst it
is unlikely that the climate change risk will
have notable impact on the Group’s financial
position over the viability assessment period,
over the longer term it is likely to have adverse
impact on the oil and gas servicing businesses
and maritime transport, however, it presents
a significant opportunity for the Group’s
businesses that service the renewables sector.
These potential market dynamics are reflected
in the Group’s strategic planning, portfolio
decision-making and impairment testing.

Given the severity of the scenarios run, the
Board consider that the Group is resilient to
the risks outlined above. Additional mitigating
actions are available to the Group in more
severe scenarios of reduced profitability and/
or liquidity:

• reduction of capital expenditure;

• not declaring dividends;

• outright sale or sale/leaseback of Group

assets;

• further divestments of the Group’s

businesses/divisions; and

• the anticipated positive impact of the

transformation activities that the Group plans
to undertake over the viability period, no
benefit from which has been assumed in the
underlying financial model.

Based on their assessment of the Group’s
prospects and viability, and in accordance with
Provision 31 of the Code, the Directors confirm
they have a reasonable expectation that the
Group will be able to continue to operate and
to meet its liabilities, as they fall due, for the
period to 31 December 2025. This conclusion
is based on the expectation that the current
refinancing process will successfully complete
and further refinancing is achieved before the
facilities expire in 2025.

Viability statement

Viability statement
The Group’s business model and strategy
are detailed on pages 10 and 11, and our
risk management framework is described on
pages 69 to 70. Understanding of our business
model, our strategy and our principal risks is a
key element in the assessment of the Group’s
prospects, as well as the formal consideration
of viability.

As part of the strategic planning process, the
Directors have assessed the Group’s viability
over a three-year period ending 31 December
2025. The Group prepares a five-year outlook
in its strategy planning process, however when
assessing the appropriate period over which
to consider viability, a shorter period of three
years was chosen as it is more closely aligned
with the timeline of the Group’s transformation
programme, which is aimed at simplifying
the organisation and divesting non-core
businesses. In addition, should the risks and
uncertainties identified on pages 62 to 68 have
an impact on the Group, it is reasonable to
believe that they will occur within this period.

In preparing this viability assessment, the Board
assumes and expects that the refinancing
process as described in the going concern
section of note one is successfully completed.
The remaining conditions to be satisfied,
although not entirely within the direct control
of the Group, are common in many borrowing
agreements. That said, the Board highlights
that the material uncertainties referred to in
respect of the Going Concern assessment may
cast significant doubt over the future viability of
the Group should they arise.

During the strategy planning process, the Board
reviews the Group’s strategy and its detailed
financial plan in light of the Group’s current
position and prospects, together with factors
and risks that might affect the future outlook.
The Board carefully assesses the performance
and prospects of each business regarding
entering new markets and geographies,
current and expected growth rates, macro
and individual business risks, prospective new
projects (and their timing), and the robustness
of individual business performance.

The Group’s plan overlays a number of
assumptions and sensitivities which are
reviewed by the Board; this includes a
review of whether additional bank facilities
will be required and available in the plan period,
as well as a robust assessment of the severe
but plausible scenarios aligned to the principal
and emerging risks facing the Group as set out
on pages 62 to 68, and the potential impact of
those scenarios on its business model, future
performance, solvency and liquidity
over the period. The scenarios which are
considered include the diverse nature of the
markets and geographies in which the Group’s
businesses operate, and their ability to react
quickly to change.

Whilst all the principal and emerging risks
identified could have an impact on the Group’s
performance, the specific risks that could
potentially impact the Group’s financial
position are:

• financial risk – trading downside risks, which

assume the Group is not successful in
delivering the anticipated profitability levels,
including in relation to contractual risk (see
below). To reflect this, operating profit was
reduced by 10% in 2023 and 25% for the
rest of the viability period. Exposure to an
increase in interest rates/borrowing costs
was also considered by aligning interest
rates and borrowing costs with the new
facilities’ term sheet and increasing the
underlying SONIA rate by 50bps.

• maintaining access to adequate funding
– the Group has historically maintained
good access to adequate funding. As
at the date of this report, the Group has
received commitment letters from all of its
six lenders to enter into a single Revolving
Credit Facility for facilities of £210m and,
as further detailed in the Going Concern
assessment on page 91, the Group expects
to complete this refinancing by 7 June 2023.
The refinancing is subject to conditions
subsequent which include granting of
guarantees and security to the lenders, the
execution of which is not entirely within the
Group’s control. The new facilities will expire
in March 2025 which also falls withing the
viability assessment period. The strength
of the Group’s strategic plan, which shows
continued deleveraging and reduction in
total borrowings gives the Board confidence
that further refinancing in advance of March
2025 will be achievable, however, the
Directors recognise that this is outside of
the direct control of the Group.

• contractual risk – winning larger contracts
and operating in more geographies with
partners potentially exposed to increased
risk of late payment or cost overruns.
To reflect this operating cashflows were
reduced by £20m over the three-year period
to 31 December 2025 and in line with the
trading risk scenario described above,
operating profit was reduced by 10% in
2023 and 25% for the rest of the viability
period.

• project delivery – risk that a project not
delivered in line with the budgeted profit
and payment terms. The potential impact of
this risk is modelled through cashflow and
operating profit reduction as above.

• group transformation - the risk of disruption
and/or distraction to its core activities if the
transformation programme is not managed
well. The potential impact of this risk is
modelled through cashflow and operating
profit reduction as above.

James Fisher and Sons plc – Annual Report 2022Strategic report72

Non-financial information statement

The information set out below, together with the cross references listed in the table below as to where further information can be found in the
main body of the Strategic report, is in compliance with the Non-Financial Reporting requirements as set out in sections 414CA and 414CB of the
Companies Act 2006:

Reporting requirement

Relevant policy

Location

Business model

Environmental matters

Group Health, Safety and Environmental policy

Planet

Page

10 to 11

34 to 41

Principal risks and uncertainties

Employees

Group Health, Safety and Environmental policy

Empowering our People

Social matters

Code of ethics

Directors’ report

People

Respect for human rights

Modern slavery and human trafficking policy

Partnerships

Anti-bribery and corruption

Anti-bribery and corruption policy

Principal risks and uncertainties

Code of ethics

Non-financial information

Audit Committee Report

42 to 51

112

42 to 51

52 to 55

Principal risks

Non-financial KPIs

Principal risks and uncertainties

62 to 70

Key performance indicators

56 to 57

Our policies
A combination of online and in person training on all the key policies is carried out across the Group, and there is also a system of bi-annual
certification for compliance officers, certifying that the relevant individuals in their businesses have read and understood the policies and are fully
compliant. All employees, contractors and third parties are encouraged to report any circumstances where there is a suspected or actual breach of
any Group policies, applicable laws, or the high standards as set out in the Code of ethics. All reported incidences of actual or suspected breach of
any of the policies are promptly and thoroughly investigated. The Audit Committee also considers any high-risk areas identified by the internal audit
function, the Group legal team or the business’ compliance officers.

Key policy

Relevant policies

Code of ethics

James Fisher is committed to ensuring the highest standards in its activities and is particularly concerned that appropriate and
ethical policies and procedures are followed in all business dealings across the Group.

The Group strives for a culture of honesty, openness and accountability. 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.

Strategic reportAnnual Report 2022 – James Fisher and Sons plc73

Key policy

Relevant policies

Group Health,
Safety and
Environmental
policy

Health and safety is the top priority and the Group actively strives for the continuous improvement of health and safety in the
workplace. We aim to provide a healthy and safe working environment for all our employees and to ensure the safety of others
affected by our operations.

The Group recognises its responsibility to protect the environment for the benefit of all. This policy represents a declaration of
our intent and commitment to minimise the environmental impact of our activities, our consumption of raw materials and our
production of waste.

The ultimate responsibility for health and safety, and the environment rests with the Group Chief Executive Officer, the Board
members, and the Executive team. This responsibility is cascaded through the organisation via divisional/regional 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.

Anti-bribery
and corruption
policy

James Fisher has zero tolerance for any form of bribery or corruption and is committed to complying with all applicable anti-
bribery and corruption laws. The Group has an established anti-bribery and corruption policy and has introduced a compliance
programme which has the support of the Board and senior management within the Group. This includes communication of
the statement and policy, training, risk assessment and ongoing monitoring. Employees 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. Ongoing 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 was rolled out throughout the Group in 2020.

Modern
slavery policy

James Fisher respects fundamental human rights, and is committed to acting ethically and with integrity in all our business
dealings and relationships and to implementing and enforcing effective systems and controls to ensure modern slavery is not
taking place anywhere in our 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.

Approval of Strategic report
The Strategic report on pages 2 to 73 was approved by the Board on 28 April 2023.

Jean Vernet
Chief Executive Officer

28 April 2023

James Fisher and Sons plc – Annual Report 2022Strategic report74

Governance at a glance

Applying the Principles
of the UK Corporate
Governance Code
This governance section of the report
is structured around the Company’s
application of the Principles of the Code:

1 Board leadership and company
purpose

Details about the Company’s

purpose, culture and values are set out
on page 85

The key activities of the Board during

the year and key priorities for 2023 are
summarised on pages 82 to 83

2 Division of responsibilities

An explanation of our governance

structure is set out on page 78

3 Composition, succession, and

evaluation

Details of this year’s Board evaluation

is set out on page 84

Report from the Chair of the

Nominations Committee is set out on
pages 86 to 88

4 Audit, risk and internal control

Report from the Chair of the Audit
Committee is set out on pages 89 to 93

5 Remuneration

Report from the Chair of the

Remuneration Committee is set out on
pages 94 to 95

Details of the Directors’ remuneration

policy for 2023 is set out on pages 96
to 99

Governance structure

The Board
The Corporate governance report on pages 82 to 85.

Audit
Committee
The Audit
Committee report
on pages 89 to 93
describes in detail
the Committee’s
role and activities.

Remuneration
Committee
The Directors’
remuneration
report on pages 94
to 110 describes
in detail the
Committee’s role
and activities.

Nominations
Committee
The Nominations
Committee report
on pages 86 to 88
describes in detail
the Committee’s
role and activities.

Executive
Committee

Investment
Committee

Group Risk
Committee

Group Health
and Safety
Committee

Group
Sustainability
Committee

Operating
divisions

Corporate
functions

GovernanceAnnual Report 2022 – James Fisher and Sons plc75

HIGHLIGHTS
Diversity (all Directors)

Female: 3
Male: 5

Length of Tenure (Chairman
and Non-Executive Directors)

Board membership and meetings
The composition of the Board and the Board Committees meets the requirements of the Code.

The Board and Board Committees held a number of scheduled and unscheduled meetings in
2022 and individual attendance is set out in the table below.

Board and Committee scheduled meetings attendance (2022)

Board

Audit Remuneration Nominations

0-2 years: 5
2-5 years: 1
5-9 years: 2

Executive Directors
Jean Vernet(1)
Duncan Kennedy(1)

Non-Executive Directors
Angus Cockburn
Aedamar Comiskey
Justin Atkinson
Inken Braunschmidt
Kash Pandya
Claire Hawkings

4/4
10/10

10/10
10/10
10/10
9/10
9/10
10/10

Former Directors and Non-Executive Directors
Eoghan O’Lionaird(1)
Michael Salter(2)

5/5
3/3

N/A
N/A

N/A
4/4
4/4
4/4
4/4
4/4

N/A
2/2

N/A
N/A

N/A
5/5
5/5
5/5
4/5
5/5

N/A
3/3

N/A
N/A

4/4
4/4
4/4
4/4
3/4
4/4

N/A
2/2

(1) Eoghan O’Lionaird stepped down from the Board on 5 September 2022. Jean Vernet joined the Board

on 5 September 2022.

(2) Michael Salter stepped down from the Board following the Company’s AGM on 5 May 2022.

Where exceptionally, a meeting has been arranged at short notice and due to other commitments,
a Director has been unable to attend a meeting, they have separately submitted their comments
and input on the matters under discussion to the Chairman of the Board or the relevant Board
Committee.

GovernanceJames Fisher and Sons plc – Annual Report 2022

Chairman’s introduction to corporate governance

Dear Shareholders
On behalf of the Board, I am pleased to
present the Company’s corporate governance
report for 2022. As we set out elsewhere in
this report, 2022 continued to be a challenging
year for the Group. In times of challenge, it
remains critical to ensure the Company has a
strong governance framework, overseen by an
experienced and engaged Board with the right
information to make informed decisions in the
interest of stakeholders. Over the course of
2022, the Board has supported the Executive
team in addressing the issues created by
macroeconomic and geopolitical matters, as
well as by the poor financial performance of
the Group to ensure that all its decisions and
actions were taken with a clear governance
framework in place.

During 2022, we reacted quickly to the
situation in Ukraine, offering immediate support
to our Ukrainian seafarers, but also introducing
new governance processes in relation to
doing business related to Russia, to stay up
to date with a quickly changing situation, and
to ensure that none of our Group businesses
are taking on obligations which they either
cannot fulfil, or which would result in some
form of financial benefit to Russia. The Group
remains vigilant of the situation in Ukraine and
continues to employ processes which enhance
supply chain transparency.

The Board continues to be focused on turning
around our performance and resetting the
Group onto a path towards sustainable
profitable growth, whilst ensuring that the
Group also delivers for all its stakeholders,
especially during a time of uncertainty for our
staff, our customers and the communities in
which we operate. The Group has previously
laid out a clear purpose supported by a strong
values-based framework and the Board will
continue to ensure that the Group is run in a
manner consistent with this framework.

Progress against 2022
governance priorities
Last year, I outlined the Board’s priorities for
2022, which were focused on putting in place
the governance structures to support and
enable the short-term business objectives
of reducing leverage through improved
operational performance and the disposal of
non-core businesses, as well as supporting
the implementation of the Group’s long-term
strategy.

Board and Committee
composition
During 2022, there were a number of changes
to the membership of the Board. Firstly, Claire
Hawkings was appointed to the Board as
an independent Non-Executive Director on
1 January 2022. Following the Company’s
AGM on 5 May 2022, Michael Salter retired
as independent Non-Executive Director. Jean
Vernet joined the Board as Chief Executive
Officer with effect from 5 September 2022,
with Eoghan O’Lionaird stepping down with
effect from that date.

UK Corporate Governance Code
The Board understands that good corporate
governance is an important element in helping
to build a successful business in a sustainable
manner. The UK Corporate Governance Code
2018, publicly available at www.frc.org.uk
(the Code) applied to the Company through
the year, and this report explains how the
Company has applied the principles set out in
the Code. During the year ended 31 December
2022 (and up to the date of this report), the
Company has applied all the principles, and
complied with the relevant provisions of the
Code.

In addition, the Company has focused recently
on how best to engage with the workforce
on Executive remuneration under one of the
elements of Code provision 41. On page 96
of the Remuneration Committee report, we
outline the steps undertaken so far by the Non-
Executive Directors to engage the workforce to
explain how Executive remuneration aligns with
wider Company pay policy. While the Company
is compliant with provision 41, this is an area
of ongoing development, and the Company
intends to build on this during 2023 as part of
its engagement activities with employees.

Strategy, purpose and values
The Code provides that a Board should
establish the Company’s strategy, purpose and
values, and that its directors should lead by
example and promote the desired culture.
In terms of leading by example, the importance
of the Executive Directors being visible in the
business and reinforcing the messaging about
our purpose and values goes without saying.
In addition, there is a programme of visits
organised for the Non-Executive Directors,
a key element of which is meeting with the
workforce for a two-way dialogue about a wide
range of issues, including purpose and values.

The Board’s governance priorities for 2022
included:

• the review and refinement of the delegated

authority matrix;

• the creation of a new Investment Committee
consisting of key members of the Executive
team, with the mandate to oversee capital
expenditure, acquisitions and disposals and
the delivery of key business projects; and

• the detailed review of our risk management

systems and controls and embedding
the improved risk framework across the
business.

During 2022, we have agreed and
implemented a new delegated authority
matrix, which includes updated reserved
matters for the Board (available on the Group
website), and the formation of the Investment
Committee with the mandate to oversee
capital expenditure, acquisitions and disposals
and the delivery of key business projects for
approval or escalation to the Board under the
reserved matters. Due to the complexity and
diversity of the Group’s businesses in terms
of size, markets and locations, it has been
challenging to employ a single, consolidated
delegated authority matrix. During 2022, we
have created a two-tiered delegated authority
matrix, with application (and therefore authority
levels) to individual businesses dependent
on a number of size and risk factors. The
review of our risk management systems and
control, supported by PwC, has resulted in a
number of key changes to the processes that
underpin the consideration of risk by the Group
operating companies, as well as the structure
of the Risk Committee and the systems it
employs to review operational risk, as well
as the macro economic and political risk
environment in which the Group operates.

2023 governance priorities
Following another challenging year, the Board’s
focus in 2023 remains on putting in place
the governance structures to support and
enable the short-term business objectives
of reducing leverage through improved
operational performance and the disposal of
non-core businesses, as well as supporting
the implementation of the Group’s long-term
strategy. In order to support these business
objectives, the Board’s governance priorities
for 2023 include the ongoing implementation
of the new delegated authority matrix and the
formation of the Investment Committee. We
will also look to restructure and reshape the
Executive Committee under the leadership of
Jean Vernet to ensure he has the support he
needs to implement the Group strategy. We
are also in the process of finalising the detailed
review of our risk management systems and
controls and will then look to embed the
improved risk framework across the business.
I look forward to reporting on progress on
these priorities next year.

GovernanceAnnual Report 2022 – James Fisher and Sons plc77

More details in relation to diversity can be
found in the Nominations Committee report on
pages 86 to 88.

Board effectiveness review
As Chairman, I lead an annual evaluation of the
effectiveness of the Board, its Committees and
the individual Directors. Following an externally-
facilitated review in 2021, for 2022, the Board
undertook a formal internal evaluation. I am
pleased to report that the review highlighted
that the Board continues to be committed and
cohesive during what remains to be a period of
change in its membership.

The evaluation process identified some
recommended actions which can be found on
page 85.

Conclusion
Having the right governance structure is vital
in enabling the Group to operate effectively in
a rapidly changing political, economic, social
and technological environment, and to make
the most of the resulting opportunities that
present themselves, as well as managing the
associated risks. As this letter sets out, we are
undertaking a number of reviews to improve
our governance structure. I am pleased with
the progress we are making but there is more
to do in building the optimal organisational
structure and supporting governance and
control frameworks. In turn, this will provide a
strong foundation from which the Group can
build its turnaround and deliver sustainable
growth and returns, whilst making a positive
impact for the benefit of all our stakeholders.
This Governance report outlines the ongoing
actions required to continue this work, and I
look forward to reporting to you on progress
next year.

Angus Cockburn
Chairman

28 April 2023

Employee engagement
To better understand the views of our
workforce, an externally facilitated
engagement survey of all our employees is
conducted annually. During the year, over
80% of employees completed the survey, an
improvement on the completion rate in the
prior year. The results of the engagement
survey were reviewed by the Board and it was
pleasing to see that many of the challenges
revealed by the survey in the prior year are
being addressed.

The results of the survey and the actions
being taken as a result are set out more fully
on page 44.

Stakeholder engagement
The Code highlights the importance of effective
engagement with shareholders and other
stakeholders. We have identified shareholders,
employees, the environment, customers and
suppliers and local communities as being our
key stakeholders.

During Board and Committee meetings, the
Group’s key stakeholders and their differing
perspectives are identified and considered as
part of the decision-making process. These
discussions, assessments and conversations
focus not only on delivering increased value
for shareholders, but also assess the impacts
of our decisions and strategies on the Group’s
wider stakeholders.

The Board recognises the importance of
regular, open and constructive dialogue with
shareholders and other stakeholders, and this
has long been a key aspect of our culture and
decision-making. The Executive Directors meet
key shareholders regularly and other members
of the Board are available to be consulted as
appropriate. I have met with most of our largest
shareholders since starting with the Company
and will continue to engage as appropriate.

The Board is also committed to embedding
sustainability into day-to-day decisions and
making this a central theme of delivering the
Group’s strategy. The Sustainability Committee,
which reports into the Board, monitors
progress on achieving the Group’s ESG
priorities. One of its key roles is overseeing the
stakeholder working groups, which include
employee representatives from all around
the Group which play an important role in
delivering our sustainability objectives.

Given the nature of the services we provide,
stakeholder engagement is a multi-faceted
issue and is one that is frequently discussed at
the Board.

More information about how we consider
and engage with our stakeholders as part of
our Board activities is set out on pages
82 and 83.

Managing risk
The Board, assisted by the Audit Committee,
ensures that our approach to risk management
is effective, extending beyond financial risk
to a wider range of strategic and operational
risks. There is a full report on our risk
management activities in our Principal Risks
and Uncertainties section of the Strategic
report on pages 62 to 70. Given the challenges
posed by the pandemic as well as the trading
issues that have faced the Group, in 2021
the Board engaged PwC LLP, to carry out
an independent review of the Group’s risk
management systems and controls. This
review concluded that the risk framework is
generally appropriate, but it also recognised
that the Group’s diversity in terms of its
operations and geographies added an inherent
layer of complexity to risk management.
The report recommended a number of
improvements, which the Group continued to
implement in 2022, as described in more detail
on page 62.

Board composition and diversity
We are committed to ensuring that the
composition of the Board has the diversity
required to be as effective as possible. The
Board is currently composed of eight Directors,
each bringing a variety of skills, knowledge
and experience, in addition to diversity of
thought. With two Executive Directors and
five Non-Executive Directors (excluding myself
as Chairman), there is a strong independent
element to the Board, which ensures that the
balance of power rests with the Non-Executive
members of the Board. Diversity is a matter
which we consider regularly, and in 2022 we
updated the Board Diversity Policy to include
aspects such as sexual orientation, disability
and socio-economic background, when
considering candidates for the Board and its
Committees. The Board Diversity Policy is
available on the Group website and sets out
our aims to ensure an appropriate mix of skills
and experience on the Board as well as the
Board’s Committees.

Further to the new Listing Rules disclosure
requirements introduced during the year
relating to board diversity, the Board is
committed to meeting the following targets:
at least 40% of the individuals on the Board
are women; at least one of the senior Board
positions is held by a woman and at least
one Board member is from a minority ethnic
background. The disclosure requirements
will apply to the Company in relation to the
financial year ending 31 December 2023. As
at 31 December 2022, one Director on the
Board is from an ethnic minority background
and one of the senior Board positions (Senior
Independent Director) is held by a woman. The
female representation on the Board is 37.5%
and the Board succession planning conducted
by the Nomination Committee will determine
plans to achieving the targets stated above.

GovernanceJames Fisher and Sons plc – Annual Report 202278

Governance framework

THE BOARD
Chairman: Angus Cockburn
Meets regularly, with at least seven scheduled meetings for the year.
During 2022 the Board also met outside of the scheduled meetings to
discuss and approve event-driven matters, such as trading updates.

The Board is responsible for steering the Group’s purpose, culture and
values, for setting the Group’s strategic priorities and for overseeing
their delivery in a way that enables sustainable long-term growth, while
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
• 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 Officer, the other
Executive Directors and other senior management to stay
informed.

• Ensures effective communication with our shareholders.

Senior Independent Non-Executive Director
• Provides a sounding board to the Chairman and appraises his

performance.

• Meets with Directors to review the Chairman’s performance.

This review is then shared with the Chairman.

• Available to respond to shareholder concerns when contact

through the normal channels is inappropriate.

Non-Executive Directors
• Contribute to developing our strategy.

• Scrutinise and constructively challenge the performance of

management in the execution of our strategy.

Non-Executive Director for Employee
Engagement
• Responsible for representing the voice of our colleagues in the

boardroom.

• Provides a regular platform for the independent element of
the Board to have direct conversations with the employees,
individually and in group settings, to gain insights into their
experiences, concerns and perspectives, and to better
understand whether the cultural change is already underway.

Executive Directors
• Responsible for management of the Group as a whole.

• Delivers strategic objectives within the Board’s stated risk

appetite and delegated limits of authority.

• Responsible for management of Group finances and records.

Matters reserved for the Board
At least once a year the Board reviews the nature and scale of
matters reserved for its decision. These include:

• Company strategy and financial performance;

• internal control and risk management systems; and

• review of the Board’s own effectiveness.

BOARD COMMITTEES
To assist in fulfilling its oversight responsibilities the Board has
established Non-Executive and Management Committees that
provide dedicated focus to particular areas, and management of the
day-to-day operations of the business. Supported by its principal
Non-Executive Committees (Nominations, Audit and Remuneration
Committees), the Board sets the strategic direction of the business.
The Committees operate within defined terms of reference as defined
by the Board. Each principal Board Committee is comprised of
independent Non-Executive Directors appointed by the Board. Terms
of reference are available upon request from the Group Company
Secretary and are also published on the Company’s website.
The Group Company Secretary acts as secretary to each of the
Committees. Each Committee chair reports to the Board on the
Committee’s activities following each Committee meeting.

KEY MANAGEMENT COMMITTEES

Group Health and Safety Committee
Chaired by Group CEO

Meets on a quarterly basis.

Discusses all health and safety issues including incidents, root
cause analysis, mitigating actions and training requirements.
Reports updates on material safety incidents and developments
to the Board.

Group Sustainability Committee
Chaired by Group CEO

Meets on a monthly basis.

Identifies, monitors and co-ordinates the Group’s sustainability
commitments, includes representation from each of the stakeholder
working groups. Works with sustainability champions from each
operating business. The Sustainability Committee report on page 27
describes in detail the Committee’s role and activities.

Group Risk Committee
Chaired by Group CEO

Meets on a quarterly basis.

Identifies and monitors operational risks throughout the Group,
supports the internal control and risk management strategy and
policy. The Principal Risks section of this report on pages 62 to 70
describes in detail the Committee’s role and activities.

Investment Committee

Chaired by Group CEO

Formed to advise and assist in the assessment of capital
investments and significant contractual commitments entered
into by the Group in accordance with the authorities delegated to
the Committee by the Board and in accordance with the agreed
strategy and budget.

GovernanceAnnual Report 2022 – James Fisher and Sons plc79

Audit Committee
Chair: Justin Atkinson
Meets at least three times a year.

Remuneration Committee
Chair: Aedamar Comiskey
Meets at least three times a year.

Nominations Committee
Chair: Angus Cockburn
Meets at least three times a year.

Assists the Board in its oversight and
monitoring of financial reporting, reviews
the Group’s internal financial controls and
systems for risk management and internal
controls and assesses independence and
objectivity of external auditor.

The Audit Committee report on pages
89 to 93 describes in detail the Committee’s
role and activities.

Agrees the remuneration policy for Executive
Directors and oversees remuneration
for other senior executives; reviews the
appropriateness and relevance of the
Group’s remuneration policy; and ensures
that the provisions of the Code relating to
remuneration are fulfilled.

Reviews workforce remuneration and related
policies and the alignment of incentives
and rewards with culture, taking these
into account when setting the policy for
Executive remuneration.

The Directors’ remuneration report on

pages 94 to 110 describes in detail the
Committee’s role and activities.

Reviews the structure, size and composition
of the Board (including skills, knowledge,
diversity and experience) and recommends
changes.

Reviews succession planning for Directors
and senior executives.

Identifies and nominates candidates for
approval by the Board, to fill vacancies
when they arise.

The Nominations Committee report
on pages 86 to 88 describes in detail the
Committee’s role and activities.

Disclosure Committee
Consisting of the Chairman, the Executive Directors and the
Group General Counsel.

Oversees the Company’s compliance with its disclosure obligations
and meets when necessary.

Special Purposes Board Committee
Consisting of the Chairman and the Executive Directors.

Empowered, under its terms of reference, to take specific 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. Meets according to business
requirements.

Operating Divisions
• Day-to-day business delivery.

• Executive Directors meet on at least
a quarterly basis and have monthly
performance management calls
with managing directors of principal
businesses.

Corporate Functions
• Day-to-day business delivery.

• Executive Directors and heads of

corporate functions meet at the Risk
Committee on a quarterly basis.

Executive Committee
Chaired by:

• Chief Executive Officer and comprises:

• Chief Financial Officer.

• Chief HR Officer.

• Head of Corporate Development.

• Group General Counsel.

• Group Business Development Director.

• Head of Business Excellence.

• The head of each division.

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 and meets on a
monthly basis.

GovernanceJames Fisher and Sons plc – Annual Report 2022
80

Board of Directors

A R N

Key

A Audit Committee

R Remuneration Committee

N Nominations Committee

Chair of Committee

Member of Committee

2. JEAN VERNET
Chief Executive Officer
Year of appointment: 2022

Appointment:
Jean joined the Group as
Chief Executive Officer on
5 September 2022.

Key strengths and experience:
• Strong leadership skills.

• Clear strategic mindset.

• Significant financial experience.

• Commercial and business

management.

Jean has considerable experience
working in the energy and the
technology sectors in both the
UK and around the world. Most
recently, Jean was Chief Executive
Officer of Smiths Group’s largest
division, John Crane, where he
drove a highly effective growth
strategy in a business that
operates in over 50 countries.
He has an engineering degree and
spent over a decade in various
financial and market-facing roles
with energy services business,
Schlumberger. His experience
also includes five years as Chief
Financial Officer of Expro, the
offshore energy services provider,
during which he played a key role
in its successful turnaround.

External appointments:
None.

1. ANGUS COCKBURN
Independent Non-Executive
Chairman of the Board and
Nominations Committee
Year of appointment: 2021

Appointment:
Angus was appointed Non-
Executive Chairman to the Board
and the Nominations Committee
in 1 May 2021.

Key strengths and experience:
• Extensive business leadership

experience.

• Strong strategic and financial

knowledge.

Angus joined from Serco Group
plc, where he was Group Chief
Financial Officer, a position he
held since October 2014. Angus’s
previous roles have included
Chief Financial Officer and Interim
Chief Executive of Aggreko plc,
Managing Director of Pringle of
Scotland, and senior finance
positions at PepsiCo Inc. He was
also previously a Non-Executive
Director of Howdens Joinery
Group plc and GKN plc.

He is a chartered accountant
with an MBA from the IMD
Business School in Switzerland
and is an Honorary Professor
at the University of Edinburgh
and a member of the Institute
of Chartered Accountants
of Scotland.

External appointments:
Senior Independent Non-
Executive Director of Ashtead
Group plc; Senior Non-Executive
Director of the privately owned
Edrington Group Limited and Non-
Executive Director of Securities
Trust of Scotland plc.

GovernanceAnnual Report 2022 – James Fisher and Sons plc81

8. CLAIRE HAWKINGS
Independent Non-Executive
Director
Year of appointment: 2022

Appointment:
Claire was appointed to the Board
on 1 January 2022.

Key strengths and experience:
• Significant experience in the

energy sector.

• ESG/sustainability leadership
and management expertise.

• Experience of the development
and delivery of organisational
strategies including business
process transformation,
leadership succession and
diversity and inclusion.

• Extensive experience in

portfolio management and
leading complex commercial
transactions.

Claire is a Non-Executive Director
and Chair of the ESG Committee
of Ibstock Plc, a market-leading
manufacturer of clay and concrete
building products. Claire is also
a Non-Executive Director and
Chair of the Responsible Business
Committee of FirstGroup plc, as
well as a Non-Executive Director
of Defence Equipment and
Support, a Bespoke Trading Entity
and Arm’s Length Body of the
Ministry of Defence. Claire has
over 30 years’ experience in the
energy sector, where she held a
variety of international leadership
positions, most recently with
Tullow Oil plc, and prior to that
with BG Group plc and British Gas
plc. Claire is a fellow of the Energy
Institute and Chapter Zero.

External appointments:
Ibstock Plc, Defence Equipment
and Support and FirstGroup plc.

3. DUNCAN KENNEDY
Chief Financial Officer
Year of appointment: 2021

Appointment:
Duncan was appointed to the
Board as Chief Financial Officer
in May 2021.

Key strengths and experience:
• Significant managerial and

financial experience.

• Track record of creating

sustainable stakeholder value
through both organic and
acquisitive strategies.

Duncan joined from (BTG) plc
(BTG), previously a FTSE250
international specialist healthcare
company, where he was Chief
Financial Officer for two years until
the company was acquired in
2019. Duncan joined BTG in 2005
and held a number of finance
and commercial leadership
positions from that time. Duncan
is a chartered accountant with a
primary degree in mathematics.

External appointments:
None.

4. AEDAMAR COMISKEY
Senior Independent
Non-Executive Director and
Chair of the Remuneration
Year of appointment: 2014

Appointment:
Aedamar was appointed to
the Board in November 2014.
She was appointed chair of the
Remuneration Committee in May
2018 and Senior Independent
Non-Executive Director in March
2019.

Key strengths and experience:
• Extensive global business

experience.

• In-depth knowledge of legal,
regulatory and governance
issues for listed companies.

Aedamar is the Senior Partner
of Linklaters LLP, where she
has been a partner since 2001.
Aedamar specialises in mergers
and acquisitions, joint ventures
and fundraisings, and is the lead
relationship partner for many of
the firm’s FTSE clients.

External appointments:
Linklaters LLP and Trustee
of Tommy’s.

5. JUSTIN ATKINSON
Independent Non-Executive
Director and Chairman of the
Audit Committee
Year of appointment: 2018

Appointment:
Justin was appointed to the
Board in February 2018 and was
appointed Chairman of the Audit
Committee in May 2018.

Key strengths and experience:
• Significant operational and

financial experience through his
previous and current roles.

• Substantial experience on

boards of listed companies
in both executive and non-
executive roles.

Justin was formerly Chief
Executive Officer of Keller Group
plc between April 2004 and May
2015, having previously held
the position of Group Finance
Director and Chief Operating
Officer. He was also previously a
Non-Executive Director of Sirius
Real Estate Ltd and Chair of the
Audit Committee. Justin was a
financial manager at Reuters plc,
and trained and qualified as a
chartered accountant at Deloitte
Haskins & Sells.

External appointments:
Chairman of Forterra plc
and Senior Independent
Non-Executive Director of
Kier Group plc.

6. INKEN BRAUNSCHMIDT
Independent Non-Executive
Director and Non-Executive
Director for Employee
Engagement
Year of appointment: 2019

Appointment:
Inken was appointed to the Board
in March 2019.

Key strengths and experience:
• Strategic growth mindset.

• Significant global operational

experience.

• Track record in innovation,

technology, digital
transformation and
management.

Inken is Chief Innovation and
Digital Officer 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 a committee member of the
Royal Academy of Engineering
Enterprise Hub.

External appointments:
Halma plc.

7. KASH PANDYA
Independent Non-Executive
Director
Year of appointment: 2021

Appointment:
Kash was appointed to the Board
in November 2021.

Key strengths and experience:
• Considerable international
leadership experience.

• Strong knowledge of

manufacturing and service
businesses.

Kash is Chair of Climate Impact
Partners, a world leading Voluntary
Carbon Market Group. Kash was
formerly Chief Executive Officer
of Helios Towers plc (HTWS), a
FTSE 250 company, between
August 2015 and April 2022, and
Non-Executive Deputy Chairman
between May 2022 and August
2022. Prior to joining HTWS, Kash
spent eight years on the board of
Aggreko plc, with responsibility
for managing its European and
International businesses. Kash
previously worked for various
engineering and manufacturing
companies in a number of senior
roles, including Jaguar, General
Electric Company, Ford Motor
Company, Novar plc (then
Caradon) plc, APW Limited and
Johnston Group.

External appointments:
Climate Impact Partners.

GovernanceJames Fisher and Sons plc – Annual Report 202282

Corporate governance report

Board focus in 2022 and principal activities
The principal activities of the Board during 2022 and how the Board considered the interests of its stakeholder groups in its decision-making and
key priorities for 2023 are set out below:

TOPIC

Trading

KEY ACTIVITIES AND
DISCUSSIONS IN 2022

STAKEHOLDER CONSIDERATIONS

• Received regular updates from

• The Board carefully considered the impact of

the Executive Directors on Group
trading.

• Invited divisional and business MDs
to present to the Board on trading
and strategic delivery.

• Carefully managed Group

indebtedness through a programme
of disposals and an enhanced cash
forecasting process.

trading updates on its stakeholders. The Board
also balanced its decision-making in relation
to dividends against the Company’s trading,
the need to reduce leverage and the need for
equitable treatment of all of the Company’s
stakeholders.

• In working to address and reduce the Company’s
leverage, the Board in particular took into account
the views and interests of shareholders, lenders
and employees.

KEY PRIORITIES
FOR 2023

• Continue to maintain
a close review of
Group trading.

• Ensure delivery of

disposals programme
and successful
implementation of
an enhanced cash
forecasting process.

Strategy

• Approved the Group priorities for

• The Board received updates on strategic

• Oversee

the future based on strategic focus,
organisational simplification and
execution.

• Approved the reorganisation of the

Group into three divisions supported
by a cohesive Executive Committee.

implementation from the Executive Directors
and businesses.

implementation of
strategic priorities.

• In reviewing implementation, and agreeing on

strategic priorities, the Board sought to balance
the impact of prioritisation on all stakeholder
groups, notably shareholders, employees
and the environment.

• Ensure reduction of
Group indebtedness.

• Building KPIs for
strategic priorities.

Risk
management

• Reviewed risk management systems

and controls.

• Considered key principal risks in

individual risk “deep dives”.

• Agreed actions for the improvement

of risk management controls,
following the review conducted by
PwC.

• The Board considered the perspectives of each
stakeholder group when reviewing the Group’s
risk management systems and controls, with
particular focus in 2022 on internal controls,
risks in relation to cybersecurity, recruitment and
retention, operating in emerging markets and
climate change.

Governance

• Engaged with institutional

shareholders and other stakeholders
throughout the year.

• Reviewed and approved the 2021

Annual Report and Accounts.

• Approved the updated Board

Diversity Policy.

• Approved the establishment of
the Investment Committee and
enhancement of the delegated
authority matrix.

• The Board recognises the importance of good
governance for all its stakeholders. The Board
confirmed governance as one of the key pillars of
the Group’s sustainability strategy (as set out on
page 27) and the potential resulting impacts on
stakeholder groups.

• Oversee

implementation of risk
management controls
improvements.

• Ongoing principal risk

“deep dives”.

• Improvements in

analysis of emerging
risks and risk
appetite.

• Maintain and enhance
the Group’s culture
and values and
key policies and
procedures.

• Oversee governance

framework
improvements.

• Continue to

strengthen internal
controls and
reporting.

GovernanceAnnual Report 2022 – James Fisher and Sons plcTOPIC

Organisational
capacity

Board
development

KEY ACTIVITIES AND
DISCUSSIONS IN 2022

• Closely monitored health and safety

performance across the Group.

• Health and safety governance and
reporting reviewed and enhanced.

• Supported by the Nominations
Committee, monitored senior
executive talent management and
development plans with succession
planning for all senior leadership
positions.

• Oversaw ongoing implementation
of employee engagement strategy.

• Continued to focus on the
composition, balance and
effectiveness of the Board and
the induction of a new Chief
Executive Officer.

• Reviewed Board composition,

diversity, and discussed and acted
on the recommendations of the
Nominations Committee.

• Undertook a formal evaluation of
the Board, its Committees and
individual Directors, and developed
an action plan.

STAKEHOLDER CONSIDERATIONS

• During the year, the health and safety of those
working for the Group continued to be an area
of focus and discussion by the Board.

• The Board has received safety updates from the
CEO at each Board meeting. In addition, Inken
Braunschmidt, in her role as designated Non-
Executive Director for employee engagement, has
reported to the Board on a regular basis on her
activities, including her discussions with employee
representatives on the employee engagement
working group.

• The Board carefully reviewed the outcomes of
the employee engagement survey and closely
monitored actions to address the challenges
identified.

• The Board has considered the interests of
its stakeholders in making changes to the
membership of the Board. In particular, the
Nominations Committee has sought to make
recommendations for new Board members who
bring expertise and experience of working with
all stakeholder groups, and can improve the
engagement to ensure that stakeholder interests
are heard clearly in the Boardroom.

KEY PRIORITIES
FOR 2023

• Continue to monitor
senior executive
talent management,
succession plans and
diversity for all key
positions.

• Continue to engage
with senior leaders
regarding health and
safety governance
and performance.

• Enhance employee
engagement at all
levels.

• Enhance the

Board’s strategic
understanding of
key markets.

• Increase the number

of Board site
visits to promote
understanding of
markets and to
promote employee
engagement with
Board.

• Annual internal

evaluation of Board
and Committee
performance.

GovernanceJames Fisher and Sons plc – Annual Report 202284

Corporate governance report cont.

Employee engagement
The Board understands the importance of
making visits to businesses in the Group to
engage with employees. Such visits enhance
Non-Executive Directors’ knowledge of
operations and strengthen their individual
contribution to Board debate. The Board
conducted an extensive programme of site
visits during the year. In addition, as part
of his induction, Jean Vernet completed a
tour of the Group’s businesses which was
an opportunity to meet and connect with
a diverse group of employees. The Board
discussed the outcomes of the business
visits, which assisted in identifying areas of
focus for the site visits scheduled in 2023.
The divisional and functional heads continue
to attend certain Board and Committee
meetings to discuss areas of strategic focus
and employee engagement. An externally
facilitated engagement survey of all our
employees is conducted annually and
reviewed by the Board.

Governance, risk and internal
controls
The Board is responsible for determining the
nature and extent of the Company’s principal
risks 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 62 to 70.

The Audit Committee monitors the Group’s
risk management and internal control process
and reviews its effectiveness on an ongoing
basis. This is part of an established process,
in accordance with the Code and the FRC’s
associated Guidance on Risk Management,
Internal Control and Related Financial and
Business Reporting, for the identification,
evaluation and management of the significant
risks facing the Group, which operates and is
reviewed continually throughout the year.

The Group’s governance framework is
described in more detail on pages 78 and
79. The Group’s internal control systems are
designed to provide the Board with reasonable
assurance as to the effective and efficient
operation of the Group in accordance with
the governance structures, and to ensure
the quality of internal and external reporting
and compliance with all applicable laws and
regulations. However, there are inherent
limitations in any system of internal controls
and accordingly even the most effective
system can provide only reasonable and not
absolute assurance. During 2023, we will be
implementing improvements to the governance
structure, in particular the implementation of
the delegated authority matrix.

As part of its internal control procedures, the
Group maintains policies and processes for
whistleblowing, anti-bribery and corruption
and to uphold its zero-tolerance approach to
any form of modern slavery. More information
in relation to those policies are included in the
principal risks and uncertainties section of the
Strategic report on page 70 and in the non-
financial information statement on pages 72
and 73.

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-
certification by the management teams of each
trading business in which they were asked to
confirm that their businesses have complied
with Group policies and procedures.

During 2021, PwC undertook a review of the
Group’s risk management framework, following
which the Board confirmed that, although
the controls and systems were adequate, a
programme of improvements was agreed for
2022. Further details on changes implemented
during the year can be found on page 62. An
overview of the Company’s risk management
and internal control systems is included in the
principal risks and uncertainties section of the
Strategic report on pages 69 to 70.

Board composition
Details about the current composition of the
Board are set out in the biographies of the
Directors on pages 80 to 81.

Board diversity
The Board believes that increasing diversity
at the Board level is important to achieve
its strategic objectives and to attract and
retain talent, as well as cultivating a culture of
inclusion and diversity through clear tone from
the top. The Board and Executive Committee
champion diversity and inclusion in their own
membership and throughout the Group.
Supported by the Nominations Committee,
the Chairman monitors the composition of
the Board to ensure that it is made up of
an appropriate mix of skills, experience and
knowledge required to effectively oversee
and support the management of the Group
and the delivery of the strategy, having regard
to the interests of the Group’s stakeholders
– shareholders, customers and suppliers,
employees, the environment and local
communities. When considering candidates
for the Board, the Nominations Committee,
on behalf of the Board, takes into account
factors such as: professional experience,
skills, education, international and industry
knowledge, social-economic background,
sexual orientation, disability, age, ethnicity
and gender.

The Nominations Committee report on pages
86 to 88 sets out its progress in this respect,
along with an example of the Nominations
Committee’s work in identifying a new CEO
candidate on behalf of the Board.

Board evaluation
Before the end of each year, the Board
undertakes an annual evaluation of the
performance of the Board, the Remuneration,
Nominations and Audit Committees, and the
individual Directors, including the Chairman,
against the framework of Board effectiveness
produced by the Financial Reporting Council.

The 2022 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 agreed actions
resulting from the Board evaluation are set
out in the table on page 85.

Training and development
Ongoing training and development for
Directors is available as appropriate and
is reviewed and agreed with the Chairman
annually. Specific and tailored updates
were provided by external advisers and
management to the Audit, Nominations and
Remuneration Committees. Key themes
included the increase of geographical risks
associated with energy supplies, costs,
sanctions, compliance and security. During
the year the Board also received reports from
the Group General Counsel on compliance, as
well as current legal and governance updates.
The Board is confident 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 Group businesses
and their operational performance, along with
an overview of Group strategy, corporate
governance, and Board procedures. The
programme also includes one-to-one meetings
with all Board and Executive Committee
members, as well as individual site visits to key
Group operating locations to understand the
business and meet management teams.

GovernanceAnnual Report 2022 – James Fisher and Sons plc85

BOARD EVALUATION
Action
Increased number and regularity of
Director site visits.

Progress in 2022/23
2023 site visit schedule agreed, including
increasing number of Non-Executive
Director visits to overseas operations.

Action
Ongoing improvements in Board
discussions on ESG matters.

Progress in 2022/23
Presentation to the Board on ESG-related
strategy and targets scheduled in 2023.

Action
Strengthen engagement with senior
management to inform succession
planning discussions.

Progress in 2022/23
Planned interactions with senior
management scheduled during the year
including Board presentations, informal
interactions and engagement during
site visits.

Action
Regular updates to be provided to the
Board and Audit Committee on the
implementation of the enhanced risk
management framework.

Progress in 2022/23
Update on the enhancement of
internal controls provided to the Audit
Committee in January 2023 and further
reviews scheduled in 2023.

Action
Enhance the monitoring of Internal Audit
findings and actions.

Progress in 2022/23
Internal Audit findings are discussed at
each scheduled Audit Committee and
reported to the Board.

The Executive Directors set the tone of our
organisation and demonstrate our valued
behaviours. Various indicators are used to
provide insight into our culture, including
employee engagement and health and
safety. We regularly assess the state of our
culture, through activities such as employee
engagement surveys and compliance reviews,
and we address behaviour that falls short of
our expectations.

Financial and business reporting
The Board considers that the Annual Report
and Accounts taken as a whole present a fair,
balanced and understandable assessment
of the Group and provides the information
necessary for shareholders to assess the
Group’s position, performance, business model
and strategy. More information about how this
assessment was made is set out in the Audit
Committee report on page 90.

The going concern assessment is set out in
the Directors’ report on page 111; the viability
statement is set out on page 85 and the
Strategic report on pages 10 to 11 sets out an
explanation of the Company’s business model
and the strategy for delivering the Company’s
objectives.

Assisted by the Group Company Secretary, the
Chairman has responsibility for these induction
programmes, and for the Board’s training and
professional development.

Stakeholders
The stakeholder voice is brought into the
boardroom throughout the annual cycle
through information provided by the Executive
Directors (as well as representatives from the
Group’s businesses and functions who are
invited to present to the Board), and through
regular updates from Directors on their
engagement activities with the stakeholders
themselves. This includes regular updates:

• from the Chairman and the Executive

Directors on their discussions with investors;

• from the Company’s brokers on the
feedback received from investors;

• from the Executive Directors, Chief HR
Officer and Inken Braunschmidt (in her
role as designated Non-Executive Director
for employee engagement) in relation to
employee engagement;

• from the Group CEO on feedback from

customers;

• from the senior management team on their
engagement with employees, customers,
suppliers, local communities; and

• from the Sustainability Committee on
the Group’s approach to reducing its
environmental impacts.

On pages 30 and 31 of our Strategic report,
we set out our principal stakeholders, how
we engage with them, the issues which are
important to them and how we respond. The
relevance of each stakeholder group may
increase or decrease depending on the matter
or issue in question, so the Board seeks to
consider the needs and priorities of each
stakeholder group during its discussions and
as part of its decision-making. On pages 82
and 83 we set out how the Board has taken
into account the interests of stakeholders when
discussing and agreeing decisions on key
matters in 2022.

Purpose, culture and values
The Board recognises the importance of its
role in building a sustainable business by
setting the tone of James Fisher’s purpose,
culture and valued behaviours, and embedding
them throughout the Group. Our core valued
behaviours and our Code of Ethics (the
behaviours we expect) underpin everything that
we do and set out the type of organisation we
want to be. Everyone who works for and with
us is required to comply with these.

GovernanceJames Fisher and Sons plc – Annual Report 202286

Nominations Committee report

MEMBERSHIP
Angus Cockburn (Chair)
Michael Salter (until 5 May 2022)
Aedamar Comiskey
Justin Atkinson
Inken Braunschmidt
Kash Pandya
Claire Hawkings

SINCE
2021
2013
2014
2018
2019
2021
2022

Key objectives
Reviewing the composition of the Board and succession planning.

Key responsibilities:
• To regularly review the structure, size and composition of the Board (including skills,

knowledge, independence and experience) and recommend any changes.

• Succession planning for Directors and senior executives of both the Company and the
operating businesses, taking into account the challenges and opportunities facing the
Company and the skills and expertise therefore needed in the future.

• Identifying and nominating candidates for Board positions, for approval by the Board.

The Committee’s terms of reference are available on the Group’s website.

Meets at least three times a year. During 2022 the Nominations Committee met four times.

The Nominations Committee reviews the
leadership and succession needs of the
Company and ensures that appropriate
procedures are in place for nominating,
training and evaluating Directors.

Overall, our objective is to ensure that the
Board is balanced, with the Directors having
a broad range of knowledge, skills and
experience to ensure the team works together
effectively in discharging its responsibilities,
including in relation to corporate governance.
We recognise the benefits of a diverse Board
and senior leadership team, including diversity
of skills, sector experience, background,
gender, and ethnicity.

2022 in review
During 2022 there were the following changes
in membership of the Board:

• On 1 January 2022, Claire Hawkings joined
the Board as a Non-Executive Director.
Claire is a Non-Executive Director and
Chair of the ESG Committee of Ibstock
Plc, a market-leading manufacturer of clay
and concrete building products, as well
as a Non-Executive Director of Defence
Equipment and Support, a Bespoke Trading
Entity and Arm's Length Body of the Ministry
of Defence and Non-Executive Director
and Chair of the Responsible Business
Committee of FirstGroup Plc. Claire has over
30 years' experience in the energy sector,
where she held a variety of international
leadership positions, most recently with
Tullow Oil plc, and prior to that with BG
Group plc and British Gas plc.

• On 5 May 2022, following the Company’s

AGM, Michael Salter (Non-Executive Director)
retired from the Board, as reported in last
year’s report; and

• On 5 September 2022, Eoghan O'Lionaird

stepped down from the Board and as Group
Chief Executive Officer, and Jean Vernet
joined the Board as Group Chief Executive
Officer. Jean joined the Company from
Smiths Group, where he was Chief Executive
Officer of its largest division, John Crane.

I would like to take this opportunity to thank
both Mike Salter and Eoghan O’Lionaird for
their service to the Company. Mike’s experience
and knowledge of the oil and gas and marine
industries were of huge benefit to James Fisher
during his nine years on the Board. Eoghan
made a considerable contribution to James
Fisher during his tenure as CEO, helping to
navigate the Group through some challenging
events, not least the COVID pandemic.

We were pleased to welcome Claire Hawkings
to the Board at the beginning of the year.
Claire's significant experience of the energy
sector is extremely valuable to the Board. Jean
Vernet, who joined the Board in September,
has considerable experience working in the
offshore energy sector in both the UK and
globally. Prior to his role at Smiths Group, Jean
spent a decade in various financial and market
facing roles with energy services business,
Schlumberger, and five years as Chief Financial
Officer of Expro, the offshore energy services
provider, where he played a key role in its
successful turnaround.

Board appointments and
succession planning

The Committee leads the process for Board
appointments and makes recommendations
to the Board within its agreed terms of
reference. Appointments are made having
regard to the balance of skills and experience
of current Directors as well as the diversity of
the Board, including gender and ethnicity.
The Committee adopts a formal, rigorous,
and transparent procedure for the appointment
of new Directors to the Board, working with
independent executive search consultants.

During 2022, the Committee sought support
from a specialist executive search consultant.
Lygon Group assisted with the appointments
of both Claire Hawkings and Jean Vernet.
With respect to Jean’s appointment,
Lygon Group was instructed to search for
Executive candidates who were established
business leaders with extensive energy
sector knowledge, and proven experience
of leading companies through turnaround
situations. Lygon Group has no connection
with the Company (other than assisting with
recruitment), nor with any individual Director.

The graphic on page 87 sets out an example
of the selection and appointment process
undertaken by the Nominations Committee, in
this case leading to the appointment of Jean
Vernet to the Board as Chief Executive Officer.

The Committee keeps under regular review
succession planning at the Executive Director
level and supports succession planning at
senior management levels to ensure a diverse
pipeline. The Chief HR Officer has also briefed
the Committee on the talent review and actions
undertaken in relation to the Group’s top
management positions.

GovernanceAnnual Report 2022 – James Fisher and Sons plc87

Director induction, training and
development
As Non-Executive Chair, I am responsible
for the formal induction of all new Directors,
assisted by the Group Company Secretary.
Each new Director is provided with the
necessary background materials to familiarise
themselves with the Group, and meetings
are arranged with other members of the
Board, the Group General Counsel, Group
Company Secretary, and members of the
Executive Committee.

Site visits to businesses around the Group are
arranged to provide a deeper understanding
of the Group’s operations, risks and strategic
priorities. A detailed induction programme
was undertaken by Jean Vernet and Claire
Hawkings, which included training from the
Company’s external legal adviser on directors’
responsibilities, the Corporate Governance
Code and Market Abuse Regulation, as well as
in-person site visits and management meetings
at the Group’s key sites.

Assisted by the Group Company Secretary,
I am also responsible for the Board’s training
and professional development. Directors
were given presentations during 2022 on
topics such as impacts of the war in Ukraine,
sustainability reporting, developments in
health safety practice and regulatory action,
insurance, investor relations, developments
in corporate governance and financial
reporting, as well as Directors’ remuneration.
Directors will continue to receive regular
training updates from appropriate internal
and external specialists on governance and
risk issues, and on financial and reporting
standards. In addition, Directors are fully
aware of their own responsibility for identifying
and satisfying their own specific training
requirements. In 2022, the Board visited key
sites, and had management and employee
engagement meetings, in order to deepen the
Board’s understanding of the operations of the
Group’s businesses and teams.

Board composition and time
commitment
There were eight Directors on the Board
as at 31 December 2022, comprising the
Non-Executive Chair, Chief Executive Officer,
Chief Financial Officer and five independent
Non-Executive Directors. The names and
biographical details of the members of the
Board are set out on pages 80 to 81.

The Company judged the Non-Executive
Chair 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.

Under the Code, the reasons for the
Board permitting its members to enter into
significant new external appointments should
be explained in the Annual Report. On 24
January 2022, the Company announced
that Claire Hawkings had been appointed
Non-Executive Director of FirstGroup Plc.
The Committee keeps under review the time
commitments of the Directors to ensure that
they have sufficient time to discharge their
duties effectively. As part of the process
of the appointment to the Board of Claire
Hawkings, the Committee assessed the time
commitments required by her other roles. It
then also considered her proposed new role at
FirstGroup Plc and concluded that she would
continue to have sufficient time to commit to
James Fisher. In considering Claire Hawkings’
external commitments, the value of Claire’s
international, leadership and sector experience
was taken into account alongside her existing
external appointments when approving the
additional appointment. Jean Vernet has no
external appointments.

Directors standing for election
or re-election
The Committee discussed and unanimously
recommended that each of the Directors
should be put forward for election or re-
election by the shareholders at the AGM
scheduled for 14 June 2023. In making
this recommendation the Committee
members (with each Committee member
recusing themselves from the discussion
and recommendation in relation to their own
re-election) have evaluated each Director in
terms of their performance, their commitment
to the role and their capacity to discharge
their responsibilities in an effective manner
given their other time commitments and
responsibilities.

Board evaluation
The Board carries out a Board/Committee
evaluation each year, and in 2021, the Board
appointed the Chartered Governance Institute
(CGI) to undertake an external evaluation. The
CGI has no other connection to the Company
or any individual Director. Further details of the
2021 external evaluation were set out on pages
84 and 85 of the 2021 Annual Report. The
resulting actions have all been implemented
in full, with the exception of implementation
of the review of risk management, which is in
the process of being implemented, and will be
completed in 2023.

For 2022, the Board undertook an internal
evaluation of its own performance, and that
of the Remuneration, Nominations and Audit
Committees, and the Chair, supported by the
Company Secretary. The evaluation picked up
on some of the key actions from the 2021 CGI
review. The results of the 2022 evaluation and
resulting actions are set out in the graphic on
page 85.

Process leading to the appointment of Jean Vernet

• The Nominations Committee agreed
a detailed candidate profile for a new
CEO, setting out the capabilities and
experience required.

• Lygon Group was appointed by

the Committee to support the process
and identify candidates fitting the
agreed profile.

• The Nominations Committee appointed
the Non-Executive Chair to work with
Lygon Group on the process to appoint
a new CEO, regularly reporting back to
the Committee on progress.

• Following engagement, Lygon

Group created a long list of potential
candidates, which was shared by the
Chair with the Nominations Committee.

• Following the interviews, each
person who had met with the
shortlisted candidates provided
feedback to the Chair.

• The Nominations Committee agreed
a shortlist of candidates to be invited
for interview by members of the
Committee, the Group CFO and the
Chief HR Officer.

• Lygon Group arranged interviews
for that group with the shortlisted
candidates.

• The Nominations Committee discussed
the feedback received and the relative
merits of each candidate.

• The Committee agreed to recommend

to the Board that Jean Vernet be
appointed as Chief Executive Officer.

• The Board approved the appointment,
to take effect on 5 September 2022.

GovernanceJames Fisher and Sons plc – Annual Report 202288

Nominations Committee report cont.

As noted on page 86, all appointments to the
Board are made having regard to the balance
of skills and experience of current Directors as
well as the diversity on the Board, including
gender.

The position of Senior Independent Director is
(and as at 31 December 2022 was) held by a
woman, Aedamar Comiskey.

The Board has one Director from an ethnic
minority background (12.5% as at 31
December 2022).

The Chief Executive Officer chairs an Executive
Committee of 10 people, with women
representing 20% of the Executive Committee
at 31 December 2022. Apart from creating a
forum to bring together a range of specialist
skills and experience it also acts as a platform
for our succession strategy into the future.
Within the wider leadership team, being the
Executive Committee and those reporting to
members of the Executive Committee, there
are 33 women (2021: 28), representing 24%.
Further information about the Company’s
approach to diversity and inclusion is set
out in the Strategic report at page 46.

2023 priorities
The Committee’s priorities for 2023 are:

• to consider the key skills, experience and
requirements for succession planning for
the Board;

• to keep under review succession planning at
the Executive Director level and to support
succession planning at senior management
level; and

• to monitor the Group’s progress towards
increasing the relative diversity in senior
management positions.

Angus Cockburn
Chairman of the Board
and Nominations Committee

28 April 2023

Following the internal evaluation, the
Committee believes the Board functions
effectively and efficiently, and is appropriate
for a Group of its size. The Committee
considers that each Director demonstrates the
knowledge, ability and experience required to
perform the functions of a director of a listed
company and is of the calibre necessary to
support and develop the Company’s long-term
strategy and success. The Committee also
considers that no individual or small group
of individuals dominates discussions or the
decision-making process.

Diversity and inclusion
James Fisher recognises the importance of
diversity of thought, skills and experience
in the effective functioning of the Board, its
Committees and the wider organisation.
This diversity may arise from any number of
sources, including differences in age, gender,
ethnicity, disability, sexual orientation, cultural
background and religious belief.

The Board’s intention is to maintain diversity
in all its senses in its own constitution, and
to encourage the same throughout the
organisation. The Board Diversity Policy is a
policy which acknowledges the importance of
diversity and includes an explicit requirement
to take into account diversity when considering
appointments to the Board. The Board and
its Committees is committed to ensuring that
all have an equal chance of developing their
careers within our Group.

The promotion of a diverse and inclusive
workplace by recruiting where we work,
enforcing pay parity, and celebrating
the uniqueness of individuals and their
communities is one of the key foundations
of the Group’s sustainability policy. During
the year, the Board and the Committee have
discussed with the Chief HR Officer the
progress made on implementing initiatives to
promote diversity and inclusion throughout the
Group. More detail on the progress of those
initiatives can be found on page 46.

There has been progress in increasing the
international and gender diversity of the
Group’s senior management group but the
Company is aware that more needs to be done
to improve the gender and ethnic mix in the
leadership population. The Board supports the
aims of the FTSE Women Leaders and Parker
Reviews, and is mindful of the targets specified
by recent updates to the Listing Rules, against
which we are required to report from next year,
and which we are voluntarily reporting on this
year in line with good practice.

We have eight Directors on our Board,
of whom three are women. The female
representation on the Board as at 31
December 2022 was therefore 37.5%. We
acknowledge that this falls slightly below the
target of 40% specified in the new Listing Rule.

GovernanceAnnual Report 2022 – James Fisher and Sons plcAudit Committee report

MEMBERSHIP
Justin Atkinson, Chairman of the Audit Committee
Michael Salter (until 5 May 2022)
Aedamar Comiskey
Inken Braunschmidt
Kash Pandya
Claire Hawkings

SINCE
2018
2013
2014
2019
2021
2022

Key objectives
To monitor the integrity of the Group’s reporting process and financial management and
to ensure that risks are carefully identified and assessed and that sound systems of risk
management and internal control are in place.

Key responsibilities:
• The accounting principles, policies and practices adopted in the Group’s accounts.

• Reviewing external financial 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.

The Committee holds a minimum of three scheduled meetings per year. During the year, the
Audit Committee met four times.

Dear Shareholders
I am pleased to present the report of
the Audit Committee for the year ended
31 December 2022, which provides an
overview of the Audit Committee’s role
in supporting the Board in discharging
its responsibility for oversight and
monitoring of financial reporting, risk
management and internal control. It is
my responsibility as Chairman of the
Audit Committee to ensure that the
Audit Committee fulfils its responsibilities
in a rigorous and effective manner.

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 specific 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.

Following on from the impacts of COVID in
the previous two years, and the market and
operational issues encountered in 2021, the
Company has faced another challenging year
in 2022.

As noted in the announcement made on
24 March 2023, required consent for the
retention of several legacy parent company
guarantees under the Group’s debt facilities
prior to the sale of the JFN business was not
obtained. Following discussions, all lenders
under the debt facilities agreed relevant waivers
and on 26 April it was announced that the
Group had reached agreement on the terms of
a new £210m secured revolving credit facility
(RCF). Because the long form documentation
of the RCF had not been signed by the date of
this Annual Report this gives rise to a material
uncertainty, as defined in the accounting
standards, relating to material events and
circumstances which may cast significant
doubt of the Group’s ability to realise its assets
and discharge its liabilities in the normal course
of business. It is, however, anticipated that the
refinancing will complete by 7 June.

I am satisfied 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
satisfied that meetings are scheduled to allow
sufficient 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 financial reporting
is fair, balanced, and understandable. We
therefore review all the Group’s financial reports
before publication, including where necessary
alternative performance measures, and we are
satisfied that they provide a fair, balanced, and
understandable assessment of the Group’s
position and performance.

Audit Committee composition
and operation
The Audit Committee met on four occasions
during the year, with meetings scheduled to
align with the Company’s external financial
reporting obligations. Details of attendance of
individual Directors can be found on page 75.
The Audit Committee was attended by the
Committee members, the Company Chairman,
Chief Executive Officer, Chief Financial Officer,
Group General Counsel, Company Secretary
and the Group Financial Controller, together
with representatives of the external auditor,
and the internal auditor.

In 2022, the Audit Committee held four
scheduled meetings in order to allow
time for consideration and fulfilment of its
responsibilities. The Audit Committee will
continue to meet on an ad hoc basis outside
the scheduled timetable, as required.

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
or phone calls with the reporting partner
of external auditor, KPMG and the relevant
partner from the internal auditor, PwC, to
discuss matters related to the Group.

The Board is satisfied that as chair of the Audit
Committee, I have significant, relevant financial
experience being a chartered accountant
who formerly served as finance director of a
FTSE company. I have been attending audit
committee meetings for over 20 years and
have chaired three other FTSE company
committees. The members of the Audit
Committee collectively have broad financial,
commercial, professional, and technical
experience and are considered to have
competence relevant to the sectors in which
the Group operates.

GovernanceJames Fisher and Sons plc – Annual Report 202290

Audit Committee report cont.

Whilst each Non-Executive Director will largely
manage their own continuing development,
the Audit Committee receives regular, technical
and governance updates throughout the year
from the external Auditor, and may request
additional information, as required.

Details of the Audit Committee’s specific
responsibilities and how it exercises those
responsibilities are set out in the remainder
of this report. The performance of the Audit
Committee (alongside the Board and the
other Committees) was internally evaluated
during the year. The results of this review
provided assurance that the Audit Committee
discharges its duties and responsibilities in
accordance with its terms of reference.

Matters of particular focus for the
Audit Committee during 2022
January 2022

August 2022

• Review of the 2022 Half Year results, Interim

Statement, and announcement.

• Going concern review.

• External auditor Half Year report.

• Review of the Group’s principal and

emerging risks.

• Review of adequacy and effectiveness
of Group’s internal control and risk
management systems.

• Review of internal audit assurance work to
30 June 2022 and consideration of internal
audit plan to 31 December 2022.

• Presentation of KPMG's initial strategy.

November 2022

• Approval of KPMG’s external audit plan

for 2023.

• Update on the implementation of internal

• Review of findings from the work undertaken

control enhancements.

on behalf of the Committee by PwC to
evaluate and suggest improvements to the
Group’s risk management framework and
system of internal controls.

• Status report from internal audit in relation

to the completion of the 2021 internal audit
programme, and commencement of the
2022 internal audit programme.

• Update from external auditors on the

progress of the 2021 audit of the Group.

March 2022

• Review of the 2021 results, Annual Report
and announcement, including a review
to ensure the report was fair, balanced
and understandable.

• Consideration of specific disclosures and

adjusting items.

• Review of the going concern and

viability statements.

• Impairment assessment review.

• Review with KPMG of the external auditor

report for 2021.

• Review of external auditor performance and

remuneration for 2021.

• Review of the Group’s principal and

emerging risks.

• Review of internal audit work during 2021,
and approval of the internal audit plan
for 2022.

• Review of internal auditor performance 2021

(including PwC as co-sourced partner).

• Appointment of PwC LLP as sole internal

auditor of the Group.

• Update from PwC in relation to their review
of the Group’s risk management controls
and systems.

• Review of internal audit on their work for

the year, and approval of the internal audit
programme for 2023.

• Review of results of the evaluation of

KPMG as external auditor, and of PwC
as internal auditor.

Financial reporting
The Audit Committee’s primary responsibility
in relation to the Group’s financial 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 financial reporting standards and
relevant financial and governance reporting
requirements;

• whether management has made appropriate
estimates and judgements in material areas
or where there has been discussion with, or
issues raised by the external auditor; and

• whether the Annual Report and Accounts
taken as a whole is fair, balanced and
understandable and provides the information
necessary for shareholders to assess the
Group’s position and performance, business
model and strategy.

Fair, balanced, and
understandable
In making its assessment on whether the
Annual Report and Accounts is fair, balanced
and understandable and provides the
information necessary for shareholders to
assess the performance, strategy and business
model of the Company, the Board has taken
into account its own knowledge of the Group,
its markets, its strategy and performance in
the year, a review of content of the Annual
Report and Accounts and other periodic
financial statements and announcements,
together with the recommendation from the
Audit Committee. Key considerations of the
Committee have included ensuring that there
is consistency between the accounts and
the narrative provided in the front half of the
Annual Report and Accounts, and that there is
an appropriate balance between the reporting
of weaknesses, difficulties and challenges
(in particular with reference to the Group’s
principal risks and uncertainties, as set out on
pages 62 to 70), as well as successes, in an
open and honest manner.

Significant issues and accounting
judgements
The Audit Committee has a primary
responsibility to review the integrity of the
Annual Report and Accounts and the Interim
Statement of the Company, which includes the
review and discussion of papers prepared by
management and takes account of the views
of the external auditor. The key areas reviewed
in the 2022 financial year are set out below.
The Audit Committee considered these matters
and how they were tested and reviewed,
including the judgements and disclosures.

APMS AND ADJUSTING ITEMS

The Committee gave careful consideration
to the judgements made in the disclosure
of alternative performance measures and
adjusting items as set out in Note 2. 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 adjusting items and
concluded that the judgements made are
appropriate. The committee agreed with
the reduction in the number of APMs used
in the report and change in presentation of
the Income statement to remove the ‘before
separately disclosed items’ and ‘separately
disclosed items’ columns presented in the
2021 Annual Report and Accounts.

GovernanceAnnual Report 2022 – James Fisher and Sons plc91

GOODWILL VALUATION

GOING CONCERN AND VIABILITY STATEMENTS

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 flows. Senior
management provided detailed analysis to
determine the sensitivity of the outcome to
changes in key assumptions and we are
satisfied that the judgements made are
both reasonable and appropriate.

REVENUE RECOGNITION AND CONTRACT DISPUTES

The estimation of contract margin and the
level of revenue and profit to recognise
in a single accounting period requires
the exercise of management judgement.
In addition, the Group has a number of
projects where payments of amounts
invoiced or considered due under of the
contract have yet to be paid or were
delayed during the year. The Committee
reviewed key estimates and judgements
applied in determining the financial status
of the more significant projects.

ASSETS HELD FOR SALE AND DISCONTINUED
OPERATIONS

The Audit Committee considered the
appropriateness of classifying the Dive
Support Vessel known as the Swordfish
within the Marine Support division and the
Nuclear business in the Specialist Technical
division as assets held for sale and, in
case of the Nuclear business, discontinued
operation at 31 December 2022. The
Committee reviewed the key considerations
for such classification and were satisfied
that the treatment was appropriate. The
Committee also reviewed the methodology
and estimates used in arriving at the fair
value of assets held for sale and liabilities
associated with assets held for sale and
considered them appropriate.

VALUATION OF THE PLC COMPANY ONLY
INVESTMENTS AND EXPECTED CREDIT LOSSES ON
LOANS TO SUBSIDIARIES

The Company holds significant investments
in and loans to various subsidiaries of the
Group. The Committee considered the
recoverability of the carrying value of those
investments and expected credit losses
(ECL) in relation to the loans to subsidiaries
and concurred with the management’s
approach to evaluating the recoverable
amounts and ECL and the resulting
provisions and reductions in the balances.

The analysis of the evidence underpinning
the going concern basis of accounting
and viability statement in the 2022 Annual
Report continues to be an area of focus for
the Group.

The Committee received reports and
analysis prepared by management, taking
into account the external auditor’s review
of these papers and their observations.
These included details on the selection of
the going concern and viability assessment
periods, the key assumptions, the
forecasting process, the committed facilities
available, and the mitigations within direct
control of the Group. The Committee
considered both base case cash flow
forecast and severe but plausible downside
scenario analysis, including the assessment
of the principal risks facing the Group which
may potentially impact the Group’s financial
position.

The Audit Committee is satisfied that
the going concern basis of preparation
continues to be appropriate in preparing
the financial statements and that it is
reasonable to expect that the Group will
be able to continue to operate and meet
its liabilities, as they fall due, for at least
12 months since the date of the financial
statements.

The Group is finalising the renewal of
its borrowing facilities. The Committee
recognise that the finalisation of the
outstanding areas in order to complete
refinancing are not totally in the direct
control of the Group which gives rise to
a material uncertainty. The Committee
reviewed the disclosures presented in Note
1 of the consolidated financial statements
together with the viability statement on
page 71 to ensure there was sufficient detail
provided to explain the basis of preparation
and the Board’s conclusion.

Risk management and
internal controls
The Board has overall responsibility for the
Group’s risk management and internal control
systems, including financial, 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, and reporting to
the Board. This work was informed by regular
updates from Internal Auditor (PwC) and
self-assessment process undertaken across
the Group. In addition, Head of Group Internal
Controls, a newly created role in 2022, attends
the Audit Committee and provides updates
on internal controls and readiness for the
upcoming internal controls reforms.

As reported last year, PwC were engaged
by the Audit Committee to carry out an
independent review in relation to the Group’s
risk management controls and systems.
Following the PwC review, the Committee
made a number of recommendations for
ongoing improvement in this area, particularly
around risk identification and risk assessment
(likelihood and impact) which the Board
approved for implementation in 2022. This
process of implementation has taken place
through 2022 and continues into 2023.

Through the course of the year, the Board
received regular reports from the Group Risk
Committee and has reviewed the Group’s
systems of risk management and internal
controls including financial, operational and
compliance controls.

The Audit Committee receives reports on
any internal control failings, which are mainly
identified from internal audits. The external
audit work also highlighted the informal nature
of many of the Group’s controls and identified
numerous control deficiencies together with
recommendations for improvement. The Audit
Committee reviews all such reports with both
the internal and external auditors to ensure that
appropriate and timely actions are identified
and completed. The internal control failings are
graded based on materiality within the context
of that operating company, and an action plan
with associated timeframes is agreed with the
relevant management team. Progress against
that plan is reported to the Audit Committee
on an ongoing basis until the actions are
complete. In addition, the new Head of Group
Internal Controls position will lead a controls
enhancement programme with a view to
identify any gaps and improve the internal
controls framework across the Group.

In 2022, in order to accelerate the
implementation of PwC internal audit
recommendations and in preparation for the
changes in internal controls requirements
under the upcoming audit and governance
reforms, the Internal Controls department was
established. An Internal Control Enhancement
Programme has been initiated, led by the
Internal Controls Department and BDO, to
improve and formalise controls where required.

During the year, the Audit Committee assessed
the Group’s risk management and internal
control systems as adequate, but with
improvements required in particular around
formalisation and documentation of controls.
Following the Committee’s recommendation,
the Board approved the Group’s risk
management and internal control systems
improvement initiatives.

GovernanceJames Fisher and Sons plc – Annual Report 2022Independence and objectivity
The Audit Committee accepts that certain
non-prohibited work is best undertaken by the
external auditor and to safeguard the external
auditor’s objectivity and independence the
Audit Committee has a policy on engagement
of the external auditor for non-audit services,
which includes a requirement for Audit
Committee approval if the permitted services
exceed a threshold of £50,000.

The Audit Committee reviews the policy
annually and recommends it to the Board for
approval. In accordance with relevant Audit
Regulations and standards published by the
FRC in June 2016, the Audit Committee has
not engaged the external auditor on matters
restricted by those Regulations and standards,
and fees from permitted work (including the
Interim Statement) have been pre-approved
by the Audit Committee. KPMG were not
instructed to carry out any prohibited non-audit
services during 2022.

KPMG provided the following non-audit
services to the Group during 2022, all of which
were approved by the Audit Committee:

• under the Norwegian Companies Act,

KPMG provided an assurance service on
the control and review procedures over the
tax submissions in relation to ScanTech AS.
The work does not result in any accounting
judgements and the fee for this service
was £8k.

• KPMG carried out the Group’s interim

statement for the period ended 30 June
2022. The fee amounted to £0.1m.

Audit Committee report cont.

A more detailed summary of the Group’s risk
management and internal control systems is
set out in the principal risks and uncertainties
section of the Strategic Report on pages
62 to 70, along with a description of some
of the actions taken and planned to bring
improvements to those controls.

Anti-bribery and corruption
We have an established anti-bribery and
corruption policy aimed at ensuring adherence
to the associated legal and regulatory
requirements. The policy includes sections
in relation to:

• the Group’s zero tolerance approach to

payment of bribes;

• the reasonableness and proportionality

of 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 using web-based tools
provided by Control Risks (the international
risk consultancy). The Group conducts
robust due diligence on its agent and joint
venture relationships prior to engagement,
and requires them to comply with the
Group’s policy and relevant law. The Board
receives reports on agent and joint venture
relationships twice a year; and

• the Group’s condemnation of facilitation

payments.

The Group has anti-bribery and corruption
training in place which is provided on induction,
and each business maintains a training log
for its people which is reported back to the
Audit Committee.

External audit performance
The Audit Committee recognises that the
quality of an audit is of paramount importance.
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,
significant 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.

The most recent assessment considered the
relationship between the external auditor and
the Group, the external auditor’s knowledge of
the Group’s business, its capability, planning
and execution of the external audit, fees and
independence.

The results of the review were considered
by the Audit Committee and discussed with
KPMG, with the main areas for focus identified
as being around recent increases in fees,
as well as planning and communications
regarding key judgmental areas.

The Committee is satisfied that KPMG
provided an effective audit and remain
independent and objective. KPMG are
recommended for re-appointment at the
Company’s forthcoming AGM.

External audit appointment
and fee
KPMG were first appointed to audit the
Company in 2008. They were re-appointed
external auditor of the Company in 2017,
following a competitive tender process.
Following the conclusion of the 2021 external
audit, Mike Barradell stepped down as lead
external audit partner for the Group following
his permitted tenure of five years. Ailsa Griffin
was appointed as lead audit partner for the
2022 financial year. Following this rotation of
the lead external audit partner, the Committee
considers a full tender for the Group’s external
audit services, subject to its annual reviews,
likely in the year ending December 2026.
This allows for any potential new audit firm to
take up the role for the year ending December
2027. The Committee believes this approach
is in the best interests of shareholders, as
over this period the Group will benefit from an
efficient and effective audit, whilst receiving
fresh challenge from a new lead external audit
partner.

Details of the external auditor’s remuneration
for 2022 are set out in Note 4 on page 94.
Against a general background in the market
of increasing fees, in 2022, there has been a
material increase in audit fees from the prior
year. This has primarily been due to the delay in
the announcement of the results by around one
month and the resultant increase in audit work
on the going concern and viability statements
together with unexpected difficulties in the
audit of the JFN business following its sale
post the year end and increased work following
the Financial Reporting Council (FRC) review
of the Annual Report for 2021 and subsequent
enhanced disclosure requirements.

The Company has complied throughout the
financial 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.

GovernanceAnnual Report 2022 – James Fisher and Sons plc93

The Internal Control Enhancement Programme
is underway to ensure that the Group is well
placed to address these provisional proposals,
through evolution, documentation and
formalisation of the existing controls. The Audit
Committee is satisfied that management’s
approach to the reforms is appropriate, and will
continue to review ongoing developments and
progress.

ESG reporting
The ESG reporting environment has been an
area of significant regulatory development
recently, and this is set to continue and
the pace of change increase in the short-
to medium-term. Guidance on reporting
(particularly in the environmental area) has
been issued by a number of bodies. Recent
events, in particular the creation of the ISSB
(International Sustainability Standards Board)
which consolidated the VRF (Value Reporting
Foundation) and the CDSB (Climate Disclosure
Standards Board) under the umbrella of the
IFRS Foundation, to develop a single set of
sustainability standards, will create further
focus on this area.

The Group continues to strengthen its
ESG-related disclosures, reporting under
the requirements of the TCFD (Task Force
on Climate-related Financial Disclosures) on
pages 38 to 41 and in alignment with the GHG
(Greenhouse Gas) protocol on pages 113 to
114.

The Directors have received briefings during
the year covering the evolving reporting,
disclosures and standard setting body
changes, recognising the increasing link
between ESG-related measures and the
presentation of financial information and
associated business commitments.

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

28 April 2023

Internal audit
The Audit Committee is responsible for
reviewing the work carried out by the internal
audit function which considers, reviews
and reports on key commercial, financial
and control risks across the Group. The
internal audit function undertakes their work
in accordance with an annual programme
approved by the Audit Committee. The scope
of each internal audit review is agreed by
the Audit Committee in consultation with the
internal auditor to ensure that key areas for
each business are addressed.

As indicated in last year’s report, early in the
year, the Audit Committee recommended that
the role of internal audit be outsourced in its
entirety to PwC from April 2022. This took
effect during the year, with PwC taking over
and continuing to execute the agreed internal
audit plan. In total 10 internal audits were
undertaken in 2022 (2021: 13). 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. The actions identified
by the internal audit function were followed
up with management for response and
identification of appropriate actions to mitigate
the associated risks. There has been continued
focus by senior management to improve the
control environment through the timely closure
of audit actions.

There were no findings in the internal audit
reports which are considered material to the
Group, although to date PWC’s work has not
identified any business which operates in a
control environment which could be described
as strong. Internal audit is responsible to the
Audit Committee for ensuring that all required
actions are followed up and completed in a
timely manner.

Following the final 2022 review, the Audit
Committee recommended, and the Board
concluded that the Group’s internal audit
process was appropriate and effective. The
effectiveness of the Group’s internal audit
function is continually reviewed, including an
annual formal review undertaken by the Audit
Committee, with the benefit of feedback from
Group businesses and functions which have
been subject to internal audit during the year.

FRC correspondence
During November 2022, the Company
received correspondence from the Financial
Reporting Council (FRC) in relation to its
review of the Company’s Annual Report
and Accounts for 2021 in accordance with
part 2 of the FRC Corporate Reporting
Review Operating Procedures, which
requested further information in relation to
the Company’s compliance with relevant
reporting and disclosure requirements in
certain areas. The FRC also highlighted that
the impairment loss on trade receivables
should be separately disclosed on the face of
the Consolidated Statement of Comprehensive
Income. Previously it was included within
administrative expenses. This balance is now
shown separately with no impact on profit. In
addition, certain disclosures in the notes to
the financial statements have been enhanced
to provide greater clarity for readers of the
Annual Report and Accounts. In particular,
the Income statement presentation has been
amended to remove the 'before separately
disclosed items' and 'separately disclosed
items' columns presented in the 2021 Annual
Report and Accounts. This change was made
to simplify the income statement presentation
and show alternative performance measures
previously included within 'separately disclosed
items' in Note 2.1. There has been no change
to continuing results for revenue, gross margin
and operating profit. The FRC review is
ongoing at the time of writing of this report.

BAM Consultation on Restoring
Trust in Audit and Corporate
Governance
In March 2021, the Department for Business
and Trade (BAM) released its consultation
paper ‘Restoring trust in audit and corporate
governance’ outlining its proposals for
strengthening the UK’s framework for major
companies and the way that they are audited.

The reforms in the BAM consultation
paper address the findings of the previous
Kingman, CMA and Brydon reports and
include proposed new measures in relation
to directors, auditors, shareholders and the
audit regulator. On 31 May 2022, the UK
Government published its response to the
consultation, setting out its plans for action
which will be implemented through a variety
of mechanisms, including audit development
and work by the professional bodies, primary
and secondary legislation, and changes by the
regulator. The response sets out how and to
what extent it is anticipated the proposals in
the consultation would be carried forward. The
measures include proposals for strengthening
the UK’s approach to internal controls over
financial reporting, including more disclosure
and attestation requirements. The May 2022
response envisages a strengthening of the
Code in this area as opposed to legislation.

GovernanceJames Fisher and Sons plc – Annual Report 202294

Directors’ remuneration report

MEMBERSHIP
Aedamar Comiskey, Chair of the Remuneration Committee since May 2018
Michael Salter (until 5 May 2022)
Justin Atkinson
Inken Braunschmidt
Kash Pandya
Claire Hawkings (appointed to the Committee on 1 January 2022)

SINCE
2014
2013
2018
2019
2021
2022

Key objectives
The Committee’s objectives are to create a fair, equitable and competitive total reward
package that supports the Group vision and strategy; and to ensure that rewards are
performance-based, encourage long-term shareholder value creation and are straightforward
to communicate and operate.

Key responsibilities:
• Designing the remuneration policy.

• Implementing the remuneration policy.

• Ensuring the competitiveness of reward.

• Designing the incentive plans.

• Setting incentive targets and determining award levels.

• Overseeing all share awards across the Group.

The Committee meets at least three times a year.

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 2022.

Work of the Committee
during 2022
During 2022, the Committee undertook the
following main activities, having due regard
at all times to the broader performance
context and the experience of the Group’s key
stakeholders:

• assessing performance against the targets
set for the 2021 annual bonus awards;

This report is comprised of two parts, namely:

• setting the targets for the 2022 annual

bonus;

• assessing performance against the

targets set for the 2019 LTIP awards and
determining vesting levels;

• agreeing the award levels and performance

targets for the 2022 LTIP awards;

• agreeing the leaving arrangements for
Eoghan O’Lionaird and Jean Vernet’s
package on appointment; and

• agreeing the Chairman’s fee and Executive
Directors’ base salaries to apply from
1 January 2023.

Part 1 – Remuneration policy report – which
provides a summary of the Directors'
remuneration policy approved by shareholders
at the 2021 AGM, as context for the
Committee’s decision-making in relation to
remuneration. In keeping with the remuneration
reporting regulations with which the Group
is required to comply, the Committee will
be conducting a review of the current
remuneration policy during 2023. We will be
engaging with shareholders on the proposed
policy ahead of putting this to a binding
shareholder resolution at the 2024 AGM; and

Part 2 – Annual report on remuneration – which
sets out payments and awards made to the
Directors, details the link between Company
performance and remuneration for 2022, and
explains how we intend the remuneration
policy will operate for 2023. This part of the
report will be put to an advisory vote at the
2023 AGM.

In discharging its responsibilities, the
Committee seeks to ensure that its policy
and practices remain consistent with the six
factors set out in Provision 40 of the 2018
UK Corporate Governance Code:

• Clarity – The current policy is understood
by our senior executive team, and we
have sought to articulate it clearly to our
shareholders and representative bodies
(both on an ongoing basis and during
consultation when material changes are
being made).

• Simplicity – The Committee is mindful of the
need to avoid overly complex remuneration
structures which can be misunderstood and
deliver unintended outcomes. Therefore,
a key objective of the Committee is to
ensure that our executive remuneration
policies and practices are straightforward
to communicate and operate.

• Risk – Our policy has been designed to
ensure that inappropriate risk-taking is
discouraged and will not be rewarded.
We do this via: (i) the balanced use of both
short-term (annual) bonuses and longer-
term incentive plans (LTIPs), which employ
a blend of financial, non-financial and
shareholder return targets; (ii) the significant
role played by equity in our incentive plans;
and (iii) malus/clawback provisions.

• Predictability – Our incentive plans

are subject to individual caps and clearly
defined performance targets, with our
share plans also subject to market standard
dilution limits.

• Proportionality – There is a clear link

between individual reward, delivery of
strategy and the Group’s long-term
performance. In addition, the significant 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.

GovernanceAnnual Report 2022 – James Fisher and Sons plc95

• NED fees: the fees payable to the

Chairman and Non-Executive Directors
are unchanged.

Shareholder feedback
The Committee is grateful for the strong
shareholder support at the 2022 AGM
for the advisory resolution to approve the
Annual statement and Annual Report on
Remuneration. We remain committed to
effective and regular engagement with our
shareholders in relation to remuneration,
and hope that we can count on your
continued support.

I hope you will join me in supporting the
remuneration-related resolution at the AGM
on 14 June 2023.

Aedamar Comiskey
Chair of the Remuneration Committee

28 April 2023

Pay and performance in 2022
James Fisher encountered another challenging
year in 2022, with performance outcomes
against our primary financial measures as
follows:

2023 remuneration
There are no changes proposed for the
remuneration policy in 2023. A summary of the
proposed approach to the implementation of
the remuneration policy in 2023 is as follows:

• Underlying operating profit from continuing

• Base salary: the Committee has delayed

operations of £19.1m (2021: £28.0m);

• Operating cashflow of £44.5m

(2021: £55.0m); and

• Underlying diluted earnings per share (17.1p)

(2021: 20.0p).

Executive Directors’ bonus potential for
2022 was capped at 100% of salary, with
70% based on meeting the Group’s financial
objectives and 30% based on individual
achievement of personal objectives. However,
as a result of the Group’s financial performance
for the year ended 31 December 2022 being
below the thresholds set at the start of the
year, the Remuneration Committee concluded
that it would not be appropriate to award any
annual bonus to the Executive Directors with
respect to 2022, notwithstanding that the
personal objectives were partially met.

Awards granted under the LTIP in 2020 are
ordinarily eligible to vest in 2023, subject
to the achievement of pre-defined 3-year
performance targets. However, as a result of
failing to hit the threshold level set for earnings
per share (EPS) and total shareholder return
(TSR), 2020 LTIP awards will lapse in full.
Neither Jean Vernet nor Duncan Kennedy
participated in this LTIP award cycle.

Further details of the targets and achievement
against them for the annual bonus and LTIP are
set out on pages 103 to 104.

Executive Director changes
during the year
As announced in June 2022, Jean Vernet was
appointed as Chief Executive Officer and took
up this position on 5 September, at which
point Eoghan O’Lionaird stepped down from
the Board. Mr O’Lionaird, however, remained
an employee of the Company until February
2023 to enable a smooth and effective
transition of responsibilities. Details of the
leaving arrangements for Mr O’Lionaird and
Mr Vernet’s package on appointment – both
of which are in line with our policy and normal
remuneration practices – are set out on
pages 104 and 105.

its review of Executive Director salaries until
later in 2023, to align with the second of a
two-phase salary review process adopted
by the Company for other employees
earning an annual base salary of £70,000
or higher. Effective 1 January 2023, base
salary increases have been awarded to the
rest of the workforce; of 5% on average for
lower-paid colleagues (earning annual base
salaries of less than £70,000) and 3% on
average to those higher earners who will be
eligible for a second review later in the year.
This approach is considered to be fair and
appropriately reflect the prevailing inflationary
environment, while ensuring that the
available pay budget at year end is focused
on supporting lower-paid colleagues,
in particular, with ongoing cost-of-living
pressures;

• Pension: no change to the pension

contributions received by the Executive
Directors;

• Annual bonus: no change to the

opportunity of 100% of salary which, for
2023, will be based 50% on adjusted
operating profit (2022: 40%), 25% on
operating cashflow (2022: 30%), and
25% on strategic (including ESG-related)
objectives (2022: 30%). Bonus payouts
will also be subject to a discretionary
assessment by the Committee of progress
on other important initiatives during the year,
including our Environment agenda;

• LTIP: in respect of 2023 LTIP awards for

Executive Directors, awards will be made as
normal after the announcement of the 2022
preliminary results, with award levels set at
175% of salary for Jean Vernet and 125% of
salary for Duncan Kennedy. 50% of awards
will be based on 3-year EPS growth, 30%
of awards will be based on relative TSR,
and the remaining 20% based on Return
on Capital Employed (ROCE) targets. At
the time of signing this report, the EPS and
ROCE performance targets attaching to
these awards have not yet been agreed by
the Committee. Consistent with previous
cycles, the TSR element will vest subject to
the Group’s relative TSR performance being
at least median (25% vesting) compared to
the constituents of the FTSE250 excluding
investment trusts, with full vesting requiring
performance to be at least upper quartile.
EPS and ROCE targets will be set to be
appropriately stretching. These will be
disclosed in the RNS announcement at
the time of making the awards; and in next
year’s Directors’ remuneration report; and

GovernanceJames Fisher and Sons plc – Annual Report 2022
96

Directors’ remuneration report cont.

Remuneration policy
report
Overview of Directors’
remuneration policy
James Fisher and Sons plc operates in
a competitive international environment.
To continue to compete successfully, the
Committee considers that it is essential that
the level and structure of remuneration and
benefits achieve 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, as a significant
contributor to competitive advantage, is
designed to support the Company’s corporate
strategy, and to align with the Company’s
valued behaviours of pioneering spirit,
integrity, energy and resilience.

A cohesive reward structure with a timely
pay review process, consistently applied to
all employees and with links to corporate
performance, is seen as critical in ensuring
all employees can associate with, and are
focused on, the attainment of the Company’s
strategic goals. Accordingly, the remuneration
package for the Executive Directors is
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 reflect 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 influence
the Group’s delivery of strategy and Group
performance. The Committee considers pay
and conditions across the workforce when
reviewing and setting the Executive Director
remuneration policy. During 2022, members of
the Committee engaged with employees on a
number of matters (more detail on page 30),
including while attending offsite engagement
sessions. Any feedback received through this
and other engagement channels is presented
to, and discussed by, the Committee at its
next meeting; and informs decision-making
at both a Group and business level. Wider
engagement on Executive remuneration
is planned in 2023 as part of the Board’s
employee engagement initiatives and the
upcoming review of the Remuneration Policy.

How shareholders’ views are
taken into account
The Committee takes an active interest
in stakeholder views on our executive
remuneration policy and its operation, and
is particularly mindful of the concerns of
shareholders. At the 2021 AGM, the current
remuneration policy was supported by a
significant majority of shareholders. In advance
of that AGM, the Committee consulted with
the Company’s major shareholders and the
main representative groups in relation to
the proposed changes to the Company’s
remuneration policy, the vast majority of
feedback received on which was supportive.
Similarly high levels of support were received
for the advisory vote to approve the Annual
report on remuneration at the 2022 AGM.

Directors’ remuneration policy
The table on the following pages summarises
the remuneration policy approved by
shareholders at the 2021 AGM. This policy
took effect from that date for a period of up
to three years. Minor amendments have been
made to the drafting of this policy from the
version approved by shareholders in 2021
(which can be found in the 2020 Annual
Report) including: (i) the data used in the pay-
for-performance scenarios; (ii) page references;
and (iii) the sections on Executive Director
service contracts and Non-Executive Director
letters of appointment, to reflect changes in
Board composition since then.

GovernanceAnnual Report 2022 – James Fisher and Sons plcELEMENT
Salary

PURPOSE AND
LINK TO STRATEGY OPERATION
Designed to attract,
retain, motivate and
reward the necessary
high calibre individuals to
the Board.

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.

PERFORMANCE
TARGETS
Not applicable.

MAXIMUM
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.

Pensions

To offer competitive
retirement benefits.

Benefits

To offer competitive
benefits.

Annual
bonus

To incentivise and reward
the Executive Directors
to deliver annual financial
and operational targets.

Workforce aligned on or
before 1 January 2023.

Not applicable.

No prescribed maximum.

Not applicable.

Up to 100% of base salary.

Majority of the bonus
potential is based
on financial targets
derived from the annual
plan; and a minority
of the bonus potential
based on individual
achievement and
personal objectives.

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.

GovernanceJames Fisher and Sons plc – Annual Report 202298

Directors’ remuneration report cont.

ELEMENT
LTIP

PURPOSE AND
LINK TO STRATEGY OPERATION
To align the interests of
the Executive Directors
with the Group’s long-
term performance,
strategy and the interests
of shareholders.

Non pensionable.

A two-year post-vesting holding
period applies to awards granted
to Executive Directors.

Annual grant of share awards.

Malus and clawback provisions
operate.

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.

An all-employee share plan.

PERFORMANCE
TARGETS
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.

Not applicable.

MAXIMUM
Up to 200% of base salary.
Awards above 125% will be
subject to stretch targets.

In Employment: 200% of
base salary for all Executive
Directors.

Post-cessation: 100%
of the “in employment”
requirement, until the second
anniversary of cessation (or
the actual shareholding if the
guideline has not been met at
cessation).

As per prevailing HMRC
limits.

Not applicable.

Sharesave

Non-
Executive
Directors

To encourage share
ownership and align the
interests of all employees
and shareholders.

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 quarterly
in cash reviewed annually: the
Committee determines the
Chairman’s fees. The Chairman and
Executive Directors determine fees for
the other Non-Executive Directors.

No prescribed maximum fee
or fee increase, although fees
are limited by the Company’s
Articles of Association.
The Board/Committee is
guided by market rates,
time commitments and
responsibility levels.

Not applicable.

Notes:
(1) The choice of the performance metrics applicable to the annual bonus reflects the Committee’s belief that any incentive compensation should be appropriately

challenging and tied to the delivery of both financial and personal objectives;

(2) LTIP performance conditions are selected based on the delivery of long-term returns to shareholders and the Group’s financial growth and are consistent with the
Company’s strategy. Where operated: (i) TSR performance is monitored by an independent advisor; and (ii) EPS growth and ROCE are derived from the audited
financial statements;

(3) The Committee operates its share plans in accordance with the plan rules and the Listing Rules. The Committee, consistent with market practice, retains discretion

over a number of areas relating to the operation and administration of the plans (e.g. treatment of awards for leavers, change of control, adjustments to performance
targets);

(4) The Committee retains the right to exercise discretion to override formulaic outcomes and ensure that the level of bonus or share awards payable is appropriate.

It may use its discretion to adjust outcomes to ensure that any payments made reflect 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 share plan does not have performance conditions; and
(6) In approving the Directors’ remuneration policy, authority is given to the Company to honour any past commitments entered into with current or former Directors

including the vesting of share awards granted in the past.

GovernanceAnnual Report 2022 – James Fisher and Sons plc99

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 financial 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.

Scenario charts, 2023 remuneration
The charts below illustrate the potential value of the 2023 packages for the Executive Directors (see page 110 for further detail), assuming: nil bonus
payout and nil vesting for the LTIP in the ‘minimum’ scenario; and a 50% bonus payout and 50% LTIP vesting in the ‘on-target’ scenario.

)

0
0
0
£

(

n
o
i
t
a
r
e
n
u
m
e
R

£3,000

£2,500

£2,000

£1,500

£1,000

£500

£0

£2,571

54.1%

£2,107

44.0%

25.2%

20.6%

£1,379

33.7%

19.2%

£650

Fixed

Annual bonus

LTIP

£1,392

47.1%

£1,173

37.3%

29.8%

25.2%

£779

28.0%

22.5%

£385

100.0%

47.1%

30.8%

25.3%

100.0%

49.5%

32.9%

27.7%

Minimum

On-target

Maximum

Maximum
+ 50% share
price growth

Minimum

On-target

Maximum

Maximum
+ 50% share
price growth

Jean Vernet

Duncan Kennedy

Approach to recruitment
New Executive Directors will be appointed on remuneration packages with the same structure and elements set out in the Directors’ remuneration
policy table. Ongoing incentive pay/share-based awards will be limited to:

• Maximum annual bonus of 100% of salary; and

• LTIP award of up to 200% of salary.

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 ongoing remuneration obligations existing prior to appointment may continue, provided that they are put to shareholders for
approval at the earliest opportunity.

For external and internal appointments, the Committee may agree that the Company will meet certain relocation and incidental expenses
as appropriate.

GovernanceJames Fisher and Sons plc – Annual Report 2022

100

Directors’ remuneration report cont.

Loss of office
In relation to Executive Directors leaving the Company, the Committee is committed to applying a consistent and equitable approach to ensure the
Company is equitable, but pays no more than necessary. The loss of office policy is in line with market practice and will be dependent on whether
the individual is deemed a ‘good leaver’ or ‘bad leaver’. The ‘good leaver’ policy includes:

• payment in lieu of notice equal to one year’s basic salary or, if termination is part way through the notice period, the amount of salary relating to
any 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;

• the ‘good leaver’ reasons are death, injury, illness or disability, redundancy, retirement, transfer of business resulting in cessation of the individual’s

employment within the Group and any other reason at the Committee’s discretion;

• no compensation is paid for summary dismissal, save for any statutory entitlements;

• Executive Directors will also be entitled to a payment in respect of accrued but untaken annual holiday entitlements on termination; and

• legal fees and outplacement support may be paid by the Company where appropriate.

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 fixed 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:

Jean Vernet
Duncan Kennedy

Contract date
5 September 2022
1 May 2021

Notice period
12 months
12 months

The Executive Directors are permitted to serve as non-executive directors of other companies, provided the appointment is first approved by the
Remuneration and Nominations Committees. Directors are allowed to retain their fees from such appointments. During 2022, the Executive Directors
held no external appointments.

Non-Executive Directors do not have service contracts but have a letter of appointment setting out their terms and conditions. Non-Executive
Directors are appointed each year for up to 12 months (subject to re-election at the AGM) and are entitled to one month’s prior written notice of early
termination for which no compensation is payable. Details of the letters for the currently appointed Non-Executive Directors are set out below:

Angus Cockburn
Justin Atkinson
Inken Braunschmidt
Aedamar Comiskey
Kash Pandya
Claire Hawkings

Date of appointment
1 May 2021
1 February 2018
1 March 2019
1 November 2014
1 November 2021
1 January 2022

Letter of appointment
1 January 2023
1 January 2023
1 January 2023
1 January 2023
1 January 2023
1 January 2023

GovernanceAnnual Report 2022 – James Fisher and Sons plc101

Annual report on remuneration
Remuneration Committee
The Committee members have no personal financial interest, other than as shareholders, in the matters to be decided.

They have no conflicts 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 confirms that its constitution and operation comply with the applicable
provisions of the UK Corporate Governance Code (the Code) (prevailing at the date this report is signed) in relation to Directors’ remuneration policy
and practice and that it has applied the Code throughout the year. As noted on page 30, with respect to Code provision 41, various channels have
been established for the Board’s engagement with employees, including in relation to remuneration. The channels include the employee engagement
survey, the activities of the Designated Non-Executive Director for Employee Engagement (including regular attendance at the employee engagement
working group), and direct engagement between the Non-Executive Directors and employees during the annual calendar of Board site visits. Any
feedback or questions arising on the subject of remuneration (whether in relation to the workforce generally, or executives specifically) is tabled at
the Committee’s next meeting for discussion. The Board is also considering further enhanced mechanisms for employee engagement in relation to
executive remuneration for implementation in 2023.

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 and workforce remuneration policies and practice.

The Committee consults the Chief Executive Officer and invites him to attend meetings when appropriate. The Chief Human Resources Officer and
Ellason LLP, the Committee’s independent adviser, attend meetings of the Committee by invitation. The Committee also has access to advice from
the Chief Financial Officer. The Company Secretary acts as secretary to the Committee. No Director or other attendee is present when his or her own
remuneration is being determined.

Advisers to the Remuneration Committee
In undertaking its responsibilities, the Committee seeks independent external advice as necessary. Following a competitive tender, the Committee
appointed Ellason LLP (Ellason) as its principal external adviser from August 2021.

The Committee confirms that Ellason provided independent remuneration advice to the Committee during 2022, and that Ellason does not have any
other connections with the Company that may impair independence. Ellason is a member and signatory of the Code of Conduct for Remuneration
Consultants, details of which can be found at www.remunerationconsultantsgroup.com.

During 2022, Ellason provided independent advice on remuneration matters including the external environment and incentive design for 2022, as
well as other matters within the Committee’s remit. Ellason provides no other services to the Company. The fees paid to Ellason in respect of work
carried out for the year under review were charged on a time and materials basis and totalled £73,089.

GovernanceJames Fisher and Sons plc – Annual Report 2022102

Directors’ remuneration report cont.

Non-Executive Directors
The structure of Non-Executive Directors’ fees for 2022 and 2023 are set out below, all of which are payable in cash.

Chairman
Other Non-Executive Director fees:
Basic fee
Additional fee for the chair of Audit Committee
Additional fee for the chair of Remuneration Committee
Additional fee for the Senior Independent Director

Total remuneration of the Executive Directors (audited)

2023
£
210,125

54,632
12,000
8,000
8,000

2022
£
210,125

54,632
12,000
8,000
8,000

Base salary
Benefits(3)
Pension(4)
Bonus in cash
Bonus in deferred shares
Total short-term remuneration
LTIP – performance
LTIP – share appreciation
Dividend equivalents
LTIP – total
Other(5)
Total remuneration
Total fixed remuneration
Total variable remuneration

Jean Vernet(1)
2022
£000
173
44
13
–
–
230
–
–
–
n/a
400
630
230
400

2021
£000
–
–
–
–
–
–
–
–
–
–
–
–
–
–

Eoghan O’Lionaird(1)

Duncan Kennedy(2)

2022
£000
359
19
27
–
–
405
–
–
–
–
–
405
405
–

2021
£000
530
26
42
–
–
598
–
–
–
n/a
–
598
598
–

2022
£000
350
11
16
–
–
377
–
–
–
n/a
–
377
377
–

2021
£000
232
7
11
–
–
250
–
–
–
n/a
–
250
250
–

(1) The amounts disclosed in relation to 2022 reflect the period:
(i) For Jean Vernet, from his appointment to the Board on 5 September 2022 to 31 December 2022;
(ii) For Eoghan O’Lionaird, from 1 January 2022 until he stepped down from the Board on 5 September 2022, although he continued to be paid until cessation

of employment on 19 February 2023, subject to mitigation. Further details can be found on page 105.

(2) For Duncan Kennedy, the amounts disclosed above for 2021 reflect the period from 1 May 2021, when he took up his role on the Board.
(3) Benefits comprise a cash allowance in lieu of car and medical insurance. For Jean Vernet, the figure also includes c.£38k in reimbursed expenses in relation to his

relocation to the UK, see page 104 for further details.

(4) Pension contributions may be paid into personal pension plans, the Company pension scheme or taken as a separate cash allowance, subject to income tax.

In line with the approach taken across the UK workforce, the Group passes on 75% of the National Insurance cost saving arising from an individual’s election to join
the Group’s SMART pension scheme arrangement through salary sacrifice. During 2022, Eoghan O’Lionaird elected to participate in the Group’s SMART pension in
this way, and the value of the cost saving passed on to him is reflected above.

(5) This relates to a one-off restricted share award granted to Jean Vernet on his appointment, in connection with share awards forgone on leaving his previous employer.

Further details are set out on page 105.

GovernanceAnnual Report 2022 – James Fisher and Sons plc103

Annual bonus awards for 2022 (audited)
The maximum annual bonus for Executive Directors was 100% of base salary, with 70% based on financial objectives (Note 1 below) and 30%
based on individual achievement of personal objectives (Note 2 below). The first 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 the
Executive Directors with respect to 2022, as set out below.

Note 1 – Financial objectives (70% of maximum):

Performance measure
Underlying operating profit (40%(1))

Actual performance
Operating cashflow (30%(1))

Actual performance

Performance target
Minimum threshold £31.0m
Maximum £37.5m
£19.1m
Minimum threshold £55.3m
Maximum £62.8m
£44.5m

Assessment against targets
Threshold starts at 0% and increases to 100% of this element
of the bonus at maximum performance.
0% of this part of the bonus was paid out.
Threshold starts at 0% and increases to 100% of this element
of the bonus at maximum performance.
0% of this part of the bonus was paid out.

(1) Updated to reflect a minor correction to the weightings published in last year’s Report.

Note 2 – Personal objectives (30% of maximum):
Jean Vernet (5 September – 31 December 2022) and Eoghan O’Lionaird (1 January – 5 September 2022)

Objectives
Operational
Reduce net debt/EBITDA, including disposal of the Board-approved businesses
Roll-out Lean program
Roll-out NPS program and Group-wide sales training
ESG
Improve engagement mean score for all employees and senior leadership
Structured analysis and framework for carbon reduction program
Strategy
Evolve the strategy for renewables and decommissioning with clear operational plans and execution underway
Total

Duncan Kennedy

Objectives
Operational
Reduce net debt/EBITDA, including disposal of the Board-approved businesses
Roll-out Lean program
ESG
Improve engagement/e-NPS results for all employees and the global finance function
Roll-out and embed risk management improvements
Define and begin deployment of BEIS/UK SOX project
Strategy
Evolve the strategy for renewables and decommissioning with clear operational plans and execution underway
Total

Weighting
(% bonus)

5%
5%
5%

5%
5%

5%
30%

Weighting
(% bonus)

5%
5%

5%
5%
5%

5%
30%

Eoghan O’Lionaird stepped down from the Board with effect from 5 September 2022, although he continued to be paid until cessation of
employment on 19 February 2023. As a ‘good leaver’, it was agreed that he should retain a pro-rated opportunity under the 2022 bonus, and for
which personal performance was to be assessed by the Committee on a discretionary basis (i.e. following the end of the financial year).

Notwithstanding their valued contribution and achievement of some of the personal objectives set, the Committee did not consider that it would be
appropriate to award any part of the 2022 bonus to the Executive Directors (including Eoghan O’Lionaird) under this element given that the financial
thresholds had not been met. Therefore, no formal assessment of these targets has been conducted. The Executive Directors’ strategic objectives
have been reset for 2023, and further details are set out in the implementation of the remuneration policy for 2023 section on page 110 (and will be
disclosed fully in the 2023 remuneration report).

GovernanceJames Fisher and Sons plc – Annual Report 2022104

Directors’ remuneration report cont.

Vesting of 2020 LTIP awards (audited)
LTIP awards granted on 24 July 2020 were due to vest in July 2023 subject to the achievement of defined EPS and TSR performance targets.
EPS is measured over the three-year period ended 31 December 2022, while TSR is measured over the three-year period from 6 April 2020.

The EPS performance condition (70% of the award) comprises a sliding scale, under which 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
47.9p

EPS
at year end
(17.1p)

EPS
growth
(135.7%)

Threshold
RPI +9%
32.5%

Maximum
RPI +18%
41.5%

Vesting %
0%

The TSR performance condition (30% of the award) also comprises a sliding scale, under which 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.

Performance target
Relative TSR

Performance
period
6 April 2020 – 5 April 2023

Threshold
Median TSR
(1.6%)

Maximum
UQ TSR
28.7%

James Fisher
TSR
(79.7%)

Vesting %
0%

TSR is calculated in GBP, using 3-month average opening and closing return index values.

As a result of EPS and TSR performance, 2020 LTIP awards will lapse in full.

Neither Jean Vernet nor Duncan Kennedy were participants in the 2020 LTIP award cycle. However, Eoghan O’Lionaird and Stuart Kilpatrick (both
former Directors) retained interests in the 2020 LTIP cycle, as set out on page 105.

LTIP awards granted in 20221 (audited)

Eoghan O’Lionaird
Duncan Kennedy

Award date
21 April 2022
21 April 2022

Proportion
of salary
100%
100%

Maximum
shares awarded
146,773
96,926

Face value
at date of grant(1)

£530k
£350k

(1) The share price at date of award was based on the five-day average closing price from 10 March 2022 (the date of the preliminary results) to 16 March 2022, of

361.1 pence. Recognising the prevailing share price at the time of grant, the Committee agreed to scale back the award size from 125% of salary to 100% of salary,
effectively reducing the grants by 20%, to mitigate the potential for windfall gains.

Vesting of the 2022 LTIP award (granted in the form of a conditional share award) is subject to achievement of performance targets over a three-year
period as disclosed in the RNS announcement notifying the market of the granting of the awards (dated 25 April 2022). 50% of the award is based
on EPS targets, 30% based on TSR targets and 20% of the award based on return on capital employed (ROCE):

• None of the EPS element of the 2022 LTIP shall vest if EPS for the 2024 financial year is less than 66 pence. 25% of the EPS element shall vest

if 2024 EPS is 66 pence, rising on a straight-line sliding scale to 100% vesting of this element if 2024 EPS is at least 76 pence.

• 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 2022. 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 below median, none of the TSR element of the award will vest. 25% of the TSR part of the award will vest for performance
at median, with a straight-line sliding scale between median and upper quartile.

• Return on capital employed (ROCE) was introduced as a measure to align the LTIP scorecard with the key pillars of our latest strategy. None of the
ROCE element of the 2022 LTIP shall vest if ROCE for 2024 is less than 11%; 25% shall vest if 2024 ROCE is 11%, rising on a straight-line sliding
scale to 100% vesting if 2024 ROCE is at least 13%.

Any part of the award that does not vest at the end of a performance period will lapse immediately. In line with the Remuneration Policy approved
by shareholders at the 2021 AGM, a two-year post-vesting holding period applies to these awards.

Deferred bonus awards granted in 2022 in respect of 2021 annual bonus (audited)
No deferred bonus awards were granted in 2022 in respect of the 2021 annual bonus as a result of no bonus being payable.

Appointment of new Chief Executive Officer
Jean Vernet joined the Board as Chief Executive Officer on 5 September 2022. His salary was set at £530,000, and his pension contribution is
up to 7.5% of salary, in line with the remuneration arrangements of his predecessor. He was eligible in 2022 for a maximum bonus of 100% of his
pro-rated salary, and is eligible in 2023 for a maximum bonus of 100% of salary and an LTIP award of 175% of salary. These award opportunities
remain within the maximum limits permissible under the remuneration policy, and have been set to provide an appropriate balance between fixed
and variable pay in his remuneration package (and, within the variable component, between short- and long-term performance). To assist with his
relocation to the UK, Mr Vernet is eligible to receive a relocation allowance of up to £115,000 to cover agreed relocation and COBRA reimbursement
expenses incurred in the first two years of his appointment.

In addition, to compensate Mr Vernet for share awards forfeited on leaving his former employer, the following restricted share award (structured as a
conditional award of shares) was granted to him on 13 September 2022:

GovernanceAnnual Report 2022 – James Fisher and Sons plc105

Recruitment award granted in 2022 (audited)

Jean Vernet

Award date
13 September 2022

Basis
on which
award made
Buy-out

Maximum
shares awarded
135,516

Face value
at date of grant(1)

£400k

(1) The share price at date of award was based on the average closing price over the three trading days from 8 September 2022 to 12 September 2022, of 295.2 pence.

No consideration was paid for the grant of the award. 50% of the shares will vest on 13 September 2023 and 50% on 13 September 2024, subject
to Mr Vernet continuing to be employed by the Group and not being under notice of termination of employment as at the vesting date. The value
and vesting period of the recruitment award was determined taking into account the value and time period for the incentive arrangements forfeited
by Mr Vernet, and replicating these to the extent possible.

Payments for loss of office (audited)
Eoghan O’Lionaird stepped down from the Board on 5 September 2022 and remained an employee to support the Company until 19 February 2023.
Details of the arrangements in respect of remuneration are as follows:

• Contractual entitlement to salary (based on an annual salary of £530,000) and benefits during a period of garden leave, which continued until his

cessation of employment by reason of mitigation on 19 February 2023.

• In respect of outstanding incentive awards, Mr O’Lionaird remained eligible to receive a pro-rata bonus in respect of the 2022 financial year. Due

to company performance, no bonus was payable for 2022. Unvested LTIP awards will vest on their normal vesting dates, subject to time prorating
and performance conditions. The two-year post-vesting holding period will apply as normal. Dividend equivalents may be credited to the extent
that awards vest. Eoghan O’Lionaird’s 2020 LTIP award will lapse in full due to the performance thresholds not being met. His 2021 and 2022
LTIP awards remain outstanding.

• Mr O’Lionaird received a contribution of £5,000 (excluding VAT) in respect of legal fees and £50,000 (excluding VAT) in respect of outplacement

support.

Payments to former Directors (audited)
As previously disclosed, Stuart Kilpatrick stepped down from the Board of the Company with effect from 29 April 2021. As set out in the 2021
Directors’ remuneration report, he continued to receive his contractual entitlement to salary and benefits during a period of garden leave that ended
on 31 March 2022. The contractual entitlement paid to Mr Kilpatrick in respect of the 2022 period was £91,192 (2021: £267,182). His 2019 LTIP
award lapsed in full, and his remaining 2019 Deferred Bonus Plan (DBP) award vested in April 2022. Mr Kilpatrick retains an interest in his 2020 LTIP
award (which, based on performance, will lapse in full). Mr Kilpatrick received no payment in lieu of notice or any other termination payments.

Fergus Graham, who stepped down from the Board in March 2020, also retained an interest in the 2019 DBP award. This award vested in full in
April 2022. Mr Graham has no further outstanding incentive awards with the Company.

CEO pay ratio (unaudited)
The table shows how the CEO’s single figure remuneration for 2022 compares to equivalent single figure remuneration for full-time equivalent UK
employees as at 1 December, ranked at the 25th, 50th and 75th percentile (and how this ratio has evolved since 2019):

2022
2021
2020
2019

25th
percentile
pay ratio
35:1
22:1
19:1
28:1

Median
pay ratio
25:1
16:1
14:1
19:1

Method
Option A
Option A
Option A
Option A

25th
percentile
£26,500
£25,000
£24,000
£24,480

Salary

Median
£36,050
£34,000
£33,127
£34,150

Total pay and benefits

75th
percentile
£54,590
£50,000
£50,000
£52,000

25th
percentile
£29,682
£27,770
£27,000
£25,459

Median
£41,852
£37,120
£37,500
£36,541

75th
percentile
pay ratio
16:1
10:1
9:1
13:1

75th
percentile
£65,557
£59,280
£58,963
£55,240

For 2022, the CEO single figure remuneration reflects the aggregate single figures for Eoghan O’Lionaird and Jean Vernet. No components of pay
and benefits have been omitted for the purpose of the above calculations. As in previous years, 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 2022.

GovernanceJames Fisher and Sons plc – Annual Report 2022106

Directors’ remuneration report cont.

The Committee monitors the trend in CEO pay ratio over time, noting that the ratio reported above for 2022 captures the recent CEO transition.
In line with the reporting regulations, the 2022 single figure includes the face value of the buyout award made to Jean Vernet on his appointment.
Were this to be excluded, the median pay ratio would be 15:1; and in line with the general trend of recent years. The Committee will continue to
keep under review the trend, in particular the impact of incentive payouts in future years. It is expected that these would be reflected in a higher ratio,
due to the relative upweighting of variable remuneration in the CEO’s package, compared with market competitive norms for the wider UK workforce
(and consistent with our pay practices and policies). However, this will take time to normalise, with the first LTIP award to be made to Jean Vernet
(in early 2023) not due to vest until 2026.

Aligning pay with performance (unaudited)
The following graph shows the value, to 31 December 2022, of £100 invested in the Company on 31 December 2012, compared with the value of
£100 invested in the FTSE 250 and FTSE SmallCap indices (excluding investment trusts) on the same date. The other points plotted are the values
at intervening financial year-ends.

Growth in the value of £100 holding over 10 years

£300

James Fisher and Sons plc

FTSE Mid 250 Excluding Investment Trust Index

FTSE Small Capitalisation Index Ex Investment Trusts

£250

£200

£150

£100

£50

£0
31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22

Remuneration of CEO compared with growth in underlying diluted earnings per share

2013

2014

2015

2017

2018

2019

Nick Henry
2016

Eoghan O’Lionaird
2020(1) 2021

2022

Jean
Vernet
2022(2)

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 100% 100%

4%
18% 13% (7)% 11%
421
492
439
35
429
263
456
921
702
418
183
691
1,393
874
1,104
100% 100% 23% 100% 88% 91% 17%
100% 100% 100% 47% 15% 100% 59%
–
45%

7% 14%
526
512
448
392
1,010
904
889
109
1,899
1,013

471
287
758
728
1,486

492
97
589
318
907

–

4% (52)% (58)% (186)% (186)%
189
230
–
–
189
230
–
400
189
630
–
–
n/a
n/a
n/a
n/a

405
–
405
–
405
–
–
n/a

598
–
598
–
598
–
n/a
n/a

522
–
522
–
522
–
n/a
n/a

(1) As part of the measures implemented by the Company at the start of the COVID pandemic, Eoghan O’Lionaird’s 2020 salary (£530,000) was reduced by 50% for

three months from 1 April 2020, and not repaid.

(2) The share schemes figure for Jean Vernet relates to the restricted share award granted to him on 13 September 2022 in compensation for the value of incentive

awards forfeited by him on leaving his previous employer in order to join James Fisher.

GovernanceAnnual Report 2022 – James Fisher and Sons plc107

Percentage change in remuneration (unaudited)
The table below shows the annual percentage change in earned salary or fees, benefits and annual bonus for those individuals who were appointed
as Board Directors during the 2022 financial year, compared to the average earnings of all of the Group’s other UK employees. As required by the
remuneration reporting regulations with which the Company is required to comply, the analysis has been expanded to include this information for the
financial year under review, and will continue to be built up until it displays a five-year history. Note that Directors who were not a Director at any point
during 2022 have not been included. The percentage changes in their remuneration for prior years (and in which they were a Director) are disclosed
in relevant previous Annual Reports.

The Committee chose the Group’s UK employees for the below pay comparison. Our UK employee population represented around 60% of the
Group’s workforce in 2022, and is therefore considered to be the most meaningful comparator group (by comparison, employees of James Fisher
and Sons plc represented less than 5% of the workforce). The Committee monitors this information carefully to ensure that there is consistency in
the fixed pay trend for Board Directors compared with the wider workforce.

Executive Directors
Jean Vernet(2)
Eoghan O’Lionaird(3)
Duncan Kennedy(4)
Non-Executive Directors
Angus Cockburn(5)
Justin Atkinson
Inken Braunschmidt
Aedamar Comiskey
Claire Hawkings(6)
Kash Pandya(7)
Michael Salter(8)
Employee population(9)

Base salary/fee(1)

2021
to 2022

2020
to 2021

2019
to 2020

2021
to 2022

Benefits
2020
to 2021

Annual bonus

2019
to 2020

2021
to 2022

2019
to 2020

N/A
0%
0%

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

N/A
14%
N/A

N/A
5%
5%
5%
N/A
N/A
5%
3.4%

N/A
(12)%
N/A

N/A
(3)%
(3)%
(3)%
N/A
N/A
(3)%
5%

N/A
7%
0%

N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.4%

N/A
13%
N/A

N/A
N/A
N/A
N/A
N/A
N/A
N/A
2%

N/A
0%
N/A

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

N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A
N/A
256%

N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A
N/A
(88)%

N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A
N/A
(19)%

(1) The 2020 to 2021, and 2019 to 2020, comparison reflects the 20% reduction to base salary volunteered by all Board Directors for three months from 1 April 2020 (the

CEO volunteering a 50% reduction), not a change in base salaries or Directors’ fees.

(2) Jean Vernet joined the Board on 5 September 2022 so a year-on-year comparison is not available.
(3) For the comparison of 2021 to 2022, the percentage changes for Eoghan O’Lionaird reflect annualised values for 2022 remuneration. Eoghan O’Lionaird left the

Board on 5 September 2022.

(4) Duncan Kennedy joined the Board in May 2021. For the comparison of 2021 to 2022, the percentage changes reflect annualised values for 2021 remuneration.
(5) Angus Cockburn joined the Board in May 2021. For the comparison of 2021 to 2022, the percentage change reflects annualised values for 2021 remuneration.
(6) Claire Hawkings joined the Board in January 2022, so a year-on-year comparison is not available.
(7) Kash Pandya joined the Board in November 2021. For the comparison of 2021 to 2022, the percentage change reflects annualised values for 2021 remuneration.
(8) For the comparison of 2021 to 2022, the percentage changes for Michael Salter reflect annualised values for 2022 remuneration. Michael Salter left the Board

on 5 May 2022.

(9) For the employee population, the year-on-year change in annual bonus is based on the year of payment; as the data required to calculate the change based on

bonuses earned in relation to the year is not available at the time of signing off this report.

Relative importance of remuneration (unaudited)

Total employee remuneration
Total dividends paid

2022
£m
145.8
–

2021
£m
136.4
–

Change
£m
9.4
–

GovernanceJames Fisher and Sons plc – Annual Report 2022108

Directors’ remuneration report cont.

Interests in shares (audited)
The interests of Directors and their connected persons in ordinary shares as at 31 December 2022, including any interests in shares provisionally
awarded under the LTIP and share options provisionally granted under the Sharesave Scheme, are as follows:

Angus Cockburn
Jean Vernet
Duncan Kennedy
Justin Atkinson
Inken Braunschmidt
Aedamar Comiskey
Claire Hawkings
Kash Pandya
Former Directors
Eoghan O’Lionaird(2)
Michael Salter(3)

Unvested
LTIP
number(1)

Unvested
deferred
bonus
shares(1)

Unvested
restricted

shares(1)

Unvested

options(1)

–
–
132,716
–
–
–
–
–

243,277
–

–
–
–
–
–
–
–
–

–
–

–
135,516
–
–
–
–
–
–

–
–

–
–
9,259
–
–
–
–
–

2,935
–

Vested but
unexercised
options
–
–
–
–
–
–
–
–

At
31 December
2021
number
5,000
N/A
5,000
3,150
–
–
N/A
–

–
–

42,313
–

Beneficial
number
5,000
–
5,000
3,150
–
–
–
–

42,313
–

(1) The unvested LTIP awards are subject to performance conditions. The unvested deferred bonus and restricted share awards are not subject to performance

conditions. Unvested options comprise grants under the Sharesave scheme and are not subject to performance conditions;

(2) Eoghan O’Lionaird’s interests in shares are shown based on the position on the date he stepped down from the Board (5 September 2022); and
(3) Michael Salter’s interests in shares are shown based on the position on the date he stepped down from the Board (5 May 2022).

No Director has an interest in the preference shares of the Company, or in the shares of any subsidiary or associated undertaking. The Directors’
interests stated above include any shares held by their connected persons and, between 31 December 2022 and 28 April 2023, there were no
changes to the Directors’ shareholdings.

Against the 200% of salary ownership guideline and based on the share price and prevailing base salary levels as at 31 December 2022, Jean
Vernet held shares equivalent to 42% of his base salary (being the estimated net of tax value of unvested restricted share awards), and Duncan
Kennedy's beneficial holding was equivalent to 4% of his base salary. In accordance with our Policy, the Executive Directors are required to retain
half of the shares vesting (after tax) under the LTIP until the guideline level of holding is met.

Executive Directors’ interest in share awards (audited)
Conditional share awards

Jean Vernet

Restricted Share Award(1)
Restricted Share Award(1)

Duncan Kennedy

LTIP
LTIP

Eoghan O’Lionaird(2) LTIP
LTIP
LTIP

Total

1 January
2022
–
–
–
35,790
–
35,790
42,307
54,197
–
96,504
132,294

Granted
during year
(no.)
67,758
67,758
135,516
–
96,926
96,926
–
–
146,773
146,773
379,215

Vested
during year
(no.)
–
–
–
–
–
–
–
–
–
–
–

Lapsed
during year
(no.)
–
–
–
–
–
–
–
–
–
–
–

31 December
2022
67,758
67,758
135,516
35,790
96,926
132,716
42,307
54,197
146,773
243,277
511,509

Vesting
date
13.09.23
13.09.24

28.05.24
21.04.25

24.07.23
09.04.24
21.04.25

Expiry
date
n/a
n/a

n/a
n/a

n/a
n/a
n/a

(1) This is the buyout award in connection with Jean Vernet’s appointment, the details of which are set out in page 105.
(2) The interests in shares for Eoghan O’Lionaird are included as at the date he stepped down from the Board (5 September 2022). To the extent the awards vest, they

will be subject to time pro-rating.

A two-year holding period applies to LTIP awards granted after the 2018 AGM.

GovernanceAnnual Report 2022 – James Fisher and Sons plc109

Share option grants

Duncan Kennedy
Sharesave
Eoghan O’Lionaird(1) Sharesave
Total

1 January
2022
–
2,935
2,935

Granted
during year
(no.)
9,259
–
9,259

Vested
during year
(no.)
–
–
–

Lapsed
during year
(no.)
–
–
–

Exercise
price
£3.24
£10.22

31 December
2022
9,259
2,935
12,194

Vesting
date

Expiry
date
01.06.27(2)
01.12.27
01.12.25(3) 01.06.26

(1) The interests in shares for Eoghan O’Lionaird are included as at the date he stepped down from the Board (5 September 2022).
(2) Duncan Kennedy was granted options under the five-year all employee Sharesave scheme granted on 11 April 2022. The options will mature on 1 June 2027, at

which point the participant may elect to receive shares or the cash saved.

(3) Eoghan O’Lionaird was granted options under the five-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.

The schemes above (other than Sharesave) are not tax-advantaged for HM Revenue and Customs purposes. As at 28 April 2023, being the last
practical date prior to the publication of this report, the only change to the Executive Directors’ interests in shares awards was the lapsing of Eoghan
O'Lionaird's Sharesave award (of options over 2,935 shares).

Sourcing of shares and dilution
The 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 LTIP awards are satisfied by the shares held by the James Fisher and Sons plc Employee Share Trust (Trust). During the year the
Trust purchased no ordinary shares on the open market (2021: 50,000) and at 31 December 2022 the Trust held 47,856 ordinary shares (2021:
54,571).

Share price during the financial year
The middle market price of one ordinary share in the Company during the financial year ranged from 251.0 pence to 510.0 pence and at
31 December 2022 was 390.5 pence.

Non-Executive Directors’ remuneration (audited)

Angus Cockburn(1)
Justin Atkinson(2)
Inken Braunschmidt
Aedamar Comiskey(3)
Claire Hawkings(4)
Kash Pandya(5)
Former Directors
Michael Salter(6)

Total fees

2022
£000
210
67
55
71
55
55

2021
£000
140
67
55
71
N/A
9

(1) Joined the Board on 1 May 2021.
(2) The fees include an additional fee for chairing the Audit Committee fee (of £12,000 per annum).
(3) The fees include additional fees for chairing the Remuneration Committee (of £8,000 per annum) and acting as Senior Independent Director (also of £8,000 per annum).
(4) Joined the Board on 1 January 2022.
(5) Joined the Board on 1 November 2021.
(6) Retired from the Board on 5 May 2022.

GovernanceJames Fisher and Sons plc – Annual Report 2022110

Directors’ remuneration report cont.

Shareholder voting (unaudited)
The Company is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. Where there are substantial votes
against resolutions including in relation to Directors’ remuneration, the Company seeks to understand the reasons for any such vote and will report
any actions in response to it. The following table reflects the voting on the Directors’ remuneration report for the year ended 31 December 2021
at the 2022 AGM and the voting on the Directors’ remuneration policy at the 2021 AGM:

Remuneration resolutions
For
Against
Total votes cast (excluding withheld votes)
Total votes withheld
Total votes cast (including withheld votes)

Directors’ remuneration report
(2022 AGM)

Directors’ remuneration policy
(2021 AGM)

Total number
of votes
37,913,927
1,995,607
39,909,534
18,745
39,928,279

% of
votes cast
95.0%
5.0%
100.0%
–
–

Total number
of votes
37,499,177
938,426
38,437,603
311,116
38,748,719

% of
votes cast
97.6%
2.4%
100.0%
–
–

Implementation of the remuneration policy for 2023 (unaudited)
With effect from 1 January 2023, the salaries of the Executive Directors remain £530,000 for Jean Vernet and £350,000 for Duncan Kennedy. The
Committee has delayed the review of Executive Director salaries until later in 2023, to align with the second of a two-phase salary review process
adopted by the Company for other employees earning an annual base salary of £70,000 or higher. Base salary increases have been awarded to the
rest of the workforce; of 5% on average for lower-paid colleagues (earning annual base salaries of less than £70,000) and 3% on average to those
higher earners who will be eligible for a second review later in the year. This approach is considered to be fair and appropriately reflect the prevailing
inflationary environment, while ensuring that the available year end pay budget is focused on supporting lower-paid colleagues, in particular, with
ongoing cost-of-living pressures.

The maximum bonus opportunity continues to be set at 100% of base salary. Financial targets are set to be challenging and appropriately
demanding. The measures remain unchanged from 2022 and will be operating profit (weighted 50%); operating cash flow (25%) and strategic
objectives (25%). Strategic objectives for 2023 will include ESG targets focused on employee engagement and health & safety, and other short-term
business priorities. The bonus will additionally be subject to a discretionary assessment by the Committee of progress on other important initiatives
during the year, including our Environment agenda. The targets are commercially sensitive but disclosure of the targets and performance against
these will be set out in the 2023 Directors’ remuneration report.

As described in the Annual statement prefacing this remuneration report, awards will be granted in 2023 under the LTIP with face values of 175% of
salary for Jean Vernet and 125% of salary for Duncan Kennedy. 50% of the award will be based on EPS growth, 30% on relative TSR and 20% on
Return on Capital Employed (ROCE).

The performance period for the EPS and ROCE elements of the award will run for three years ending 31 December 2025. For the TSR element,
performance will be measured over three years from 6 April 2023 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; and straight-line vesting in between.
At the date of signing this report, the Committee has not finalised the EPS and ROCE performance targets. These will be set to be appropriately
stretching in the context of the Group’s strategic plan. The Committee intends to disclose the targets in the RNS announcement at the time of
making awards.

Aedamar Comiskey
Chair of the Remuneration Committee

28 April 2023

GovernanceAnnual Report 2022 – James Fisher and Sons plc111

Directors’ report

Additional information and statutory disclosures

SUBJECT MATTER
Particulars of important events affecting the Company
which have occurred since the end of financial year
Likely future developments in the business
Research and development
Employee involvement and engagement
Relationships with suppliers, customers and others
Greenhouse gas emissions, energy consumption
and efficiency action
Use of financial instruments

LOCATION

Strategic report
Strategic report
Strategic report
Strategic report
Strategic report

PAGES
06 to 07
14 to 17
14 to 17
52
30
31

Directors' report
Note 29

113 to 114
170

This section contains additional information which the Directors are required by law and regulation to include within the Annual Report and Accounts.
The Directors’ report comprises this section as well as the rest of the Governance section (from pages 74 to 110) and those sections of the Strategic
report or financial statements as referenced in this section.

We have chosen, in accordance with the Companies Act 2006, to include certain information in our Strategic report or financial statements that
would otherwise be required to be disclosed in the Directors’ report. This is set out in the table above.

The Directors’ report and Strategic report comprise the ‘management reports’ for the purposes of compliance with Financial Services Authority’s
Disclosure Guidance and Transparency Rules (DTR) 4.1.8R. The information that fulfils the requirements of the Corporate Governance Statement for
the purposes of DTR 7 can be found in the governance information on page 76 (all of which forms part of this Directors’ report) and in this Directors’
report. The statement of Directors’ responsibilities on page 115 is incorporated into this Directors’ report by reference.

Going concern
The Group’s business activities, together with the factors likely to affect its future development, the financial position of the Group and a description
of the principal risks and uncertainties are set out in the Strategic report on pages 2 to 73. Having assessed the principal risks and the other
matters discussed in connection with the viability statement, the Directors consider it appropriate to adopt the going concern basis of accounting in
preparing this Annual Report and Accounts as set out in Note 1 on page 134.

Dividends
As a result of performance challenges, the Company did not pay an interim dividend for 2022, and the Board is not recommending the payment of a
final dividend for the year. The Board is committed to reinstating the dividend when appropriate.

Share capital
Details of the share capital of the Company and the shares held by the Company’s Employee Share Trust, including the rights and obligations
attaching to the shares are set out in Note 30 to the Financial statements on page 178. The rights and obligations attaching to the shares are set
out in the Company’s Articles of Association (Articles). There are no specific restrictions 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 benefit trust, the trustees have discretion to
vote on any shares as they see fit and have not waived their right to receive dividends.

At the AGM held on 5 May 2022, the Company was given authority to purchase up to 2,519,776 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 2022, 50,395,519 ordinary shares of 25 pence
each have been issued, are fully paid up and are listed on the London Stock Exchange, representing 99.8% of the Company’s share capital, and
100,000 cumulative preference shares of £1 each have been issued and fully paid up, representing 0,2% of the Company’s share capital.

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 2022, the Company had been notified (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:

GovernanceJames Fisher and Sons plc – Annual Report 2022112

Directors’ report cont.

Substantial shareholders

Trustees of the Sir John Fisher Foundation
Schroders plc
Aberforth Partners LLP
Invesco Limited
Odyssean Investment Trust
NFU Mutual Insurance Society Limited
Montanaro Asset Management Limited

Ordinary
shares
11,592,360
4,970,246
2,582,790
2,520,890
2,192,220
1,976,768
1,471,066

Nature of
%(1)
holding
Direct
22.98
Indirect
9.89
Indirect
5.12
Indirect
5.00
4.35
Direct
3.92 Direct/ Indirect
Direct
2.91

(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.

In the period from 31 December 2022 to the date of this report, the Company received the
following notification:

Substantial shareholders

Odyssean Investment Trust

Directors
The biographies of the current Board of
Directors are set out on pages 80 and
81. Details in relation to changes in the
composition of the Board are provided in the
Nominations Committee report on pages 86
to 88.

Powers of Directors
The powers of the Directors are determined
by the Company’s Articles, the Companies Act
2006 and in certain circumstances (including
in relation to the issuing or buying back by the
Company of its shares) the authority given by
the Company in general meeting. The Directors
will be seeking shareholder approval for 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 office on the date
seven days before the date of notice of the
AGM shall retire from office and shall be eligible
for re-election at the AGM.

In accordance with the UK Corporate
Governance Code 2018 (Code), all Directors
will offer themselves for election or re-election
at the forthcoming AGM.

Ordinary
shares
2,520,000

%
5.00

Nature of
holding
Direct

Directors’ and officers’
liability insurance and indemnities
The Company maintains an appropriate level
of directors’ and officers’ 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.

Directors’ conflict of interest
Under the Companies Act 2006, a director
must avoid a situation where a direct or
indirect conflict of interest may occur. The
Board has adopted established procedures
to address the management of any potential
or actual conflicts of interest. A conflict must
be authorised in advance by the Board.
Directors are asked at each Board meeting
to check the register of conflicts and confirm
that the register remains up to date and that it
remains appropriate for the relevant matter to
remain authorised.

Employment of disabled persons
James Fisher is an equal opportunities
employer and is firmly 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 (including
anyone who becomes disabled whilst
employed with James Fisher) are treated fairly
and that their training, career development and
promotion needs are met.

The Group recognises its responsibility
to provide a safe operating environment
for all its employees. Our strong focus on
employee training, regulatory compliance
and accident reduction provides the support
to allow accountability to remain with local
management who are best-placed to ensure
that their businesses comply with local laws
and regulations and specific needs on a day-
to-day basis. The review of health and safety
performance is the first item on the agenda at
each Board and business board meetings.

We recognise that the success of our business
depends on our talented workforce. Employees
throughout the Group are encouraged to
participate in training and development
programmes and to obtain professional
qualifications relevant to their roles.

Additional information
for shareholders
The Articles can only be amended by a
special resolution at a general meeting of the
shareholders.

No political donations were made during the
year. Details of the Group’s involvement in
charitable initiatives is set out on pages 31 and
45.

Details of Group subsidiaries can be found
on pages 192 to 195. Companies within
the Group have overseas branches in Chile,
Mozambique, the United Arab Emirates and
Taiwan.

Significant 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 significant in terms of their likely impact
on the business as a whole apart from those
set out below.

The Company is a guarantor of all of the
Group’s bilateral bank facilities which upon
a change of control could be withdrawn.

The Singapore Submarine Rescue Service
Agreement made between James Fisher
Singapore Pte Ltd. and First Response Marine
Pte Ltd. dated 17 October 2008 may terminate
upon a change of control of the Company or
James Fisher Singapore Pte Ltd.

The rules of the Company’s LTIP, ESOS and
Sharesave schemes set out the consequences
of a change of control on the rights of
participants under those schemes. Participants
are generally able to exercise their options on
a change of control, provided that the relevant
performance conditions have been satisfied.

GovernanceAnnual Report 2022 – James Fisher and Sons plc113

There are no agreements between the
Company and its Directors or employees
providing for compensation for loss of office
or employment (whether through resignation,
purported redundancy or otherwise) that arise
in the event of a change of control of
the Company.

Disclosure of information
to the Auditor
Each Director in office at the date of approval
of this Directors’ report confirms that:

• 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.

Information required by Listing Rule 9.8.4

The details of long-term incentive schemes
as required by LR 9.8.4R are set out in the
Remuneration Report on pages 94 to 110.

SECR
Fugitive Emissions (Scope 1)
Mobile Combustion (Scope 1)
Stationary Combustion (Scope 1)
Purchased Energy (Scope 2)
Scope 1 & 2 Total
Business travel by car (Scope 3)
Scope 1 & 2 + business travel
by car (Scope 3)
Business travel (Scope 3)
Commuting (Scope 3)
Fuel- and energy-related activities
(Scope 3)
Upstream leased assets (Scope 3)
Waste generated in operations
(Scope 3)
Water (Scope 3)
Scope 3 excluding business
travel by car (Scope 3)
Total tCO2e
Total MWh
Scope 1 & 2 + business
travel by car (Scope 3) CO2e
intensity ratio (tCO2e/£m
revenue)
Scope 1, 2 & 3 CO2e intensity
ratio (tCO2e/£m revenue)

tCO2e
32
31,843
926
852
33,653
179

33,832
2,217
232

7,670
12,980

27
0.2

23,126.2
56,958.2

115

Streamlined Energy and Carbon
Reporting (SECR)
Having expanded on the Group’s Scope 3
reporting for our 2022 GHG assessment, we
have updated our SECR reporting format to
better align with the mandatory Scope 1 and 2,
and voluntary Scope 3 requirements for SECR
reporting.

Annual Energy Use

In 2022, the Group’s total energy consumption
associated with Scope 1 and 2 was 287,865
MWh. The Group’s UK facilities accounted for
63%, with the non-UK facilities accounting for
the remaining 37%.

Fuel was the largest source of energy
consumed (97.1%), followed by electricity
(1.9%), and gas (0.9%). Outside the UK, fuel
was also the largest source of energy (98.5%),
with a minor contribution from electricity
(1.2%), and gas (0.3%).

Fuel consumption includes liquid fuels, namely
diesel, petrol, burning oil, fuel oil, and gas oil,
used for stationary (e.g., generator sets) and
mobile combustion (e.g., vessels and company
fleet vehicles) activities. Gas consumption
includes gaseous fuels, namely natural gas,
and liquid petroleum gas, used for stationary
(e.g., boilers) and mobile combustion (e.g.,
forklifts) activities.

Greenhouse Gas Emissions

In 2022, the Group’s total Scope 1 and 2
greenhouse gas emissions was 79,110 tCO2e.
As with energy consumption, the Group’s
non-UK facilities accounted for most of the
greenhouse gas emissions (64%), with the UK
facilities accounting for the remaining 36%.

Fuel consumption accounted for most of
the greenhouse gas emissions (97.4%),
followed by electricity consumption (1.9%),
gas consumption (0.6%), and refrigerants
(0.1%). With respect to the non-UK facilities,
fuel consumption also accounted for most of
the greenhouse gas emissions (98.0%), with a
minor contribution from electricity consumption
(1.7%), gas consumption (0.2%), and
refrigerants (0.1%).

Assessing the full Scope 3 emissions across
the Group is an ongoing exercise. However, we
have reported on certain Scope 3 emissions:
waste generated in operations emissions
category 5, business travel emissions category
6, employee commuting emissions category
7, and upstream leased assets emissions
category 8. Further details on our Scope 3
reporting and commitments made can be
found on page 36 and within our 2022 Annual
Sustainability Report, including TCFD report on
pages 58 and 59.

MWh
0
115,796
4,312
3,917
124,025
717

124,742
0
917

0
20,670

0
0

21,587

146,329

2020-21
Non-UK

MWh
0
180,013
1,488
2,756
184,257
23

184,280
0
264

0
22,029

0
0

22,293

206,573

tCO2e
79
49,593
360
1,026
51,058
7

51,065
1,201
68

11,416
6,024

166
2

18,877
69,942

103

142

MWh
0
99,989
3,026
3,407
106,422
914

107,336
409
2,755

0
73,495

0
0

76,659

183,995

tCO2e
27
27,495
639
675
28,836
227

29,063
1,504
671

6,623
19,625

437
9

28,869
57,932

113

tCO2e
36
49,189
216
832
50,273
397

50,670
5,778
2,696

11,448
9,881

1,146
3

30,952
81,622

160

2021-22
Non-UK

MWh
0
178,310
950
2,182
181,442
1,488

182,930
0
10,314

0
35,775

0
0

46,089

229,019

Having expanded on the Group’s Scope 3 reporting for our 2022 GHG assessment, we have updated our SECR reporting format to better align with
the mandatory Scope 1 and 2, and voluntary Scope 3 requirements for SECR reporting.

GovernanceJames Fisher and Sons plc – Annual Report 2022
Additionally, during this transition, it was
recommended that our baseline and impact
disclosures be based on location-based
results, where previously, we reported using
market-based data.

The re-calculation resulted in the Group’s
Scope 1 and 2 baseline reducing from
114,374 tCO2e, to 84,711 tCO2e.

While the SAAS solution, including Quality
Analysis (QA) by expert sustainability analysts,
plays a key role in ensuring assessment
accuracy, the system and its output is only as
good as the data going in. We are continually
developing guidance and supporting tools for
those reporting, such as providing step by step
instructions to assist with accounting for the
emissions from leased assets.

Further details can be found on page 21 in

our 2022 Annual Sustainability Report.

Annual General Meeting (AGM)
The AGM is to be held at 11.00 am on
Wednesday, 14 June, 2023 at Abbey House
Hotel and Gardens in Barrow-in-Furness. Further
details will be provided in the Notice of AGM.

The Directors’ report was approved by the
Board of Directors and is signed on its behalf by:

Duncan Kennedy
Chief Financial Officer

28 April 2023

114

Directors’ report cont.

Emissions Intensity Ratio

The Group measures intensity as greenhouse
gas emissions per unit of revenue (£ m). We
are also tracking intensity per employee count,
and specific intensity measures within the
businesses where relevant.

Methodology

The Group used verifiable activity data, namely
meter data and invoices, where reasonable
and practicable. Where verifiable data was
not available, estimates based on data from
previous comparable time periods was used to
close the gaps. The activity data was reported
at an operational company level and collated
and analysed at Group level. Our greenhouse
emissions are calculated in accordance
with the requirements of the GHG Protocol:
A Corporate Accounting and Reporting
Standard, revised edition.

Emission conversion factors from the UK
Department for Business, Energy & Industrial
Strategy (2021), International Energy Agency
(2021), United Nations (2022), and the
Environmental Protection Agency (2022) were
used, amongst others, in the calculation of the
energy usage and greenhouse gas emissions.

Energy Efficiency Action

As part of our commitment to setting net zero
targets in alignment with the Paris Climate
Agreement, emissions reduction pathways
have been modelled and 2023 will see the
relevant reduction options embedded into
the strategies and plans of our operating
companies, not replacing the detailed planning
in place at this level but enhancing and
ensuring alignment with Group priorities and
targets.

Throughout the Group we are continuing
to install energy efficient lighting, replace
end-of-life appliances with energy efficient
replacements, we are looking into the use of
voltage optimisation technology to regulate
incoming power supply, and we are continuing
to install interior motion sensors throughout
the Group where appropriate. Solar panels are
also being explored across various operating
companies.

Due to our decentralised model, our operating
companies have continued to adapt solutions
to address their areas of focus. We are working
to put in place, the tooling, guidance, and
tracking methods to measure the reduction
associated with these actions and increase
co-ordination across businesses.

We plan to review our policies around the use
of appliances and switching off equipment at
the end of a working day.

We are in the process of transitioning across
to one (renewable) energy supplier for our
UK based operating companies, three of
which have entered into our unique contract
and with others to follow in line with contract
renewals. While this does not directly lead to
increased energy efficiency, this does lead to
less emissions (market-based) and greater
awareness of our net zero activities throughout
the Group. When it comes to workplace
energy expenditure, we believe the employee’s
day-to-day habits are more influential than any
design change.

Energy efficiency campaigns and initiatives
planned for 2023 will focus on encouraging
energy-efficient habits. This may include:

• Routine energy audits.

• Encouraging use of electronic signing, note
taking and file storage, minimising the use
of printers.

• ‘Switch off’ when not in use.

• Optimising room ventilation instead of using

A/C, when practical.

• Use of low brightness, dark mode, and other

power-saving settings on computers.

Our Business Excellence programme will
lead our ESOS phase 3 audits in 2023, the
outputs of which is a key driver toward greater
building efficiencies for example conserving
energy through stabilising indoor temperatures
through roofs and ceilings.

The Business Excellence programme, through
traditional schemes (Lean manufacturing and
continuous improvement) will provide input into
energy efficiency opportunities and help make
greater use of what we have through greater
productivity and efficiency in our systems and
processes.

Further details on how we plan to deliver

against target on energy efficiency and
progress made in 2022 can be found page 35
and in our 2022 Annual Sustainability Report,
online, page 18.

2021 data

In 2022 we moved from manual data
collection, assessment, and impact reporting
to a SAAS solution. This identified a significant
emissions allocation and manual data input
error and minor variances due to different
conversion factors used, that required us to
re-calculate our GHG emissions for the
reporting year 2020-21.

GovernanceAnnual Report 2022 – James Fisher and Sons plc115

Statement of Directors’ responsibilities
in respect of the Annual Report and the Financial statements

The Directors are responsible for preparing
the Annual Report and the Group and parent
Company financial statements in accordance
with applicable law and regulations.

Company law requires the Directors to
prepare Group and parent Company financial
statements for each financial year. Under that
law they are required to prepare the Group
financial statements in accordance with UK-
adopted international accounting standards
and applicable law and have elected to prepare
the parent company financial statements on
the same basis.

Under company law the Directors must not
approve the financial statements unless they
are satisfied that they give a true and fair view
of the state of affairs of the Group and parent
Company and of the Group’s profit or loss for
that period. In preparing each of the Group
and parent Company financial 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 UK-adopted international
accounting standards;

• assess the Group and parent Company’s
ability to continue as a going concern,
disclosing, as applicable, matters related to
going concern; and

• use the going concern basis of accounting
unless they either intend to liquidate the
Group or the parent Company or to cease
operations, or have no realistic alternative
but to do so.

The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the parent
Company’s transactions and disclose with
reasonable accuracy at any time the financial
position of the parent Company and enable
them to ensure that its financial statements
comply with the Companies Act 2006. They
are responsible for such internal control as
they determine is necessary to enable the
preparation of financial statements that are free
from material misstatement, whether due to
fraud or error, and have general responsibility
for taking such steps as are reasonably open
to them to safeguard the assets of the Group
and to prevent and detect fraud and other
irregularities.

Under applicable law and regulations, the
Directors are also responsible for preparing a
Strategic report, Directors’ report, Directors’
Remuneration report and Corporate
Governance Statement that complies with that
law and those regulations.

The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
Company’s website. Legislation in the UK
governing the preparation and dissemination of
financial statements may differ from legislation
in other jurisdictions.

In accordance with Disclosure Guidance and
Transparency Rule 4.1.14R, the financial
statements will form part of the annual
financial report prepared using the single
electronic reporting format under the TD ESEF
Regulation. The auditor’s report on these
financial statements provides no assurance
over the ESEF format.

Responsibility statement of the
Directors in respect of the annual
financial report
We confirm that to the best of our knowledge:

• the financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and
fair view of the assets, liabilities, financial
position and profit or loss of the Company
and the undertakings included in the
consolidation taken as a whole; and

• the Strategic report 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.

We consider the Annual Report and Accounts,
taken as a whole, is fair, balanced and
understandable and provides the information
necessary for shareholders to assess the
Group’s position and performance, business
model and strategy.

Signed on behalf of the Board of Directors

Jean Vernet
Chief Executive Officer

28 April 2023

Duncan Kennedy
Chief Financial Officer

28 April 2023

GovernanceJames Fisher and Sons plc – Annual Report 2022116

Independent auditor’s report
to the members of James Fisher and Sons plc

1 Our opinion is unmodified
We have audited the financial statements of James Fisher and Sons plc (“the Company”) for the year ended 31 December 2022 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 and Company Statement of Changes in Equity and the
related notes, including the accounting policies in note 33.

In our opinion:

• the financial 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 2022 and

of the Group’s loss for the year then ended;

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

• the parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting standards and

as applied in accordance with the provisions of the Companies Act 2006; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.

We were first appointed as auditor by the directors on 30 June 2008. The period of total uninterrupted engagement is for the fifteen financial years
ended 31 December 2022. We have fulfilled 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.

No non-audit services prohibited by that standard were provided.

OVERVIEW
Materiality: group
financial statements
as a whole

£1.65m (2021: £1.10m) 0.3% of revenue from continuing operations (2021:3.9% of Group operating profit,
normalised to exclude items disclosed in Note 2.1)

Coverage

78% (2021:87%) of group revenue

Key audit matters

Recurring risks

Revenue recognition

Impairment of goodwill

Parent company impairment of investments

Event driven

New: Going concern

vs 2021





Financial statementsAnnual Report 2022 – James Fisher and Sons plc2 Material uncertainty related to going concern

Going concern

Refer to page 89 (Audit Committee
report and disclosure of material
uncertainty related to going concern
(Note 1).

We draw attention to note 1 of the
financial statements which indicates
that the Group is in the process
of refinancing its banking facilities
following the identification and short-
term waiver of technical restrictions
on parent company guarantees
relating to the disposal of James
Fisher Nuclear. The Group has
received a signed commitment letter
from its lenders, together with a long-
form term sheet and a waiver period
extension to 7 June 2023. In order to
complete the refinancing by the long-
stop date of 7 June 2023 and allow
the new facility to be drawn, certain
areas remain, including drafting of
full documentation and finalisation of
the security package. These actions
are not all in the direct control of the
Group.

These events and conditions, along
with the other matters explained
in note 1, constitute a material
uncertainty that may cast significant
doubt on the group’s and the parent
company’s ability to continue as a
going concern.

Our opinion is not modified in respect
of this matter.

THE RISK
Disclosure quality

The financial statements explain how
the Board has formed a judgement
that it is appropriate to adopt the
going concern basis of preparation
for the Group and parent Company.

That judgement is based on an
evaluation of the inherent risks to the
Group’s and Company’s business
model and how those risks might
affect the Group’s and Company’s
financial resources or ability to
continue operations over a period of
at least 12 months from the date of
approval of the financial statements.

There is little judgement involved in
the directors’ conclusion that risks
and circumstances described in
note 1 to the financial statements
represent a material uncertainty over
the ability of the group and company
to continue as a going concern for
a period of at least 12 months from
the date of approval of the financial
statements.

However, clear and full disclosure of
the facts and the directors’ rationale
for the use of the going concern basis
of preparation, including that there is
a related material uncertainty, is a key
financial statement disclosure and
so was the focus of our audit in this
area. Auditing standards require that
to be reported as a key audit matter.

117

OUR RESPONSE
Our procedures included:

Assessing transparency

We considered whether the going concern disclosure in note 1
to the financial statements gives a full and accurate description
of the Directors’ assessment of going concern, including the
identified risks, and related sensitivities.

Our work over management’s going concern assessment
also included:

Refinancing assessment

We inspected the signed commitment letter, associated term
sheet and waiver amendment letter provided by the lenders to
ascertain the committed level of financing, the relevant expiry
dates and the related covenant requirements.

Refinancing assessment

We assessed the outstanding areas in order for the Group to
complete refinancing and whether these are within the control
of the Group.

Covenant calculation

We reperformed the year end covenant calculation for the
existing banking facilities in line with the loan agreements.

Benchmarking assumptions

We critically assessed assumptions in base case and
downside scenarios, in particular those which would
impact on the net debt/EBITDA and interest cover covenants
included in the new facility term sheet. Consistency with
assumptions used in other areas was checked. Key
assumptions included underlying operating profit, net debt
and forecast interest rates.

The interest rate assumption was benchmarked against third
party evidence to determine an appropriate range of possible
outcomes.

Historical comparisons

We have reviewed the Group’s ability to achieve forecasts and
the accuracy of historical forecasts.

Sensitivity analysis

We have considered whether the assumptions applied in the
severe but plausible scenario are considered to be severe
enough using our assessment of the possible range of each
key assumption and taking account of plausible (but not
unrealistic) adverse effects that could arise.

Our results: We found the going concern disclosure in note 1
with a material uncertainty to be acceptable.

Financial statementsJames Fisher and Sons plc – Annual Report 2022118

Independent auditor’s report cont.
to the members of James Fisher and Sons plc

3 Other key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include
the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest
effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. Going concern is a
significant key audit matter and is described in section 2 of our report. We summarise below the other key audit matters (unchanged from 2021), in
decreasing order of audit significance, 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 financial 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.

Revenue recognition over construction contract income £33.5m (2021: £38.6m), Contract assets £46.3m (2021: £55.5m) and Contract
Liabilities £8.5m (2021: £9.0m) Risk vs 2021: Stable

Refer to page 89 (Audit Committee report), page 189 (accounting policy) and page 140 (financial disclosure).

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 inputs measure of the contract. These input measures include
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.

For long-term contracts, disputes with customers and contract delays can lead to uncertainty over the total contract price and contract assets
representing work completed where payment is not yet due. The effect of these matters is that, as part of our risk assessment, we determined
that revenue recognition and the associated recoverability of contract assets has a high degree of estimation uncertainty, with a potential range of
reasonable outcomes greater than our materiality for the financial statements as a whole, and possibly many times that amount.

In addition, within the Specialist Technical division, it is common for international customers to require defence contractors to comply with their
industrial cooperation regulations, often referred to as offset requirements. Within these agreements, penalties can arise, normally as a fixed
percentage of the unfulfilled offset obligation, and consideration is needed of whether these penalties are accounted for as variable consideration
or a levy recognised as a cost of sale. This is highly judgemental due to the complexities of offset agreements and uncertainties over whether offset
claims will be accepted by the relevant country’s offset authority.

Our response: We performed the 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 not be able to obtain the required evidence to support relying on them.

Our audit procedures included:

1 Test of details: For long term contracts, selecting contracts for substantive audit procedures based on qualitative factors, such as commercial
complexity, delays for completion and life of contract, and quantitative factors, such as financial significance and profitability 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 documentation and countersigned agreements.

Our testing included assessing the impact of delays to timetable by reviewing contracts and communication with customers and reviewing

evidence over the Group’s ability to fulfil contract requirements, including third party legal advice.

We inspected the offset contracts and challenged management’s accounting for these. We recalculated the offset provision for two contracts
based upon factual and forecast claims, challenged management on actual and forecast spend and verified accepted claims submitted to the
relevant offset authority.

In our testing we identified a number of misstatements that management have adjusted for.

2 Historical comparisons: Assessing the reliability of the Group’s forecasts of costs to complete by considering historical accuracy of their

forecasts on contracts.

3 Personnel interviews: Corroborating the forecasts and financial assumptions through discussions with operational management for a sample of
contracts and comparing these to the forecasts and assumptions used by the Group in respect of revenue recognition and recognition of contract
assets and liabilities.

4 External corroboration: Seeking direct confirmation of amounts outstanding with the customer where appropriate.

5 Our sector expertise: Utilising KPMG industry specialists who have particular skills in contracting to review the risks associated with contracts

that have offset requirements, and to review the submitted claims and likely future spend to challenge the offset provision recorded.

6 Assessing transparency: Assessing the appropriateness of the Group’s disclosures in respect of revenue recognition, contract assets and

liabilities and offset arrangements.

We found revenue recognition, associated contract assets and liabilities and accounting for offset arrangements, to be acceptable (2021: acceptable).

Financial statementsAnnual Report 2022 – James Fisher and Sons plc
119

Impairment of goodwill related to JFD with carrying value of £34.1m (2021: £32.3m) and a CGU included within ‘Multiple CGUs without
significant goodwill’, including impairment charge of £4.4m (2021: £27.5m) Risk vs 2021: Stable

Refer to page 89 (Audit Committee report), page 185 (accounting policy) and page 148 (financial disclosure).

The risk: Forecast based assessment

The recoverability of goodwill in the Group is subjective due to the inherent uncertainty involved in forecasting and discounting future cash flows,
particularly in light of the ongoing trading and operational difficulties faced in the current and prior years.

The effect of these matters is that, as part of our risk assessment, we determined that the recoverable amount of goodwill has a high degree of
estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole and
possibly many times that amount. The financial statements note 12 discloses the sensitivity estimated by the Group for goodwill.

We have isolated the risk of material impairment to JFD and a CGU without individually significant goodwill balances as these have the lowest
headroom within both the Group’s discounted cashflow workings and our own sensitivities.

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 detailed testing is inherently the most effective means of obtaining audit evidence.

Our audit procedures included:

1 Historical comparisons: Assessing the reasonableness of management’s budgets by considering the historical accuracy of previous forecasts.

2 Our sector experience: Evaluating the assumptions used, in particular those relating to anticipated revenue growth, including expected

new business and rates of contract retention, the discount rate and the terminal growth rate. We have considered market conditions, including
potential impacts of climate change and known or probable changes in the business environment, in the procedures performed and reflected our
knowledge of the business and industries. We assessed the key inputs to the Group’s forecasts, drawing on historical data and our own research
and sector experience.

3 Benchmarking assumptions: Comparing the Group’s assumptions to externally derived data in relation to key inputs such as market growth
rate, terminal growth value, discount rate (using our own valuation specialist), and the period of cash flows included within the model. Review of
the capital expenditure included in the budget and considering whether such items are allowable in the value-in-use cash flow forecasts under the
accounting standards.

4 Sensitivity analysis: Performing sensitivity analysis on the key assumptions noted above either in isolation or in aggregate. This included

reperforming management’s sensitivities within their goodwill model.

5 Assessing transparency: Assessing whether the Group’s disclosures about the sensitivity of the outcome of the impairment assessment to

changes in key assumptions reflected the risks inherent in the recoverable amounts of goodwill.

Our results: We found the Group goodwill balance, and the related impairment charges, to be acceptable (2021: acceptable).

Parent Company impairment of investment in and loans to subsidiaries, £1.1m (2021: £nil), carrying value £456.5m (2021: £486.3m)
Risk vs 2021: Stable

Refer to page 89 (Audit Committee report), pages 155 and 156 (accounting policy) and pages 155 and 156 (financial disclosure).

The risk: Forecast based assessment

The recoverability of the Parent Company’s investments in accordance with IAS 36 and loans to subsidiaries in accordance with IFRS 9 is subjective
due to the inherent uncertainty involved in forecasting and discounting future cash flows, particularly in light of the ongoing trading, the Group’s
market capitalisation vs Parent company’s net assets and operational difficulties faced in the current and prior years.

The effect of these matters is that, as part of our risk assessment, we determined that the recoverable amount of investment in subsidiaries and
of loans to subsidiaries has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for
the financial statements as a whole and possibly many times that amount. The financial statements note 17 discloses management’s process for
undertaking the impairment and expected credit loss assessment, including details of key assumptions and sensitivity analysis.

Financial statementsJames Fisher and Sons plc – Annual Report 2022120

Independent auditor’s report cont.
to the members of James Fisher and Sons plc

Our audit procedures included:

1 Benchmarking assumptions: Assessing the reasonableness of management’s forecasts by utilising the procedures carried out in respect of

the Group’s impairment of goodwill assessment (see above) and assessing the reasonableness of any differences in assumptions for the purpose
of the Company’s assessment in relation to the impairment of investment in and loans to subsidiaries.

2 Assessing methodology: Assessing the Company’s methodology in relation to recoverability of investments and loans in accordance with

applicable accounting standards. This resulted in a change to the methodology used.

3 Assessing transparency: Assessing whether the Company’s disclosures about the sensitivity of the outcome of the recoverability assessment

to changes in key assumptions reflected the risks inherent in the recoverable amounts of the investment and loans balances and the methodology
of the Company’s assessment.

Our results: We found the carrying value of Parent Company investments in and loans to subsidiaries and the related impairment charges, to be
acceptable (2021: acceptable).

4 Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at £1.65m (2021: £1.10m) determined with reference to a benchmark of Group
revenue from continuing operations, of £478.1m of which it represents 0.3% (2021: Group operating profit, normalised to exclude items disclosed in
Note 2.1, of £28.0m, of which it represented 3.9%).

During the year, we have reconsidered the most appropriate benchmark on which to set materiality, and this has resulted in a change to the
benchmark and materiality amount. We consider total Group revenue from continuing operations to be the most appropriate benchmark because of
the significant fluctuations in the profit before tax in recent years caused by impairments and delays to contracts following the pandemic. Whilst the
Group is focused on profit measures, there has been significant volatility in recent years which has impacted the Group’s profit before tax without any
significant reduction in the scale of the operations.

Materiality for the Parent company financial statements as a whole was set at £1.6m (2021: £1.0m), determined by reference to the parent
company’s total assets of £487m (2021: £510m), of which it represents 0.32% (2021:0.20%).

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 financial statements as a whole.

Performance materiality for the group was set at 65% (2021: 65%) of materiality for the financial statements as a whole, which equates to £1.1m
(2021: £0.7m).

We applied these percentages in our determination of performance materiality based on the level of control deficiencies and identified misstatements
during this period and the prior period.

Performance materiality for the parent company was set at 75% (2021: 75%) of materiality for the financial statements as a whole, which equates to
£1.2m (2021: £0.75m).

We applied this percentage in our determination of performance materiality because we did not identify any factors indicating an elevated level of
risk.

We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £82k (2021: £55k), in addition to
other identified misstatements that warranted reporting on qualitative grounds.

Of the Group’s 176 (2021: 189) reporting components, we subjected 13 (2021: 15) to full scope audits for Group purposes and 2 (2021: 2) to
specified risk-focussed audit procedures. The latter were not individually financially significant enough to require a full scope audit for Group
purposes but did present specific individual risks that needed to be addressed.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc121

The components within the scope of our work accounted for the following percentages of the Group’s results:

Audits for group reporting purposes
Specified procedures for group reporting purposes
Total

Number of
components
13 (2021: 15)
2 (2021: 2)
15 (2021: 17)

Group
Revenue
75% (2021: 85%)
3% (2021: 2%)
78% (2021: 87%)

Group profit

before tax Group total assets
78% (2021: 83%)
4% (2021: 2%)
82% (2021: 85%)

75% (2021: 75%)
0% (2021: 1%)
75% (2021:76%)

The remaining 22% (2021: 13%) of total Group revenue, 25% (2021: 24%) of Group profit before tax and 18% (2021: 15%) of total Group assets
is represented by 161 (2021: 172) reporting components, none of which individually represented more than 4% of any of total Group revenue, 2%
Group profit 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 significant
risks of material misstatement within these.

The Group audit team instructed component auditors as to the significant 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 £1.0m (2021: £0.1m to
£0.7m), having regard to the mix of size and risk profile of the Group across the components.

The work on 12 (2021: 13) of the 15 (2021: 17) components was performed by component auditors and the rest, including the audit of the Parent
Company, was performed by the Group audit team.

The scope of the audit work performed was predominantly substantive as we placed limited reliance upon the Group’s internal control over
financial reporting.

The Group team visited 5 (2021: 1) component locations to assess the audit risk and strategy. Regular video and telephone conference meetings
were also held with all component auditors. At these visits and meetings, the findings 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.

5 The impact of climate change on our audit
In planning our audit, we have considered the potential impact of climate change on the group’s business operations and its financial statements
taking into account the different divisions. We recognise given the diverse nature of the group’s operations there are potentially both risks and
opportunities arising as a result of climate change.

The potential effects of climate change vary for different activities of the group, with those divisions that are more linked to fossil fuel activity
potentially being more affected as there is a transition to focus on more renewable energy sources.

Uncertainties and potential changes to the longer-term activity of the group could affect the elements of financial statements with forward-looking
assessments such as impairment of, or reassessment of the life of, long-term assets and goodwill balances.

As part of our risk assessment we made enquiries of management and reviewed board minutes and related risk and internal audit documents.
We have held discussions with our own climate change professionals to challenge our risk assessment. Our risk assessment took into account the
nature of the group’s long-term assets and the relative size of assets related to the divisions with most exposure to climate change uncertainty.

In the course of our audit work, we also took climate change factors into account in evaluating the directors’ assessment of the useful life of vessels.

We have read the disclosure of climate related information in the front half of the annual report and considered consistency with the financial
statements and our audit knowledge.

Financial statementsJames Fisher and Sons plc – Annual Report 2022122

Independent auditor’s report cont.
to the members of James Fisher and Sons plc

6 Going concern basis of preparation
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Company
or to cease their operations, and as they have concluded that the Group’s and the Company’s financial position means that this is realistic for at least
12 months from the date of approval of the financial statements (“the going concern period”).

As stated in section 2 of our report, they have also concluded that there is a material uncertainty related to going concern.

An explanation of how we evaluated management’s assessment of going concern is set out section 2 of our report.

Our conclusions based on this work:

• we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;

• we have nothing material to add or draw attention to in relation to the directors’ statement in note 1 to the financial statements on the use of the

going concern basis of accounting, and their identification therein of a material uncertainty 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 same statement under the Listing Rules is materially consistent with the financial statements and our audit knowledge.

7 Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure
to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

• Enquiring of directors, the audit committee, internal audit, the Group General Counsel and the Company Secretary and inspection of policy

documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, the Group’s
channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.

• Reading Board, audit committee and risk committee minutes.

• Considering remuneration incentive schemes and performance targets for management and directors.

• Using analytical procedures to identify any unusual or unexpected relationships.

• Consultation with our own forensic professionals regarding the identified fraud risks and the design of the audit procedures planned in response

to these. This involved discussion between the engagement partner, the Group audit team and the forensic professionals.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. This included
communication from the Group audit team to full scope component audit teams of relevant fraud risks identified 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 the
Group level.

As required by auditing standards and taking into account possible pressures to meet profit targets, covenants for banking facilities 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 in particular:

• the risk that Group and component management may be in a position to make inappropriate accounting entries;

• the risk of bias in accounting estimates and judgements such as provisions for contract disputes; and the risk of bias in accounting for estimates

and judgements in relation to revenue recognition over long term contracts including variable consideration.

Further detail in respect of revenue recognition is set out in the key audit matter disclosure in section 3 of this report. On this audit the risk relating to
fraudulent revenue recognition is in relation to construction contract income as described in Section 3. For the remaining revenue streams, we do not
believe there is a fraud risk related to revenue recognition as the recognition is not complex.

We did not identify any additional fraud risks.

We performed procedures including:

• Identifying journal entries to test for all full scope components based on risk criteria and comparing the identified entries to supporting

documentation. These included unexpected journals posted to revenue, expense, cash accounts; and commissions paid to agents as well as
journals posted by senior members of management.

• Evaluating the business purpose of significant unusual transactions.

• Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.

We discussed with the audit committee matters related to actual or suspected fraud, for which disclosure is not necessary, and considered any
implications for our audit.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc123

Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our
general commercial and sector experience, through discussion with the directors, the Group General Counsel, the Company Secretary and other
management (as required by auditing standards) and from inspection of the Group’s regulatory and legal correspondence and discussed with the
directors, the Group General Counsel, the Company Secretary and other management the policies and procedures regarding compliance with laws
and regulations.

As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for
complying with regulatory requirements.

We communicated identified 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 identified 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 the Group level.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including
related companies legislation), distributable profits legislation, taxation legislation and pension legislation and we assessed the extent of compliance
with these laws and regulations as part of our procedures on the related financial 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 financial statements, for instance through the imposition of fines or litigation or the loss of the Group’s license to
operate. We identified the following areas as those most likely to have such an effect: health and safety, anti-bribery, foreign corrupt practices act,
employment law, maritime law and certain aspects of company legislation recognising the nature of the Group’s activities.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors, the
Company Secretary and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational
regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

We discussed with the audit committee matters related to actual or suspected breaches of laws or regulations, for which disclosure is not necessary,
and considered any implications for our audit.

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 financial
statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further
removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the
inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there 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.

8 We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the
financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below,
any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information
therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified
material misstatements in the other information.

Strategic report and directors’ report

Based solely on our work on the other information:

• we have not identified material misstatements in the strategic report and the directors’ report;

• in our opinion the information given in those reports for the financial year is consistent with the financial 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.

Financial statementsJames Fisher and Sons plc – Annual Report 2022124

Independent auditor’s report cont.
to the members of James Fisher and Sons plc

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 financial statements and our audit knowledge.

Based on those procedures, other than the material uncertainty related to going concern referred to above, we have nothing further material to add
or draw attention to in relation to:

• the directors’ confirmation within the viability statement on page 71 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 identified, 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 qualifications or assumptions.

We are also required to review the viability statement, set out on page 71 under the Listing Rules. Based on the above procedures, we have
concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge.

Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial 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 financial statements and our audit knowledge.

Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and our audit
knowledge:

• the directors’ statement that they consider that the annual report and financial 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 significant issues that the audit committee considered

in relation to the financial 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 specified by the Listing Rules for our review, and to report to you if a corporate governance statement has not been
prepared by the company. We have nothing to report in these respects.

Based solely on our work on the other information described above:

• with respect to the Corporate Governance Statement disclosures about internal control and risk management systems in relation to financial

reporting processes and about share capital structures:

– we have not identified material misstatements therein; and

– the information therein is consistent with the financial statements; and

• in our opinion, the Corporate Governance Statement has been prepared in accordance with relevant rules of the Disclosure Guidance and

Transparency Rules of the Financial Conduct Authority.

9 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 financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the

accounting records and returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

We have nothing to report in these respects.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc125

10 Respective responsibilities
Directors’ responsibilities

As explained more fully in their statement set out on page 115, the directors are responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error; assessing the Group and 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 financial 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 influence the economic decisions of users
taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The Company is required to include these financial statements in an annual financial report prepared using the single electronic reporting format
specified in the TD ESEF Regulation. This auditor’s report provides no assurance over whether the annual financial report has been prepared in
accordance with that format.

11 The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and
the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Ailsa Griffin (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
1 St. Peter Square
Manchester
M2 3AE

28 April 2023

Financial statementsJames Fisher and Sons plc – Annual Report 2022126

Consolidated income statement
for the year ended 31 December 2022

Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Impairment of trade and other receivables
Share of post-tax results of associates
Operating profit/(loss)
Finance income

Finance expense
Profit/(loss) before taxation
Income tax
Profit/(loss) for the year from continuing operations

Loss for the year from discontinued operations, net of tax
Loss for the year

Attributable to:
Owners of the Company
Non-controlling interests

Loss per share
Basic
Diluted

Profit/(loss) per share – continuing activities
Basic
Diluted

Year ended
31 December
2022
Total
£m

Notes

Year ended
31 December
2021
restated*
Total
£m

29
16
4
7

10
10

478.1
(350.9)
127.2
(104.4)
0.3
1.6
24.7
0.7

(10.9)
14.5
(5.5)
9.0

(19.8)
(10.8)

(11.1)
0.3
(10.8)

pence
(22.1)
(22.1)

pence
17.4
17.4

442.4
(338.8)
103.6
(118.9)
(7.3)
1.9
(20.7)
0.3

(8.5)
(28.9)
0.8
(28.1)

(0.1)
(28.2)

(27.8)
(0.4)
(28.2)

pence
(55.2)
(55.2)

pence
(55.0)
(55.0)

* 2021 results are restated due to a business classified as discontinued operations – see Note 5.

The presentation of the consolidated income statement has been amended to include a line item ‘impairment of trade and other receivables’ and for removal of

columns headed ‘separately disclosed items’ in the 2021 Annual Report – see Note 1: Presentation of financial statements.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc

Consolidated statement of other comprehensive income
for the year ended 31 December 2022

127

Loss for the year

Other comprehensive income:
Items that will not be classified to the income statement
Actuarial 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
Tax on items that may be reclassified

Total other comprehensive income for the year

Total comprehensive income for the year

Attributable to:
Owners of the Company
Non-controlling interests

Year ended
31 December
2022
£m
(10.8)

Year ended
31 December
2021
£m
(28.2)

Notes

29
16

7.1
(1.3)
5.8

8.8
3.6
0.4
0.6
(1.1)
12.3
18.1

7.3

6.9
0.4
7.3

6.3
(0.5)
5.8

(2.6)
(2.6)
0.3
0.3
0.4
(4.2)
1.6

(26.6)

(26.1)
(0.5)
(26.6)

Financial statementsJames Fisher and Sons plc – Annual Report 2022128

Consolidated and Company statement of financial position
at 31 December 2022

Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-use assets
Investment in joint ventures
Investments in subsidiaries
Other investments
Retirement benefit surplus
Other receivables
Deferred tax assets

Current assets
Inventories
Trade and other receivables
Assets held for sale
Cash and cash equivalents

Current liabilities
Trade and other payables
Provisions
Liabilities associated with assets held for sale
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
2022
£m

Notes

31 December
2021
restated*
£m

31 December
2022
£m

31 December
2021
£m

12
13
14
15
16
17
17
23
19
9

18
19
20
27

21
22
20
8
27
27

21
22
23
30
27
27
9

116.3
8.2
119.7
52.3
8.7
–
1.4
5.5
0.7
8.4
321.2

49.8
148.2
36.2
53.6
287.8

(122.4)
(5.3)
(16.3)
(1.9)
(67.4)
(13.2)
(226.5)
61.3
382.5

(0.5)
(1.4)
(0.4)
(0.1)
(121.8)
(39.7)
(0.3)
(164.2)
218.3

12.6
26.8
(0.6)
(6.8)
185.8
217.8
0.5
218.3

133.5
13.3
122.2
41.8
8.0
–
1.4
–
4.1
9.6
333.9

49.0
153.3
10.7
68.0
281.0

(139.5)
(2.0)
–
(4.5)
(33.6)
(9.9)
(189.5)
91.5
425.4

(1.3)
(1.1)
(1.9)
(0.1)
(173.9)
(36.1)
(0.4)
(214.8)
210.6

12.6
26.8
(0.6)
(20.4)
191.5
209.9
0.7
210.6

–
–
1.1
1.0
–
456.5
1.4
5.5
–
–
465.5

–
22.2
–
0.4
22.6

(27.2)
–
–
–
(45.3)
(0.2)
(72.7)
(50.1)
415.4

–
–
(0.2)
(0.1)
(121.8)
(1.3)
(0.8)
(124.2)
291.2

12.6
26.8
(0.6)
3.6
248.8
291.2
–
291.2

–
–
1.4
1.3
–
486.3
1.4
–
–
1.0
491.4

–
6.9
–
11.7
18.6

(19.5)
–
–
–
(20.3)
(0.2)
(40.0)
(21.4)
470.0

–
–
(1.4)
(0.1)
(173.9)
(1.4)
–
(176.8)
293.2

12.6
26.8
(0.6)
–
254.4
293.2
–
293.2

* Non current other receivables, Current trade and other receivables and Current trade and other payables have been restated for the 2021 comparative period

(see Note 1).

The Company’s loss for the year was £11.6m (2021: £12.2m profit).

The financial statements were approved by the Board of Directors on 28 April 2023 and signed on its behalf by:

Duncan Kennedy
Chief Financial Officer

Company number: 00211475

Financial statementsAnnual Report 2022 – James Fisher and Sons plc

129

Consolidated and Company cash flow statement
for the year ended 31 December 2022

(Loss)/profit for the year
Tax (credit)/charge
Adjustments to reconcile (loss)/profit before tax to net cash flows
Depreciation and amortisation

Impairments

Loss on remeasurement to fair value less costs to sell
Net finance expense/(income)

(Gain)/loss on disposal of businesses, net of disposal costs

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
Income tax payments
Cash flow from operating activities

Investing activities
Dividends from joint venture undertakings
Proceeds from the disposal of a subsidiary, net of cash disposed
Proceeds from the disposal of property, plant and equipment
Finance income
Acquisition of subsidiaries, net of cash acquired
Loans advanced to subsidiaries
Loans repaid from subsidiaries
Acquisition of property, plant and equipment
Development expenditure
Cash flows from/(used in) investing activities

Financing activities
Proceeds from the issue of share capital
Finance costs
Acquisition of non-controlling interests (NCI)
Net purchase of own shares by Employee Share Ownership Trust
Purchase of own shares for LTIP vesting
Capital element of lease repayments
Proceeds from borrowings
Repayment of borrowings
Cash flows used in financing activities

Net increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Net foreign exchange differences
Cash transferred to asset held for sale
Cash and cash equivalents at 31 December

Notes

2
5

28
27

5
27

Group

Company

31 December
2022
£m
(10.8)
4.7

31 December
2021
restated*
£m
(28.2)
(0.8)

31 December
2022
£m
(11.6)
(0.5)

31 December
2021
restated*
£m
12.2
(0.2)

41.1
0.7
13.3
10.3
(2.5)
(1.7)
(3.2)
2.5
(1.9)
0.1
52.6
(8.1)
44.5

1.7
15.1
2.2
0.8
(2.6)
–
–
(31.7)
(1.3)
(15.8)

–
(7.5)
(1.5)
–
–
(14.5)
166.0
(182.6)
(40.1)

(11.4)
34.5
2.5
(2.8)
22.8

44.2
38.4
–
8.3
0.2
(1.0)
(2.7)
(5.1)
11.8
(2.2)
62.9
(7.9)
55.0

1.6
6.2
14.7
0.3
(1.1)
–
–
(28.2)
(1.5)
(8.0)

0.1
(5.6)
–
(0.5)
(0.5)
(13.7)
205.0
(210.9)
(26.1)

20.9
13.5
0.1
–
34.5

0.8
27.7
–
(6.1)
–
0.1
–
(3.9)
5.2
0.3
12.0
(0.1)
11.9

–
–
–
14.7
–
(34.8)
32.8
(0.4)
–
12.3

–
(7.2)
–
–
–
(0.2)
166.0
(182.5)
(23.9)

0.3
(8.6)
–
–
(8.3)

1.0
2.0
–
(5.2)
–
0.6
–
(1.7)
8.6
(1.9)
15.4
(0.1)
15.3

–
–
–
11.4
–
(49.9)
69.3
(0.3)
–
30.5

0.1
(4.7)
–
(0.5)
(0.5)
(0.2)
205.0
(210.7)
(11.5)

34.3
(42.9)
–
–
(8.6)

* Cash generated from operations for the year ended 31 December 2021 has been re-presented to reallocate ‘separately disclosed items’ to the relevant line items
within cash generated from operations. In addition, £6.1m prepayments related to the acquisition of property, plant and equipment has been reclassified from
trade and other receivables (see Note 1). Proceeds from borrowings and repayment of borrowings have also been restated (Note 1).

Financial statementsJames Fisher and Sons plc – Annual Report 2022

130

Consolidated statement of changes in equity
for the year ended 31 December 2022

Share
capital
£m
12.6
–
–

Share
premium
£m
26.7
–
–

Retained
earnings
£m
214.6
(27.8)
5.8

Other
reserves
£m
(16.5)
–
(4.1)

Treasury
shares
£m
(0.2)
–
–

Total
shareholders
equity
£m
237.2
(27.8)
1.7

Non-
controlling
interests
£m
0.7
(0.4)
(0.1)

Total
equity
£m
237.9
(28.2)
1.6

–

–
–
–
–
–
–
–
12.6
–
–

–

–
–
12.6

–

–
–
–
–
–
0.1
–
26.8
–
–

–

–
–
26.8

–

0.2

(0.7)
0.3
(0.1)
–
(0.5)
–
(0.1)
191.5
(11.1)
5.8

–

(0.9)
0.5
185.8

–
–
–
–
–
–
–
(20.4)
–
12.2

1.4

–
–
(6.8)

–

–
–
–
(0.5)
–
–
0.1
(0.6)
–
–

–

–
–
(0.6)

0.2

(0.7)
0.3
(0.1)
(0.5)
(0.5)
0.1
–
209.9
(11.1)
18.0

1.4

(0.9)
0.5
217.8

–

0.5
–
–
–
–
–
–
0.7
0.3
0.1

–

(0.6)
–
0.5

At 1 January 2021
Loss for the year
Other comprehensive income
Contributions by and distributions
to owners:
Remeasurement of non-controlling
interest put option
Changes in ownership interest without
a change in control
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 2021
Loss for the year
Other comprehensive income
Contributions by and distributions
to owners:
Remeasurement of non-controlling
interest put option
Changes in ownership interest without
a change in control
Share-based payments
At 31 December 2022

Other reserve movements

Other reserves
At 1 January 2021
Other comprehensive income
Remeasurement of non-controlling interest put option
At 31 December 2021
Other comprehensive income
Remeasurement of non-controlling interest put option
At 31 December 2022

Translation
reserve
£m
(14.3)
(2.6)
–
(16.9)
8.7
–
(8.2)

Hedging
reserve
£m
0.5
(1.5)
–
(1.0)
3.5
–
2.5

Put option
liability
£m
(2.7)
–
0.2
(2.5)
–
1.4
(1.1)

0.2

(0.2)
0.3
(0.1)
(0.5)
(0.5)
0.1
–
210.6
(10.8)
18.1

1.4

(1.5)
0.5
218.3

Total
£m
(16.5)
(4.1)
0.2
(20.4)
12.2
1.4
(6.8)

Financial statementsAnnual Report 2022 – James Fisher and Sons plc131

Company statement of changes in equity
for the year ended 31 December 2022

At 1 January 2021
Profit for the year
Other comprehensive income
Contributions by and distributions
to owners:
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 2021
Loss for the year
Other comprehensive income
Contributions by and distributions
to owners:
Share-based compensation
At 31 December 2022

Share
capital
£m
12.6
–
–

Share
premium
£m
26.7
–
–

Retained
earnings
£m
236.7
12.2
5.9

Hedging
reserves
£m
1.9
–
(1.9)

Treasury
shares
£m
(0.2)
–
–

Total
shareholders
equity
£m
277.7
12.2
4.0

–
–
–
–
–
–
12.6
–
–

–
12.6

–
–
–
–
0.1
–
26.8
–
–

–
26.8

0.3
(0.1)
–
(0.5)
–
(0.1)
254.4
(11.6)
5.5

0.5
248.8

–
–
–
–
–
–
–
–
3.6

–
3.6

–
–
(0.5)
–
–
0.1
(0.6)
–
–

–
(0.6)

0.3
(0.1)
(0.5)
(0.5)
0.1
–
293.2
(11.6)
9.1

0.5
291.2

Financial statementsJames Fisher and Sons plc – Annual Report 2022132

Notes to the financial 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 financial statements comprise the financial 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 2022. The Company’s shares are
listed on the London Stock Exchange. The Company and consolidated financial statements were approved for publication by the Directors on
28 April 2023.

The Group financial statements have been prepared in accordance with UK-adopted international accounting standards. The Company financial
statements have been prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the
provisions of the Companies Act 2006. The financial statements are prepared on a going concern basis and on a historical cost basis, modified
to include revaluation to fair value of certain financial 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 financial statements. The loss after taxation in the Company
was £11.6m (2021: £12.2m profit). The Group and Company financial statements are presented in Sterling and all values are rounded to the nearest
0.1 million pounds (£0.1m) except when otherwise indicated.

Presentation of financial statements
As part of an ongoing review of the financial statements for the year ended 31 December 2021 by the FRC’s Corporate Reporting Review Team,
the presentation of the consolidated income statement has been amended to include a line item for ‘impairment of trade and other receivables’.
The 2021 comparative has been amended to reclassify £7.3m which was previously within administrative expenses and disclosed within Note 29.
There was no impact on profit. In addition two prior year adjustments were identified in relation to the presentation of contract assets and contract
liabilities (see Balance sheet prior year restatements below).

The Income statement presentation has been amended to remove the ‘before separately disclosed items’ and ‘separately disclosed items’ columns
presented in the 2021 Annual Report and Accounts. This change was made to simplify the income statement presentation and show alternative
performance measures previously included within ‘separately disclosed items’ in Note 2.1. Any material items disclosed under IAS1 are included in
Note 4. There has been no change to continuing results for revenue, gross margin and operating profit.

The FRC’s review was based on the Annual Report and Accounts and did not benefit 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. Please note that 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.

Balance sheet prior year restatements
In the prior year a contract asset and corresponding contract liability of £6m was recognised in respect of what was understood to be a commission
payment for which there was considered to be an obligation to make payments over a number of years. It is now recognised by the Directors from
further analysis of the underlying agreement that these costs relate to services that will be performed over a number of years which are cancellable
under the agreement. The Directors do not consider there to be a contractual obligation under the agreement and therefore have restated the
comparatives to derecognise the contract liability and therefore the corresponding asset. This change in presentation within the Consolidated
statement of financial position has no effect on the profit of the Group or Company, the cash position of the Group or Company in their balance
sheets and has no further impact on the Group’s or Company’s financial statements. The effect of the restatement on the Consolidated statement
of financial position in respect of the comparative amount for the year ended 31 December 2021 is set out below.

In the prior year other payables of £4.8m was recognised in respect of a pain provision. It is now recognised by the Directors that this pain provision
should have been presented as a reduction in contract assets to represent a single net position on one contract. This change in presentation within
the Consolidated statement of financial position has no effect on the profit of the Group or Company, the cash position of the Group or Company in
their balance sheets and has no further impact on the Group or Company’s financial statements. The effect of the restatement on the Consolidated
statement of financial position in respect of the comparative amount for the year ended 31 December 2021 is set out below.

Prepayments
Contract assets
Current trade and other receivables
Current assets
Contract assets
Non-current other receivables
Non-current assets
Accruals
Other payables
Current liabilities
Total assets less current liabilities

31 Dec 2021
As reported
£m
9.8
60.3
157.3
285.0
6.0
10.1
339.9
(72.0)
(15.2)
(199.5)
425.4

Adjustment
£m
–
(4.8)
(4.8)
(4.8)
–
–
–
–
4.8
4.8
–

Adjustment
£m
0.8
–
0.8
0.8
(6.0)
(6.0)
(6.0)
5.2
–
5.2
–

31 Dec 2021
Restated
£m
10.6
55.5
153.3
281.0
–
4.1
333.9
(66.8)
(10.4)
(189.5)
425.4

Financial statementsAnnual Report 2022 – James Fisher and Sons plc133

1. GENERAL INFORMATION CONT.
Cash flow prior year restatement
The movement in trade and other receivables presented in the prior year Consolidated cash flow statement included prepayments in respect of the
acquisition of property, plant and equipment of £6.1m.

It is now recognised by the Directors that the movement in trade and other receivables in respect of this prepayment of £6.1m presented within the
Consolidated cash flow statement for the year ended 31 December 2021 was incorrectly presented within ‘cash flows from operating activities’
when it should have been included within ‘cash flows from investing activities’. In preparing the Consolidated cash flow statement for the year ended
31 December 2022, the Directors have therefore restated the comparative amounts to now present the movement in trade and other receivables
of £6.1m in respect of prepayments in relation to the acquisition of property, plant and equipment within cash flows from investing activities. This
change in presentation within the Consolidated cash flow statement has no effect on the cash position of the Group or Company in their balance
sheets and has no further impact on the Group’s or Company’s financial statements. The effect of the restatement on the Consolidated cash flow
statement in respect of the comparative amount for the year ended 31 December 2021 is set out below:

Decrease/(increase) in trade and other receivables
Cash flow from operating activities

Acquisition of property, plant and equipment
Cash flows from/(used in) investing activities

Group consolidated
cash flow statement

31 Dec 2021
As reported
£m
(11.2)
48.9

31 Dec 2021
Restated
£m
(5.1)
55.0

(22.1)
(1.9)

(28.2)
(8.0)

Gross up of drawdowns and repayments of external borrowings
The proceeds from and repayments of borrowings had been incorrectly calculated in the prior year Group and Company cash flow statement.
In preparing the Group and Company cash flow statement for the year ended 31 December 2022, the Directors have restated the comparative
amounts to show the proceeds from and repayments of borrowings as gross balances in line with IAS 7.21. This change in presentation within
the Group and Company cash flow statement has no effect on the cash position of the Group or Company in its balance sheet and has no further
impact on the Group or Company’s financial statements. The effect of the restatement on the Consolidated and Company cash flow statement in
respect of the comparative amount for the year ended 31 December 2021 is set out below.

Proceeds from borrowings
Repayment of borrowings
Cash flows used in financing activities

Group consolidated
cash flow statement

31 Dec 2021
As reported
£m
84.0
(89.9)
(26.1)

31 Dec 2021
Restated
£m
205.0
(210.9)
(26.1)

Company
cash flow statement

31 Dec 2021
As reported
£m
–
(5.7)
(11.5)

31 Dec 2021
Restated
£m
205.0
(210.7)
(11.5)

Gross up of subsidiary loans
The net loans advanced to subsidiaries presented in the prior year Company’s cash flow statement included the net position of the loans made
to and from subsidiaries instead of the gross cash receipts and payments. In preparing the Company’s cash flow statement for the year ended
31 December 2022, the Directors have restated the comparative amounts to show the loans advance to and repaid from subsidiaries separately
in line with IAS 7.21. This change in presentation within the Company cash flow statement has no effect on the cash position of the Company in its
balance sheet and has no further impact on the Company’s financial statements. The effect of the restatement on the Company cash flow statement
in respect of the comparative amount for the year ended 31 December 2021 is set out below.

Loans advanced to subsidiaries
Loans repaid from subsidiaries
Cash flows from/(used in) investing activities

Company
cash flow statement

31 Dec 2021
As reported
£m
–
19.4
30.5

31 Dec 2021
Restated
£m
(49.9)
69.3
30.5

Financial statementsJames Fisher and Sons plc – Annual Report 2022134

Notes to the financial statements cont.

1. GENERAL INFORMATION CONT.
Going concern
In determining the appropriate basis of preparation of the financial statements for the year ended 31 December 2022, the Board is required to
consider whether the Group and Parent Company can continue in operational existence for a period of at least 12 months from the date of approval
of the Financial Statements. The Board has concluded that it is appropriate to adopt the going concern basis, having undertaken a rigorous
assessment of the financial forecasts, key uncertainties and sensitivities, as set out below.

The Group had £88.0m of undrawn committed facilities at 31 December 2022 (31 December 2021: £111.5m). At 31 December 2022, the Group
had £247.5m of committed facilities (31 December 2021: £287.5m). £40.0m of revolving credit facilities which existed at 31 December 2021 were
due for renewal in July 2022, however the Board did not pursue the renewal of this facility given the significant liquidity headroom.

Following the sale of James Fisher Nuclear in March 2023, the Group retained several legacy parent company guarantees supporting the obligations
of JFN (the “PCGs”). The retention of the PCGs required consent under the Group’s debt facilities prior to the sale of JFN, which was not obtained
at the time. This resulted in the Group needing to obtain waivers in respect of the PCG and accelerating its refinancing process. As at the date of
this report, the Group has received commitment letters from all of its six lenders to enter into a single Revolving Credit Facility for facilities of £210m.
In addition, the Group has an agreed long-form term sheet, together with agreed principles to govern security and inter-creditor arrangements. The
Group and lenders have agreed a long-stop date of 7 June to complete the necessary next steps that will allow the new RCF to be drawn. The
agreed term sheet contains conditions subsequent, including finalisation of the security package, the execution of which is not entirely within the
Group’s control. The existing waiver in respect of the technical restriction on parent company guarantees relating to the disposal of James Fisher
Nuclear remains in place until 7 June 2023, the agreed long-stop date, and the Group expects to complete the refinancing by this date.

The key terms of the new facility agreement are:

• Maturity date: 31 March 2025.

• Net debt/EBITDA covenant (measured quarterly): 3.5x for 30 June and 30 September 2023, 3.25x for 31 December 2023 and 31 March 2024,

3x for 31 March 2024, 2.75x for 30 June 2024 and 2.5x thereafter.

• Interest cover covenant (measured quarterly): 2.5x in June and September 2023, 1.75x in December 2023 and March 2024, 2x in June and

September 2024, 2.5x in December 2023 and 2.75x in March 2025.

• Scheduled amortisation of: £15m on 30 September 2023, £10m on 31 December 2023 and £10m on 30 June 2024.

• Minimum liquidity requirement: £10m.

The Group has been in compliance with the requirements of its financial covenants under the existing agreement and remained so at the
31 December 2022 measurement date.

Going concern assessment period

Accounting standards require the directors to make an assessment of the company’s ability to continue to operate as a going concern for at least
12 months from the date of approval of the financial statements. The Board has considered an appropriate period for going concern assessment
taking into account any known liquidity events that will occur after the 12 months period. Given that the refinancing is agreed with the completion
expected in the coming weeks, the directors concluded that the 12 months going concern assessment period is appropriate.

Board assessment

Base case

The Group continues to closely monitor and manage its liquidity and covenants compliance. The Group has prepared base case cash flow forecasts
that demonstrate the Board’s best estimate for the going concern assessment period, taking into account the wider macro-economic environment
such as increases in the base interest rate. The Board believes that in the preparation of the base case it has taken into account some potential
downside risks to business performance, including the likelihood of winning major new contracts, ongoing project delivery risks and timing of
contract cashflows. The base plan does not include any further disposals or acquisitions. The base case demonstrated the Company would have
headroom against its facilities and would comply with covenants over the going concern period.

Severe but plausible downside scenario

The Group also modelled severe but plausible downside scenarios in which the Board has taken account of the following:

• trading downside risks, which assume the Group is not successful in delivering the anticipated profitability levels due to risks associated with

contract wins and/or delays and forecast margins achievement resulting in operating profit reduction of 10% in 2023 and 25% in 2024;

• cash inflow disruptions that may result from late payments from customers or project delivery challenges resulting in £20m cash receipts reduction

evenly spread over the going concern period;

• further increase in interest rates of 50bps.

The above scenarios, individually and combined, demonstrated sufficient liquidity headroom and covenants compliance.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc135

1. GENERAL INFORMATION CONT.
Going concern cont.
Board assessment cont.

Conclusion

Based on their assessment, the Directors believe it remains appropriate to prepare the financial statements on a going concern basis. However,
the Directors recognise that the finalisation of the outstanding areas in order to complete refinancing are not totally in the direct control of the
Group. This gives rise to a material uncertainty, as defined in the accounting standards, relating to material events and circumstances which may
cast significant doubt on the Group’s ability continue as a going concern and to realise its assets and discharge its liabilities in the normal course
of business. The Group, however, expects that the refinancing will be completed in the coming weeks. The financial statements do not include any
adjustments that would result from the basis of preparation being inappropriate.

2. ALTERNATIVE PERFORMANCE MEASURES
The Group uses a number of alternative (non-Generally Accepted Accounting Practice (non-GAAP)) performance measures which are not defined
within IFRS. The alternative performance measures (APMs) should be considered in addition to and not as a substitute or superior to the information
presented in accordance with IFRS, as APMs may not be directly comparable with similar measures used by other companies.

The Group believes that APMs, when considered together with IFRS results, provide the readers of the financial statements with complementary
information to better understand and compare the financial performance and position of the Group from period to period. The adjustments are
usually items that are significant in size and/or non-recurring in nature. These measures are also used by management for planning, reporting and
performance management purposes. Some of the measures form part of the covenant ratios calculation required under the terms of the Group’s
loan agreements.

As APMs include the benefits of restructuring programmes or use of the acquired intangible assets but exclude certain significant costs, such as
amortisation of intangible assets, litigation, material restructuring and transaction items, they should not be regarded as a complete picture of the
Group’s financial performance, which is presented in its IFRS results. The exclusion of adjusting items may result in underlying profits/(losses) being
materially higher or lower than IFRS earnings.

During the year a review has been performed to determine which APMs are most relevant to users of the financial results. As a consequence,
some measures have been removed (including underlying dividend cover and underlying cash conversion) and a leverage (replacing underlying
net borrowings) and interest cover APMs have been added with a view to increase reliance on statutory measures and reduce the number of APMs.
The following APMs are referred to in the Annual Report and Accounts and described in the following paragraphs.

2.1 Underlying operating profit
Underlying operating profit is defined as operating profit from continuing and discontinued operations (see Note 5) adjusted for 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, asset impairment and profit/loss relating to the sale of businesses or any other significant one-off
adjustments to income or expenses (“adjusting items”).

Underlying operating profit is used as a basis for net debt/EBITDA and interest cover covenant calculation, required under the terms of the Group’s
loan agreements. This APM is also used internally to measure the Group’s performance against previous years and budgets, as the adjusting items
fluctuate year on year and may be unknown at the time of budgeting.

Financial statementsJames Fisher and Sons plc – Annual Report 2022136

Notes to the financial statements cont.

2. ALTERNATIVE PERFORMANCE MEASURES CONT.
2.1 Underlying operating profit cont.

Continuing operations

Amortisation
of acquired
intangible
assets
£m
–
–
–
2.1

Impairment
charges/
(reversals)
£m
–
(4.5)
(4.5)
5.2

Specific
trade
receivables
provision
£m
–
–
–
–

As
reported
£m
478.1
(350.9)
127.2
(104.4)

Re-
structuring
£m
–
–
–
1.7

Disposal of
businesses
and assets
£m
–
(0.9)
(0.9)
(2.5)

Underlying
results
£m
478.1
(356.3)
121.8
(96.2)

Dis-
continued
operations
£m
42.8
(43.3)
(0.5)
(6.9)

Total
underlying
results
£m
520.9
(399.6)
121.3
(103.1)

Other/Tax
£m
–
–
–
1.7

0.3

1.6
24.7
0.7
(10.9)

14.5
(5.5)

9.0

(19.8)

(10.8)
5.2%

10.1
(2.6)
14.7
9.9
(7.4)
24.7

–

–
2.1
–
–

2.1
–

2.1

–

2.1

1.5
0.1
0.5
–
–
2.1

–

–
0.7
–
–

0.7
–

0.7

–

0.7

(0.8)
1.8
–
(0.3)
–
0.7

(1.1)

–
(1.1)
–
–

(1.1)
–

–

–
1.7
–
–

1.7
–

–

–
(3.4)
–
–

(3.4)
–

–

–
1.7
–
–

1.7
0.8

(0.8)

1.6
26.4
0.7
(10.9)

16.2
(4.6)

–

(0.8)

0.1
(7.3)
–
(0.1)

(7.4)
0.8

1.7
19.1
0.7
(11.0)

8.8
(3.8)

(1.1)

1.7

(3.4)

2.5

11.6

(6.6)

5.0

–

(1.1)

(1.1)
–
–
–
–
(1.1)

–

1.7

0.4
1.3
–
–
–
1.7

–

(19.8)

19.8

–

(3.4)

2.5

(8.3)
5.5%

13.3
−17.0%

5.0
3.7%

(2.4)
–
–
(1.0)
–
(3.4)

0.2
–
–
–
1.5
1.7

7.9
0.6
15.2
8.6
(5.9)
26.4

2022
Continuing
operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Impairment of trade
receivables
Share of post-tax
results of associates
Operating profit/(loss)
Finance income
Finance expense
Profit/(loss) before
taxation
Income tax
Profit/(loss) for the
year from continuing
operations
Discontinued
operations
(Loss)/profit for the
year from discontinued
operations, net of tax
Profit/(loss) for
the year
Operating margin (%)

Segmental underlying
operating profit is
calculated as follows:
Marine Support
Specialist Technical
Offshore Oil
Tankships
Corporate
Continuing

During the year, adjusting items were in relation to the following matters:

Amortisation of acquired intangibles (see Note 13).

The impairment charges/(reversals) relate to goodwill, intangible and tangible assets, and assets held for sale (see Notes 12, 13, 14 and 20).

Specific trade receivables provision relates to a recovery of amounts provided for in 2021 in relation to specific counterparty risk and receivables
billed over 12 months ago in relation to certain projects – see below 2021 table.

Restructuring costs relates to restructuring programmes completed during the year by the Fendercare and JFD businesses.

Disposal of businesses and assets relates to the disposal during 2022 of James Fisher Mimic Ltd, Prolec Ltd and Strainstall UK Ltd (see Note 26)
for £18.5m proceeds with £4.3m gains less £1.8m costs of disposal. In addition, the Group has recognised a gain of £0.9m on disposal of one of its
vessels in the Tankships division.

Other includes £1.5m past service cost recognised for the MNRPF scheme in respect of ill health early retirement benefits (see Note 23).

Financial statementsAnnual Report 2022 – James Fisher and Sons plc137

2. ALTERNATIVE PERFORMANCE MEASURES CONT.
2.1 Underlying operating profit cont.

2021
Continuing
operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Impairment of trade
receivables
Share of post-tax
results of associates
Operating
profit/(loss)
Finance income
Finance expense
Profit/(loss)
before taxation
Income tax
Profit/(loss) for the
year from continuing
operations
Discontinued
operations
(Loss)/profit for the
year from discontinued
operations, net of tax
Profit/(loss) for
the year
Operating margin (%)

Segmental underlying
operating profit is
calculated as follows:
Marine Support
Specialist Technical
Offshore Oil
Tankships
Corporate
Continuing

As
reported
restated
£m
442.4
(338.8)
103.6
(118.9)

Amortisation
of acquired
intangible
assets
£m
–
–
–
2.9

Impairment
charges
£m
–
11.0
11.0
27.5

Continuing operations
Specific
trade
receivables
provision
£m
–
–
–
–

Litigation
£m
–
–
–
3.1

Disposal of
businesses
and assets
£m
–
–
–
(0.1)

Underlying
results
£m
442.4
(327.8)
114.6
(85.5)

Dis-
continued
operations
£m
51.7
(45.8)
5.9
(6.0)

Total
underlying
results
£m
494.1
(373.6)
120.5
(91.5)

Other/Tax
£m
–
–
–
–

(7.3)

1.9

(20.7)
0.3
(8.5)

(28.9)
0.8

–

2.9
–
–

2.9
–

–

38.5
–
–

38.5
–

(28.1)

2.9

38.5

(0.1)

(28.2)
–4.7%

(21.0)
7.1
(5.2)
1.3
(2.8)
(20.6)

–

2.9

2.3
0.1
0.5
–
–
2.9

–

38.5

18.3
2.8
13.9
3.5
–
38.5

4.3

–

4.3
–
–

4.3
–

4.3

–

4.3

2.4
–
1.9
–
–
4.3

–

3.1
–
–

3.1
–

3.1

–

3.1

3.1
–
–
–
–
3.1

–

(0.1)
–
–

(0.1)
–

–

–
–
–

–
(10.9)

(3.0)

1.9

28.0
0.3
(8.5)

19.8
(10.1)

–

0.1

–
–
(0.1)

(0.1)
–

(3.0)

2.0

28.0
0.3
(8.6)

19.7
(10.1)

(0.1)

(10.9)

9.7

(0.1)

9.6

–

(0.1)

0.1

–

(0.1)

(10.9)

9.6
6.3%

–
0.1%

9.6
5.7%

(0.1)
–
–
–
–
(0.1)

–
–
–
–
–
–

5.0
10.0
11.1
4.8
(2.8)
28.1

During 2021, adjusting items were in relation to the following matters:

Amortisation of acquired intangibles (see Note 13).

The impairment charges relate to goodwill, intangible and tangible assets, right-of-use assets and assets held for sale (see Notes 12, 13, 14, 15
and 20).

Specific trade receivables provision relates to amounts provided for specific counterparty risk and receivables billed over 12 months ago in relation
to certain projects.

Litigation costs relates to matters described in Note 31: Commitments and contingencies.

Disposal of businesses and assets relates to the disposal during 2021 of James Fisher Testing Services Ltd which was sold for proceeds of £5.7m
and resulted in a gain of £0.5m; sale of James Fisher NDT Ltd for which proceeds were £1.2m and loss on disposal of £0.7m; and a gain of £0.3m
on the disposal of the Paladin Dive Support Vessel for US$17.3m in gross proceeds.

Financial statementsJames Fisher and Sons plc – Annual Report 2022138

Notes to the financial statements cont.

2. ALTERNATIVE PERFORMANCE MEASURES CONT.
2.2 Covenant EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation)
Covenant EBITDA is calculated in line with the Group’s banking covenants. It is defined as the underlying operating profit before interest, tax,
depreciation and amortisation, adjusted for impacts of IFRS 16. The covenants require that EBITDA is calculated excluding the effects of IFRS 16.
The IFRS 16 adjustment is calculated as a difference between ROU depreciation and operating lease payments.

Underlying operating profit
Depreciation and amortisation
Less: Depreciation on right-of-use assets
Amortisation of acquired intangibles

IFRS 16 impact removed
Covenant EBITDA

* Excludes discontinued operations.

2022
£m*
26.4
40.3
(12.2)
(2.1)
0.2
52.6

2021
£m
28.0
44.2
(13.2)
(2.9)
(1.8)
54.3

2.3 Leverage
Leverage is calculated in line with the Group’s banking covenants. It is defined as Covenant EBITDA divided by underlying net borrowings.
Underlying net borrowings is net borrowings as set out in Note 28, including guarantees and excluding right-of-use operating leases, which are the
leases which would be considered operating leases under IAS17, prior to the introduction of IFRS 16. Guarantees are those issued by a bank or
financial institution to compensate a stakeholder in the event of a Group company not fulfilling its obligations in the ordinary course of business in
relation to either advance payments or trade debtors.

Net borrowings (Note 28)
Guarantees
Less: right-of-use operating leases
Underlying Net borrowings
Covenant EBITDA
Leverage

2022
£m
185.8
2.3
(46.0)
142.1
52.6
2.7

2021
£m
185.6
8.4
(38.2)
155.8
54.3
2.9

2.4 Underlying Capital employed and Return on Capital Employed (ROCE)
Capital employed is defined as net assets less right-of-use assets, less cash and cash equivalents 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 defined as the underlying operating profit, divided by average capital employed. Group ROCE, is defined as underlying operating
profit, less notional tax, calculated by multiplying the underlying effective tax rate by the underlying operating profit, divided by average capital
employed, as calculated below. Group ROCE is a KPI that is used internally and externally and forms part of performance conditions under the
Group’s LTIP scheme.

Net assets
Less right-of-use assets
Plus net borrowings
Capital employed
Add: amortisation of customer relationships

Underlying operating profit
Notional tax at the underlying effective tax rate

Average capital employed
Return on average capital employed

2022
£m
218.3
(52.3)
185.8
351.7
1.7
353.4

19.1
(5.1)
14.0
355.1
3.9%

2021
£m
210.6
(41.8)
185.6
354.4
2.4
356.8

28.0
(14.3)
13.7
377.4
3.6%

Financial statementsAnnual Report 2022 – James Fisher and Sons plc2. ALTERNATIVE PERFORMANCE MEASURES CONT.
2.4 Underlying Capital employed and Return on Capital Employed (ROCE) cont.
The four divisional ROCE’s are detailed below:

Marine
Support
£m
119.4
(6.3)
9.9
123.0
1.6
124.6

7.9
123.2
6.4%

Marine
Support
£m
114.8
(6.1)
10.6
119.3
2.6
121.9

5.0
142.5
3.5%

Specialist
Technical
£m
83.9
(3.0)
3.3
84.1
0.1
84.2

(6.7)
91.2
-7.4%

Specialist
Technical
£m
97.7
(6.2)
6.6
98.1
0.1
98.2

9.9
101.1
9.8%

Year ended 31 December 2022
Net assets
Less right-of-use assets
Plus net borrowings
Capital employed
Add: amortisation of customer relationships

Underlying operating profit
Average capital employed
Return on average capital employed

Year ended 31 December 2021
Net assets
Less right-of-use assets
Plus net borrowings
Capital employed
Add: amortisation of customer relationships

Underlying operating profit
Average capital employed
Return on average capital employed

2.5 Interest cover

Interest receivable on Short-term deposits less interest payable on bank loans
Finance lease interest
Arrangement fees
Covenant interest

Underlying net operating profit
IFRS 16 impact removed

Interest cover

139

Offshore
Oil
£m
102.8
(4.0)
4.4
103.3
–
103.3

15.2
101.7
14.9%

Offshore
Oil
£m
100.0
(4.6)
5.1
100.5
–
100.5

11.1
108.5
10.2%

2022
£m
8.1
0.1
(1.0)
7.2

26.4
(0.7)
25.7
3.5

Tankships
£m
34.0
(38.1)
33.8
29.7
–
29.7

8.6
32.1
26.8%

Tankships
£m
36.0
(23.6)
22.2
34.5
–
34.5

4.8
32.9
14.7%

2021
£m
6.0
0.1
(1.2)
4.9

28.0
(1.6)
26.4
5.4

2.6 Underlying earnings per share
Underlying earnings per share (EPS) is calculated as the total of underlying profit before tax, less income tax, but excluding the tax impact on
adjusting items, less profit attributable to non-controlling interests, divided by the weighted average number of ordinary shares in issue during the
year. Underlying earnings per share is a performance condition used for the LTIP schemes.

Loss attributable to owners of the Company
Adjusting items
Tax on adjusting items
Underlying profit attributable to owners of the Company

Basic weighted average number of shares (Note 10)
Diluted weighted average number of shares (Note 10)
Underlying basic earnings per share
Underlying diluted earnings per share

2022
£m
(11.1)
1.7
0.8
(8.6)

2021
£m
(27.8)
48.7
(10.9)
10.0

50,345,989
50,367,147
(17.1)
(17.1)

50,345,477
50,356,037
20.0
20.0

Financial statementsJames Fisher and Sons plc – Annual Report 2022140

Notes to the financial statements cont.

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 18 to 25. Marine Support, Specialist Technical and Offshore Oil are differentiated by markets
and industries which they serve. The Tankships division is differentiated by the services which they provide. The Board assess the performance of
the segments based on underlying operating profit, 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. 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 benefit obligations and corporate liabilities that
cannot reasonably be allocated to operating segments.

During the year, the Nuclear business (within Specialist Technical) has been classified as held for sale and is shown as discontinued operations.
The prior year comparative has been restated.

Year ended 31 December 2022
Segmental revenue
Inter-segmental sales
Revenue

Underlying operating profit/(loss)
APMs (see Note 2)
Operating profit/(loss)
Finance income
Finance expense
Profit/(loss) before tax
Income tax
Profit/(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

Marine
Support
£m
224.6
(0.1)
224.5

Specialist
Technical
£m
68.2
(0.1)
68.1

Offshore
Oil
£m
106.7
(0.1)
106.6

Tankships
£m
78.9
–
78.9

Corporate
£m
–
–
–

Continuing
Total
£m
478.4
(0.3)
478.1

Discontinued
Total
£m
43.9
(1.1)
42.8

7.9
2.2
10.1

0.6
(3.2)
(2.6)

15.2
(0.5)
14.7

8.6
1.3
9.9

(5.9)
(1.5)
(7.4)

188.1
2.4
190.5
(71.2)
119.3

114.4
3.4
117.8
(34.0)
83.8

131.4
2.8
134.2
(31.4)
102.8

86.5
–
86.5
(52.5)
34.0

63.6
–
63.6
(185.3)
(121.7)

26.4
(1.7)
24.7
0.7
(10.9)
14.5
(5.5)
9.0

584.0
8.7
592.7
(374.4)
218.3

(7.3)
(13.3)
(20.6)
–
–
(20.6)
0.8
(19.8)

16.3
–
16.3
(16.3)
–

Total
£m
522.3
(1.4)
520.9

19.1
(15.0)
4.1
0.7
(10.9)
(6.2)
(4.7)
(10.8)

600.3
8.7
609.0
(390.7)
218.3

9.6
11.0

4.6
5.6

8.9
11.2

4.0
12.1

–
0.4

27.1
40.3

0.3
0.8

27.4
41.1

Revenue from continuing activities disclosed in the income statement is comprised of goods and services of £372.3m (2021: £335.3m), services
revenue including operation of vessels and plant and equipment of £62.0m (2021: £58.7m) and construction contract income of £33.5m (2021:
£38.6m). These revenues are accounted for under IFRS 15: Revenue from Contracts with Customers.

At 31 December 2022, there is £6.1m (2021: £5.3m) consideration allocated to performance obligations that were unsatisfied and expected to be
recognised as revenue within 12 months.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc141

3. SEGMENTAL INFORMATION CONT.

Revenue from operating lease rental income is £10.3m (2021: £9.8m) which is accounted for under IFRS 16: Leases. Property, plant and equipment
which is used to generate operating lease rental income is detailed in Note 14. The nature of the leasing activities in the period are various short term
equipment leases in the Offshore Oil and Marine Support divisions.

Revenue from discontinued activities disclosed in the income statement is comprised of goods and services of £27.8m (2021: £34.7m) and
construction contract income of £15.0m (2021: £17.0m).

For details of the amount of impairment losses and reversals of impairment losses recognised in profit or loss during the period, see Note 2.1.

The following table shows the maturity profile of operating lease receivables using the undiscounted payments:

Operating lease receivables

Year ended 31 December 2021
Segmental revenue
Inter-segmental sales
Revenue

Underlying operating profit/(loss)
APMs (see Note 2)
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

Within 1
year
£m
3.7

Specialist
Technical
restated*
£m
81.8
(0.3)
81.5

1 – 2
years
£m
2.1

2 – 3
years
£m
2.2

3 – 4
years
£m
2.3

4 – 5
years
£m
2.4

Offshore Oil
£m
86.5
(0.2)
86.3

Tankships
£m
60.1
–
60.1

Corporate
£m
–
–
–

Continuing
Total
restated*
£m
443.1
(0.7)
442.4

Discontinued
Total
restated*
£m
52.8
(1.1)
51.7

10.0
(2.9)
7.1

11.1
(16.3)
(5.2)

4.8
(3.5)
1.3

(2.8)
–
(2.8)

Marine
Support
£m
214.7
(0.2)
214.5

5.0
(26.0)
(21.0)

>5
years
£m
2.6

Total
£m
495.9
(1.8)
494.1

28.0
(48.7)
(20.7)
(8.3)
(29.0)
0.8
(28.2)

617.2
8.0
625.2
(414.6)
210.6

28.1
(48.7)
(20.6)
(8.1)
(28.7)
0.6
(28.1)

581.3
7.8
589.1
(392.1)
197.0

(0.1)
–
(0.1)
(0.2)
(0.3)
0.2
(0.1)

35.9
0.2
36.1
(22.5)
13.6

189.7
2.6
192.3
(77.4)
114.9

6.1
12.3

118.9
3.0
121.9
(37.8)
84.1

124.2
2.2
126.4
(26.4)
100.0

2.4
5.1

6.3
12.1

75.1
–
75.1
(39.2)
35.9

4.3
12.4

73.4
–
73.4
(211.3)
(137.9)

–
0.5

19.1
42.4

0.3
1.8

19.4
44.2

* 2021 results are restated due to a business classified as discontinued operations – see Note 5.

Financial statementsJames Fisher and Sons plc – Annual Report 2022142

Notes to the financial statements cont.

3. SEGMENTAL INFORMATION CONT.
Geographic information
Geographical revenue is determined by the location in which the product or service is provided. Where customers receive the product or service
in one geographical location for use or shipment to another it is not practicable for the Group to identify this and the revenue is attributed to the
location of the initial shipment. The geographical allocation of segmental assets and liabilities is determined by the location of the attributable
business unit.

The prior year comparative has been restated for the Nuclear business which has been classified as held for sale and is shown as discontinued
operations.

United Kingdom
2022
£m

2021
£m

Rest of Europe
2022
£m

2021
£m

Middle East,
Africa & Americas
2021
£m

2022
£m

Asia Pacific

2022
£m

2021
£m

Total

2022
£m

2021
£m

165.1
(0.3)
164.8

146.2
(0.4)
145.8

65.3
–
65.3

54.7
–
54.7

155.5
–
155.5

136.3
(0.3)
136.0

92.5
–
92.5

106.0
–
106.0

478.4
(0.3)
478.1

443.1
(0.7)
442.4

Continuing
Revenue
Segmental revenue
Inter-segmental sales
Group revenue

Discontinued
Revenue
Segmental revenue
Inter-segmental sales
Group revenue

Continuing
Segmental non-current assets
Segmental current assets
Segmental assets
Investment in joint ventures
Segmental liabilities

Discontinued
Segmental non-current assets
Segmental current assets
Segmental assets
Investment in joint ventures
Segmental liabilities

43.6
(1.1)
42.5

52.6
(1.1)
51.5

209.9
177.0
386.9
0.3
(314.1)
73.1

–
16.3
16.3
–
(16.3)
–

213.6
183.7
397.3
0.1
(321.8)
75.6

15.0
20.9
35.9
–
(22.5)
13.4

–
–
–

40.9
7.1
48.0
3.1
(8.0)
43.0

–
–
–
–
–
–

–
–
–

44.0
5.1
49.1
2.4
(8.0)
43.5

–
–
–
–
–
–

–
–
–

26.8
53.2
80.0
0.2
(36.1)
44.1

–
–
–
–
–
–

–
–
–

26.6
44.9
71.5
0.3
(46.0)
25.8

–
–
–
–
–
–

0.3
–
0.3

34.9
34.2
69.1
5.1
(16.2)
58.1

–
–
–
–
–
–

0.2
–
0.2

33.0
30.4
63.4
5.0
(16.3)
52.1

–
–
–
0.2
–
0.2

4. OPERATING PROFIT
Detailed below are the key amounts recognised in arriving at operating profit for continuing operations:

Amortisation of intangible assets (Note 13)
Depreciation of property, plant and equipment (Note 14)
Depreciation of ROU assets (Note 15)
Impairment charges/(reversals):
Goodwill and intangible assets (Notes 12 and 13)
Tangible fixed assets, including ROU assets (Note 14 and 15)
Vessel held for sale (Note 20)
Staff costs (Note 6)
(Gain)/loss on disposal of businesses, net of disposal costs (Note 26)
Costs of material litigation

43.9
(1.1)
42.8

52.8
(1.1)
51.7

312.5
271.5
584.0
8.7
(372.8)
218.3

–
16.3
16.3
–
(16.3)
–

2022
£m
5.2
23.3
12.6

4.6
1.1
(5.4)
145.8
(2.5)
–

317.2
264.1
581.3
7.8
(392.1)
197.0

15.0
20.9
35.9
0.2
(22.5)
13.6

2021
£m
7.4
23.6
13.2

29.2
9.3
–
136.4
0.2
3.1

Financial statementsAnnual Report 2022 – James Fisher and Sons plc143

4. OPERATING PROFIT CONT.

The total remuneration of the Group’s auditor, KPMG LLP, for services provided to the Group during the year ended 31 December 2022 is
analysed below:

Audit of the financial statements of the parent
Half year review
Local statutory audits of subsidiaries
Total fees payable to Group auditor

2022
£m
0.6
0.1
3.8
4.5

2021
£m
0.5
0.1
1.4
2.0

Included in the audit fee for the year ended 31 December 2022 is £0.5m in relation to the year ended 31 December 2021, which was billed
subsequent to the completion of the audit. An amount of £1.5m in 2022 represents the estimated fee for additional audit work performed in the year.
The total remuneration of the Group’s auditor for the audit in relation to the year ended 31 December 2022 was £4.0m (2021: £2.5m).

5. DISCONTINUED OPERATIONS
In December 2022, management agreed a plan to sell the Nuclear business as a result of a strategic decision to rationalise and focus the portfolio
within the Specialist Technical division. At 31 December, the business has been classified as held for sale and is part of a single co-ordinated plan
to dispose of a separate major line of business. It is classified as a discontinued operation.

On 3 March 2023, the Group announced that the entire share capital of James Fisher Nuclear Holdings Limited and related properties were sold to
Myneration Limited, a wholly-owned investment vehicle of Rcapital Partners LLP for a consideration of £3. The Group has retained certain parent
company guarantees which historically were given to support the obligations of JFN (see Note 31).

Results of discontinued operations
Revenue
Inter-segmental sales

Expenses
Loss before taxation
Income tax
Loss from operating activities after tax
Loss on remeasurement to fair value less costs to sell
Income tax on loss on remeasurement to fair value less costs to sell
Loss for the year from discontinued operations

Attributable to:
Owners of the Company
Non-controlling interests

Cash flows from/(used in) discontinued operations
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities
Net cash flows for the year

2022
£m
43.9
(1.1)
42.8
(50.1)
(7.3)
0.8
(6.5)
(13.3)
–
(19.8)

(19.8)
–
(19.8)

2022
£m
(3.1)
(5.0)
–
(8.1)

2021
£m
52.8
(1.1)
51.7
(51.8)
(0.1)
–
(0.1)
–
–
(0.1)

(0.1)
–
(0.1)

2021
£m
1.1
(1.1)
–
–

Financial statementsJames Fisher and Sons plc – Annual Report 2022144

Notes to the financial statements cont.

5. DISCONTINUED OPERATIONS CONT.

At 31 December 2022, the disposal group was stated at fair value less costs to sell and comprised the following assets and liabilities:

Property, plant and equipment
Inventories
Trade and other receivables
Cash and cash equivalents
Assets held for sale

Trade and other payables
Lease liabilities
Taxation
Liabilities associated with assets held for sale

2022
£m
2.3
0.7
10.5
2.8
16.3

(13.7)
(2.2)
(0.3)
(16.3)

On transfer of assets to held for sale a £13.3m loss was recognised on remeasurement to fair value less cost to sell, consisting of impairments of
goodwill (£8.1m), property, plant and equipment (£3.9m) and anticipated costs of disposal (£1.3m).

The non-recurring fair value measurement for the disposal group before £1.3m costs to sell has been categorised as a Level 3 fair value based on
the present value of cash flows.

6. GROUP EMPLOYEE COSTS
(a) Staff costs including Directors’ remuneration were as follows:

Wages and salaries
Social security costs
Pension costs
Share-based compensation

2022
£m
127.3
12.8
5.2
0.5
145.8

2021
£m
119.8
11.6
4.7
0.3
136.4

The total staff costs which were capitalised during the year amounted to £0.5m (2021: £0.4m).

The actual number of persons including Executive Directors employed by the Group was 2,526 persons at 31 December 2022 (2021: 2,704
persons).

The average number of persons including Executive Directors employed by the Group is detailed below by function:

Production and Engineering
Sales
Administration
Seafarers

2022
Number
1,608
213
789
37
2,647

2021
Number
1,637
190
799
36
2,662

The Directors’ remuneration and their interest in shares of the Company are set out in the Directors’ remuneration report on pages 94 to 110.
The amount charged against operating profit in the year in respect of Directors’ short-term remuneration was £0.9m (2021: £1.0m) in respect of
emoluments and £0.1m (2021: £0.1m) in respect of pension contributions to defined contribution schemes. The number of Directors accruing
retirement benefits were 2 (2021: 2). The charge for share-based payments in respect of Directors was £0.2m (2021: £0.1m) and aggregate gains
under the exercise of options was £nil (2021: £nil).

(b) Compensation of key management to the Group

Short-term employee benefits
Share-based payments

2022
£m
2.9
0.3
3.2

2021
£m
2.4
0.2
2.6

Key management personnel include the Board of Directors of the Company and other senior members of the management team.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc7. NET FINANCE 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
Total expense
Net finance expense – continuing operations

8. TAXATION
(a) The tax charge is based on profit 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
Tax expense on continuing operations

145

2021
£m

0.3

(6.3)
(0.1)
(2.1)
(8.5)
(8.2)

2022
£m

0.7

(8.8)
–
(2.1)
(10.9)
(10.2)

2022
£m

2021
£m

(1.2)
(6.3)

0.5
0.2
(6.8)

0.7
(0.3)

0.9
–
(5.5)

(0.7)
(6.0)

1.3
(0.3)
(5.7)

8.3
–

(0.6)
(1.2)
0.8

The tax expense excludes a tax credit from discontinued operations of £0.8m (2021: £nil).

The total tax charge in the income statement includes a further £0.1m (2021: £0.3m) which is stated within the share of post-tax results of
joint ventures.

Prior year UK tax includes a credit of £7.9m, which represents deferred tax recognised on the timing differences created following the impairment of
dive support vessels during the year ended 31 December 2020 and the Group’s current expectations regarding Dive Support operations.

(b) Tax included within other comprehensive income:

Current tax:
Foreign exchange losses on internal loans
Contributions to defined benefit pension schemes
Deferred tax:
Actuarial gain on defined benefit pension schemes
Relating to derivatives

2022
£m

(0.4)
0.4

(1.7)
(0.7)
(2.4)

2021
£m

–
0.5

(1.0)
0.4
(0.1)

In addition, deferred tax of £nil (2021: £0.1m) was charged and £nil current tax (2021: £0.1m) was credited to the consolidated statement of
changes in equity in respect of share-based payments.

Financial statementsJames Fisher and Sons plc – Annual Report 2022146

Notes to the financial statements cont.

8. TAXATION CONT.
(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. Profits for these activities are not subject to corporation tax. The tax on the Group’s profit before tax differs from the theoretical amount
that would arise using the rate applicable under UK corporation tax rules as follows:

Profit/(loss) before tax
Tax arising from interests in joint ventures

Tax on profit/(loss) at UK statutory tax rate of 19% (2021: 19%)
Tonnage tax relief/(expense) on vessel activities
Expenses not deductible for tax purposes
(Over)/under provision In prior years:
Current tax
Deferred tax
Higher tax rates on overseas income
Non-taxable income
Impact of change of rate
Movement on unrecognised deferred tax

2022
£m
14.5
0.1
14.6
2.8
(0.8)
1.6

(0.7)
(0.9)
2.8
(0.8)
0.1
1.5
5.6

2021
£m
(28.9)
0.3
(28.6)
(5.4)
0.6
4.2

(1.0)
1.8
1.8
(0.3)
1.1
(3.3)
(0.5)

Expenses not deductible for tax purposes relate mainly to non-recurring items such as goodwill impairments, costs associated with business
disposals, and losses made on business disposals.

The effective rate on the (loss)/profit before income tax from continuing operations is 37.9% (2021: 2.6%). The effective income tax rate on the
underlying profit before tax is 28.4% (2021: 51.2%). Underlying profit before tax is included in Note 2. Over provision in previous years arose due
to the timing in which certain transactions have been accounted for, rather than any correction.

9. DEFERRED TAX
Deferred tax at 31 December relates to the following:

Assets
Retirement benefits
Property, plant and equipment
Share-based payments
Derivative financial instruments
Losses carried forward
Temporary differences

Liabilities
Retirement benefits
Property, plant and equipment
Intangible assets
Derivative financial instruments

Group

2022
£m

–
3.3
–
–
6.4
1.1
10.8

(0.7)
–
(1.4)
(0.6)
(2.7)

2021
£m

0.5
4.0
–
0.1
3.4
1.6
9.6

–
–
(0.4)
–
(0.4)

Company

2022
£m

2021
£m

–
–
–
–
–
0.6
0.6

(0.8)
–
–
(0.6)
(1.4)

0.4
–
–
0.1
–
0.5
1.0

–
–
–
–
–

Within the net £8.1m deferred tax asset, £4.7m relates to the UK. The majority of this relates to tax losses and timing differences following the
impairment of the Dive Support Vessels in 2020. The deferred tax asset has been recognised on the basis that management considers it probable
that future UK taxable profits would be available against which the tax losses and timing differences can be recovered and, therefore, the related
deferred tax asset can be realised. Assessments are based on the Group’s five year forecast, which is consistent with the information used to
determine the Group’s going concern assessment.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc147

9. DEFERRED TAX CONT.

At 31 December 2022, the Group had unrecognised tax losses of £21.4m (2021: £37.3m). £16.3m (2021: £34.6m) of these losses can be carried
forward indefinitely, and £5.1m (2021: £2.7m) will expire within the next 10 years. Deferred tax assets have not been recognised for the £21.4m tax
losses because it is not probable that future taxable profits will be available against which the Group can use the benefits therefrom.

Deferred tax assets and liabilities included in the consolidated balance sheet have been stated according to the net exposures in each tax jurisdiction.

The gross movement on the deferred income tax account is as follows:

Balance at 1 January
Charged to comprehensive income
Charged to equity
Credited to income statement
Balance at 31 December

Group

Company

2022
£m
9.2
(2.4)
–
1.3
8.1

2021
£m
3.4
(0.6)
(0.1)
6.5
9.2

2022
£m
1.0
(2.3)
–
0.5
(0.8)

2021
£m
2.8
(0.5)
(0.1)
(1.2)
1.0

At 31 December 2022, the Group has no deferred income tax liability (2021: £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 profits 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 ending 31 December 2022 relates to the following:

Deferred tax assets
Deferred tax liabilities:
Property, plant and equipment
Intangible assets
Deferred income tax credit

Group

2022
£m
(3.0)

0.7
1.0
(1.3)

2021
£m
4.6

(7.5)
(3.6)
(6.5)

10. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares in issue
during the year, after excluding 47,855 (2021: 54,571) 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 profit 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 2022, 1,759,740 options (2021: 650,513) 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.

The calculation of the basic and diluted earnings per share is based on the following data:

Loss after tax attributable to shareholders

2022
£m
(11.1)

2021
£m
(27.8)

Financial statementsJames Fisher and Sons plc – Annual Report 2022148

Notes to the financial statements cont.

10. EARNINGS PER SHARE CONT.
Weighted average number of shares

Basic weighted average number of shares
Potential exercise of share-based payment schemes
Diluted weighted average number of shares

Earnings per share
Basic earnings per share
Diluted earnings per share

Earnings per share – continuing operations
Basic earnings per share
Diluted earnings per share

Earnings per share – discontinued operations
Basic earnings per share
Diluted earnings per share

11. DIVIDENDS PAID AND PROPOSED
There were no dividends paid or proposed in either 2022 or 2021.

12. GOODWILL

Reconciliation of carrying amount
At 1 January 2021
Impairment
Disposals
Exchange differences
At 31 December 2021
Impairment
Disposals
Discontinued operations
Reallocation between CGUs
Exchange differences
At 31 December 2022

2022
Number of
shares
50,345,989
21,158
50,367,147

2021
Number of
shares
50,345,477
10,560
50,356,037

pence
(22.1)
(22.1)

pence
17.4
17.4

pence
(39.5)
(39.5)

JFD
£m
32.7
–
–
(0.4)
32.3
–
–
–
0.9
0.9
34.1

Scantech
£m
23.4
–
–
(0.5)
22.9
–
–
–
–
0.2
23.1

Fendercare
£m
16.7
–
–
–
16.7
–
–
–
–
0.3
17.0

Multiple
units without
significant
goodwill
£m
93.7
(27.5)
(3.9)
(0.7)
61.6
(4.4)
(7.1)
(8.1)
(0.9)
1.0
42.1

pence
(55.2)
(55.2)

pence
(55.0)
(55.0)

pence
0.2
0.2

Total
£m
166.5
(27.5)
(3.9)
(1.6)
133.5
(4.4)
(7.1)
(8.1)
–
2.4
116.3

Details of disposals are provided in Note 26 and of discontinued operations in Note 5.

In 2022, the Group experienced projects in subsea operations in the EU being deferred or cancelled at short notice by customers, including projects
that had been awarded to the Group. This led to a reduction in profitability in the Marine Contracting business in the EU (reported within the Marine
Support operating segment). As a result of this, and of a more cautious outlook given this disruption, an impairment of £4.4m in relation to a CGU
which is a business operation within the Marine Support segment was recognised in administrative expenses, resulting in zero goodwill remaining in
respect of that CGU.

In 2021, due to the continuing impact of COVID, a number of projects in our subsea and decommissioning operations were deferred or cancelled
which led to a reduction in profitability. Based on the value in use calculations, impairments were identified in respect of three CGUs within the Marine
Support operating segment and charges of £13.9m, £12.6m and £1.0m have been recognised respectively, resulting in a zero recoverable amount
for one CGU and recoverable values of £7.4m and £3.0m respectively for the remaining CGUs based on their value in use.

During 2022, a subsidiary that previously reported its results through Marine Support operating segment moved under management of JFD.
As the result, goodwill associated with that subsidiary was moved under JFD’s CGU.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc149

12. GOODWILL CONT.
Impairment testing for CGUs containing goodwill
The headroom and the key assumptions used in determining the recoverable amount of each CGU, or group of CGUs, are as follows:

JFD
Scantech
Fendercare
Multiple units without significant
goodwill
Total

Headroom
2022
£m
35.6
39.8
49.3

2021
£m
74.1
24.1
81.5

183.5
308.2

288.5
468.2

Discount rate
(post-tax)*

Five-year average
revenue growth rate

Terminal value
growth rate

2022
14.7%
12.9%
15.3%

2021
10.5%
10.0%
11.4%

2022
3.2%
7.0%
2.7%

2021
17.3%
2.0%
8.4%

14.1%

10.3%

12.8%

4.2%

2022
2.6%
2.6%
2.6%

2.6%

2021
1.8%
1.8%
1.8%

1.8%

* The pre-tax discount rates are 0.8% (2021: 0.6%) higher than the post-tax rates stated above.

Headroom represents the difference between the recoverable amount and net assets, including goodwill, of a CGU.

The individual carrying values for ‘multiple CGUs without significant goodwill balances’ amount to less than 10% of the Group’s total goodwill
balance. The assumptions in the table above represent weighted average amounts.

Key assumptions
The recoverable amount is based on a value in use calculation, which is determined by performing discounted future post-tax cash flow calculations
for a five-year period and projected into perpetuity. For CGUs designated as assets held for sale/discontinued operations, the fair value less costs to
sell is used.

The five-year cashflow forecasts are based on the budget for the following year (year one) and the strategic business plans for years two to five.
The five-year revenue growth rate is calculated as cumulative average growth rate over five years and is derived from the five-year plan which is
prepared by management, and is reviewed and approved by the Board. The five-year plan reflects a combination of past experience, management’s
assessment of the current contract portfolio, contract wins, contract retention, sales pipeline (including historic contract win rates), price increases,
as well as future expected market trends (including the impact of climate change, where relevant), adjusted to meet the requirements of IAS 36
Impairment of Assets.

The forecast five-year revenue growth rate for JFD was assessed to be 3.2%, significantly lower than in 2021 and below the expected growth rate
for the sectors of the defence market in which we operate. The reduction in JFD’s growth rate reflects the challenges the business experienced in
2022 with several large contracts being delayed or cancelled and rectifications required for a long-term service contract.

Scantech CGU’s five-year growth expectation has been revised upwards to 7% reflecting the strong oil and gas and renewables markets in
which this CGU operates. The Scantech CGU had strong performance in 2021 and 2022, delivering 18% and 23% revenue growth and 34% and
52% operating profit growth in each of 2021 and 2022 respectively. The CGU has consistently demonstrated its ability to deliver against budgets
and forecasts.

Fendercare’s five-year growth rate of 2.7% reflects the current and expected increase in the STS markets, in particular in LNG STS transfers where
demand has increased in 2022. The growth projections are, however, lower than 2021 estimates mostly driven by the pressure from the under-
utilisation of fixed cost anchorages in Asia.

The growth rate for multiple CGUs without significant balance has increased due to exclusion of discontinued, sold and impaired CGUs which
contributed low levels of growth to the 2021 rate, pulling the average down. The CGUs remaining in 2022 balances include CGUs operating in
high growth industries such as renewables which are expected to have significant growth in the next five years. In particular, there is one CGU
which operates in the maintenance and safety operations for offshore windfarms for which the five-year growth expectation is estimated to be 29%
reflecting the high growth potential in the renewables market as a result of the UK energy targets for net zero and windfarms actively being built in
both UK and surrounding waters (market growth rate source: 4C Offshore).

Cash flows beyond year five are projected into perpetuity using a long-term terminal growth rate in line with management’s long-term expectations
for the prevailing rates of inflation which are sourced from Tradingeconomics website.

The cash flows are discounted at a post-tax discount rate which is based on the Group’s weighted average cost of capital (WACC) (pre-tax rate
8.0% (2021: 3.1%), post-tax rate 7.2% (2021: 2.5%)), adjusted for CGUs’ specific country and business risks. The inputs used in the WACC
calculation include risk free rate, equity risk premium and risk adjustment are based on information from third party sources. The increase in WACC
from 2021 to 2022 is driven by both a higher cost of equity resulting from an increase in the risk free rate and the recent increase in the cost of
borrowing seen in 2022. Country specific risk premiums, which are sourced from the publication by Prof. A. Damodaran, have also increased across
most territories in which we operate.

The growth and discount rates are stated on nominal basis.

Financial statementsJames Fisher and Sons plc – Annual Report 2022150

Notes to the financial statements cont.

12. GOODWILL CONT.
Sensitivity to impairment
The value-in-use calculations were assessed for sensitivity to reasonably possible changes to assumptions. Sensitivities carried out across all CGUs
were (1) increasing the discount rate by 2.0%; (2) increasing the discount rate by 2% and reducing operating profit by 10%; (3) reducing the terminal
growth to zero; and (4) reducing operating profit by 25%.

All of the CGUs with significant goodwill balances showed positive headroom in all of the scenarios. The sensitivities identified that the headroom is most
sensitive to changes in the operating profit, which would need to be decreased by 33% for Fendercare, 35% for JFD and 47% for Scantech to give rise to
a goodwill impairment in these CGUs. This is not considered a reasonably possible change given current market conditions and business performance.

An additional sensitivity was run on JFD to reflect the removal of a large unsecured contract in 2024 and 2025. Positive headroom remained under
this scenario.

For one CGU without significant goodwill, the sensitivities identified that the headroom is most sensitive to changes in the operating profit, which
would need to reduce by 21% to give rise to a goodwill impairment in respect of this CGU. For the CGU in question, such reduction is not
considered to be reasonably possible due to its history of delivering its budgets and strong contract pipeline. All other CGUs without significant
goodwill show no impairment under any of the scenarios.

13. OTHER INTANGIBLE ASSETS

Group
Cost
At 1 January 2021
Additions
Acquisitions
Disposals
Exchange differences
At 31 December 2021
Additions
Transfer
Disposals
Exchange differences
At 31 December 2022

Amortisation
At 1 January 2021
Charge for the period
Impairment
Disposals
Exchange differences
At 31 December 2021
Charge for the period
Impairment
Transfer
Disposals
Exchange differences
At 31 December 2022

Net book value at 31 December 2022
Net book value at 31 December 2021
Net book value at 31 December 2020

Development
costs
£m

Intellectual
property
£m

Customer
relationships
£m

29.2
1.5
–
(1.6)
0.1
29.2
1.2
(2.0)
(4.8)
0.1
23.7

18.8
3.9
1.7
(1.6)
(0.1)
22.7
2.3
0.2
(1.1)
(4.5)
0.2
19.8

3.9
6.5
10.4

9.8
–
0.7
–
(0.1)
10.4
–
–
(0.1)
0.2
10.5

5.2
1.1
–
–
–
6.3
1.2
–
–
(0.1)
0.1
7.5

3.0
4.1
4.6

18.7
–
–
(1.0)
(0.2)
17.5
0.1
(0.3)
–
0.5
17.8

13.6
2.4
–
(1.0)
(0.2)
14.8
1.7
–
(0.3)
–
0.3
16.5

1.3
2.7
5.1

Total
£m

57.7
1.5
0.7
(2.6)
(0.2)
57.1
1.3
(2.3)
(4.9)
0.8
52.0

37.6
7.4
1.7
(2.6)
(0.3)
43.8
5.2
0.2
(1.4)
(4.6)
0.6
43.8

8.2
13.3
20.1

Customer relationships relate to items acquired through business combinations which are amortised over their estimated useful economic life resulting
in an amortisation charge of £2.1m (2021: £2.9m) charged to administrative expenses. 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. The related amortisation is
charged to cost of sales. Based on an assessment of the recoverable amount using value in use, an impairment charge of £0.2m (2021: £1.7m) has
been recognised within cost of sales in respect of development costs in the Marine Support division where the projects have been discontinued.

Included within £2.3m transfers at cost in 2022 is £1.4m of assets within the Nuclear business which have been reclassified to Assets held for sale
(Note 20).

There was no research and development charged to operating profit (2021: £nil).

Financial statementsAnnual Report 2022 – James Fisher and Sons plc14. PROPERTY, PLANT AND EQUIPMENT

Group
Cost:
At 1 January 2021
Additions
Reclassifications
Disposals
Exchange differences
At 31 December 2021
Additions
Reclassifications
Disposals
Exchange differences
At 31 December 2022

Depreciation:
At 1 January 2021
Provided during the year
Provision for impairment
Reclassifications
Disposals
Exchange differences
At 31 December 2021
Provided during the year
Provision for impairment
Reclassifications
Disposals
Exchange differences
At 31 December 2022

Net book value at 31 December 2022
Net book value at 31 December 2021
Net book value at 31 December 2020

Assets
under
construction
£m

Vessels
£m

Property
£m

Plant and
equipment
£m

137.9
5.4
(28.8)
(31.9)
(0.9)
81.7
4.1
0.3
(20.7)
0.6
66.0

82.6
5.1
3.5
(18.1)
(20.1)
(0.6)
52.4
5.8
(0.3)
–
(19.3)
0.3
38.9

27.1
29.3
55.3

4.1
3.0
(2.3)
(1.1)
(0.1)
3.6
9.7
(3.6)
(0.2)
–
9.5

–
–
–
–
–
–
–
–
–
–
–
–
–

9.5
3.6
4.1

35.7
0.3
1.2
(1.7)
(0.1)
35.4
0.5
(5.7)
(4.2)
1.0
27.0

13.6
1.7
1.6
–
(1.3)
(0.1)
15.5
1.5
0.9
(1.1)
(4.2)
0.6
13.2

13.8
19.9
22.1

215.2
10.7
1.1
(11.5)
(2.4)
213.1
13.1
(2.9)
(12.8)
4.5
215.0

138.5
16.8
–
–
(9.8)
(1.8)
143.7
16.0
0.1
(5.0)
(11.9)
2.8
145.7

69.3
69.4
76.7

151

Total
£m

392.9
19.4
(28.8)
(46.2)
(3.5)
333.8
27.4
(11.9)
(37.9)
6.1
317.5

234.7
23.6
5.1
(18.1)
(31.2)
(2.5)
211.6
23.3
0.7
(6.1)
(35.4)
3.7
197.8

119.7
122.2
158.2

Included in property, plant and equipment is aggregate interest capitalised of £0.7m (2021: £0.8m).

Reclassifications of £5.8m at Net Book Value (NBV) in 2022 includes assets reclassified to Assets held for sale – £4.2m (Nuclear Business) and £1.5m
(JFD Singapore) see (Note 20). In 2021, there is £10.7m NBV being vessel transfers to Assets held for sale (Note 20).

Disposals during the year included £1.4m NBV relating to two vessels in the Tankships division as part of the wider fleet renewal strategy.

Restructuring programmes within the Specialist Technical division were completed during 2022 resulting in an impairment charge of £1.0m charged
to cost of sales. Following improved market conditions and improving utilisation, there is a credit of £0.3m to cost of sales in the Tankships division
on part reversal of a vessel impairment (2021: £3.5m charge related to Vessels).

Climate change impact was considered for the Vessel UEL’s and no adjustments was required.

Financial statementsJames Fisher and Sons plc – Annual Report 2022152

Notes to the financial statements cont.

14. PROPERTY, PLANT AND EQUIPMENT CONT.

The Group recognises operating leases rental income as revenue (see Note 3). Property, plant and equipment includes the following assets which
provide rental income. The Group has classified these leases as operating leases because they do not transfer substantially all of the risks and
rewards incidental to the ownership of the assets.

Group
Cost:
At 1 January 2021
Additions
Disposals
Exchange differences
At 31 December 2021
Additions
Disposals
Exchange differences
At 31 December 2022

Depreciation:
At 1 January 2021
Provided during the year
Disposals
Exchange differences
At 31 December 2021
Provided during the year
Disposals
Exchange differences
At 31 December 2022

Net book value at 31 December 2022
Net book value at 31 December 2021
Net book value at 31 December 2020

Company
Cost:
At 1 January 2021
Additions
At 31 December 2021
Additions
Disposals
At 31 December 2022

Depreciation:
At 1 January 2021
Provided during the year
Provision
At 31 December 2021
Provided during the year
Disposals
At 31 December 2022

Net book value at 31 December 2022
Net book value at 31 December 2021
Net book value at 31 December 2020

Vessels
£m

Plant and
equipment
£m

–
0.9
–
–
0.9
–
–
–
0.9

–
0.2
–
–
0.2
0.2
–
–
0.4

0.5
0.7
–

38.4
1.4
(0.8)
(0.7)
38.3
1.8
(1.4)
0.4
39.1

22.5
2.5
(0.7)
(0.4)
23.9
2.5
(0.8)
0.2
25.8

13.3
14.4
15.9

Vessels
£m

Property
£m

Plant and
equipment
£m

10.5
0.1
10.6
–
(10.6)
–

7.8
0.5
2.0
10.3
0.2
(10.5)
–

–
0.3
2.7

2.3
–
2.3
–
–
2.3

1.6
0.1
–
1.7
0.1
–
1.8

0.5
0.6
0.7

3.5
0.2
3.7
0.3
–
4.0

3.0
0.2
–
3.2
0.2
–
3.4

0.6
0.5
0.5

Total
£m

38.4
2.3
(0.8)
(0.7)
39.2
1.8
(1.4)
0.4
40.0

22.5
2.7
(0.7)
(0.4)
24.1
2.7
(0.8)
0.2
26.2

13.8
15.1
15.9

Total
£m

16.3
0.3
16.6
0.3
(10.6)
6.3

12.4
0.8
2.0
15.2
0.5
(10.5)
5.2

1.1
1.4
3.9

In the prior year as a result of challenging market conditions and lower than expected utilisation an impairment review was conducted which resulted
in an impairment charge of £2.0m.

Disposals in the year related to a vessel, the Thames Fisher, which was sold yielding a £1.0m profit on sale, which is shown within cost of sales.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc153

Total
£m

53.2
28.2
(2.6)
(0.4)
78.4
(3.1)
25.3
(3.7)
1.8
98.7

21.3
13.2
4.2
(2.0)
(0.1)
36.6
12.6
0.4
(1.3)
(3.1)
1.2
46.4

52.3
41.8
31.9

Vessels
£m

Property
£m

Plant and
equipment
£m

26.6
25.4
–
(0.1)
51.9
–
21.6
–
1.2
74.7

13.1
8.4
4.2
–
–
25.7
7.6
–
–
–
0.8
34.1

40.6
26.2
13.5

24.6
2.6
(2.1)
(0.3)
24.8
(3.0)
3.0
(3.6)
0.6
21.8

7.6
4.4
–
(1.5)
(0.1)
10.4
4.6
0.4
(1.2)
(3.0)
0.4
11.6

10.2
14.4
17.0

2.0
0.2
(0.5)
–
1.7
(0.1)
0.7
(0.1)
–
2.2

0.6
0.4
–
(0.5)
–
0.5
0.4
–
(0.1)
(0.1)
–
–

1.5
1.2
1.4

15. RIGHT-OF-USE ASSETS

Group
Cost:
At 1 January 2021
Additions
Disposals
Exchange differences
At 31 December 2021
Reclassifications
Additions
Disposals
Exchange differences
At 31 December 2022

Depreciation:
At 1 January 2021 as reported
Provided during the year
Provision for impairment
Disposals
Exchange differences
At 31 December 2021
Provided during the year
Provision for impairment
Reclassifications
Disposals
Exchange differences
At 31 December 2022

Net book value at 31 December 2022
Net book value at 31 December 2021
Net book value at 31 December 2020

Additions during the year included a new vessel and renewal of leases within the Marine Support division.

During 2021, as a result of challenging market conditions and lower than expected utilisation an impairment review was conducted which resulted in
an impairment charge to cost of sales of £4.2m for the vessels in the Marine Support division.

The Company had right-of-use assets in respect of leasehold property with a cost of £2.2m (2021: £2.2m), accumulated depreciation of £1.2m
(2021: £0.9m). Depreciation charged in the year amounted to £0.3m (2021: £0.2m).

Reclassifications relate to the business classified as assets held for sale (see Note 20).

The income statement includes the following charges related to short-term and low value leases:

Short-term leases
Low value leases

2022
£m
0.2
–
0.2

2021
£m
0.2
–
0.2

At 31 December 2022 and 2021, there were no material cashflows which have not been included in the lease liability because it is not reasonably
certain that the leases will be extended.

Financial statementsJames Fisher and Sons plc – Annual Report 2022154

Notes to the financial statements cont.

16. INVESTMENT IN ASSOCIATES AND JOINT ARRANGEMENTS
Details of the Group’s joint ventures and associated undertakings are set out on page 195.

Investment in joint ventures
Loans to associate

2022
£m
6.2
2.5
8.7

2021
£m
6.0
2.0
8.0

Loans to associate relate to First Response Marine and further information is set out in Note 32.

The Group’s share of the assets, liabilities and trading results of joint ventures and associates, which are accounted for under the equity accounting
method, are as follows:

Current assets
Non-current assets
Current liabilities
Non-current liabilities

Revenue
Cost of sales
Administrative expenses
Profit from operations
Net finance expense
Profit before tax
Tax
Profit after tax

Profit after tax:
Continuing
Discontinued

Segmental analysis of profit after tax:
Marine Support
Specialist Technical

Movement on investment in joint ventures:
At 1 January
Provision against investments
Profit for the year
Dividends received
Share of fair value gains on cash flow hedges
Exchange adjustments
At 31 December

2022
£m
15.5
16.8
(4.6)
(21.5)
6.2

13.0
(10.1)
(1.3)
1.6
0.2
1.8
(0.1)
1.7

1.6
0.1
1.7

1.1
0.6
1.7

6.0
(0.5)
1.7
(1.7)
0.4
0.3
6.2

2021
£m
9.8
17.5
(1.7)
(19.6)
6.0

11.4
(8.4)
(1.0)
2.0
0.3
2.3
(0.3)
2.0

1.9
0.1
2.0

1.4
0.6
2.0

5.5
–
2.0
(1.6)
0.3
(0.2)
6.0

There are no capital commitments or contingent liabilities in respect of the Group’s interests in joint ventures.

The provision in the year relates to an investment in the Specialist Technical division where the recoverable amount is below carrying value. The
£0.5m charge has been recorded within administrative expenses.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc155

17. FINANCIAL ASSETS
Group
Other investments

Other investments with a net book value of £1.4m (2021: £1.4m) in the Group and Company balance sheets are in unquoted entities, held at fair
value and subject to annual impairment review. They comprise a 17.2% (2021: 17.2%) equity interest in ordinary shares in SEML De Co-operation
Transmanche, an unlisted company incorporated in France, whose main activity is a port and ferry operator. In addition, the Group has a 50%
interest in JFD Domeyer GmbH, a company incorporated in Germany which provides in-service support and aftermarket services to the local
customer base.

Company
Cost:
At 1 January 2021
Additions
Net movement on loans to subsidiaries
At 31 December 2021
Additions
Net movement on loans to subsidiaries
Utilisation of provision
At 31 December 2022

Amount provided:
At 1 January and 31 December 2021
Provided in the year
Utilisation of provision
At 31 December 2022

Net book value at 31 December 2022
Net book value at 31 December 2021

Equity investments (shares)

Subsidiary undertakings

Shares
£m

137.1
3.2
–
140.3
0.2
–
–
140.5

0.4
25.7
–
26.1

114.4
139.9

Loans
£m

409.5
–
(22.6)
386.9
–
(3.2)
(40.5)
343.2

40.5
1.1
(40.5)
1.1

342.1
346.4

Total
£m

546.6
3.2
(22.6)
527.2
0.2
(3.2)
(40.5)
483.7

40.9
26.8
(40.5)
27.2

456.5
486.3

Investments in subsidiaries comprise equity investments (shares) stated at cost. A provision is made if there are indicators that the carrying value
may not be recoverable. For initial impairment assessment, the value of the investment is compared with the net assets of the entities invested in.
If the net assets are lower than the investment value, the Company estimates recoverable amount using value in use calculations for the entity and its
subsidiaries using cashflow projections taken from the budget for year one and most recent five-year strategic plans for years two to five which are
approved by the Board. Cash flows beyond year five are projected into perpetuity using a long-term terminal growth rate in line with management’s
long-term expectations for the prevailing rates of inflation. The cash flows are discounted at a post-tax discount rate which is based on the Group’s
WACC. The impairment assessment for equity investments is performed under IAS 36.

Within the table above, the £25.7m provision charge comprises a £20.0m write down in the Nuclear business following designation as held for sale
and remeasurement to fair value less costs to sell (see Note 5). The remaining £5.7m relates to the sale of the Strainstall business’ UK operations
(see Note 26). For the remaining overseas Strainstall businesses a value in use calculation has been performed with no further impairments
considered necessary.

The key assumptions used in the value in use calculations are the same for the Goodwill CGUs, as detailed in Note 12. Where there is no goodwill
associated with the underlying business, 5 year discounted cashflows have been calculated based on budgeted data for year one inflated for years 2
to 5 at a 10 year average historic inflation rate of 2.6%, a terminal value has also been calculated based on the year 5 year cashflows inflated by the
10 year average historic inflation.

As disclosed in Note 34, the Directors consider this to be a key area of estimation uncertainty. The value-in-use calculations were assessed for
sensitivity to reasonably possible changes to assumptions. Sensitivities carried out across all CGU’s were (1) increasing the discount rate by 2.0%;
(2) increasing the discount rate by 2% and reducing operating profit by 10%; (3) reducing the terminal growth to zero; and (4) reducing operating
profit by 25%.

All of the investment balances showed positive headroom in all of the scenarios.

The sensitivities identified that the headroom is most sensitive to changes in the operating profit, which would need to be decreased by an amount
that is not considered a reasonably possible change given current market conditions and business performance.

Financial statementsJames Fisher and Sons plc – Annual Report 2022156

Notes to the financial statements cont.

17. FINANCIAL ASSETS CONT.
Group cont.
Loans to subsidiary undertakings

Loans are advanced to subsidiaries as permitted in the Parent Company banking agreements. Each subsidiary loan has a formalised agreement with
clearly defined terms and are interest bearing as determined by rates decided by Group Treasury which are reviewed quarterly.

Loans receivable from subsidiaries are recorded initially at amortised cost and reduced by an allowance for expected credit losses (“ECL”) in
accordance with IFRS 9. The assessment of credit risk and the estimation of ECL is probability-weighted and incorporates all reasonable and
supportable information, including forward looking information, relevant to the assessment, including information about past events, current
conditions and forecasts of economic conditions at the reporting date.

Management’s definition of default is where the net assets or forecast cash flows at the effective interest rate (EIR) have nil headroom or less and
therefore do not support the loan value.

For each immediate subsidiary subgroup loan an assessment has been made to determine what stage the loan is at. If the credit risk of the loan has
not significantly increased and if the loan is not already in default then a 12 month ECL has been calculated and hence estimated the probability of
an event occurring in the next 12 months that would give rise to default (stage 1). If the credit risk has significantly increased or the loan has already
defaulted, an impairment at life-time ECL has been calculated.

A significant increase in credit risk (SICR) is considered to be where headroom <10% of loan or deterioration in operating profit over last 12 months
without a recovery plan.

Base case discounted cashflows have been prepared for each immediate subsidiary subgroup with which the Company has a loan. The cashflows
are discounted at the effective rate of interest (EIR) for the loans, include loans payable/receivable, including associated interest, to entities outside of
the immediate subsidiary subgroup.

In preparing the cashflows it is assumed that where the immediate subsidiary subgroup or entity has loans receivable, if these are party to group
support, these would be recoverable and therefore have been included in in the cashflows.

A number of probability weighted downsides have been prepared including reduction of underlying operating profits by 25%, increasing the EIR
by 0.5% and reducing the terminal growth rate to 0 with appropriate probabilities assigned. Whilst some of these scenarios resulted in default, none
of these scenarios resulted in a material ECL. Provision is made when the discounted cash flows results in a cash shortfall and there is no support
expected to be received by the counterparty.

As a result of the work performed and based on the facts and circumstances described above an expected credit loss provision of £1.1m has
been recognised.

A list of subsidiary undertakings is included on pages 192 to 195.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc18. INVENTORIES

Work in progress
Raw materials and consumables
Finished goods

157

Group

2022
£m
10.1
11.2
28.5
49.8

2021
£m
6.5
12.5
30.0
49.0

Inventories are stated net of impairment provisions of £5.5m (2021: £6.9m). The cost of inventories recognised as an expense within cost of sales
was £81.9m (2021: £72.7m).

There were no write down of inventories recorded as an expense in the year (2021: £1.0m). There was no reversal of any write downs in inventories
in the year (2021: £nil).

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
Current trade and other receivables

* See Note 1.

Contract assets
Other non-trade receivables
Non-current other receivables

Group

Company

2022
£m
68.7
–
1.5
18.2
45.7
14.1
148.2

2021
restated*
£m
64.3
–
1.8
21.1
55.5
10.6
153.3

2022
£m
–
3.6
–
17.2
–
1.4
22.2

Group

Company

2022
£m
0.6
0.1
0.7

2021
£m
–
4.1
4.1

2022
£m
–
–
–

2021
£m
–
0.9
–
5.4
–
0.6
6.9

2021
£m
–
–
–

Contract assets (current) reduced from £55.5m to £45.7m due to £7.8m transferred to held for sale (see Note 5) and also due to projects completed
during the year within the Specialist Technical and Marine Support divisions.

Prepayments includes £4.2m (2021: £6.1m) relating to new build vessel deposits in the Tankships division.

Non-current other non-trade receivables includes £2.9m in 2021 related to new build vessel deposits which is classified within current prepayments
in 2022.

20. ASSETS AND LIABILITIES HELD FOR SALE
In June 2021, management agreed a plan to sell the Dive Support Vessel (DSV) known as the Swordfish within the Marine Support division.
During January 2023, the vessel was sold for £18.4m being proceeds less selling costs. At 31 December, a £5.4m reversal of impairment loss
has been recorded in cost of sales.

£16.3m assets and £16.3m liabilities relates to the Nuclear business in the Specialist Technical division which was classified as a discontinued
operation, see Note 5 for details.

£1.5m assets relates to land and buildings for a business within the Specialist Technical division.

Financial statementsJames Fisher and Sons plc – Annual Report 2022158

Notes to the financial statements cont.

21. TRADE AND OTHER PAYABLES
Current liabilities

Trade payables
Amounts owed to group undertakings
Amounts owed to joint venture undertakings
Taxation and social security
Other payables
Accruals
Deferred consideration
Contract liabilities

* See Note 1.

Non-current liabilities

Other payables

Group

Company

2022
£m
42.6
–
0.2
4.9
14.8
51.4
–
8.5
122.4

2022
£m
0.5

2021
restated*
£m
45.0
–
–
6.7
10.4
66.8
1.6
9.0
139.5

2021
£m
1.3

2022
£m
5.2
12.4
–
0.9
3.0
5.7
–
–
27.2

2022
£m
–

Revenue recognised in the year of £0.5m was included in the contract liabilities at 31 December 2021 (2021: £3.5m at 31 December 2020).

The reduction in the accruals to £51.4m was a consequence of a business classified as a discontinued operation and also timing of projects.

22. PROVISIONS

At 1 January 2021
Provided during the year
Released to income statement
At 31 December 2021
Provided during the year
At 31 December 2022

Cost of material
litigation
£m
–
2.0
–
2.0
–
2.0

Warranty
£m
1.6
–
(0.5)
1.1
1.3
2.4

Other
£m
–
–
–
–
2.3
2.3

2021
£m
4.4
11.6
–
0.3
3.2
–
–
–
19.5

2021
£m
–

Group
Total
£m
1.6
2.0
(0.5)
3.1
3.6
6.7

Provisions in respect of warranties are based on management’s assessment of the previous history of claims, expenses incurred and an estimate
of future obligations on goods and services supplied where a warranty has been provided to the customer. ‘Costs of material litigation’ are those
arising from the process of exiting a number of historic joint venture companies. The Company has applied the exemption in paragraph 92 of IAS 37
from disclosing further details relative to this matter. Further details have not been disclosed as this could be seriously prejudicial to the outcome.
The timing of settlement is uncertain due to the legal process being outside of the Group’s control and we do not expect the outcome to exceed the
amount provided. Provisions due within one year were £5.3m (2021: £2.0m) and provisions due greater than one year were £1.4m (2021: £1.1m).

Within the Specialist Technical division, some international customers require defence contractors to comply with their industrial co-operation
regulations, often referred to as offset requirements. The intention of offset requirements is to enhance the social and economic environment of
the foreign country by requiring the contractor to promote investment in the country. The offset requirements can be satisfied through purchasing
supplies and services from in-country vendors, providing financial support for in-country projects, establishment of joint ventures with local
companies (direct investment) and establishing facilities for in-country operations. It can also involve technology and technical know-how transfer.
In the event contractors fail to perform in accordance with offset requirements then penalties may arise unless a negotiated position can be reached
with the respective authorities. Offset obligations are calculated based on regulations, normally a fixed percentage of the revenue contract value.
Similarly, penalties are calculated on standard methodology, normally a fixed percentage of the unfulfilled offset obligation. Offset contractual
compliance is monitored separately from the revenue contract counterparty.

The Group has entered into foreign offset agreements as part of securing some international business. As at 31 December 2022, a provision
of £2.3m has been recognised in regard to offset agreement penalties. The liability is expected to be settled over the next 24 months.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc159

23. RETIREMENT BENEFIT OBLIGATIONS
The Group and Company defined benefit pension scheme obligations relate to the James Fisher and Sons plc Pension Fund for Shore Staff
(Shore staff), the Merchant Navy Officers Pension Fund (MNOPF) and the Merchant Navy Ratings Pension Fund (MNRPF) which are regulated
under UK pension legislation. The financial statements incorporate the latest full actuarial valuations of the schemes which have been updated
to 31 December 2022 by qualified actuaries using assumptions set out in the table below. These defined benefit schemes expose the Company
to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk. In addition, by participating in certain multi-
employer industry schemes, the Company can be exposed to a pro-rata share of the credit risk of other participating employers. There are no plans
to withdraw from the MNOPF or MNRPF schemes in the foreseeable future. The Group’s obligations in respect of its pension schemes at
31 December 2022 were as follows:

Shore staff
MNOPF
MNRPF

Group

Company

2022
£m
5.5
(0.4)
–
5.1

2021
£m
(1.0)
(0.9)
–
(1.9)

2022
£m
5.5
(0.2)
–
5.3

2021
£m
(1.0)
(0.4)
–
(1.4)

Shore staff
The assets of this scheme are held in a separate trustee administered account and do not include any of the Group’s assets. The scheme was
closed to new members in October 2001 and closed to future accrual on 31 December 2010. The most recent actuarial valuation was as at 31 July
2019. It is valued every three years following which deficit contributions and the repayment period are subject to agreement between the Company
and the Trustees. Funding arrangements are set out in the most recent triennial actuarial valuation report. Estimated contributions to the scheme in
2023 are £0.5m. The weighted average duration of the Shore staff scheme is 11 years.

The Shore staff plan assets and obligations have been updated to 31 December resulting in a surplus being recognised. A surplus, when calculated
on an accounting basis, is recognised when the Group can realise the economic benefit at some point during the life of the plan or when the plan
liabilities are all settled and there are no remaining beneficiaries. Based on a review of the plan’s governing documentation, the Company has a right
to a refund of surplus assuming the gradual settlement of the plan liabilities over time until all members have left. The Directors therefore take the
view that it is appropriate to recognise the surplus. The recognition of the surplus is considered to be a judgement in line with IFRIC 14 (see Note 34).

MNOPF
The MNOPF is an industry-wide pension scheme which is accounted for as a defined benefit scheme. It is valued every three years and deficits have
typically been funded over a ten year period. The most recent triennial actuarial valuation of the scheme was as at 31 March 2021 and no additional
deficit funding was requested by the Trustees. Funding arrangements are set out in the most recent triennial actuarial valuation report. The respective
share of the Group and Company in the net retirement benefit obligation of the MNOPF are 3.0% (2021: 3.0%) and 1.5% (2021: 1.5%) respectively.
Disclosures relating to this scheme are based on these allocations which are reviewed and changes notified to the Company. Information supplied
by the trustees of the MNOPF has been reviewed by the Company’s actuaries. The principal assumption in the review is the discount rate on the
scheme’s liabilities which was 4.80% (2021: 1.85%). The disclosures below relate to the Group’s share of the assets and liabilities within the MNOPF.
Estimated contributions to this scheme in 2023 are £0.4m which is represented by the deficit in the table above. The Company does not have an
unconditional right to a refund of a scheme surplus. The weighted average duration of the MNOPF scheme is 10 years.

MNRPF
The MNRPF is an industry-wide pension scheme which is accounted for as a defined benefit scheme. The most recent actuarial valuation of the
MNRPF was at 31 March 2020. A valuation will be performed during 2023 and a schedule of contributions agreed. Information supplied by the
trustees of the MNRPF has been reviewed by the Company’s actuaries. The share of the Group and the Company in the net retirement benefit
obligation of the MNRPF are 2.19% and 0.79% respectively. These allocations are reviewed and changes notified to the Company. The principal
assumption in the MNRPF valuation is the discount rate on the schemes liabilities which was 4.80% (2021: 1.85%). Estimated contributions to this
scheme are £nil in 2023. The Company does not have an unconditional right to a refund of a scheme surplus. The weighted average duration of the
MNRPF scheme is 12 years.

In 2018, the Trustees became aware of historic legal uncertainties relating to changes to ill-health early retirement benefits payable from the MNRPF.

In order to resolve the issue the Trustee sought directions from the Court, and in February 2022, the High Court approved a settlement in principle.
During the year, a £1.5m past service cost has been recognised within administrative expenses relating to the Group’s share of additional liabilities
which have been estimated to date.

New issues were identified in 2021 in relation to the Fund’s administrative and benefit practices as part of the benefit review carried out by the Fund’s
lawyers. The Trustee is undertaking further investigations and the potential quantum of these issues at the moment is uncertain.

Financial statementsJames Fisher and Sons plc – Annual Report 2022160

Notes to the financial statements cont.

23. RETIREMENT BENEFIT OBLIGATIONS CONT.
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 reflect
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

2022
3.15
3.05
4.80
4.80

21.9
23.5
23.3
25.1

2021
3.40
3.25
1.85
1.85

21.8
23.4
23.3
25.1

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
Rate of inflation
Rate of mortality

MNRPF
Discount rate
Rate of inflation
Rate of mortality

Change in
assumption

Change in
deficit

Increase of 0.5%
Increase by 0.5%
Increase in life
expectancy of 1 year

Decrease by 4.8%
Increase by 3.9%
Increase by 3.5%

Decrease by 4.5%
Increase by 2.2%
Increase by 3.1%

Decrease by 5.4%
Increase by 2.0%
Increase by 2.1%

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 significant impact on the value of liabilities.

(a) The assets and liabilities of the schemes at 31 December are:

At 31 December 2022
Fair value of scheme assets*
Present value of scheme liabilities
Effect of asset ceiling
Net pension surplus/(liabilities)

At 31 December 2021
Fair value of scheme assets*
Present value of scheme liabilities
Effect of asset ceiling
Net pension liabilities

Group

Company

Shore
staff
£m
52.3
(46.8)
–
5.5

Shore
staff
£m
65.8
(66.8)
–
(1.0)

MNOPF
£m
65.9
(61.1)
(5.2)
(0.4)

MNRPF
£m
20.2
(18.3)
(1.9)
–

Group

MNOPF
£m
97.2
(87.5)
(10.6)
(0.9)

MNRPF
£m
29.0
(26.1)
(2.9)
–

Total
£m
138.4
(126.2)
(7.1)
5.1

Total
£m
192.0
(180.4)
(13.5)
(1.9)

Shore
staff
£m
52.3
(46.8)
–
5.5

Shore
staff
£m
65.8
(66.8)
–
(1.0)

MNOPF
£m
33.0
(30.6)
(2.6)
(0.2)

MNRPF
£m
7.2
(6.6)
(0.6)
–

Company

MNOPF
£m
48.6
(43.8)
(5.2)
(0.4)

MNRPF
£m
10.4
(9.4)
(1.0)
–

Total
£m
92.5
(84.0)
(3.2)
5.3

Total
£m
124.8
(120.0)
(6.2)
(1.4)

Financial statementsAnnual Report 2022 – James Fisher and Sons plc23. RETIREMENT BENEFIT OBLIGATIONS CONT.
(a) The assets and liabilities of the schemes at 31 December are cont.
* The Shore staff scheme includes the following asset categories:

Investment funds: Diversified alternatives (unquoted)
Investment funds: Liability driven investments (2022: quoted, 2021: unquoted)
Investment funds: Absolute return bonds (unquoted)
Investment funds: Asset backed securities (2022: quoted, 2021: unquoted)
Investment funds: other (unquoted)
Cash or liquid assets

161

2022
£m
18.7
12.6
12.8
0.3
4.9
3.0
52.3

2021
£m
24.3
11.0
12.9
14.6
2.0
1.0
65.8

The value of the Shore staff assets is determined by fund managers using principles of fair valuation as determined appropriate given the nature
of the investment. During the year, the funds held in asset backed securities were re-allocated to liability driven investments and the total asset
reduction is due to the decrease in market values of the assets.

For the MNRPF and MNOPF schemes, the value of the assets are projected by our corporate actuary using the generic accounting report as on
31 March 2022 and is projected in line with market movement. The MNOPF and MNRPF schemes do not provide employer/participant specific
asset details and do not provide details of assets as at year ends, therefore, the bifurcation of assets for these schemes at 31 December 2022 has
not been presented.

The MNRPF and MNOPF contributions paid by the Group are not refundable in any circumstances and the balance sheet liability reflects an
adjustment for any agreed deficit recovery contributions in excess of deficit determined using the Group’s assumptions. Other investments in the
Shore staff scheme comprise diversified growth funds, liability driven investments, absolute return and private market funds.

(b) Expense recognised in the income statement

At 31 December 2022
Past service cost
Expenses
Interest cost on benefit obligation
Return on scheme assets
Interest cost on the asset ceiling

At 31 December 2021
Expenses
Interest cost on benefit obligation
Return on scheme assets

Group

Company

Shore
staff
£m
–
0.1
1.2
(1.2)
–
0.1

0.1
0.9
(0.8)
0.2

MNOPF
£m
–
0.2
1.6
(1.8)
0.2
0.2

MNRPF
£m
1.5
0.3
0.4
(0.5)
0.1
1.8

–
1.3
(1.3)
–

–
0.4
(0.4)
–

Total
£m
1.5
0.6
3.2
(3.5)
0.3
2.1

0.1
2.6
(2.5)
0.2

Shore
staff
£m
–
0.1
1.2
(1.2)
–
0.1

0.1
0.9
(0.8)
0.2

MNOPF
£m
–
0.1
0.8
(0.9)
0.1
0.1

MNRPF
£m
0.6
0.1
0.2
(0.2)
–
0.7

–
0.6
(0.6)
–

–
0.1
(0.1)
–

Total
£m
0.6
0.3
2.2
(2.3)
0.1
0.9

0.1
1.6
(1.5)
0.2

The actual return on the Shore staff plan assets is a loss of £11.9m (2021: gain of £4.2m).

Financial statementsJames Fisher and Sons plc – Annual Report 2022162

Notes to the financial statements cont.

23. RETIREMENT BENEFIT OBLIGATIONS CONT.
(c) Movements in the net defined benefit liability

Group

Company

At 1 January 2022
Expense recognised in the
income statement
Contributions paid to scheme
Remeasurement gains and losses
At 31 December 2022

At 1 January 2021
Expense recognised in the
income statement
Contributions paid to scheme
Remeasurement gains and losses
At 31 December 2021

Shore
staff
£m
1.0

0.1
(1.6)
(5.0)
(5.5)

8.8

0.2
(1.6)
(6.4)
1.0

MNOPF
£m
0.9

MNRPF
£m
–

Total
£m
1.9

0.2
(0.5)
(0.2)
0.4

1.3

–
(0.5)
0.1
0.9

1.9
–
(1.9)
–

0.2

–
(0.2)
–
–

2.2
(2.1)
(7.1)
(5.1)

10.3

0.2
(2.3)
(6.3)
1.9

Shore
staff
£m
1.0

0.1
(1.6)
(5.0)
(5.5)

8.8

0.2
(1.6)
(6.4)
1.0

0.1
(0.2)
(0.1)
0.2

0.6

–
(0.2)
–
0.4

0.7
–
(0.7)
–

0.1

–
(0.1)
–
–

MNOPF
£m
0.4

MNRPF
£m
–

Total
£m
1.4

(d) Changes in the present value of the defined benefit obligation are analysed as follows:

Group

Company

At 1 January 2022
Asset ceiling adjustment*

Past service cost
Interest cost
Remeasurement loss/(gain):
Actuarial loss arising from
scheme experience
Actuarial (gain)/loss arising from
changes in demographic assumptions
Actuarial gain arising from changes
in financial assumptions
Net benefits paid out
At 31 December 2022

At 1 January 2021
Expenses
Interest cost
Remeasurement (gain)/loss:
Actuarial gain arising from
scheme experience
Actuarial gain arising from changes
in demographic assumptions
Actuarial gain arising from changes
in financial assumptions
Net benefits paid out
At 31 December 2021

Shore
staff
£m
66.8
–
66.8
–
1.2

1.3

0.1

(19.5)
(3.1)
46.8

71.7
0.1
0.9

–

(0.1)

(2.6)
(3.2)
66.8

MNOPF
£m
98.1
(10.6)
87.5
–
1.6

MNRPF
£m
29.0
(2.9)
26.1
1.5
0.4

2.7

(1.4)

(24.6)
(4.7)
61.1

100.5
–
1.3

1.1

(0.1)

(9.0)
(1.7)
18.3

31.1
–
0.4

(3.2)

(2.3)

–

–
(0.5)
98.1

–

–
(0.2)
29.0

Total
£m
193.9
(13.5)
180.4
1.5
3.2

5.1

(1.4)

(53.1)
(9.5)
126.2

203.3
0.1
2.6

(5.5)

(0.1)

(2.6)
(3.9)
193.9

Shore
staff
£m
66.8
–
66.8
–
1.2

1.3

0.1

(19.5)
(3.1)
46.8

71.7
0.1
0.9

–

(0.1)

(2.6)
(3.2)
66.8

MNOPF
£m
49.0
(5.2)
43.8
–
0.8

MNRPF
£m
10.4
(1.0)
9.4
0.6
0.2

1.3

(0.7)

(12.3)
(2.3)
30.6

50.3
–
0.6

(1.7)

–

–
(0.2)
49.0

0.4

(0.1)

(3.3)
(0.6)
6.6

10.7
–
0.1

(0.4)

–

–
–
10.4

* Adjusted to separate the asset ceiling – see (e) below.

0.9
(1.8)
(5.8)
(5.3)

9.5

0.2
(1.9)
(6.4)
1.4

Total
£m
126.2
(6.2)
120.0
0.6
2.2

3.0

(0.7)

(35.1)
(6.0)
84.0

132.7
0.1
1.6

(2.1)

(0.1)

(2.6)
(3.4)
126.2

Financial statementsAnnual Report 2022 – James Fisher and Sons plc163

23. RETIREMENT BENEFIT OBLIGATIONS CONT.
(e) Changes in the effect of the asset ceiling are analysed as follows:

As at 1 January 2022
Interest
Change in adjustment in excess
of interest
As at 31 December 2022

Group

Company

Shore
staff
£m
–
–

MNOPF
£m
(10.6)
(0.2)

MNRPF
£m
(2.9)
(0.1)

–
–

5.6
(5.2)

1.1
(1.9)

Total
£m
(13.5)
(0.3)

6.7
(7.1)

Shore
staff
£m
–
–

MNOPF
£m
(5.2)
(0.1)

MNRPF
£m
(1.0)
–

–
–

2.7
(2.6)

0.4
(0.6)

Total
£m
(6.2)
(0.1)

3.1
(3.2)

(f) Changes in the fair value of the plan assets are analysed as follows:

Group

Company

Shore
staff
£m
65.8
(0.1)

MNOPF
£m
97.2
(0.2)

MNRPF
£m
29.0
(0.3)

Total
£m
192.0
(0.6)

Shore
staff
£m
65.8
(0.1)

MNOPF
£m
48.6
(0.1)

MNRPF
£m
10.4
(0.1)

Total
£m
124.8
(0.3)

1.2

1.8

0.5

3.5

1.2

0.9

0.1

2.2

At 1 January 2022
Expenses
Return on scheme assets recorded
in interest
Remeasurement loss/(gain):
Return on plan assets excluding
interest income
Contributions by employer
Net benefits paid out
At 31 December 2022

At 1 January 2021
Return on scheme assets recorded
in interest
Remeasurement loss/(gain):
Return on plan assets excluding
interest income
Contributions by employer
Net benefits paid out
At 31 December 2021

(13.1)
1.6
(3.1)
52.3

62.9

0.8

3.7
1.6
(3.2)
65.8

(28.7)
0.5
(4.7)
65.9

99.2

1.3

(3.3)
0.5
(0.5)
97.2

(7.3)
–
(1.7)
20.2

(49.1)
2.1
(9.5)
138.4

30.9

193.0

0.4

2.5

(2.3)
0.2
(0.2)
29.0

(1.9)
2.3
(3.9)
192.0

(13.1)
1.6
(3.1)
52.3

62.9

0.8

3.7
1.6
(3.2)
65.8

(14.3)
0.2
(2.3)
33.0

49.7

0.6

(1.7)
0.2
(0.2)
48.6

(g) History of experience gains and losses

Shore staff
Fair value of scheme assets
Defined benefit obligation
Surplus/(deficit) in scheme
Remeasurement gain/(loss):
Return on plan assets excluding interest income
Remeasurement (loss)/gain on scheme liabilities

MNOPF
Group
Fair value of scheme assets
Defined benefit obligation
Asset ceiling
Deficit in scheme

2022
£m
52.3
(46.8)
5.5

(13.1)
(18.1)

2022
£m
65.9
(61.1)
(5.2)
(0.4)

2021
£m
65.8
(66.8)
(1.0)

3.7
(2.7)

2021
£m
97.2
(98.1)
–
(0.9)

2020
£m
62.9
(71.7)
(8.8)

5.7
14.7

2020
£m
99.2
(100.5)
–
(1.3)

(2.7)
–
(0.5)
7.2

(30.1)
1.8
(5.9)
92.5

10.6

123.2

0.1

1.5

(0.4)
0.1
–
10.4

2019
£m
58.9
(59.3)
(0.4)

6.5
2.2

2019
£m
103.8
(107.2)
–
(3.4)

1.6
1.9
(3.4)
124.8

2018
£m
53.3
(57.9)
(4.6)

(1.7)
(0.3)

2018
£m
103.7
(108.8)
–
(5.1)

Financial statementsJames Fisher and Sons plc – Annual Report 2022164

Notes to the financial statements cont.

23. RETIREMENT BENEFIT OBLIGATIONS CONT.
(g) History of experience gains and losses cont.

MNOPF
Company
Fair value of scheme assets
Defined benefit obligation
Asset ceiling
Deficit in scheme

MNRPF
Group
Fair value of scheme assets
Defined benefit obligation
Asset ceiling
Deficit in scheme

MNRPF
Company
Fair value of scheme assets
Defined benefit obligation
Asset ceiling
Deficit in scheme

2022
£m
33.0
(30.6)
(2.6)
(0.2)

2022
£m
20.2
(18.3)
(1.9)
–

2022
£m
7.2
(6.6)
(0.6)
–

2021
£m
48.6
(49.0)
–
(0.4)

2021
£m
29.0
(29.0)
–
–

2021
£m
10.4
(10.4)
–
–

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
(10.4)
–
(0.8)

2018
£m
52.5
(56.1)
–
(3.6)

2018
£m
24.9
(31.3)
–
(6.4)

2018
£m
8.6
(10.9)
–
(2.3)

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 £45.1m (2021: £52.2m).

(h) Defined contribution schemes
The Group operates a number of defined contribution schemes. The pension charge for the year for these arrangements is equal to the contributions
paid and was £5.0m (2021: £4.7m).

During the year the Company contributed £0.5m (2021: £0.5m) into defined contribution schemes.

24. SHARE-BASED PAYMENTS
The Group operates a Long-Term Incentive Plan (LTIP) in respect of Executive Directors and certain senior employees and details are set out in the
Director’s remuneration report on pages 94 to 110. It also operates a Sharesave scheme (Sharesave) for eligible employees which is HM Revenue
and Customs approved.

The Group recognised an expense in respect of equity-settled share-based payments of £0.5m (2021: £0.3m), Company £0.5m (2021: £0.3m)
during the year.

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

2022
Number
284,653
640,834
(247,836)
–
677,651
12,154

Sharesave scheme

WAEP
£10.67
£3.24
£8.57
£0.00
£4.41
£14.09

2021
Number
449,898
70,868
(138,703)
(97,410)
284,653
44,428

LTIP awards
2022
Number
386,413
1,242,218
(244,807)
–
1,383,824
–

2021
Number
309,021
193,115
(115,723)
–
386,413
–

WAEP
£9.86
£11.06
£11.91
£5.44
£10.67
£8.19

Financial statementsAnnual Report 2022 – James Fisher and Sons plc165

24. SHARE-BASED PAYMENTS CONT.
Sharesave scheme
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 satisfied. 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 640,834 options under this scheme on 11 April 2022.

No options were exercised in 2022 or 2021. For the sharesave options outstanding at 31 December 2022, the weighted average remaining
contractual life is 2 years and 10 months (2021: 2 year and 6 months). The weighted average fair value of options granted during the year was £1.25
(2021: £2.95). The range of exercise prices for options outstanding at the end of the year was £3.24 – £20.98 (2021: £10.22 – £20.98). The fair
value of share-based payments has been estimated using the Black-Scholes model for the Sharesave.

LTIP awards scheme
LTIP awards are granted in the form of a conditional share award to certain employees. Vesting requirements for this scheme are set out within the
Directors’ remuneration report on page 104. The 2022 LTIP awards have been granted over 926,337 ordinary shares of 25p each.

A ‘reset share award’ was made in May 2022 to certain employees as part of the Company’s reset, reinforce and realise strategy. A restricted share
award (structured as a conditional award of shares) has been granted over 180,365 (2021: nil) ordinary shares of 25p each.

As described in the Directors remuneration report on pages 104 and 105, a restricted share award (structured as a conditional award of shares) over
135,516 ordinary shares of 25p each was granted to Mr Vernet (CEO) on 13 September 2022.

No options were exercised in 2022 or 2021. For LTIP awards the weighted average remaining contractual life is 2 years and nil months (2021: 1 year
and 9 months). The weighted average fair value of options granted during the year was £3.32 (2021: £9.27). The fair value of share-based payments
has been estimated using the Black-Scholes model for 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.

Company
Outstanding at 1 January
Granted during the year
Forfeited during the year
Exercised
Outstanding at 31 December
Exercisable at 31 December

2022
Number
66,100
55,811
(49,013)
–
72,898
12,154

Sharesave scheme

WAEP
£9.15
£3.24
£7.57
£0.00
£5.55
£14.09

2021
Number
166,276
5,952
(8,718)
(97,410)
66,100
44,428

LTIP awards
2022
Number
246,450
590,599
(192,223)
–
644,826
–

2021
Number
196,441
121,253
(71,244)
–
246,450
–

WAEP
£7.03
£11.06
£11.49
£5.44
£9.15
£8.19

Sharesave scheme
In 2021, the weighted average share price at the date of exercise for the Sharesave options was £11.25, no options were exercised in 2022. For
the share options outstanding at 31 December 2022, the weighted average remaining contractual life is 2 year and 10 months (2021: 2 year and
6 months). The weighted average fair value of options granted during the year was £1.24 (2021: £2.92). The range of exercise prices for options
outstanding at the end of the year was £3.24 – £20.98 (2021: £10.22 – £20.98). The fair value of share-based payments has been estimated using
the Black-Scholes model for the Sharesave.

LTIP scheme
No options were exercised in 2022 or 2021. For LTIP awards the weighted average remaining contractual life is 1 year and 9 months (2021: 1 year
and 8 months). The weighted average fair value of options granted during the year was £3.27 (2021: £8.99). The fair value of share-based payments
has been estimated using the Black-Scholes model for 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 (%)

Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price.

2022
1.6%
3 – 7
£3.72 – £3.80
40.0%
1.60% – 1.76%

2021
1.6%
3 – 7
£10.74 – £11.04
40.0%
0.14% – 0.39%

Financial statementsJames Fisher and Sons plc – Annual Report 2022166

Notes to the financial statements cont.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc25. BUSINESS COMBINATIONSYear ended 31 December 2022On 1 March, James Fisher Subtech Group Limited paid £0.2m to buy back shares in Subtech Offshore Services Nigeria Ltd (SOSN) in Marine Support, from a third party. The Group previously consolidated SOSN as a subsidiary in accordance with IFRS 10, following the transaction the accounting treatment remained unchanged and the impact of the change in ownership interest is recorded within equity (see Consolidated statement of changes in equity).On 22 August, James Fisher Servicos Empresariais Ltda paid £1.3m to acquire an additional 30% shares in Servicos Maritimos Continental S.A (Continental) in Marine Support, thereby increasing its ownership to 90%. The Group previously consolidated Continental as a subsidiary in accordance with IFRS 10, following the transaction the accounting treatment remained unchanged and the impact of the change in ownership interest is recorded within equity (see Consolidated statement of changes in equity).Year ended 31 December 2021On 2 June, the Group purchased Subsea Engenuity Ltd for a consideration of up to £0.7m. £0.4m was paid on completion with a further £0.3m of deferred consideration. Subsea Engenuity’s innovative technology significantly reduces risk in well abandonment operations and is expected to be launched commercially in 2022. The acquired assets includes £0.7m intangible assets.On 7 July, JF Overseas Ltd purchased an additional 51% shares in James Fisher Nigeria Ltd, thereby increasing its ownership to 100%. This transaction did not result in a change of control and is recorded within equity.26. DISPOSAL OF BUSINESSESYear ended 31 December 2022On 19 December 2022, the Group disposed of its 100% shareholding in Strainstall UK Ltd from its Marine Support division to BES Group for £9.4m cash consideration. The assets and liabilities disposed were as follows:£mConsideration received9.4less net assets disposed:Goodwill(3.0)Property, plant and equipment(0.2)Right-of-use assets(0.3)Inventories(2.4)Trade and other receivables(2.9)Cash and cash equivalents(0.6)Trade and other payables1.5Lease liabilities0.4Net assets disposed(7.5)Costs in relation to businesses sold(0.9)Gain on disposal1.0Cash flow from the disposal of businessesCash received9.4Cash and cash equivalents disposed(0.6)Costs in relation to businesses sold(0.9)7.926. DISPOSAL OF BUSINESSES CONT.
Year ended 31 December 2022 cont.
On 19 December 2022, the Group disposed of its 100% shareholding in Prolec Ltd from its Marine Support division to Kinshofer GmbH, part
of Lifco AB for £4.9m cash consideration. The assets and liabilities disposed were as follows:

Consideration received
Less net assets disposed:
Goodwill
Other intangible assets
Inventories
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Net assets disposed
Costs in relation to businesses sold
Gain on disposal

Cash flow from the disposal of businesses
Cash received
Cash and cash equivalents disposed
Costs in relation to businesses sold

167

£m
4.9

(1.0)
(0.1)
(1.1)
(1.2)
(0.5)
0.9
(3.0)
(0.4)
1.5

4.9
(0.5)
(0.4)
4.0

On 19 December 2022, the Group disposed of its 100% shareholding in James Fisher Mimic Ltd from its Marine Support division to BES Group for
£4.2m cash consideration. The assets and liabilities disposed were as follows:

Consideration received
Less net assets disposed:
Goodwill
Other intangible assets
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Net assets disposed
Costs in relation to businesses sold
Gain on disposal

Cash flow from the disposal of businesses
Cash received
Cash and cash equivalents disposed
Costs in relation to businesses sold

The total gains on disposal of £2.5m are included within administrative expenses. The above disposals do not meet the IFRS 5 criteria for
discontinued operations.

£m
4.2

(3.0)
(0.1)
(0.7)
(0.5)
0.6
(3.7)
(0.5)
–

4.2
(0.5)
(0.5)
3.2

Financial statementsJames Fisher and Sons plc – Annual Report 2022168

Notes to the financial statements cont.

26. DISPOSAL OF BUSINESSES CONT.
Year ended 31 December 2021
On 2 November 2021, the Group disposed of its 100% shareholding in James Fisher Testing Services Ltd from its Marine Support division to
Phenna Group for £5.7m cash consideration. The assets and liabilities disposed were as follows:

Consideration received
less net assets disposed:
Goodwill
Property, plant and equipment
Right-of-use assets
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Lease liabilities
Net assets disposed
Costs in relation to businesses sold
Gain on disposal

Cash flow from the disposal of businesses
Cash received
Cash and cash equivalents disposed
Costs in relation to businesses sold

£m
5.7

(3.9)
(0.2)
(0.2)
(1.1)
(0.2)
0.5
0.2
(4.9)
(0.3)
0.5

5.7
(0.2)
(0.3)
5.2

On 31 December 2021, the Group disposed of its 100% shareholding in James Fisher NDT Ltd from its Marine Support division to Irisndt Ltd for
£1.2m cash consideration. The assets and liabilities disposed were as follows:

Consideration received
less net assets disposed:
Property, plant and equipment
Right-of-use assets
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Lease liabilities
Net assets disposed
Costs in relation to businesses sold
Loss on disposal

Cash flow from the disposal of businesses
Cash received
Cash and cash equivalents disposed
Costs in relation to businesses sold

£m
1.2

(1.0)
(0.6)
(1.2)
(0.1)
0.5
0.7
(1.7)
(0.2)
(0.7)

1.2
(0.1)
(0.2)
0.9

On 16 November 2021, Subtech Group Holdings Pty Ltd sold 51% of its 100% shareholding in Subtech South Africa Pty to Thembani Shipping Pty
Ltd (21%) and Tacenda Consulting Pty Ltd (30%). Cash proceeds were £0.2m and costs of disposal were £0.1m.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc27. 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:

At 31 December 2022

Currency
Due within one year
Due between one and two years

At 31 December 2021

Currency
Due within one year
Due between one and two years
Due between two and five years

169

2021
£m
20.3
–
0.2
20.5

2021
£m
173.9
1.4
175.3

GBP
45.3
121.8
167.1

GBP
20.3
39.0
134.9
194.2

Group

Company

2022
£m
30.8
36.6
13.2
80.6

2021
£m
33.5
0.1
9.9
43.5

2022
£m
8.7
36.6
0.2
45.5

Group

Company

2022
£m
121.8
39.7
161.5

2021
£m
173.9
36.1
210.0

2022
£m
121.8
1.3
123.1

Group

Company

GBP
67.4
121.8
189.2

Group

GBP
33.5
39.0
134.9
207.4

BRL
–
–
–

BRL
0.1
–
–
0.1

Total
67.4
121.8
189.2

Company

Total
33.6
39.0
134.9
207.5

The interest rates charged during the year ranged from 2.2% to 5.5% (2021: 1.7% to 2.3%). There were no loans secured against the assets of the
Group or Company in the current or prior period.

Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise:

Cash at bank and in hand
Overdrafts

Group

Company

2022
£m
53.6
(30.8)
22.8

2021
£m
68.0
(33.5)
34.5

2022
£m
0.4
(8.7)
(8.3)

2021
£m
11.7
(20.3)
(8.6)

Financial statementsJames Fisher and Sons plc – Annual Report 2022170

Notes to the financial statements cont.

28. RECONCILIATION OF NET BORROWINGS
Net debt comprises interest bearing loans and borrowings less cash and cash equivalents.

Cash and cash equivalents*
Cash – classified within Assets held for sale
Debt due within one year
Debt due after one year

Lease liabilities
Net borrowings

Cash and cash equivalents*
Debt due within one year
Debt due after one year

Lease liabilities
Net borrowings

31 December
2021
£m
34.5
–
(0.1)
(174.0)
(174.1)
(46.0)
(185.6)

31 December
2020
£m
13.5
(0.2)
(178.9)
(179.1)
(32.5)
(198.1)

Cash
flow
£m
(11.4)
–
–
16.6
16.6
14.5
19.7

Cash
flow
£m
20.9
0.1
5.8
5.9
13.7
40.5

Other
non cash**

£m
–
–
–
(1.0)
(1.0)
(17.8)
(18.8)

Other
non cash**

£m
–
–
(0.9)
(0.9)
(27.0)
(27.9)

Transfers
£m
(2.8)
2.8
(36.5)
36.5
–
–
–

Transfers
£m
–
–
–
–
–
–

Exchange
movement
£m
2.5
–
–
–
–
(3.6)
(1.1)

31 December
2022
£m
22.8
2.8
(36.6)
(121.9)
(158.5)
(52.9)
(185.8)

Exchange
movement
£m
0.1
–
–
–
(0.2)
(0.1)

31 December
2021
£m
34.5
(0.1)
(174.0)
(174.1)
(46.0)
(185.6)

* As defined in Note 27.
** Other non cash includes lease additions and finance expense related to the unwind of discount on right-of-use lease liability.

Transfers includes £2.8m cash and cash equivalents related to a discontinued operation (see Note 5).

29. FINANCIAL INSTRUMENTS
Capital management
The primary objective of the Group’s capital management policy is to maintain a strong credit rating and covenant ratios in order to be able
to support the continued growth of its trading businesses and to increase shareholder value. The Group meets its day-to-day working capital
requirements through operating cash flows, with borrowings in place to fund acquisitions and capital expenditure. At 31 December 2022, the Group
had £88.0m (2021: £111.5m) of undrawn committed facilities.

The Group is required under the terms of its loan agreements to maintain covenant ratios in respect of net debt to EBITDA and net interest costs to
underlying earnings before interest. The Group met its covenant ratios for the year ended 31 December 2022. The Directors have prepared forecasts
of the cash flows for the subsequent 18-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 reduced to a maximum
of £247.5m (2021: £287.5m).

The Group manages its capital structure so as to maintain investor, supplier and market confidence and to provide returns to shareholders that will
support the future development of the business. The Group’s dividend policy is based on the expected growth in sustainable income streams after
making provision for the retention of capital to invest in growth and acquisitions. In evaluating growth investment opportunities the Group applies a
hurdle rate of a 15% pre-tax return on capital invested.

Capital efficiency is monitored by reference to Return on Capital Employed (Underlying ROCE – see Note 2.4).

Financial statementsAnnual Report 2022 – James Fisher and Sons plc171

29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(a) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.
These arise principally from the Group’s receivables from customers and from cash balances held with financial institutions. The carrying amount
of financial assets represents the maximum credit exposure. There are no significant concentrations of credit risk within the Group. The Group’s
exposure to credit risk is influenced 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 41% of Group revenue (2021: 22%). No customer
accounted for more than 10% (2021: 5%) of Group revenue. New customers are subject to creditworthiness checks and credit limits are subject to
approval by senior management. Goods are sold subject to retention of title clauses so that in the event of non-payment the Group may have
a secured claim.

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

2022
£m
127.2
53.6

3.8

3.1
187.7

2021
£m
147.3
68.0

0.1

0.1
215.5

2022
£m
13.9
0.4

3.8

3.1
21.2

2021
£m
6.1
11.7

0.1

0.1
18.0

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 91 to 180 days
Overdue more than 180 days

The movement in the provision for impairment of trade receivables is as follows:

Balance at 1 January
On disposal of subsidiaries
Provided in the year
Written off
Exchange differences

Group

2022
gross
£m
37.3
43.2
80.5

Allowance
£m
–
(11.8)
(11.8)

2021
gross
£m
40.6
42.4
83.0

Allowance
£m
–
(19.0)
(19.0)

Group

Company

2022
£m
37.3
17.7
3.7
2.5
5.8
13.5
80.5

2021
£m
40.6
12.5
5.8
2.2
4.3
17.6
83.0

2022
£m
–
–
–
–
–
–
–

Group

Company

2022
£m
19.0
(0.2)
(0.3)
(8.4)
1.7
11.8

2021
£m
19.5
–
7.3
(7.8)
–
19.0

2022
£m
–
–
–
–
–
–

2021
£m
–
–
–
–
–
–
–

2021
£m
–
–
–
–
–
–

Financial statementsJames Fisher and Sons plc – Annual Report 2022172

Notes to the financial statements cont.

29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(a) Credit risk cont.

The Group considers that the trade receivables that have not been provided against and are past due by more than 30 days are collectable based
on historic payment behaviour and extensive analysis of underlying customers’ credit ratings. Based on historic default rates, used to inform our view
of future expected credit losses, the Group believes that apart from the amounts included in the table above, no impairment allowance is necessary
in respect of trade receivables. For debts overdue by more than 180 days and where the evidence suggests non-recoverability, the Company makes
provision for impairment as the ECL is considered to be 100%.

Loss allowances for trade receivables and contract assets are measured at an amount equal to lifetime expected credit losses (ECL) based on
the simplified approach. When determining whether the credit risk of a financial asset has increased significantly 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 financial asset has increased significantly if it is more than 180 days overdue.

For contract assets, in the event of a contract issue, specific provision is made where appropriate.

(b) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages its cash resources and
borrowings to ensure that it will have sufficient liquidity to meet its liabilities as they fall due but in a manner designed to maximise the benefit of
those resources whilst ensuring the security of investment resources. The Group forecasts the profile of its cash requirements on a monthly basis
and ensures that sufficient facilities are available to meet peak requirements which occur at predictable times in the year. The Group manages the
maturity profile of its borrowings by maintaining a regular dialogue with its lenders and ensuring that it commences the renegotiation of facilities
sufficiently early to allow a comprehensive review of its requirements before completion.

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 significant reduction in
available facilities in any single period.

The following are the contractual maturities of financial liabilities, including interest payments:

At 31 December 2022

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 2021

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:

Carrying
amount
£m

Contractual
cash flows
£m

Within 1
year
£m

189.2
52.9
122.9

(204.7)
(57.4)
(122.9)

(78.7)
(14.2)
(122.9)

1 – 2
years
£m

(126.0)
(12.0)
–

2 – 3
years
£m

–
(9.4)
–

–

(3.0)

(0.6)

(2.6)
362.4

(58.6)
(446.6)

(58.6)
(275.0)

–
(138.6)

–
(10.0)

£m

207.5
46.0
150.8

£m

(221.0)
(53.1)
(150.8)

(38.9)
(12.5)
(150.8)

(44.2)
(10.6)
–

(137.9)
(8.5)
–

0.1

(0.3)

–

0.5
404.9

(33.0)
(458.2)

(33.0)
(235.5)

–
(54.8)

–
(146.4)

3 – 4
years
£m

4 – 5
years
£m

Greater
than
5 years
£m

–
(4.9)
–

(0.6)

–
(5.5)

£m

–
(7.4)
–

–

–
(7.4)

–
(4.1)
–

(0.6)

–
(4.7)

£m

–
(3.9)
–

–

–
(3.9)

–
(12.8)
–

–

–
(12.8)

£m

–
(10.2)
–

–

–
(10.2)

Financial statementsAnnual Report 2022 – James Fisher and Sons plc173

2 – 3
years
£m

3 – 4
years
£m

4 – 5
years
£m

Greater
than
5 years
£m

29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(b) Liquidity risk cont.

At 31 December 2022

Company
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 2021

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:

Carrying
amount
£m

Contractual
cash flows
£m

Within 1
year
£m

167.1
1.5
17.4

(182.6)
(1.5)
(17.4)

(56.6)
(0.3)
(17.4)

1 – 2
years
£m

(126.0)
(0.3)
–

–

(3.0)

(0.6)

(2.6)
183.4

(58.6)
(263.1)

(58.6)
(133.5)

–
(126.9)

–
(0.3)
–

(0.6)

–
(0.9)

£m

194.2
1.6
7.4

£m

(198.4)
(2.6)
(7.4)

(16.3)
(0.3)
(7.4)

(44.2)
(0.3)
–

(137.9)
(0.3)
–

0.1

(0.3)

–

0.5
203.8

(33.0)
(241.7)

(33.0)
(57.3)

–
(44.5)

–
(138.2)

–
(0.1)
–

(0.6)

–
(0.7)

£m

–
(0.3)
–

–

–
(0.3)

–
(0.1)
–

(0.6)

–
(0.7)

£m

–
(0.3)
–

–

–
(0.3)

–
(0.4)
–

–

–
(0.4)

£m

–
(0.9)
–

–

–
(0.9)

The Group is exposed to foreign currency risks on sales, purchases, cash and borrowings denominated in currencies other than Sterling. The
Group’s risk management policy uses forward exchange contracts to hedge its transactional exposures. 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 flow
hedges are stated at fair value. The principal translation exposures relate to the US Dollar, Norwegian Kroner, Singapore Dollar, and Australian Dollar.

The Group’s exposure to foreign currency transactional risk in its principal currencies was as follows based on notional amounts:

Trade receivables
Cash at bank and in hand
Trade payables
Gross balance sheet exposure
Forecast sales
Forecast purchases
Gross exposure
Forward exchange contracts
Net exposure

USD
m
59.6
1.4
(7.3)
53.7
179.9
(65.1)
168.5
(81.8)
86.7

31 December 2022

EUR
m
3.0
(0.8)
(4.4)
(2.2)
7.2
(14.5)
(9.5)
0.2
(9.3)

NOK
m
0.1
–
(11.7)
(11.6)
–
(0.5)
(12.1)
–
(12.1)

SGD
m
0.1
1.9
(0.6)
1.4
–
–
1.4
–
1.4

AUD
m
0.1
–
–
0.1
–
–
0.1
–
0.1

NGN
m
91.7
34.0
(6.7)
119.0
411.7
(380.6)
150.1
–
150.1

Financial statementsJames Fisher and Sons plc – Annual Report 2022174

Notes to the financial statements cont.

29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(c) Foreign exchange risk cont.

Trade receivables
Cash at bank and in hand
Trade payables
Gross balance sheet exposure
Forecast sales
Forecast purchases
Gross exposure
Forward exchange contracts
Net exposure

USD
m
54.0
2.8
(8.2)
48.6
145.4
(55.1)
138.9
(44.7)
94.2

31 December 2021

EUR
m
1.8
1.5
(2.9)
0.4
9.7
(15.0)
(4.9)
0.2
(4.7)

NOK
m
–
0.1
(10.8)
(10.7)
0.7
–
(10.0)
–
(10.0)

SGD
m
–
0.7
(0.2)
0.5
–
–
0.5
–
0.5

AUD
m
0.3
–
(0.3)
–
–
–
–
–
–

NGN
m
107.1
9.4
(12.3)
104.2
333.0
(83.0)
354.2
–
354.2

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 Sterling against the Group’s key currencies. 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 profits and losses and to financial instruments denominated in
foreign currency.

US Dollar
Other

2022

2021

Equity
£m
(1.9)
(0.3)
(2.2)

Income
statement
£m
(5.1)
0.1
(5.0)

Equity
£m
(2.4)
(0.4)
(2.8)

Income
statement
£m
(3.4)
–
(3.4)

Included within operating profit are foreign currency losses of £2.4m (2021: gains of £3.3m).

(d) Interest rate risk

The Group uses interest rate swaps to convert interest rates on certain borrowings from floating rates to fixed hedge exposure to fluctuations in
interest rates. The interest rate profile of the Group’s financial assets and liabilities are set out in the table below:

Fixed rate instruments
Financial liabilities

Variable rate instruments
Financial assets
Financial liabilities

Group

Company

2022
£m

(0.1)

53.6
(189.1)
(135.5)

2021
£m

(0.1)

68.0
(207.5)
(139.5)

2022
£m

(0.1)

0.4
(130.5)
(130.1)

2021
£m

(0.1)

11.7
(194.2)
(182.5)

Where hedging criteria are met the Group classifies interest rate swaps as cash flow 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 2022, a 1% change in the interest rate would
have had the following impact:

Variable rate instruments
Interest rate swap
Cash flow sensitivity

2022
Income
statement
£m
(1.3)
0.5
(0.8)

2021
Income
statement
£m
(1.4)
0.7
(0.7)

Financial statementsAnnual Report 2022 – James Fisher and Sons plc175

29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(e) Fair values

There are no material differences between the book value of financial 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

Company
Liabilities carried at amortised cost
Unsecured bank loans and overdrafts
Trade and other payables
Leases
Preference shares

2022

Carrying
value
£m

(189.1)
(122.9)
(52.9)
(0.1)
(365.0)

(167.1)
(17.4)
(1.5)
(0.1)
(186.1)

Fair
value
£m

(192.6)
(122.9)
(52.9)
(0.1)
(368.5)

(170.5)
(17.4)
(1.5)
(0.1)
(189.5)

Note

27
21
27
30

2021

Carrying
value
£m

(207.5)
(150.8)
(46.0)
(0.1)
(404.4)

(194.2)
(7.4)
(1.6)
(0.1)
(203.3)

Fair
value
£m

(202.8)
(150.8)
(46.0)
(0.1)
(399.7)

(189.6)
(7.4)
(1.6)
(0.1)
(198.7)

Fair value has been determined by reference to the market value at the balance sheet date or by discounting the relevant cash flows using current
interest rates for similar instruments. The fair value of the financial assets has been assessed by the Directors with reference to the current prospects
of the investments and associated risks.

Fair value hierarchy

The Group classifies fair value measurement using a fair value hierarchy that reflects the significance 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

Financial instruments carried at fair value as set out below:

Group
Financial assets measured at fair value
Forward exchange contracts – cash flow hedges
Interest rate swaps – cash flow hedges
Call option

Financial liabilities measured at fair value
Forward exchange contracts – cash flow hedges
Interest rate swaps – cash flow hedges
Financial liabilities not measured at fair value
Unsecured bank loans and overdrafts
Leases

Level 2

2022
£m

3.1
3.8
–
6.9

(2.6)
–

(192.6)
(52.9)
(248.1)
(241.1)

2021
£m

0.1
0.1
–
0.2

(0.5)
(0.1)

(202.8)
(46.0)
(249.4)
(249.2)

Level 3

2022
£m

2021
£m

–
–
–
–

–
–

–
–
0.8
0.8

–
–

–
–
–
0.8

Financial statementsJames Fisher and Sons plc – Annual Report 2022176

Notes to the financial statements cont.

29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(e) Fair values cont.

Fair value hierarchy cont.

Company
Financial assets measured at fair value
Forward exchange contracts – cash flow hedges
Interest rate swaps – cash flow hedges

Level 2

2022
£m

3.1
3.8
6.9

(2.6)
–

(170.5)
(173.1)
(166.2)

2021
£m

0.1
0.1
0.2

(0.5)
(0.1)

(189.6)
(190.2)
(190.0)

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.

Reconciliation of level 3 fair values

The following table shows the movement in level 3 fair values:

Balance at 1 January 2022
Purchase cost
Balance at 31 December 2022

Call option
2022
£m
–
0.8
0.8

During the year the Group entered into a call option agreement to acquire the business and business assets of a Company. Management has
concluded that the Group does not have ‘control’ over the entity whereby it is exposed, or has rights, to variable returns from its involvement with
the entity and has the ability to affect those returns through its power over the entity. The £0.8m option payment which is included within Trade and
other receivables, was in close proximity to the year end and represents the fair value.

Fair value hedges – Group and Company

At 31 December 2022 and 31 December 2021 the Group did not have any outstanding fair value hedges.

Cash flow 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 financial
position; in “effective portion of changes in fair value of cash flow hedges” in the Consolidated statement of other comprehensive income (OCI), and
in “administrative expenses” within the Income statement.

The Group designates the spot element of forward foreign exchange contracts to hedge its currency risk and applies a hedge ratio of approximately
50%. The forward elements of forward exchange contracts are excluded from the designation of the hedging instrument and are separately
accounted for as a cost of hedging which is recognised in equity in the hedging reserve. The Group’s policy is for the critical terms of the forward
exchange contracts to align with the hedged item.

The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount
and timing of their respective cash flows. The Group assesses whether the derivative designated in each hedging relationship is expected to be and
has been effective in offsetting changes in cash flows of the hedged item using the hypothetical derivative method.

In these hedge relationships, the main sources of ineffectiveness are changes in timing of the hedged transactions.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc177

29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(e) Fair values cont.

Forward foreign exchange contracts

At 31 December 2022, 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 Dollar $81.8m

Buy
Euro €0.2m

Maturity

January 2023 – December 2023

Exchange
rate

Fair value
£m

1.23

1.10

0.5

–

At 31 December 2021, the Group and Company held forward currency contracts designated to hedge future commitments in US Dollars and Euro.
The terms of the contracts are as follows:

Sell
US Dollar $44.7m

Buy
Euro €0.2m

Maturity

January 2022 – December 2022

Exchange
rate

Fair value
£m

1.37

1.10

(0.4)

–

The foreign exchange contracts have been negotiated to match the expected profile of receipts. At 31 December 2022, these hedges were
assessed to be highly effective and an unrealised gain of £1.5m (2021: loss of £3.3m) relating to the hedging instruments is included in equity.

In respect of the changes in the value of the hedging instrument of the forward contracts, a loss of £0.6m (2021: £0.3m loss) was recognised in
the income statement and a gain of £0.8m (2021: £2.9m loss) 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 fixed
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:

Sterling interest rate swaps

Amount

2022
£m
50.0

2021
£m
75.0

Maturity
29 October 2027

Fixed rate
%
2.1% – 3.1%

Fair value

2022
£m
3.8

2021
£m
–

In respect of the interest rate swaps, a gain of £0.3m (2021: expense of £0.5m) was recognised in the income statement, and a gain of £3.9m
(2021: £1.0m gain) was recognised in the Consolidated statement of other comprehensive income.

Financial statementsJames Fisher and Sons plc – Annual Report 2022178

Notes to the financial statements cont.

29. FINANCIAL INSTRUMENTS CONT.
Capital management cont.
(f) Market risk

The Group has the following derivative financial instruments in the following line items in the statement of financial 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

30. SHARE CAPITAL
Allotted, called up and fully paid

In millions of shares
In issue at 1 January and at 31 December

Issued share capital

Group

Company

2022
£m
3.1
3.8
6.9

Group

2022
£m
(2.6)
–
(2.6)

2021
£m
0.1
0.1
0.2

2021
£m
(0.5)
(0.1)
(0.6)

2022
£m
3.1
3.8
6.9

Company

2022
£m
(2.6)
–
(2.6)

2021
£m
0.1
0.1
0.2

2021
£m
(0.5)
(0.1)
(0.6)

25p Ordinary shares

£1 Cumulative
Preference shares

2022
50.4

2022
£m
12.6

2021
50.4

2021
£m
12.6

2022
0.1

2022
£m
0.1

2021
0.1

2021
£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
47,855 (2021: 54,571) ordinary shares of 25p

2022
£m
0.6

2021
£m
0.6

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
2022 was £0.6m (2021: £0.6m). The trust has not waived its right to receive dividends.

No shares were issued during the year. In the year ended 31 December 2021, 26,738 ordinary shares with an aggregate nominal value of £6,685
were issued to satisfy awards made under the Company’s Executive Share Option Scheme at option prices of 521.67p and 567p per share giving
rise to total consideration of £530,055.

The Trust purchased no shares during the year. During 2021, the Trust purchased 50,000 of its own shares in the market at an average cost per
share of £9.87 and a total cost of £0.5m.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc179

31. COMMITMENTS AND CONTINGENCIES
Capital commitments
At 31 December, capital commitments for which no provision has been made in these accounts amounted to:

Group

2022
£m
6.0

2021
£m
1.6

Company

2022
£m
–

2021
£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) Subsidiaries of the Group have issued performance and payment guarantees to third parties with a total value of £28.3m (2021: £33.5m).

(d) The Group is liable for further contributions in the future to the MNOPF and MNRPF if additional actuarial deficits 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 deficit.

(e) 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.

As described in Note 22, the Group has entered into foreign offset agreements as part of securing some international business. The remaining
contractual offset obligation at the end of December 2022 is £25m. The penalties which would be incurred if the offset obligation is not delivered,
excluding those already provided, is estimated to be £4.6m. The contingent liabilities disclosed assume no change from the current contractual
obligations. However, contract time extensions have been requested and plans are in place to mitigate the penalty risk as far as possible

There are no other significant provisions and no individually significant contingent liabilities that required specific disclosure.

In the normal course of business, the Company and certain subsidiaries have given parental and subsidiary guarantees in support of loan and
banking arrangements and the following:

> 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 11 vessels. The charters expire between 2023 and 2032.

> The Group has given an unlimited performance guarantee to the Singapore Navy in the event of default by First Response Marine Pte Ltd

(its Singapore joint venture), in providing submarine rescue and related services under its contract.

> As at 31 December 2022, the Group had provided a performance guarantee to a customer of James Fisher Nuclear Limited (JFN) in the
event of default by JFN in performing its contractual duties and obligations for decommissioning works. Following the sale of JFN (see
Note 5), these guarantees will remain with the Group although certain limited counter-indemnities have been put in place. The Group has
also received certain limited undertakings and information rights in respect of the principal parent company guarantee remaining in place
following completion. In the event that JFN defaults on its commitments under the contract, possible remedies available to JFN’s customer
range from a financial settlement with the Group based on demonstrated losses, to contracting with the Group to complete the project. The
Group is preparing a contingency plan should the latter scenario present itself.

There have been no amounts recognised during the year in relation to these guarantees.

Financial statementsJames Fisher and Sons plc – Annual Report 2022180

Notes to the financial statements cont.

32. RELATED PARTY TRANSACTIONS
Transactions with related parties
FCM businesses

The Group has interests of between 40% and 50% in several joint ventures providing ship-to-ship transfer services in Northern Europe and Asia
through its wholly owned subsidiary, Fender Care Marine Solutions 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 (2021: £0.1m). Dividends received or receivable during the
period included in the results of the Group are £0.5m (2021: £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. The
interest is held through Scan Tech Norway AS who have provided a loan to Pleat Mud Coolers AS of £0.6m 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 on cessation.
Interest charged in the period amounted to £0.1m (2021: £0.1m).

Wuhu Divex Diving Systems

The Group has a 49% stake in Wuhu Divex Diving System Ltd, an entity which manufactures advanced diving systems for the Chinese market.
A provision in the year has been made to the investment, full details are set out in Note 16. There is no provisions made against amounts owed
by related parties.

Mil Vehicles & Technologies Private Limited

The Group has a 49% stake in Mil Vehicles & Technologies Private Limited, an entity which provides services to fulfil the annual maintenance contract
with the Indian government for the submarine rescue service.

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 AS

Wuhu Divex Diving Systems

JF Technologies LLC

Company

2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021

Services to
related
parties
£m
–
–
–
–
–
–
–
–
–
0.5
–
–

Sales to
related
parties
£m
0.5
0.6
–
–
0.3
0.6
0.4
0.3
–
3.9
–
–

Purchases
from related
parties
£m
0.5
0.7
–
–
–
–
0.2
0.2
–
–
–
–

Amounts
owed by
parties
£m
0.2
0.1
1.2
1.0
–
2.1
–
0.9
0.1
0.2
–
–

Amounts
owed to
parties
£m
0.1
0.7
–
–
–
–
–
–
–
–
–
–

The Company has entered into transactions with its subsidiary undertakings primarily in respect of the provision of accounting services, finance
and the provision of share options to employees of subsidiaries.

The amount outstanding from subsidiary undertakings to the Company at 31 December 2022 was £345.7m (2021: £343.9m). Amounts owed
to subsidiary undertakings by the Company at 31 December 2022 totalled £12.4m (2021: £11.6m).

The Company has had no expense in respect of bad or doubtful debts of subsidiary undertakings in the year (2021: £nil).

Financial statementsAnnual Report 2022 – James Fisher and Sons plc181

33. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies set out below have, unless otherwise stated, been applied consistently throughout the year and the preceding year.

In accordance with IFRS 5 ‘Non-current Assets Held for Sale and Discontinued Operations’, the comparative income statement has been
represented so that the disclosures in relation to discontinued operations related to all operations that have been discontinued by the balance sheet
date (see Note 5).

33.1 Basis of preparation of the consolidated financial statements
The results of subsidiaries are consolidated for the periods from or to the date on which control has passed. Control exists when the Company
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. This assessment is re-performed whenever there is a subsequent share purchase and a
change in subsidiary ownership. 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 financial 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
financial 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
classified 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.

Associates

An associate is an entity over which the Group has significant influence, and which is not a joint arrangement or subsidiary. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control or joint control of those policies.

Any investment in joint ventures or associates 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 reflects the Group’s share of the post-tax result of the joint venture
or associate. The Group’s share of any changes recognised by the joint venture or associate in other comprehensive income are also recognised in
other comprehensive income.

Non-controlling interests

Non-controlling interests represent the proportion of profit or loss and net assets not held by the Group and are presented separately in the income
statement and in the consolidated statement of financial 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 deficit 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 financial 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.

Discontinued operations and assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be
recovered through a sale transaction rather than through continuing use. The assets or disposal group are measured at the lower of carrying amount
and fair value less cost to sell.

A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished from the rest
of the Group and which:

(a) represents a separate major line of business or geographical area of operations;

(b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held for sale.

When an operation is classified as a discontinued operation, the comparative statement of profit and loss and OCI is re-presented as if the operation
had been discontinued from the start of the comparative year.

Financial statementsJames Fisher and Sons plc – Annual Report 2022182

Notes to the financial statements cont.

33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.1 Basis of preparation of the consolidated financial statements cont.
Applicable accounting standards issued but not yet adopted

IFRS 17 Insurance contracts has been issued but not yet adopted by the Group. IFRS 17 is effective for accounting periods beginning on or after
1 January 2023. IFRS 17 requires insurance liabilities to be measured at a current fulfillment value and provides a more uniform measurement and
presentation approach for all insurance contracts. These requirements are designed to achieve the goal of a consistent, principle-based accounting
for insurance contracts. IFRS 17 supersedes IFRS 4 Insurance Contracts as of 1 January 2023. The Group’s assessment of the impact for the
Group is ongoing.

33.2 Foreign currency
Group

The financial 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 financial statements, the results and financial 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.

(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.

33.3 Financial instruments
IFRS 9 Financial Instruments became effective on 1 January 2018. This standard replaced IAS 39 and introduced requirements for classifying
and measuring financial 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 financial and non-financial risk exposures. 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

• Reclassification of assets held for sale as Other Investments, with these being fair valued at each reporting period.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc183

33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.3 Financial instruments cont.
(a) Financial assets

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are
initially recognised when the Group becomes a party to the contractual provisions of the instrument.

A financial asset, other than a trade receivable without a significant financing component, or financial liability is initially measured at fair value plus
transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially
measured at the transaction price.

A financial asset is measured at amortised cost if it is not designated as fair value through the profit and loss account (FVTPL) and it is held to collect
contractual cash flows with contractual terms that give rise on specified dates to cash flows 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 flows and selling financial assets with contractual terms that give rise on specified dates to cash flows 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 financial assets not classified as measured at amortised cost or FVOCI, as described above, including derivative financial instruments are
measured at fair value through profit and loss.

Financial assets at fair value through profit and loss, including any interest or dividend income, are recognised in the profit 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 profit or loss.

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 profit and loss. Other net gains or losses, and those on de-recognition accumulated through the OCI, are
re-classified in the profit or loss.

Equity investments are measured at fair value with dividends recognised through the profit and loss. Other net gains or losses, are recognised in the
OCI, and are never re-classified in the profit or loss.

(b) Financial liabilities

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified 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 profit or loss.

Contingent consideration is considered to be a financial liability measured at FVTPL.

Other financial 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 profit or loss.

The Group de-recognises a financial asset when the contractual rights to the cash flows from that asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred.

The Group de-recognises a financial liability when its contractual obligations are discharged or cancelled, or expire. On de-recognition of a financial
liability, the difference between the carrying amount extinguished and the consideration paid is recognised in profit or loss.

(d) Derivative financial instruments and hedge accounting

The Group holds derivative financial 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 profit or loss.
The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast
transactions arising from changes in foreign exchange rates and interest rates and certain derivatives and non-derivative financial 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 flows 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.

Financial statementsJames Fisher and Sons plc – Annual Report 2022184

Notes to the financial statements cont.

33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.3 Financial instruments cont.
(d) Derivative financial instruments and hedge accounting cont.

Cash flow hedges

When a derivative is designated as a cash flow 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 profit 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 flow
hedging relationships.

For all hedged forecast transactions, the amount accumulated in the hedging reserve is reclassified to profit or loss in the same period or periods
during which the hedged expected future cash flows affect profit or loss.

Cash and short-term deposits included in the statement of financial 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 flow statement comprise
cash and short-term deposits, net of bank overdrafts.

If the hedged future cash flows 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 reclassified to profit or loss.

Net investment hedges

When a derivative instrument or a non-derivative financial 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 profit or loss. The amount recognised in OCI is reclassified to profit or loss as a reclassification adjustment on disposal of the
foreign operation.

(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 financial loss of the Group if a
customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from
customers and investments in debt securities. The Group recognises a loss allowance of 100% on trade receivables which are more than 180 days
overdue. The carrying amounts of financial assets and contract assets represent the maximum credit exposure.

33.4 Intangible assets
Intangible assets, excluding goodwill arising on a business combination, are stated at cost or fair value less any provision for impairment.

Intangible assets assessed as having finite 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 identifiable assets, liabilities and contingent liabilities acquired. Goodwill is initially recognised at cost and is subsequently measured at
cost less any accumulated impairment losses.

When the Group disposes of an operation within a CGU or restructures the business, any disposal/reallocation is performed using a relative value
approach, unless the Directors consider another method better reflects the goodwill associated with the remaining and reorganised units.

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.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc185

33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.5 Property, plant and equipment
Property, plant and equipment is stated at cost, less accumulated depreciation and any provision for impairment losses. Cost comprises expenditure
incurred during construction, delivery and modification. Where a substantial period of time is required to bring an asset into use, attributable finance
costs are capitalised and included in the cost of the relevant asset.

Dry dock overhaul

Dry dock costs for owned and leased vessels are deferred as a component of the related tangible fixed asset and depreciated over their useful
economic lives until the next estimated overhaul.

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 reflect the
relevant market conditions and expectations, obsolescence and normal wear and tear.

33.6 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 inflows 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 flows relating to the asset are discounted
to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and risks specific 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 benefits acquired with the goodwill. These are designated as cash generating units (CGU). Impairment is then assessed annually 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. For CGUs designated as assets held for sale/discontinued operations, the fair value less costs
to sell is used. 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 identifiable cash flows.

Research expenditure is expensed in the income statement as incurred.

Expenditure on development which represents the application of research to the development of new products or processes is capitalised provided
that specific projects are identifiable, technically feasible, and the Group has sufficient 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.

If an event occurs after the recognition of an impairment that leads to a decrease in the amount of the impairment loss previously recognised the
impairment loss is reversed. The reversal is recognised in the income statement to the extent that the carrying value of the asset does not exceed its
amortised cost at the reversal date.

33.7 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product to its present location
and condition. Raw materials, consumables stores and finished goods for sale are stated at purchase cost on a first-in, first-out basis. Work in
progress and finished 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.

Financial statementsJames Fisher and Sons plc – Annual Report 2022186

Notes to the financial statements cont.

33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.8 Taxation
Corporation tax is provided on taxable profits 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 profit 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 financial
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 profit; 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 profits 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.

Deferred tax arising on actuarial gains and losses relating to defined benefit 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.

Deferred tax assets and liabilities are required to be offset in the statement of financial position if, and only if, the Company has a legally enforceable
right to set off current tax assets and liabilities, and the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on the
same taxable company.

33.9 Leases
The Group leases land and buildings for some of its offices, 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 flexibility, 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 significant event or change in circumstances within its control.

The Group also leases vessels, with lease terms typically of up to five years and IT equipment and machinery, typically for a duration of less than
10 years.

The Group has applied IFRS 16 using the modified 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 identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group uses the definition 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 its
incremental borrowing rates as the discount rate.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc187

33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.9 Leases cont.
Lease payments included in the measurement of the lease liability comprise the following:

• fixed payments, including in-substance fixed 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 profit 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 financial 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 finance 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 finance 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 classification 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.

33.10 Pension plans
(i) Defined contribution schemes

Pre-determined contributions paid to a separate privately administered pension plan are recognised as an expense in the income statement
in the period in which they arise. Other than this contribution the Group has no further legal or constructive obligation to make further contributions
to the scheme.

(ii) Defined benefit schemes

A defined benefit scheme is a pension plan under which the amount of pension benefit that an employee receives on retirement is defined 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 benefits is determined using the projected unit credit method, which attributes entitlement to benefits to the current period
(current service cost) and to current and prior periods (to determine the present value of the defined benefit 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 benefits 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 defined benefit charge is determined by applying the discount rate to the net defined benefit liability at the start of the
period and is recognised in the income statement. A liability is recognised in the statement of financial position which represents the present value of
the defined benefit obligations at the balance sheet date, less the fair value of the scheme assets and is calculated separately for each scheme.

The defined benefit obligations represent the estimated amount of future benefits 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 outflows
arising from these obligations. When the calculation results in a benefit to the Group, the recognised asset is limited to the total of any unrecognised
past service costs and the present value of economic benefits 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.

Financial statementsJames Fisher and Sons plc – Annual Report 2022188

Notes to the financial statements cont.

33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.11 Share-based payments
Executive savings related share option schemes are operated under which options are granted to employees of the Group. An expense is
recognised in the income statement with a corresponding credit to equity in respect of the fair value of employee services rendered in exchange for
options granted, which is determined by the fair value of the option at the date of grant. The amount is expensed over a specified 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 profitability 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 satisfied, provided that all other performance conditions are satisfied.

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 satisfied 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.

33.12 Short-term employee benefits
The Group recognises a liability and an expense for short-term employee benefits, including bonuses, only when contractually or constructively
obliged.

33.13 Share capital and reserves
Ordinary shares are classified 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 finance 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 profit 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 financial 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 flow hedging instruments related to
hedged transactions that have not yet occurred.

33.14 Revenue recognition
Revenue represents income derived from contracts for the provision of goods and services by the Company and its subsidiary undertakings
to customers in exchange for consideration in the ordinary course of the Group’s activities.

The Group performs a broad range of activities and enters into the following types of contracts with customers:

Marine Support businesses provide products, services and solutions to the global marine market. These are supplied to a range of end market
sectors including marine, oil and gas, ports, construction and renewables. Revenues in this division are from goods and services including operation
of vessels and plant and equipment and from construction contracts.

Our Specialist Technical businesses provide products and services over time including: diving equipment, submarine rescue vessels and through-life
rescue services, special operation swimmer delivery vehicles, saturation diving systems and engineering solutions to the international defence, UK
nuclear decommissioning and commercial diving markets. Revenues in this division are from goods and services including operation of plant and
equipment and from construction contracts.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc189

33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.14 Revenue recognition cont.
Our Offshore Oil businesses supply a range of services and equipment to the global oil and gas and renewable energy industries. This includes the
design and engineering of specialist equipment and technology, platform maintenance and modification, well testing support, subsea operations and
maintenance services. Revenues in this division are from goods and services including operation of plant and equipment.

Our Tankships division offers services from operating a fleet of product and chemical tankers which trade along the UK and northern European
coastline carrying clean petroleum products and chemicals to coastal storage facilities. Revenues in this division are from goods and services
including operation of vessels.

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 benefit from them either on their own or together with
other resources that are readily available to the customer and they are separately identifiable 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 modifications,
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 identified 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 specifications, 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 profit recognition

Revenue from the sale of goods and services is recognised at a point in time as performance obligations are satisfied which is typically upon
shipment of the goods, based on the shipping terms, or as services are rendered. Control transfer is assessed on a contract by contract basis. The
transaction price is predetermined in accordance with a specified contract and allocated to the specific performance obligations.

Services revenue including operation of vessels and plant and equipment is recognised as performance obligations are satisfied which is over
time as the customer receives and consumes the benefits provided by the Company’s performance. The transaction price is predetermined in
accordance with a specified contract.

Revenue from construction contracts are predominantly within the Specialist Technical and Marine Support segments which have longer
term construction contracts where revenue is recognised over a period of time according to the stage of completion reached in the contract
by measuring the proportion of costs incurred for work performed to total estimated costs (input method). Costs are only included in the
measurement of progress towards satisfying the performance obligation where there is a direct relationship between the input and the satisfaction
of the performance obligation. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised
immediately as an expense.

Contract assets arise where the Group has the right to receive consideration for the work completed which has not been billed at the reporting date
(accrued income), while contract liabilities represent liabilities for consideration from customers received in advance.

Certain contracts within the Nuclear business, which is classified as an asset held for sale (see Note 5), contain variable consideration related to
‘pain/gain share’ clauses which may result in a reduction or increase of revenue. The calculation for this amount is determined by the target price
contract with the customer. A gain or pain share would only be included in contract revenue to the extent that it is highly probable that a significant
reversal of revenue will not occur. The extent of the constraint is assessed to ensure that the total amount attributable to the variable consideration
is included in the transaction price. A pain share is payable to the customer and is accounted for as a reduction of revenue.

Within the Marine Support division, there are specific maintenance contracts which include variable consideration related to performance-based
achievements over a number of years. Variable consideration can be recognised at an expected value only to the extent that it is highly probably
that a reversal will not occur. Reflecting on the contract terms, the susceptibility of factors outside of the entity’s control that would impact the
consideration and the limited experience history management has on these specific maintenance contracts, management have concluded that the
variable consideration should be constrained. On this basis £nil of the £3.5m variable consideration within these contracts has been recognised
in the period.

Revenue from construction contracts is payable when milestones on agreed deliverables are achieved which is typically 30 days following completion
of a milestone. It is noted there are significant balances outstanding regarding construction income in the period, all of which are expected to
be received within the next 12 months. For other types of revenue, the payment terms are typically 30-90 days. The categories of revenue from
customers are disclosed in the Segmental information (see Note 3).

Bid costs

All pre-contract bidding costs which are incurred irrespective of whether the contract is awarded relating to the design, manufacture or operation of
assets or the provision of services are expensed when incurred.

In some circumstances, the Company incurs costs to obtain a contract with a customer, for example commission fees. These costs are recognised
initially as an asset within debtors: contract assets and amortised on a systematic basis as the goods and services are transferred to the customer.

Financial statementsJames Fisher and Sons plc – Annual Report 2022190

Notes to the financial statements cont.

33. SIGNIFICANT ACCOUNTING POLICIES CONT.
33.14 Revenue recognition cont.
Warranty costs

Provision is made for warranties offered with products where it is probable that an obligation to transfer economic benefits 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 22.

Revenue – operating lease rental income

Revenue is measured at the fair value of consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is
recognised in the income statement on a straight-line basis over the period of the hire.

33.15 Other investments
Other investments which are in unquoted entities are held at fair value and subject to an annual review. The Group elects on an asset by asset basis
whether fair value movements are posted to the income statement or directly to reserves.

33.16 Intra-group financial instruments
Where the Company enters into financial guarantee contracts to guarantee the indebtedness 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.

34. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of
the Group’s accounting policies 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 ongoing basis.

Information about estimates and judgements made in applying accounting policies that have the most significant effects on the amounts recognised
in the consolidated financial statements is included below:

Revenue
Revenue is set out in Notes 3 and 33.14. Revenue is recognised as performance obligations are satisfied 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 specific risks associated with the performance of the contract (for example design, construction and testing) or generally accepted practice
where there are no specific arrangements in the contract. Areas of estimation relate to construction contract accounting and specifically 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.

Assets held for sale and discontinued operations
Judgement was taken that the carrying value of the Nuclear business would be recovered through a sale rather than continuing use in accordance
with IFRS 5 paragraphs 6 to 8 criteria. Consequently the assets and liabilities of the business have been classified as held for sale – see Note 20.

The classification as discontinued activities was a judgement based on management’s view of IFRS 5 paragraph 32 that the disposal group classified
as held for sale represents a separate major line of business due to its size relative to Group revenue and the nature of operations.

Impairment of goodwill
Goodwill, which is set out in Note 12, of £116.3m (2021: £133.5m) is tested annually for any permanent impairment in accordance with the
accounting policy in Note 33.6. The value in use of the Group’s cash generating units (CGU) requires assumptions about future levels of demand,
gross margins and cost inflation. Inherent uncertainty involved in forecasting and discounting future cash flows is a key area of judgement.
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 flow and its carrying value. The assessment also includes sensitivity analysis to identify the range of outcomes and the validity
of underlying assumptions.

Impairment of parent company investments
Parent company investments in Note 17 comprising shares and loans totalling £456.5m, are tested annually for impairment. For shares, the
Company estimates recoverable amount using value in use calculations which requires assumptions about future levels of demand, gross margins
and cost inflation. Inherent uncertainty involved in forecasting and discounting future cash flows is a key area of judgement. For loans receivable, the
Company makes an assessment of credit risk and the estimation of expected credit losses are required to be unbiased, probability-weighted and
should incorporate all available information relevant to the assessment, including information about past events, current conditions and reasonable
and supportable forecasts of economic conditions at the reporting date.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc191

34. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES CONT.
Defined benefit pensions
Pension assumptions are used to determine the amount of defined benefit obligations including future rates of inflation, discount rates and mortality
of members (see Note 23).

Foreign offset agreements
As described in Notes 22 and 31, the Group has entered into foreign offset agreements as part of securing some international business. These
agreements contain penalties which would be incurred if the offset obligation is not delivered. There were estimates and judgements in arriving
at the amounts provided. This included judgement in assessing the accounting treatment of the contracts whereby the offset is treated as a levy
recognised within cost of sales. Estimates were applied in calculating the offset provisions and the contingent liability to meet the offset requirements
in country.

Income taxes
Taxation is set out in Notes 8, 9 and 33.8. The Group is subject to income taxes in several jurisdictions. Significant 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 final 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 profits 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 includes a charge of £1.3m (2021: £7.9m credit), which represents deferred tax recognised on the timing differences created following the
impairment of dive support vessels during the year ended 31 December 2020. The associated deferred tax asset will be utilised gradually over future
accounting periods as the tax value of the vessels is amortised in line with rates set by HM Revenue & Customs.

35. POST BALANCE SHEET EVENTS
In March 2023, Tankships has entered into a contract to sell the Mersey Fisher. The vessel will be delivered to the new owners during June 2023 with
expected consideration of USD 3m.

Financial statementsJames Fisher and Sons plc – Annual Report 2022192

Subsidiaries and associated undertakings

GROUP
PERCENTAGE OF
EQUITY CAPITAL

NAME OF COMPANY

ADDRESS

JF STS (Guernsey) Ltd

St Peter Port4

GROUP
PERCENTAGE OF
EQUITY CAPITAL

100%***

100%

Al Khobar City,
PO Box 2716, Al Olaya,
3447, Saudi Arabia

100%

Barrow-in-Furness1

100%

Maritime Engineers
(Asia Pacific) Pte Ltd

Maritime Engineers
Pty Ltd

Singapore, 50892911

Henderson, Australia10

100%

NAME OF COMPANY

ADDRESS

Marine Support

Deep Sea Operation &
Maintenance Co. Ltd

EDS HV Management
Limited

Electricity Distribution
Services Limited

Fender Care
(Changshu) Limited

Barrow-in-Furness1

100%

Room 1211, Building 4,
Huifeng Times Plaza,
No 22 Huanghe Road,
Changshu City, Jiangsu,
215500, China

100%

Fender Care Limited

Barrow-in-Furness1

Singapore6

Fender Care Marine
(Asia Pacific) Pte Ltd

Fender Care Marine
(Gibraltar) Limited

28 Irish Town, Gibraltar

100%

Fender Care Marine Ltd Barrow-in-Furness1

Fender Care Marine
Ltd, Agencia Chile –
Chile branch

El Trovador 4280, Apt 1205,
Las Condes, Santiago,
253-389, Chile

Fender Care Marine
Products (Asia Pacific)
Pte Limited

Singapore6

Fender Care Marine
Sohar LLC

Al Batinah Region,
PO Box 37, Sohar, 327

100%

70%

Fendercare Australia
Pty Ltd

8D Sparks Road, Henderson
WA 6166, Australia

100%

Fendercare Servicos
Marinhos do Brasil Ltda

Hughes Marine
Engineering Limited

Hughes Sub Surface
Engineering Limited

James Fisher Asset
Information Services
Limited

James Fisher Ghana
Limited

James Fisher Marine
Services Limited

Avenida Feliciano Sodre
325, Centro, Niteroi,
Rio De Janeiro,
CEP: 24030-012, Brazil

100%

Barrow-in-Furness1

100%

Barrow-in-Furness1

100%

Barrow-in-Furness1

100%

HNO No.1, East Legon,
Telley, Tesa Link,
Otsokrikri Street,
East Legon, Accra, Ghana

49%

Barrow-in-Furness1

100%

Martek Marine Limited

Barrow-in-Furness1

Martek-Marine
(Asia Pacific) Pte Ltd

James Fisher
Renouvelables

1 Raffles Place, Tower 2,
Level #19-61 & #20-61,
Singapore 048616

3 rue de France Comte,
CS50311, Hauts de
Quimpcanpoix, 5103,
Cherbourg, France

Namibia Subtech Diving
and Marine (Proprietary)
Limited

Shop 48, Second Floor,
Old Power Station
Complex, Armstrong Street,
Windhoek, Namibia

Rotos 360 Limited

Barrow-in-Furness1

Servicos Maritimos
Continental S.A.

Rio de Janeiro, Brazil9

Strainstall International
for Project Engineering
LLC

Blg 3141, Street Anas Bin
Malik, 8292, Al Malqa Dist.
Riyadh, Saudi Arabia

Strainstall Malaysia Sdn
Bhd

Ground Floor, 8,
Lorong Universiti B,
Section 16, 46350 Petaling
Jaya Selangor Darul Ehsan,
Malaysia

Strainstall Singapore
Pte Ltd

25 North Bridge Road,
Level 7, Singapore, 179104

Subtech (Pty) Ltd

Briardene, South Africa8

Subtech (Pty) Ltd –
Mozambique branch

Rua da Educacao, No. 38,
Matola, Mozambique

Subtech Diving &
Marine Tanzania
Limited

Subtech Marine (Pty)
Limited

Subtech Marine R2S
Offshore LLC

The Slipway Road, Msasani
Peninsula, Dar Es Salaam,
United Republic of Tanzania

PO Box 90757,
Shop 48, Old Power Station
Complex, Armstrong Street,
Windhoek, Namibia

Floor 1, Building 81,
Zone 36, Street 362,
Al Jazira Al Arabiya Street,
Al Messila Area, Doha, Qatar

Subtech Middle East
Saudi Company

Office 102, Al Jazira
Building, Al Khobar,
Saudi Arabia

100%

90%

100%

70%

49%

100%

James Fisher Maritime
Deutschland GmbH

Stadthausbrucke 8, 20355
Hamburg, Germany

100%

Subtech Norte Lda

James Fisher Rumic
Limited

Barrow-in-Furness1

100%*

JCM Scotload Ltd

Barrow-in-Furness1

100%

Rua de Se no 114, Distrito
Urbano 1, Bairro Central,
Maputo City, Mozambique

Financial statementsAnnual Report 2022 – James Fisher and Sons plc193

GROUP
PERCENTAGE OF
EQUITY CAPITAL

NAME OF COMPANY

ADDRESS

100%

Offshore Oil

GROUP
PERCENTAGE OF
EQUITY CAPITAL

NAME OF COMPANY

ADDRESS

Subtech Offshore

Ocra (Mauritius) Limited,
Level 2, Max City Building,
Remy Ollier Street, Port
Louis, Mauritius

100%

Subtech South Africa
(Pty) Ltd

Specialist Technical

Cowan Manufacturing
Pty Limited

Divex Asia Pacific Pty
Ltd

Divex FZE

Briardene, South Africa8

90%

BDO Tax (WA) Pty Ltd,
‘BDO’, 38 Station Street,
Subiaco, WA6008, Australia

100%

Bibra Lake, Australia12

100%

PO Box 261749, Jebel Ali
Free Zone, Dubai, United
Arab Emirates

Divex Limited

Westhill3

High Technology
Sources Limited

Barrow-in-Furness1

James Fisher Defence
Italy SRL

Via Giulio Caccini, 100198,
Rome, Italy

James Fisher Defence
Limited

James Fisher Defence
North America Limited

James Fisher Nuclear
Limited

James Fisher
Singapore Pte Ltd

Barrow-in-Furness1

100%

Suite 808, 1220 North
Market Street, Wilmington
DE 19801, United States

100%

Oldmeldrum2

100%

Singapore 50892911

100%

JF Nuclear Limited

Barrow-in-Furness1

JFD Australia Pty Ltd

c/o BDO, Mia Yellagonga,
Tower 22, Level 9, 5 Spring
Street, Perth, WA, 6000

JFD Limited

Westhill3

JFD Ortega B.V.

Vliegveldstraat 100,
B515, Technology Base,
Enschede, Netherlands

JFD Singapore Pte Ltd Singapore, 50892911

JFD South Africa (Pty)
Limited

c/o Mazars,
Mazars House, Rialto Road,
Grand Moorings Precinct,
Century City, Cape Town,
SA 7441, South Africa

100%

JFD Sweden AB

Rindovagen, Rindo Vastra,
185 41 Vaxholm, Sweden

100%

Buchan Technical
Services Limited

James Fisher Marine
Services Malaysia Ltd

James Fisher Marine
Services Middle East
Limited FZCO

James Fisher MFE
Limited

James Fisher Offshore
Limited

James Fisher Offshore
Malaysia Sdn Bhd

Barrow-in-Furness1

100%

Level 1, Lot 7, Block F,
Sanguking Commercial
Building Jalan Patau-Patau,
87000 Labuan FT, Malaysia

100%

PO Box 371072, Dubai,
United Arab Emirates

100%

Barrow-in-Furness1

100%

Oldmeldrum2

Room A, Ground Floor,
Lot 7, Block F, Saguking
Commercial Building Jalan
Patau-Patau, 87000 Labuan
FT, Malaysia

James Fisher Personnel
S.A. de C.V.

Ciudad de Mexico, D.F.,
Mexico13

James Fisher
Subsea Excavation
Incorporated

21559 Provincial Boulevard,
Katy TX 77450,
United States

James Fisher Subsea
Excavation Mexico S.A.
de C.V.

James Fisher Subsea
Excavation Pte Limited

Ciudad de Mexico, D.F.,
Mexico13

133 Cecil Street,
#16-01, Keck Seng Tower,
Singapore, 069535

JF Singapore Holdings
PTE Ltd

137 Telok Ayer Street,
#05-02, Singapore 068602

RMSPumptools FZE

1-153, THUB, Dubai Silicon
Oasis, Dubai, United Arab
Emirates

RMSPumptools Limited Barrow-in-Furness1

RMSPumptools Saudi
Industrial Company

2397, Unit Number 8,
al Khobar, 34632-6282,
Saudi Arabia

Scan Tech AS

Stavanger5

Scan Tech Personell AS Stavanger5

100%*

100%

Scan Tech Produckt
Personell AS

Scantech Offshore
do Brasil Comercio E
Servicos Ltda

Scantech Offshore
Limited

Scantech Offshore
Pty Ltd

Subsea Engenuity
Limited

Stavanger5

R 01 223, Lote 146 Quadra
02, Balneario das Garcas,
Rio das Ostras, 28.898-268,
Brazil

Barrow-in-Furness1

100%*

Henderson, Australia10

100%

Oldmeldrum2

100%

Financial statementsJames Fisher and Sons plc – Annual Report 2022194

Subsidiaries and associated undertakings cont.

NAME OF COMPANY

ADDRESS

GROUP
PERCENTAGE OF
EQUITY CAPITAL

NAME OF COMPANY

ADDRESS

Holding Companies

Barrow-in-Furness1

100%

EDS HV Group Limited Barrow-in-Furness1

GROUP
PERCENTAGE OF
EQUITY CAPITAL

100%

Everard (Guernsey) Ltd St Peter Port4

Barrow-in-Furness1

100%

Tankships

Cattedown Wharves
Limited

F.T. Everard Shipping
Limited

F.T. Everard & Sons
Limited

James Fisher (Crewing
Services) Limited

James Fisher
(Guernsey) Limited

James Fisher (Shipping
Services) Limited

James Fisher Crewing
(CY) Limited

James Fisher Everard
Limited

Barrow-in-Furness1

100%*

Barrow-in-Furness1

100%*

St Peter Port4

100%***

Barrow-in-Furness1

100%*

115 Griva Digeni, Trident
Centre, Limassol, 3101,
Cyprus

100%

Barrow-in-Furness1

100%

James Fisher Maritime
Limited

Karaiskaki, 13, 3032,
Limassol, Cyprus

Onesimus Dorey
(Shipowners) Ltd

Scottish Navigation
Company Limited

St Peter Port4

Oldmeldrum2

100%

100%*

100%

Fender Care Marine
Solutions Limited

James Fisher
(Aberdeen) Limited

James Fisher and Sons
Nigeria Limited

James Fisher Holdings
UK Limited

James Fisher Hong
Kong Limited

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

Barrow-in-Furness1

100%*

7th Floor, 1 Kingsway Road,
Falomo, Ikoyi, Lagos, Lagos
State, Nigeria

99%*

Barrow-in-Furness1

100%*

Level 17, Silvercord Tower 2,
30 Canton Road, Tsim Sha
Tsui, Kowloon, Hong Kong

100%

Barrow-in-Furness1

100%*

Oldmeldrum2

Rua 01 No 223, Quadra 02,
Lote 146-part, Balneario das
Garcas, Brazil

100%

Barrow-in-Furness1

100%*

Barrow-in-Furness1

100%*

Bibra Lake, Australia12

100%

JF Overseas Limited

Barrow-in-Furness1

100%*

100%

Martek Holdings
Limited

Strainstall Group
Limited

Subtech Group
Holdings (Pty) Ltd

Barrow-in-Furness1

100%*

Briardene, South Africa8

100%

Financial statementsAnnual Report 2022 – James Fisher and Sons plc195

Associated undertakings and significant holdings in undertakings other than subsidiary undertakings

ADDRESS

NAME OF COMPANY
Marine Support
Eurotestconsult Limited County Laois, Ireland7
Eurotestconsult UK
Limited

Ruby House,
40A Hardwick Grange,
Woolston, Warrington,
Cheshire, WA1 4RF
Suite 6.01, 6th Floor,
Plaza See Hoy Chan Jalan
Raja Chulan, 50200,
Kuala Lumpur, Malaysia
Torontostraat 20,
3197 KN, Rotterdam Botlek,
Netherlands
Fujairah Port,
PO Box 5198, Fujairah,
United Arab Emirates
Unit 4, Thembani House,
41 Brand Road, Glenwood,
Durban, 4001, South Africa
G013, GH-1, Industrial City
of Abu Dhabi (ICAD-1),
Mussafeh, PO Box 45628,
Abu Dhabi,
United Arab Emirates
Plot 146/16, Emirates
Industrial City, Sajja Industrial
Area, PO Box 25896,
Sharjah,
United Arab Emirates
E-LOB Office No. E-69G-20,
PO Box 51602, Hamriyah
Free Zone – Sharjah, United
Arab Emirates
11 Aduemi Close, North
Kaneshie, Accra, Ghana
JA 1104 – 1106, DLF Tower
– A, Jasole District Centre,
New Delhi, 11044, India
67 Rua Damiao de Gois,
Alvalade, Borough, District
of Maianga, Ingombota
Municipality, Angola
Barrow-in-Furness1

HNO No.1, East Legon,
Telley, Tesa Link,
Otsokrikri Street, East
Legon, Accra, Ghana
2nd Floor, Architects Place, 2
Idowu Taylor Street, Victoria
Island, Lagos, Nigeria
3 Sovereign Square,
Sovereign Street, Leeds,
LS1 4ER
PO Box 2255, Office No.70,
Barwa Commercial Avenue,
Doha, Qatar

FC Viking Sdn.Bhd

Fender Care Benelux
B.V.

Fender Care Marine
LLC

Fender Care Marine SA
(Pty) Ltd

Fender Care Marine
Services LLC

Fender Care Middle
East LLC

Fender Care Omega
(Middle East) FZC

Fendercare Marine
Ghana Limited
Fendercare Marine
Omega India Private
Limited
James Fisher (Angola)
Limitada

James Fisher Angola
UK Limited
James Fisher Ghana
Limited

James Fisher Nigeria
Limited

Nuclear
Decommissioning
Limited
Strainstall Laboratories
WLL

NAME OF COMPANY
Strainstall Middle East
LLC

Strainstall Testing Lab
LLC
Subtech Offshore
Services Nigeria Limited

Specialist Technical
First Response Marine
Pte Ltd
James Fisher
Technologies LLC

JFD Domeyer GmbH

Wuhu Divex Diving
System Limited

GROUP
PERCENTAGE OF
EQUITY CAPITAL
49%**

49%**

100%

ADDRESS
PO Box 111007Jebel Ali
Industrial Area 1, Dubai,
United Arab Emirates
PO Box 62579, Abu Dhabi,
United Arab Emirates
Plot 15, Block 110, Henry
Ojogho Crescent, Off Road
69, Lekki Phase 1, Lagos,
Nigeria

16 Benoi Road, 629889,
Singapore
5821 Langley Avenue,
Loveland, Colorado, 80538,
USA
Konsul-Smidt-Str. 15,
28217, Bremen, Germany
No.58 Yongchang Road,
Jiujiang District, Wuhu City,
Anhui Province, PR China

50%

49%

50%

49%

1 Fisher House, PO Box 4, Barrow-in-Furness, Cumbria, LA14 1HR.
2 North Meadows, Oldmeldrum, Aberdeenshire, AB51 0GQ.
3 JFD, Westhill Industrial Estate, Enterprise Drive, Westhill, Aberdeen,

AB32 6TQ.

4 4th Floor, West Wing, Trafalgar Court, Admiral Park, St Peter Port, Guernsey,

GY1 2JA.

5 Finnestadsvingen 23, 4029 Stavanger, Norway.
6 9 Tuas West Avenue, Peck Tiong Choon Building, Singapore 638442.
7 Unit D, Zone 5, Clonminam Business Park, Portlaoise, County Laois, Ireland.
8 Unit 3, 11 Travertine Crescent, Briardene, Durban North, KwaZulu-Natal,

4051, South Africa.

9 Rua Tenente Celio, No.150, Bairro Granja Caveleiros, Macae, State of Rio de

Janeiro, 27.930-120, Brazil.

10 8A Sparks Road, Henderson, WA 6166, Australia.
11 19 Loyang Lane, Singapore 508929.
12 54 Bushland Ridge, Bibra Lake WA 6163, Australia.
13 Gabriel Mancera 1041 Del Valle, Benito Juarez, 03100, Ciudad de Mexico,

D.F., Mexico.

* Held by the Parent Company (all other subsidiaries are held by an

intermediate subsidiary).

** Consolidated as subsidiary undertakings.
*** Held by nominee shareholders.

GROUP
PERCENTAGE OF
EQUITY CAPITAL

50%
50%

49%

50%

49%**

50%

49%*

50%

49%

100%

25%

49%**

Financial statementsJames Fisher and Sons plc – Annual Report 2022196

Group financial record
for the five years ended 31 December

Revenue
Marine Support
Specialist Technical
Offshore Oil
Tankships
Continuing operations
Discontinued operations
Total

Underlying operating profit
Marine Support
Specialist Technical
Offshore Oil
Tankships
Common costs
Continuing operations
Discontinued operations
Total

Net finance costs
Underlying profit before taxation
APMs
Loss on remeasurement to fair value less costs to sell
(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
Assets/(liabilities) held for sale
Contingent consideration
Pension obligations
Taxation
Capital employed
Net borrowings
Lease liabilities
Equity

Earnings per share
Basic
Diluted
Dividends declared per share

Operating margin (%)
Return on capital employed (%)
Leverage
Dividend cover (times)

2022
£m

224.5
68.1
106.6
78.9
478.1
42.8
520.9

7.9
0.6
15.2
8.6
(5.9)
26.4
(7.3)
19.1

(10.3)
8.8
(1.7)
(13.3)
(6.2)
(4.6)
(10.8)

124.5
119.7
52.3
10.0
69.2
17.1
–
5.1
6.2
404.1
139.8
46.0
218.3
404.1

pence
(22.1)
(22.1)
–

3.7%
3.9%
2.7
–

2021
£m
Restated*

214.5
81.5
86.3
60.1
442.4
51.7
494.1

5.0
10.0
11.1
4.8
(2.8)
28.1
(0.1)
28.0

(8.3)
19.7
(48.7)
–
(29.0)
0.8
(28.2)

146.8
122.2
41.8
9.4
62.5
10.7
–
(1.9)
4.7
396.2
147.4
38.2
210.6
396.2

pence
(55.2)
(55.2)
–

5.7%
3.6%
2.9
–

2020
£m

249.4
130.4
78.0
60.4
518.2
–
518.2

10.1
14.0
11.2
8.0
(2.8)
40.5
–
40.5

(9.0)
31.5
(84.0)
–
(52.5)
(4.8)
(57.3)

186.6
158.2
31.9
8.9
66.6
–
(1.7)
(10.3)
(4.2)
436.0
175.0
23.1
237.9
436.0

pence
(114.2)
(114.2)
8.0

7.8%
6.7%
2.8
6.0

2019
£m

311.6
149.4
88.2
67.9
617.1
–
617.1

24.5
18.4
14.2
12.0
(2.8)
66.3
–
66.3

(7.8)
58.5
(10.7)
–
47.8
(11.1)
36.7

215.2
210.6
27.9
9.9
107.5
–
(8.2)
(5.8)
(10.7)
546.4
203.0
27.4
316.0
546.4

pence
73.1
72.7
11.3

10.7%
11.3%
2.7
8.2

2018
£m

274.3
156.5
70.0
60.7
561.5
–
561.5

26.8
21.4
6.8
9.9
(2.8)
62.1
–
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

pence
89.5
88.9
31.6

11.0%
12.2%
1.9
2.5

* 2021 results are restated due to a business classified as discontinued operations – see Note 5.

Financial statementsAnnual Report 2022 – James Fisher and Sons plc

197

Brokers
Investec Bank (UK) Limited

30 Gresham Street
London EC2V 7QP

Peel Hunt LLP

100 Liverpool Street
London EC2M 2AT

Financial Calendar
14 June 2023

Annual General Meeting

Investor information

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-fisher.com

Registrar
Link Group

10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL

Auditor
KPMG LLP

1 St Peters Square
Manchester M2 3AE

Bankers
Bank of Ireland

4th Floor
Bow Bells House
1 Bread Street
London EC4M 9BE

Barclays Bank PLC

1st Floor
3 Hardman Street
Spinningfields
Manchester M3 3HF

DBS Bank Ltd

London Branch
One London Wall
London EC2Y 5EA

HSBC UK Bank PLC

2nd Floor
Landmark
St Peters Square
1 Oxford Street
Manchester M1 4BP

Lloyds Bank PLC

Lovell Park
1 Lovell Park Road
Leeds LS1 1NS

Santander UK PLC

298 Deansgate
Manchester M3 4HH

Debt advisors
N.M. Rothschild & Sons Limited

82 King Street
Manchester M2 4WQ

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 financing
to the Group.

As such the forward-looking statements involve risk and uncertainty. Accordingly, whilst it is believed the expectations reflected 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 profit forecast.

Design and Production
www.carrkamasa.co.uk

Financial statementsJames Fisher and Sons plc – Annual Report 2022James 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