Annual Report 2022

HARNESSING

THE BLUE

ECONOMY

Energy

Defence

Marine

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.

See our Strategic report

from page 02

Our Corporate

Governance report

How we are managed and take

decisions, including our report on

Directors’ remuneration.

See our Corporate Governance

report from page 74

Our Financial

statements

Detailed information on our finances,

as well as information for shareholders

and readers of this Annual Report.

See our Financial statements

from page 116

Strategic report Annual Report 2022 – James Fisher and Sons plc

STRATEGIC REPORT

We are James Fisher and Sons plc 02

At a glance 04

Chairman’s review 06

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

– Our sustainability strategy 28

– 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 74

Chairman’s introduction to

corporate governance 76

Governance framework

Board of Directors 80

Corporate governance report 82

Nominations Committee report 86

Audit Committee report 89

Directors’ remuneration report 94

Directors’ report 111

Statement of Directors’ responsibilities 115

FINANCIAL STATEMENTS

Independent auditor’s report 116

Consolidated income statement 126

Consolidated statement of other

comprehensive income 127

Consolidated and Company statement

of financial position 128

Consolidated and Company cash

flow statement 129

Consolidated statement of changes

in equity 130

Company statement of changes

in equity 131

Notes to the financial statements 132

Subsidiaries and associated

undertakings 192

Group financial record 196

Investor information 197

Inside this report

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.

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.

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.

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.

Strategic report 01James Fisher and Sons plc – Annual Report 2022

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.

2.2GW

of monitored and

managed offshore

substation assets

175

years working at sea

of the world’s Navies

are served by us

We are James Fisher and Sons plc

PIONEERING SAFE AND TRUSTED

SOLUTIONS TO COMPLEX PROBLEMS

IN HARSH ENVIRONMENTS TO CREATE

A SUSTAINABLE FUTURE.

Strategic report Annual Report 2022 – James Fisher and Sons plc02

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.

Always guided by our values:

Strategic reportJames Fisher and Sons plc – Annual Report 2022 03

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

We have a long history.

From our origins as a

ship owner and operator

175 years ago, to our

position today as a global

provider of trusted marine

engineering solutions.

Our highly skilled global team

has deep domain expertise

across our markets, enabling us

to design and deliver solutions to

the most demanding operational

and technical challenges faced by

our customers around the world.

WHAT WE DO

We help our customers solve operating

challenges in the energy, marine, and

defence markets. The services we offer

include:

Energy

• Oil and gas: we support the full lifecycle

of production from exploration, development

and monitoring, to well productivity and

decommissioning.

• Renewables: we partner with developers

and operators to provide site preparation,

installation support, commissioning and

maintenance for offshore wind projects.

We also provide marine life and environmental

protection through big bubble barrier

technology that reduces noise emissions.

• Nuclear: our services include new build,

engineering concept design and testing,

through to end-of-life decommissioning.

Defence

• We are a leader in the provision of submarine

rescue and technical solutions, special

operations and diving equipment for the

global defence industry.

Marine

• We operate a fleet of chemical and product

tankers, which mainly trade along the UK

and northern Europe coastline as well as

in the Caribbean islands. We also provide

ships with technical and crew management

services.

• As well as ship-to-ship transfer services of

oil and liquefied natural gas (LNG), we offer

mooring and fendering solutions.

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 markets on page 13

Employees

2,367

Countries

Strategic report Annual Report 2022 – James Fisher and Sons plc04

HIGHLIGHTS

Our achievements in 2022 will contribute

to our future growth and demonstrate our

ability to meet growing demand in our

markets. Highlights include:

Energy

Alongside increased demand for renewable

energy, there is a growing need for responsible

practices and carbon capture projects to

optimise extraction from old or uneconomical

oil fields. Experts in artificial lift, RMSPumptools

opened a new facility in Al Khobar, Kingdom

of Saudi Arabia (KSA), to serve the Middle East

oil and gas market.

Defence

JFD – diving, submarine and hyperbaric rescue

expert – won the prestigious NATO Submarine

Rescue System contract worth £63m. The

‘Third In-Service Support’ (3ISS) contract,

sees JFD continuing to deliver safety critical

operational assurance services to NSRS for the

next five years with the potential to be extended

to nine years.

Marine

Our Tankships division rebounded well in 2022

with robust performance driven by improved

overall utilisation of 92% compared to 86%

in 2021. Favourable market conditions led to

improved earnings. Idle days were reduced by

47% YoY and time charter equivalent earnings

for the coastal fleet improved YoY by 42%. Our

STS operations, run by Fendercare, transported

LNG with a market value of over $850m in 2022.

HOW WE WORK

Across our family of businesses we are

united by our shared purpose and valued

behaviours which guide how we work

together and with all our stakeholders.

We work with courage and integrity by

focusing on our customers’ needs and

empowering our people to find the right

solutions and make the right decisions.

Safety comes first

We work in challenging, high-risk

environments. Protecting our people, those

who work with us and those who will be

impacted by our activities, is our first priority.

Any incident is one too many.

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 2022 Strategic report 05

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.

Chairman’s review

We entered 2023 as a more

streamlined company and with

a new senior management team.

Angus Cockburn

Strategic report06 Annual Report 2022 – James Fisher and Sons plc

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 2022 Strategic report 07

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.

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.

FOCUS

SIMPLIFY

DELIVER

Strategic report08 Annual Report 2022 – James Fisher and Sons plc

James 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 report 09James Fisher and Sons plc – Annual Report 2022

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.

OUR CULTURE

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.

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.

WHY INVEST IN US

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.

OUR PURPOSE

Business model and strategy

Strategic report Annual Report 2022 – James Fisher and Sons plc10

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.

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.

Focus areas

• Top talent

• Diversity and inclusion

• Health, safety and

security

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

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

• Innovation

• Customer engagement

• Governance

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.

Established specialisms

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.

Trusted, innovative partner

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 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.

Performance focus

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.

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.

5 5

James Fisher and Sons plc – Annual Report 2022 Strategic report 11

Key performance indicators

Operating profit – continuing operations (£m)

£24.7m

The Group’s 2022 and 2021 operating profit results exclude operating

losses from discontinued operations (2022: £4.2m; 2021: £nil).

Underlying operating profit* –

continuing operations (£m)

£26.4m

2022 £26.4m

2021 £28.0m

2020 £40.5m

2019 £66.3m

2018 £62.1m

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 (%)

5.5%

2022 5.5%

2021 6.3%

2020 7.8%

2019 10.7%

2018 11.0%

Underlying operating profit including discontinued operations was

3.7% in 2022 and 5.7% in 2021.

Return on operating capital employed* (%)

3.9%

2022 3.9%

2021 3.6%

2020 6.7%

2019 11.3%

2018 12.2%

Cash flow from operating activities (£m)

£44.5m

2022 £44.5m

2021 £55.0m

2020 £88.0m

2019 £58.1m

2018 £87.4m

Leverage* (times)

2.7 times

2022 2.7

2021 2.9

2020 2.8

2019 2.7

2018 1.9

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

* 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.

2022

2021

£(43.5)m 2020

2019 £55.6m

2018 £61.4m

£24.7m

£(20.7)m

Strategic report Annual Report 2022 – James Fisher and Sons plc12

Our markets

Anticipating change to deliver innovation, operational

excellence and specialist engineering in global energy,

defence and marine markets.

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.

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.

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.

James Fisher office locations

James Fisher and Sons plc – Annual Report 2022 Strategic report 13

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

Chief Executive Officer’s review

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.

Jean Vernet

Strategic report14 Annual Report 2022 – James Fisher and Sons plc

• 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 2022 Strategic report 15

Chief Executive’s review cont.

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.

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.

Strategic report Annual Report 2022 – James Fisher and Sons plc16

Offshore 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.

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

MARINE SUPPORT

2022 2021 Change %

Revenue (£m) 224.5 214.5 4.7

Underlying operating profit (£m) 7.9 5.0 58

Operating profit/(loss) (£m) 10.1 (21.0) n/m

SPECIALIST TECHNICAL (CONTINUING OPERATIONS)

2022 2021 Change %

Revenue (£m) 68.1 81.5 (16.4)

Underlying operating profit (£m) 0.6 10.0 (94.0)

Operating (loss)/profit (£m) (2.6) 7.1 n/m

TANKSHIPS

2022 2021 Change %

Revenue (£m) 78.9 60.1 31.3

Underlying operating profit (£m) 8.6 4.8 79.2

Operating profit (£m) 9.9 1.3 n/m

OFFSHORE OIL

2022 2021 Change %

Revenue (£m) 106.6 86.3 23.5

Underlying operating profit (£m) 15.2 11.1 36.9

Operating profit/(loss) (£m) 14.7 (5.2) n/m

James Fisher and Sons plc – Annual Report 2022 Strategic report 17

Our divisions

MARINE

SUPPORT

Strategic report18 Annual Report 2022 – James Fisher and Sons plc

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.

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.

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.

Revenue (£m)

£224.5m

2019 £311.6m

2022 £224.5m

2020 £249.4m

2021 £214.5m

Statutory operating profit/(loss) (£m)

£10.1m

Underlying operating profit* (£m)

£7.9m

2019 £24.5m

2022 £7.9m

2020 £10.1m

2021 £5m

Return on capital employed (%)

6.4%

2019 11.9%

2022 6.4%

2020 5.0%

2021

3.5%

* Before adjusting items.

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.

2022 £10.1m

£(69.5)m 2020

2021£(21.0)m

2019 £14.9m

Strategic report 19James Fisher and Sons plc – Annual Report 2022

Our divisions cont.

SPECIALIST

TECHNICAL

Strategic report20 Annual Report 2022 – James Fisher and Sons plc

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.

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.

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.

Revenue (£m)

£110.9m

2019 £149.4m

2022 £42.8m

2020 £130.4m

2021 £51.7m

Statutory operating profit/(loss) (£m)

£(23.2)m

Underlying operating profit* (£m)

£(6.7)m

2019 £18.4m

£(7.3)m

2020 £14.0m

2021 £10.0m

Return on capital employed (%)

(7.4)%

2019 16.7%

(7.4)%

2020 12.9%

2021

9.8%

* Before adjusting items.

2019 £18.1m

£(20.6)m

2020 £12.4m

2021 £7.1m

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).

2022

2022 £68.1m

Key

Discontinued

Continuing

2021 £81.5m

2022

£0.6m

£(0.1)m

2022 £(2.6)m

Strategic report 21James Fisher and Sons plc – Annual Report 2022

Our divisions cont.

OFFSHORE

OIL

Strategic report22 Annual Report 2022 – James Fisher and Sons plc

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.

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.

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.

Revenue (£m)

£106.6m

2019 £88.2m

2022 £106.6m

2020 £78.0m

2021 £86.3m

Statutory operating profit/(loss) (£m)

£14.7m

Underlying operating profit* (£m)

£15.2m

2019 £14.2m

2022 £15.2m

2020 £11.2m

2021 £11.1m

£11.1m

Return on capital employed (%)

14.9%

2019 10.3%

2022 14.9%

2020 8.9%

2021

10.2%

* Before adjusting items.

2019 £13.7m

2022 £14.7m

2020 £8.4m

2021 £(5.2)m

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 report 23James Fisher and Sons plc – Annual Report 2022

Our divisions cont.

TANKSHIPS

Strategic report24 Annual 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.

Revenue (£m)

£78.9m

2019 £67.9m

2022 £78.9m

2020 £60.4m

2021 £60.1m

Statutory operating profit/(loss) (£m)

£9.9m

Underlying operating profit* (£m)

£8.6m

2019 £12.0m

2022 £8.6m

2020 £8.0m

2021 £4.8m

Return on capital employed (%)

26.8%

2019 35.4%

2022 26.8%

2020 25.5%

2021

14.7%

* Before adjusting items.

2019 £12.0m

2022 £9.9m

2020 £8.0m

2021 £1.3m

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 report 25James Fisher and Sons plc – Annual Report 2022

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

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 34

– Resource efficiency 35

– Greenhouse Gas (GHG) emissions 36

– Transition to net zero and

TCFD disclosures 38

People

– Top talent 42

– Equity, diversity and inclusion 46

– Health, safety and security 50

Partnerships

– Innovation 52

– Customer engagement 53

– Governance 54

For more details see our separate

2022 Annual Sustainability Report.

Strategic report Annual Report 2022 – James Fisher and Sons plc26

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.

• Clear, consistent, and transparent

communication between programmes and

organisational levels.

• Delivery of our sustainability commitments.

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.

• Arrange for periodic reviews of its own

performance and, at least annually, review its

constitution and terms of reference to ensure

it is operating at maximum effectiveness.

Sustainability cont. / Governance

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

James Fisher and Sons plc – Annual Report 2022 Strategic report 27

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.

Sustainability cont. / Our sustainability strategy

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

ResilienceEnergy

PARTNERSHIP

Innovate responsibly

and deliver consistent results

for our customers and

shareholders

PLANET

Protect and restore

the environment

PEOPLE

Improve the lives of our people

and those in the communities in which

we operate

OUR

STAKEHOLDERS

Strategic report Annual Report 2022 – James Fisher and Sons plc28

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 PAGE

REFERENCE

Planet

Portfolio

choices

Evolve our portfolio to serve the energy transition,

with focus on growing renewables, remediation

capabilities, and improving customers’ efficiency.

Page 34

Resource

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 35

GHG emissions

Reduce our GHG emissions footprint by sourcing

energy and fuels from low carbon sources and

investing in emissions abatement initiatives towards

a net zero future.

Page 36

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.

Page 46

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 50

Partnership

Innovation

Develop and champion creative solutions to

complex challenges through the integration and

smart application of our specialist domain expertise,

and in partnership with other players in the industry.

Page 52

Customer

engagement

Build stronger customer relationships to better

understand and resolve pain points and foster

collaboration towards value creation and shared

success.

Page 53

Governance

Commit to openness and accountability by living our

valued behaviours, ensuring appropriate business

policies, standards and controls are in place, and

improving transparency of our supply chain.

Page 54

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.

James Fisher and Sons plc – Annual Report 2022 Strategic report 29

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

• The Group’s commitment to business ethics

• 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 Page 30

Employees Page 30

Customers/suppliers Page 31

Environment Page 31

Local communities 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.

SHAREHOLDERS

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.

• The Chairman meets with the largest

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

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

Sustainability cont. / Engaging for value

EMPLOYEES

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.

• Inken Braunschmidt (designated

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 report Annual Report 2022 – James Fisher and Sons plc30

ENVIRONMENT

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

LOCAL COMMUNITIES

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

CUSTOMERS AND SUPPLIERS

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

James Fisher and Sons plc – Annual Report 2022 Strategic report 31

Sustainability cont. / Alignment with sustainability frameworks

CDP SCORESHEET CURRENT AND PREVIOUS YEAR

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.

Refer to our TCFD report within our online

2022 Annual Sustainability Report.

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.

Business strategy, financial planning

& scenario analysis

Emissions reduction

initiatives

Value chain

engagement

Targets

Scope 3

emissions

(incl. verification)

Scope 1 & 2

emissions

(incl. verification)

Risk management

process

Risk disclosure

Opportunity

disclosure

Governance

Energy

Business strategy & financial planning

Emissions reduction

initiatives

Value chain

engagement

Targets

Scope 3

emissions

Scope 1 & 2

emissions

Risk management

process

Risk disclosure

Opportunity

disclosure

Governance

Energy

2022

2021

Strategic report Annual Report 2022 – James Fisher and Sons plc32

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).

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.

Contributing to the UN Sustainable Development Goals

James Fisher and Sons plc – Annual Report 2022 Strategic report 33

Sustainability cont. / Planet

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.

FOCUS AREAS

• Portfolio choices

• Resource efficiency

• GHG emissions

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 report Annual Report 2022 – James Fisher and Sons plc34

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 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’.

James Fisher and Sons plc – Annual Report 2022 Strategic report 35

EMISSIONS TYPE/SCOPE (tCO

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.

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 tCO

e, to 84,711 tCO

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.

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.

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.

tCO

e % SPLIT 2022

Scope 1 (77,603 tCO

Scope 2 (1,508 tCO

Scope 3 (60,444 tCO

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

GHG emissions category

Mobile combustion

Business travel

Waste generated

in operations

Stationary

combustion

Water

Upstream leased

assets

Commuting

Purchased

energy

Fugitive

emissions

Fuel and energy-

related activities

76,684

29,505

855

18,071

7,906

1508

3,367

1,582 12

Total:

139,554

tCO

56%

43%

Key

Scope 1

Scope 2

Scope 3

Strategic report Annual Report 2022 – James Fisher and Sons plc36

DELIVERY OF FIRST DUAL-FUEL

TANKERS

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.

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 CO

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.

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

in our 2022 Annual Sustainability Report.

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:

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.

James Fisher and Sons plc – Annual Report 2022 Strategic report 37

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.

Sustainability cont. / Planet cont.

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.

a) Describe the board’s oversight

of climate-related risks and

opportunities.

Status: Disclosed

Page 43

b) Describe management’s role

in assessing and managing

climate-related risks and

opportunities.

Status: Disclosed

Pages 43 to 46

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.

a) Describe the climate-related

risks and opportunities the

organization has identified over

the short, medium, and long

term.

Status: Disclosed

Page 46

b) Describe the impact of climate-

related risks and opportunities

on the organization’s

businesses, strategy, and

financial planning.

Status: Disclosed

Pages 47 to 53

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

Pages 51 to 53

RISK MANAGEMENT

Disclose how the organization

identifies, assesses, and

manages climate-related risks.

a) Describe the organization’s

processes for identifying and

assessing climate-related risks.

Status: Disclosed

Page 54

b) Describe the organization’s

processes for managing climate-

related risks.

Status: Disclosed

Pages 43 to 45,

and page 55

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

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) Disclose the metrics used by the

organization to assess climate-

related risks and opportunities

in line with its strategy and risk

management process.

Status: Disclosed

Pages 57 to 58

b) Disclose Scope 1, Scope 2

and, if appropriate, Scope

3 greenhouse gas (GHG)

emissions and the related risks.

Status: Scope 1 and 2

emissions disclosed. Scope 3

emissions in process.

Pages 58 and 59

c) Describe the targets used by the

organization to manage climate-

related risks and opportunities

and performance against targets.

Status: Scope 1 and 2 climate

targets disclosed. Scope 3

targets in process.

Pages 60 to 65

Strategic report Annual Report 2022 – James Fisher and Sons plc38

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.

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).

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.

Internal Audit Function

Conducts audit

assurance for all risks

including climate risks.

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.

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.

Audit Committee

Monitors effectiveness

of company’s risk

management controls.

Chief Executive Officer

Delegated day-to-day

responsibility for climate

change strategy.

Legend:

Figure 1. Governance framework overview

CEO chaired committee Operations and functionsBoard elected committee / office

Top-Down Risk Management

Bottom-Up Risk Management

James Fisher and Sons plc – Annual Report 2022 Strategic report 39

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.

Sustainability cont. / Planet cont.

2025

-17%

2030

-38%

2050

Net zero

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 CO

e/FTE and

e/£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.

% reduction relative to the base year.

Scope 1 and 2 reduction targets

For more details and to view our full 2022 TCFD disclosure

see our separate 2022 Annual Sustainability Report.

Strategic report Annual Report 2022 – James Fisher and Sons plc40

VESSEL’S REDUCTION

OPTIONS (NOT LIMITED TO)

DESCRIPTION

Speed management Develop and implement a standard

operating procedure for slow steaming,

which considers expected time of arrival,

weather, currents, etc.

Draft displacement optimisation

in ballast

Develop and implement a standard

operating procedure for draft

displacement optimisation in ballast.

This includes training of the crew.

Fuel switch – MFO to MGO 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

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.

Auxiliary system optimisation 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.

Air cavity lubrication

(medium-term, long-term)

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.

Hybridisation – conventional

hybrid ship (medium-term,

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 2022 Strategic report 41

Top talent

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.

Engagement Wellbeing

Talent

management

Top talent

Sustainability cont. / People

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.

FOCUS AREAS

• Top talent

• Equity, diversity and inclusion

• Health, safety and security

Strategic report Annual Report 2022 – James Fisher and Sons plc42

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.

2022 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

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 2022 Strategic report 43

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.

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.

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.

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

Sustainability cont. / People cont.

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.

Strategic report Annual Report 2022 – James Fisher and Sons plc44

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.

Wellbeing

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.

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.

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.

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.

BANDING TOGETHER FOR

MOVEMBER

James Fisher and Sons plc – Annual Report 2022 Strategic report 45

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

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

(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.

Sustainability cont. / People cont.

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.

GENDER DIVERSITY METRICS, 2022 VS 2021

2022 2021

Gender diversity Male Female % Female Male Female % Female

Board Directors

(1)

5 3 38% 6 2 25%

Executive Team

(2)

5 2 29% 8 4 33%

Senior Managers

(3)

102 33 24% 69 34 33%

Employees 1,724 493 22% 1,991 577 22%

Total 1,836 531 22% 2,074 617 23%

Strategic report Annual Report 2022 – James Fisher and Sons plc46

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 2022 Strategic report 47

Sustainability cont. / People cont.

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

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

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.

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.

Refer to our online 2022 Annual

Sustainability Report for further information

and examples.

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.

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

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.

Strategic report Annual Report 2022 – James Fisher and Sons plc48

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.

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

2022 COMMUNITY INITIATIVES

Spanning five countries

worldwide, 93 initiatives were

conducted in 2022 totalling

2334.5 people hours donated.

Split by theme (Hours donated)

Split by country (Number of initiatives)

Total number of

initiatives: 93

Total number of

hours donated:

2,334.5

Australia (3)

Netherlands (1)

Singapore (1)

South Africa (14)

UK (74)

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)

James Fisher and Sons plc – Annual Report 2022 Strategic report 49

Sustainability cont. / People cont.

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:

• 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.

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.

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.

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.

Strategic report Annual Report 2022 – James Fisher and Sons plc50

METRICS AND TARGETS

Refer to Key Performance Indicators on

page 56 for our 2022 metrics and targets

performance.

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.

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 2022 Strategic report 51

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.

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.

Sustainability cont. / Partnerships

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.

FOCUS AREAS

• Innovation

• Customer engagement

• Governance

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 report Annual Report 2022 – James Fisher and Sons plc52

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 2022 Strategic report 53

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.

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.

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.

Sustainability cont. / Partnerships cont.

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 report Annual Report 2022 – James Fisher and Sons plc54

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 2022 Strategic report 55

Non-financial key performance indicators

Hours spent supporting local community integration*

56%

2023 75%

2022 56%

2021 N/A

* (2hr per employee headcount).

Base year

2022

Baseline

56%

Total Recordable Injury Frequency (TRIF)*

2.65

2023

2022 2.65

2021 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

Employee Engagement Score (Gallup)

3.84

2023 3.95

2022 3.84

2021 3.6

Base year

2021

Baseline

3.6

Fatalities

2023

2022

2021

Base year

2021

Baseline

Lost Time Incident Frequency (LTIF)*

0.51

2023

2022

2021 2.6

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

Base year

2021

Baseline

2.6

Key

Target

2022

2021

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.

2.385

0.459

0.51

Strategic report Annual Report 2022 – James Fisher and Sons plc56

Scope 3 emissions – business travel (tCO

7,906

2023 7,115.4

2022 7,906

2021 N/A

Base year

2022

Baseline

7,906

Scope 1 and Scope 2 emissions (tCO

79,110

2025 70,480

2022 79,110

2021 84,711

Base year

2021

Baseline

84,711

James Fisher and Sons plc – Annual Report 2022 Strategic report 57

Financial review

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.

Duncan Kennedy

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.

Strategic report58 Annual Report 2022 – James Fisher and Sons plc

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%.

Adjusting 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.

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 2022 Strategic report 59

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.

Financial review cont.

Strategic report Annual Report 2022 – James Fisher and Sons plc60

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 2022 2021 Movement

Bank net borrowings (132.9) (139.6) 6.7

Finance leases (IAS 17 basis) (6.9) (7.8) 0.9

Right-of-use liabilities (46.0) (38.2) (7.8)

Net debt (185.8) (185.6) (0.2)

Table C

£m 2023 2024 2025 2026 Total

No extensions 47.5 200.0 – – 247.5

With extensions – 87.5 30.0 130.0 247.5

Table B

£m 2022 2021 Movement

Bank net borrowings (132.8) (139.6) 6.8

Finance leases (IAS 17 basis) (6.9) (7.8) 0.9

Bonds and guarantees (2.3) (8.4) 6.1

Net debt – covenants basis (142.0) (155.8) 13.8

EBITDA – covenants basis 52.6 54.3 (1.7)

Net debt : EBITDA 2.7 2.9 (0.2)

Table D

£m

At 31

December

2021

Transfer

to Assets

Held for

Sale

Balances

sold as

part of

business

disposals

Held for sale

fixed asset

adjustments

Movement

excluding

disposals

and

transfers

At 31

December

2022

Inventory 49.0 (0.7) (3.5) – 5.0 49.8

Trade

and other

receivables 153.3 (10.5) (4.8) – 10.2 148.2

Net cash

and other

borrowings 34.4 (2.8) (1.6) – (43.8) (13.8)

Trade

and other

payables (139.5) 13.7 3.0 – 0.4 (122.4)

Provisions (2.0) – – – (3.3) (5.3)

Current tax (4.5) 0.3 – – 2.3 (1.9)

Lease

liabilities (9.9) 2.2 0.4 – (5.9) (13.2)

Assets

held for

sale 10.7 14.0 – 11.5 – 36.2

Liabilities

associated

with assets

held for

sale – (16.3) – – – (16.3)

Net

current

assets 91.5 – (6.5) 11.5 (35.2) 61.3

James Fisher and Sons plc – Annual Report 2022 Strategic report 61

1. NEW RISK: GROUP TRANSFORMATION PROGRAMME

Nature:

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.

Potential impact:

• 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

Mitigation:

• 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.

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.

Strategic report Annual Report 2022 – James Fisher and Sons plc62

2. NEW RISK: MAINTAINING ACCESS TO ADEQUATE FUNDING

Nature:

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.

Potential impact:

• The Group may not have the liquidity required to

ensure that it remains a going concern

• Disposals of additional businesses may be

required

• The Group’s reputation and ability to secure

competitive contracts with suppliers and

customers may be adversely impacted

Mitigation:

• Regular meetings are held with all lenders

to provide trading and operational updates

• Selection of third-party expert support to assist

with refinancing

• 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:

Group trading companies may

experience and adverse operational

incident or failure to maintain appropriate

levels of health and safety.

Potential impact:

• The health and safety of our workforce and

others could be impacted by our operations

• The Group’s reputation could potentially suffer

if there was a major accident or health and

safety issue

• Claims and regulatory action may be taken

against the Company or the affected business

Mitigation:

• First item on plc and business board agendas

• 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 2022 Strategic report 63

4. CYBER SECURITY RISK

Nature:

The Group may experience loss or harm

related to technical infrastructure or the

use of technology within the Group.

Potential impact:

Cyber attacks could result in

financial and reputational damage

by way of significant interruption to

business systems. Phishing could

result in financial and reputational

damage by way of theft or fraud.

Mitigation:

• Further embedding of new Group-wide operating system

with enhanced security, alongside infrastructure and software

updates to existing systems

• Regular review of IT security issues, including penetration

testing

• Enhanced cyber awareness training and regular briefings

• Improved threat detection software and cyber phishing

testing 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.

Principal risks and uncertainties cont.

5. OPERATING IN EMERGING MARKETS

Nature:

The Group operates in overseas

emerging markets and key growth

economies with fluctuating legislative

restrictions, embargoes, sanctions and

exchange controls, often undertaken

in association with local joint venture

partners.

Potential impact:

Those operations may expose the

Group to increased risk of governance

and compliance issues. Any significant

failure to comply with laws or

regulations could lead to penalties

and other financial liabilities, as well

as reputational issues. Where there is

a jurisdictional requirement for local

investment or representation, the

Group’s ability to continue business

in that jurisdiction could be adversely

impacted from an ethical or legal

perspective.

Mitigation:

• Corporate governance framework, including limits

of authority

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

relationships, including use of bespoke web-based

platform

• Policies and training

• Corporate structuring of relationships, using external local

legal advice

• 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 report Annual Report 2022 – James Fisher and Sons plc64

6. CLIMATE CHANGE

Nature:

The Group operates in industries which

may be adversely impacted due to the

change in energy mix. The Group is

committed to minimising the impact of

its operations on climate change.

Potential impact:

The Group may suffer operational impacts of

extreme weather events, as well as potential

changes in technologies, markets and regulation in

response to climate change which could increase

costs, challenge the viability of Group services or

affect assets values. The Group is also conscious

of the need to reduce its impact on the climate,

including its emission of greenhouse gases.

Mitigation:

• Continuing the Group’s end 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:

The Group operates in markets where

larger project-based contractors may

seek to pass risk down the supply chain.

Potential impact:

Through its growth and diversification into new

markets and geographies, the Group may be

exposed to increased contractual risks, which

could result in financial impact caused by late

payment, cost overruns, increased claims and

litigation, and/or exposure to non-UK legal

jurisdiction uncertainty.

Mitigation:

• Internal contract management governance,

including policy and training

• Internal and external specialist legal support

• Appropriate balance of risk and reward in

contracts, based on Group principles

• 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 2022 Strategic report 65

Principal risks and uncertainties cont.

8. PROJECT DELIVERY

Nature:

Group businesses may fail to meet

customer expectations or contractual

requirements on project delivery.

Potential impact:

This could cause significant adverse financial and

reputational consequences, and/or increased cost

and management time resulting from management

of disputes and litigation.

Mitigation:

• Increasing the specialist project management

skillset across the Group through training and

recruitment

• Implementation of project management best

practices

• Focus on post-signature contract management

• Salary benchmarking and role banding exercise

• 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:

The Group may fail to attract, retain

and develop personnel of the requisite

calibre and to plan for succession in key

leadership positions.

Potential impact:

This may result in the Group not being able to

maintain its existing strong and experienced

management teams in its operational businesses,

and/or a risk to the Group’s delivery of its

strategic objectives, which depends on recruiting

and retaining the right people in all areas of our

business to maintain competitive advantage.

Mitigation:

• Implementation of employee strategy

• Graduate recruitment

• Talent identification and management

• Management development programmes

• Appraisal process

• Training plans

• Remuneration incentives

• Succession planning

• Salary benchmarking and role banding exercise

Context:

Progress continues on implementation of the employee strategy to improve recruitment and retention. New senior management positions have

been filled during the course of 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 report Annual Report 2022 – James Fisher and Sons plc66

10. FINANCIAL RISK

Nature:

The Group is exposed to interest rate,

foreign exchange and credit risk. The

Group’s decentralised operating model

requires robust and effective financial

controls.

Potential impact:

An increase in interest rates or change in

exchange rates or credit restriction would have

a financial impact on the Group. Poor financial

controls may impact adversely on reporting

accuracy or risk of fraud.

Mitigation:

• Formalised Group internal controls and

accounting policy manuals

• Documented levels of delegated authority

for all operating companies

• Half-yearly self-certifications covering the

effectiveness of financial controls signed by

operating company Finance Directors

• Third party whistleblowing hotline available

to all employees (from mid-2022)

• Internal Audit reviews on a periodic basis for

all operating companies

• 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 2022 Strategic report 67

Principal risks and uncertainties cont.

11. PANDEMIC RISK

Nature:

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.

Potential impact:

The current impact on the Group’s operations

created by the COVID pandemic may continue.

A future pandemic, or governmental response to

a potential virus spread may impact the Group’s

ability to provide services to its customers.

Mitigation:

• Tracking and following Government restrictions

and recommendations

• Making office locations safe for work

• Home working where possible, supported

by improved IT services enabling better

communication

• COVID working group providing advice and

support to employees

• Enhanced employee assistance programme

• Encouraging vaccination where possible

Context:

The ongoing COVID pandemic 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 report Annual Report 2022 – James Fisher and Sons plc68

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.

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.

James Fisher and Sons plc – Annual Report 2022 Strategic report 69

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.

Anti-bribery and corruption

The Board is committed to ensuring the

highest standards in all of the Group’s business

dealings and condemns corruption in all its

forms. The Group has a formal anti-bribery and

corruption statement and policy and does not

tolerate or condone corruption or bribery in any

of the Group’s business dealings. This policy

has been implemented throughout the Group

and is supported by a Group-wide training

programme (both online and in person),

delivered by the Group legal team and regular

compliance reviews through Internal Audit.

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.

Strategic report Annual Report 2022 – James Fisher and Sons plc70

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.

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.

James Fisher and Sons plc – Annual Report 2022 Strategic report 71

Non-financial information statement

The information set out below, together with the cross references listed in the table below as to where further information can be found in the

main body of the Strategic report, is in compliance with the Non-Financial Reporting requirements as set out in sections 414CA and 414CB of the

Companies Act 2006:

Reporting requirement Relevant policy Location Page

Business model Business model 10 to 11

Environmental matters Group Health, Safety and Environmental policy Planet

Principal risks and uncertainties

34 to 41

Employees Group Health, Safety and Environmental policy

Code of ethics

Empowering our People

Directors’ report

42 to 51

112

Social matters Code of ethics People 42 to 51

Respect for human rights Modern slavery and human trafficking policy

Code of ethics

Partnerships

Non-financial information

52 to 55

Anti-bribery and corruption Anti-bribery and corruption policy Principal risks and uncertainties

Audit Committee Report

Principal risks Principal risks and uncertainties 62 to 70

Non-financial KPIs 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 report Annual Report 2022 – James Fisher and Sons plc72

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 2022 Strategic report 73

Governance at a glance

The Board

The Corporate governance report on pages 82 to 85.

Operating

divisions

Corporate

functions

Investment

Committee

Group Risk

Committee

Group Health

and Safety

Committee

Group

Sustainability

Committee

Governance structure

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

Audit

Committee

The Audit

Committee report

on pages 89 to 93

describes in detail

the Committee’s

role and activities.

Nominations

Committee

The Nominations

Committee report

on pages 86 to 88

describes in detail

the Committee’s

role and activities.

Remuneration

Committee

The Directors’

remuneration

report on pages 94

to 110 describes

in detail the

Committee’s role

and activities.

Executive

Committee

Governance74 Annual Report 2022 – James Fisher and Sons plc

HIGHLIGHTS

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

Executive Directors

Jean Vernet

(1)

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

Duncan Kennedy

(1)

10/10 N/A N/A N/A

Non-Executive Directors

Angus Cockburn 10/10 N/A N/A 4/4

Aedamar Comiskey 10/10 4/4 5/5 4/4

Justin Atkinson 10/10 4/4 5/5 4/4

Inken Braunschmidt 9/10 4/4 5/5 4/4

Kash Pandya 9/10 4/4 4/5 3/4

Claire Hawkings 10/10 4/4 5/5 4/4

Former Directors and Non-Executive Directors

Eoghan O’Lionaird

(1)

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

Michael Salter

(2)

3/3 2/2 3/3 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.

Diversity (all Directors)

Female: 3

Male: 5

Length of Tenure (Chairman

and Non-Executive Directors)

0-2 years: 5

2-5 years: 1

5-9 years: 2

Governance 75James 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.

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.

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.

Governance76 Annual Report 2022 – James Fisher and Sons plc

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.

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

Governance 77James Fisher and Sons plc – Annual Report 2022

KEY MANAGEMENT COMMITTEES

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.

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.

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.

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.

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.

Governance78 Annual Report 2022 – James Fisher and Sons plc

Nominations Committee

Chair: Angus Cockburn

Meets at least three times a year.

Reviews the structure, size and composition

of the Board (including skills, knowledge,

diversity and experience) and recommends

changes.

Reviews succession planning for Directors

and senior executives.

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.

Corporate Functions

• Day-to-day business delivery.

• Executive Directors and heads of

corporate functions meet at the Risk

Committee on a quarterly basis.

Special Purposes Board Committee

Consisting of the Chairman and the Executive Directors.

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.

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.

Audit Committee

Chair: Justin Atkinson

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.

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.

Remuneration Committee

Chair: Aedamar Comiskey

Meets at least three times a year.

Agrees the remuneration policy for Executive

Directors and oversees remuneration

for other senior executives; reviews the

appropriateness and relevance of the

Group’s remuneration policy; and ensures

that the provisions of the Code relating to

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.

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.

Governance 79James Fisher and Sons plc – Annual Report 2022

Key

Audit Committee

Remuneration Committee

Nominations Committee

Chair of Committee

Member of Committee

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.

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.

Board of Directors

Governance80 Annual Report 2022 – James Fisher and Sons 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.

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.

Governance 81James Fisher and Sons plc – Annual Report 2022

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

KEY ACTIVITIES AND

DISCUSSIONS IN 2022 STAKEHOLDER CONSIDERATIONS

KEY PRIORITIES

FOR 2023

Trading

• Received regular updates from

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.

• The Board carefully considered the impact of

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.

• 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 future based on strategic focus,

organisational simplification and

execution.

• Approved the reorganisation of the

Group into three divisions supported

by a cohesive Executive Committee.

• The Board received updates on strategic

implementation from the Executive Directors

and businesses.

• In reviewing implementation, and agreeing on

strategic priorities, the Board sought to balance

the impact of prioritisation on all stakeholder

groups, notably shareholders, employees

and the environment.

• Oversee

implementation of

strategic priorities.

• Ensure reduction of

Group indebtedness.

• Building KPIs for

strategic priorities.

Risk

management

• Reviewed 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.

• Oversee

implementation of risk

management controls

improvements.

• Ongoing principal risk

“deep dives”.

• Improvements in

analysis of emerging

risks and risk

appetite.

Governance

• Engaged with institutional

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.

• 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.

Governance82 Annual Report 2022 – James Fisher and Sons plc

TOPIC

KEY ACTIVITIES AND

DISCUSSIONS IN 2022 STAKEHOLDER CONSIDERATIONS

KEY PRIORITIES

FOR 2023

Organisational

capacity

• 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.

• 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.

• 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.

Board

development

• 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.

• 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.

• 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.

Governance 83James Fisher and Sons plc – Annual Report 2022

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.

Corporate governance report cont.

Governance84 Annual Report 2022 – James Fisher and Sons plc

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.

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.

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.

Governance 85James Fisher and Sons plc – Annual Report 2022

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.

Nominations Committee report

MEMBERSHIP SINCE

Angus Cockburn (Chair) 2021

Michael Salter (until 5 May 2022) 2013

Aedamar Comiskey 2014

Justin Atkinson 2018

Inken Braunschmidt 2019

Kash Pandya 2021

Claire Hawkings 2022

Key objectives

Reviewing the composition of the Board and succession planning.

Key responsibilities:

• To regularly review the structure, size and composition of the Board (including skills,

knowledge, independence and experience) and recommend any changes.

• Succession planning for Directors and senior executives of both the Company and the

operating businesses, taking into account the challenges and opportunities facing the

Company and the skills and expertise therefore needed in the future.

• Identifying and nominating candidates for Board positions, for approval by the Board.

The Committee’s terms of reference are available on the Group’s website.

Meets at least three times a year. During 2022 the Nominations Committee met four times.

Governance86 Annual Report 2022 – James Fisher and Sons plc

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.

• 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 the interviews, each

person who had met with the

shortlisted candidates provided

feedback to the Chair.

• 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.

• Following engagement, Lygon

Group created a long list of potential

candidates, which was shared by the

Chair with the Nominations Committee.

• 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.

Process leading to the appointment of Jean Vernet

Governance 87James Fisher and Sons plc – Annual Report 2022

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.

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

Nominations Committee report cont.

Governance88 Annual Report 2022 – James Fisher and Sons plc

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.

Audit Committee report

MEMBERSHIP SINCE

Justin Atkinson, Chairman of the Audit Committee 2018

Michael Salter (until 5 May 2022) 2013

Aedamar Comiskey 2014

Inken Braunschmidt 2019

Kash Pandya 2021

Claire Hawkings 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.

Governance 89James Fisher and Sons plc – Annual Report 2022

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

• Review of findings from the work undertaken

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.

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

control enhancements.

• 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.

Audit Committee report cont.

Governance90 Annual Report 2022 – James Fisher and Sons plc

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.

GOING CONCERN AND VIABILITY STATEMENTS

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.

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.

GOODWILL VALUATION

The Audit Committee considered the

Group’s carrying value of goodwill and

impairment reviews based on underlying

assumptions, together with the achievability

of long-term forecasts and the discount

rates applied to forecast 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.

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.

Governance 91James Fisher and Sons plc – Annual Report 2022

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.

Independence 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.

Governance92 Annual Report 2022 – James Fisher and Sons plc

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.

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 page 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

Governance 93James Fisher and Sons plc – Annual Report 2022

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.

This report is comprised of two parts, namely:

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.

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;

• 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.

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.

Directors’ remuneration report

MEMBERSHIP

SINCE

Aedamar Comiskey, Chair of the Remuneration Committee since May 2018 2014

Michael Salter (until 5 May 2022) 2013

Justin Atkinson 2018

Inken Braunschmidt 2019

Kash Pandya 2021

Claire Hawkings (appointed to the Committee on 1 January 2022) 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.

Governance94 Annual Report 2022 – James Fisher and Sons plc

Pay and performance in 2022

James Fisher encountered another challenging

year in 2022, with performance outcomes

against our primary financial measures as

follows:

• Underlying operating profit from continuing

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.

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:

• Base salary: the Committee has delayed

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

• 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

Governance 95James Fisher and Sons plc – Annual Report 2022

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.

Directors’ remuneration report cont.

Governance96 Annual Report 2022 – James Fisher and Sons plc

ELEMENT

PURPOSE AND

LINK TO STRATEGY OPERATION MAXIMUM

PERFORMANCE

TARGETS

Salary Designed to attract,

retain, motivate and

reward the necessary

high calibre individuals to

the Board.

Base salaries are a fixed annual sum

normally effective 1 January and

payable monthly in cash.

Salaries are reviewed each year,

normally effective 1 January

and recognising the individual’s

performance and experience,

developments in the relevant

employment market and having

regard to the Group’s performance

as well as comparing each Executive

Director’s base salary to market data.

No prescribed maximum

salary or salary increase.

Salaries are set for each

Executive Director within a

range around the market

median for similar positions

in appropriate comparator

companies. The Committee

is also guided by the general

increase for the employee

population although

increases may be higher or

lower than this to recognise,

for example, an increase

in the scale, scope or

responsibility of an individual

and/or performance.

Not applicable.

Pensions To offer competitive

retirement benefits.

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.

Workforce aligned on or

before 1 January 2023.

Not applicable.

Benefits To offer competitive

benefits.

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.

No prescribed maximum. Not applicable.

Annual

bonus

To incentivise and reward

the Executive Directors

to deliver annual financial

and operational targets.

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.

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.

Governance 97James Fisher and Sons plc – Annual Report 2022

ELEMENT

PURPOSE AND

LINK TO STRATEGY OPERATION MAXIMUM

PERFORMANCE

TARGETS

LTIP To align the interests of

the Executive Directors

with the Group’s long-

term performance,

strategy and the interests

of shareholders.

Annual grant of share awards.

Non pensionable.

A two-year post-vesting holding

period applies to awards granted

to Executive Directors.

Malus and clawback provisions

operate.

Up to 200% of base salary.

Awards above 125% will be

subject to stretch targets.

Sliding scale targets

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.

ownership

To ensure alignment

between the interests of

Executive Directors and

shareholders.

Executive Directors are required to

retain half of the shares vesting after

tax under the LTIP until the guidelines

are met.

Post-cessation guidelines apply

to share awards granted following

the 2021 AGM. In determining the

relevant number of shares to be

retained post-cessation, shares

acquired from own purchases and

share awards granted prior to the

2021 AGM will not be counted.

In Employment: 200% of

base salary for all Executive

Directors.

Post-cessation: 100%

of the “in employment”

requirement, until the second

anniversary of cessation (or

the actual shareholding if the

guideline has not been met at

cessation).

Not applicable.

Sharesave To encourage share

ownership and align the

interests of all employees

and shareholders.

An all-employee share plan. As per prevailing HMRC

limits.

Not applicable.

Non-

Executive

Directors

To provide fees 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.

Directors’ remuneration report cont.

Governance98 Annual Report 2022 – James Fisher and Sons plc

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.

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.

£0

£500

£1,000

£1,500

£2,000

£2,500

£3,000

Minimum

£650

100.0%

100.0% 49.5% 32.9% 27.7%

22.5%

28.0%

29.8% 25.2%

37.3%

47.1%

47.1% 30.8% 25.3%

19.2%

33.7%

25.2%

44.0%

20.6%

54.1%

£1,379

£2,107

£2,571

Fixed

Annual bonus

LTIP

£385

£779

£1,173

£1,392

On-target

Jean Vernet Duncan Kennedy

Maximum Maximum

+ 50% share

price growth

Minimum On-target Maximum Maximum

+ 50% share

price growth

Remuneration (£000)

Governance 99James Fisher and Sons plc – Annual Report 2022

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:

Contract date Notice period

Jean Vernet 5 September 2022 12 months

Duncan Kennedy 1 May 2021 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:

Date of appointment Letter of appointment

Angus Cockburn 1 May 2021 1 January 2023

Justin Atkinson 1 February 2018 1 January 2023

Inken Braunschmidt 1 March 2019 1 January 2023

Aedamar Comiskey 1 November 2014 1 January 2023

Kash Pandya 1 November 2021 1 January 2023

Claire Hawkings 1 January 2022 1 January 2023

Directors’ remuneration report cont.

Governance100 Annual Report 2022 – James Fisher and Sons plc

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.

Governance 101James Fisher and Sons plc – Annual Report 2022

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.

2023

2022

Chairman 210,125 210,125

Other Non-Executive Director fees:

Basic fee 54,632 54,632

Additional fee for the chair of Audit Committee 12,000 12,000

Additional fee for the chair of Remuneration Committee 8,000 8,000

Additional fee for the Senior Independent Director 8,000 8,000

Total remuneration of the Executive Directors (audited)

Jean Vernet

(1)

Eoghan O’Lionaird

(1)

Duncan Kennedy

(2)

2022

£000

2021

£000

2022

£000

2021

£000

2022

£000

2021

£000

Base salary 173 – 359 530 350 232

Benefits

(3)

44 – 19 26 11 7

Pension

(4)

13 – 27 42 16 11

Bonus in cash – – – – – –

Bonus in deferred shares – – – – – –

Total short-term remuneration 230 – 405 598 377 250

LTIP – performance – – – – – –

LTIP – share appreciation – – – – – –

Dividend equivalents – – – – – –

LTIP – total n/a – – n/a n/a n/a

Other

(5)

400 – – – – –

Total remuneration 630 – 405 598 377 250

Total fixed remuneration 230 – 405 598 377 250

Total variable remuneration 400 – – – – –

(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.

Directors’ remuneration report cont.

Governance102 Annual Report 2022 – James Fisher and Sons plc

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 Performance target Assessment against targets

Underlying operating profit (40%

(1)

) Minimum threshold £31.0m

Maximum £37.5m

Threshold starts at 0% and increases to 100% of this element

of the bonus at maximum performance.

Actual performance £19.1m 0% of this part of the bonus was paid out.

Operating cashflow (30%

(1)

) Minimum threshold £55.3m

Maximum £62.8m

Threshold starts at 0% and increases to 100% of this element

of the bonus at maximum performance.

Actual performance £44.5m 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

Weighting

(% bonus)

Operational

Reduce net debt/EBITDA, including disposal of the Board-approved businesses 5%

Roll-out Lean program 5%

Roll-out NPS program and Group-wide sales training 5%

ESG

Improve engagement mean score for all employees and senior leadership 5%

Structured analysis and framework for carbon reduction program 5%

Strategy

Evolve the strategy for renewables and decommissioning with clear operational plans and execution underway 5%

Tot al 30%

Duncan Kennedy

Objectives

Weighting

(% bonus)

Operational

Reduce net debt/EBITDA, including disposal of the Board-approved businesses 5%

Roll-out Lean program 5%

ESG

Improve engagement/e-NPS results for all employees and the global finance function 5%

Roll-out and embed risk management improvements 5%

Define and begin deployment of BEIS/UK SOX project 5%

Strategy

Evolve the strategy for renewables and decommissioning with clear operational plans and execution underway 5%

Tot al 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).

Governance 103James Fisher and Sons plc – Annual Report 2022

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 Base EPS

EPS

at year end

EPS

growth

Threshold

RPI +9%

Maximum

RPI +18% Vesting %

Underlying diluted EPS 47. 9 p (17.1p) (135.7%) 32.5% 41.5% 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

Performance

period

Threshold

Median TSR

Maximum

UQ TSR

James Fisher

TSR Vesting %

Relative TSR 6 April 2020 – 5 April 2023 (1.6%) 28.7% (79.7%) 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 2022

(audited)

Award date

Proportion

of salary

Maximum

shares awarded

Face value

at date of grant

(1)

Eoghan O’Lionaird 21 April 2022 100% 146,773 £530k

Duncan Kennedy 21 April 2022 100% 96,926 £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:

Directors’ remuneration report cont.

Governance104 Annual Report 2022 – James Fisher and Sons plc

Recruitment award granted in 2022 (audited)

Award date

Basis

on which

award made

Maximum

shares awarded

Face value

at date of grant

(1)

Jean Vernet 13 September 2022 Buy-out 135,516 £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):

Method

25th

percentile

pay ratio

Median

pay ratio

75th

percentile

pay ratio

2022 Option A 35:1 25:1 16:1

2021 Option A 22:1 16:1 10:1

2020 Option A 19:1 14:1 9:1

2019 Option A 28:1 19:1 13:1

Salary Total pay and benefits

25th

percentile Median

75th

percentile

25th

percentile Median

75th

percentile

2022 £26,500 £36,050 £54,590 £29,682 £41,852 £65,557

2021 £25,000 £34,000 £50,000 £ 27,770 £ 37,120 £59,280

2020 £24,000 £3 3,127 £50,000 £27,000 £ 37, 5 0 0 £58,963

2019 £24,480 £34,150 £52,000 £25,459 £36,541 £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.

Governance 105James Fisher and Sons plc – Annual Report 2022

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

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

James Fisher and Sons plc

FTSE Mid 250 Excluding Investment Trust Index

FTSE Small Capitalisation Index Ex Investment Trusts

£0

£50

£100

£150

£200

£250

£300

Remuneration of CEO compared with growth in underlying diluted earnings per share

Nick Henry Eoghan O’Lionaird

Jean

Vernet

2013 2014 2015 2016 2017 2018 2019 2019 2020

(1)

2021 2022 2022

(2)

Annual change –

underlying diluted EPS (pence) 18% 13% (7)% 11% 7% 14% 4% 4% (52)% (58)% (186)% (186)%

Salary, pensions and benefits (£000) 439 471 492 492 512 526 421 189 522 598 405 230

Annual performance bonus (£000) 263 287 97 429 392 448 35 – – – – –

Short-term remuneration (£000) 702 758 589 921 904 1,010 456 189 522 598 405 230

Share schemes (£000) 691 728 318 183 109 889 418 – – – – 400

CEO total remuneration (£000) 1,393 1,486 907 1,10 4 1,013 1,899 874 189 522 598 405 630

Actual bonus as a percentage of maximum 100% 100% 23% 100% 88% 91% 17% – – – – –

LTIP vesting as a percentage of maximum 100% 100% 100% 47% 15% 100% 59% n/a n/a n/a – n/a

ESOS vesting as a percentage of maximum 100% 100% – 45% – – – n/a n/a n/a 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.

Directors’ remuneration report cont.

Governance106 Annual Report 2022 – James Fisher and Sons plc

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.

Base salary/fee

(1)

Benefits Annual bonus

2021

to 2022

2020

to 2021

2019

to 2020

2021

to 2022

2020

to 2021

2019

to 2020

2021

to 2022

2019

to 2020

2019

to 2020

Executive Directors

Jean Vernet

(2)

N/A N/A N/A N/A N/A N/A N/A N/A N/A

Eoghan O’Lionaird

(3)

0% 14% (12)% 7% 13% 0% N/A N/A N/A

Duncan Kennedy

(4)

0% N/A N/A 0% N/A N/A N/A N/A N/A

Non-Executive Directors

Angus Cockburn

(5)

0% N/A N/A N/A N/A N/A N/A N/A N/A

Justin Atkinson 0% 5% (3)% N/A N/A N/A N/A N/A N/A

Inken Braunschmidt 0% 5% (3)% N/A N/A N/A N/A N/A N/A

Aedamar Comiskey 0% 5% (3)% N/A N/A N/A N/A N/A N/A

Claire Hawkings

(6)

N/A N/A N/A N/A N/A N/A N/A N/A N/A

Kash Pandya

(7)

0% N/A N/A N/A N/A N/A N/A N/A N/A

Michael Salter

(8)

0% 5% (3)% N/A N/A N/A N/A N/A N/A

Employee population

(9)

0% 3.4% 5% 1.4% 2% N/A 256% (88)% (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)

2022

£m

2021

£m

Change

£m

Total employee remuneration 145.8 136.4 9.4

Total dividends paid – – –

Governance 107James Fisher and Sons plc – Annual Report 2022

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:

Beneficial

number

Unvested

LTIP

number

(1)

Unvested

deferred

bonus

(1)

Unvested

restricted

(1)

Unvested

options

(1)

Vested but

unexercised

options

31 December

2021

number

Angus Cockburn 5,000 – – – – – 5,000

Jean Vernet – – – 135,516 – – N/A

Duncan Kennedy 5,000 132,716 – – 9,259 – 5,000

Justin Atkinson 3,150 – – – – – 3,150

Inken Braunschmidt – – – – – – –

Aedamar Comiskey – – – – – – –

Claire Hawkings – – – – – – N/A

Kash Pandya – – – – – – –

Former Directors

Eoghan O’Lionaird

(2)

42,313 243,277 – – 2,935 – 42,313

Michael Salter

(3)

– – – – – – –

(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

1 January

2022

Granted

during year

(no.)

Vested

during year

(no.)

Lapsed

during year

(no.)

31 December

2022

Vesting

date

Expiry

date

Jean Vernet Restricted Share Award

(1)

– 67,75 8 – – 67,75 8 13.09.23 n/a

Restricted Share Award

(1)

– 67,75 8 – – 67,75 8 13.09.24 n/a

– 135,516 – – 135,516

Duncan Kennedy LTIP 35,790 – – – 35,790 28.05.24 n/a

LTIP – 96,926 – – 96,926 21.04.25 n/a

35,790 96,926 – – 132,716

Eoghan O’Lionaird

(2)

LTIP 42,307 – – – 42,307 24.07. 23 n/a

LTIP 54,197 – – – 54,197 09.04.24 n/a

LTIP – 146,773 – – 146,773 21.04.25 n/a

96,504 146,773 – – 243,277

Total 132,294 379,215 – – 511, 50 9

(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.

Directors’ remuneration report cont.

Governance108 Annual Report 2022 – James Fisher and Sons plc

Share option grants

1 January

2022

Granted

during year

(no.)

Vested

during year

(no.)

Lapsed

during year

(no.)

Exercise

price

31 December

2022

Vesting

date

Expiry

date

Duncan Kennedy Sharesave – 9,259 – – £3.24 9,259 01.06.27

(2)

01.12. 27

Eoghan O’Lionaird

(1)

Sharesave 2,935 – – – £10.22 2,935 01.12. 25

(3)

01.06.26

Total 2,935 9,259 – – 12,194

(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)

Total fees

2022

£000

2021

£000

Angus Cockburn

(1)

210 140

Justin Atkinson

(2)

67 67

Inken Braunschmidt 55 55

Aedamar Comiskey

(3)

71 71

Claire Hawkings

(4)

55 N/A

Kash Pandya

(5)

55 9

Former Directors

Michael Salter

(6)

19 55

(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.

Governance 109James Fisher and Sons plc – Annual Report 2022

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:

Directors’ remuneration report

(2022 AGM)

Directors’ remuneration policy

(2021 AGM)

Remuneration resolutions

Total number

of votes

% of

votes cast

Total number

of votes

% of

votes cast

For 37,913,927 95.0% 37,49 9 ,177 97.6%

Against 1,995,607 5.0% 938,426 2.4%

Total votes cast (excluding withheld votes) 39,909,534 100.0% 3 8 , 4 37,6 03 100.0%

Total votes withheld 18,745 – 311,116 –

Total votes cast (including withheld votes) 39,928,279 – 38,748,719 –

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

Directors’ remuneration report cont.

Governance110 Annual Report 2022 – James Fisher and Sons plc

Directors’ report

Additional information and statutory disclosures

This section contains additional information which the Directors are required by law and regulation to include within the Annual Report and Accounts.

The Directors’ report comprises this section as well as the rest of the Governance section (from pages 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 178.

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:

SUBJECT MATTER LOCATION PAGES

Particulars of important events affecting the Company

which have occurred since the end of financial year Strategic report

06 to 07

14 to 17

Likely future developments in the business Strategic report 14 to 17

Research and development Strategic report 52

Employee involvement and engagement Strategic report 30

Relationships with suppliers, customers and others Strategic report 31

Greenhouse gas emissions, energy consumption

and efficiency action Directors' report 113 to 114

Use of financial instruments Note 29 170

Governance 111James Fisher and Sons plc – Annual Report 2022

Directors’ report cont.

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.

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.

Substantial shareholders

Ordinary

shares %

(1)

Nature of

holding

Trustees of the Sir John Fisher Foundation 11,592,360 22.98 Direct

Schroders plc 4,970,246 9.89 Indirect

Aberforth Partners LLP 2,582,790 5.12 Indirect

Invesco Limited 2,520,890 5.00 Indirect

Odyssean Investment Trust 2,192,220 4.35 Direct

NFU Mutual Insurance Society Limited 1,976,768 3.92 Direct/ Indirect

Montanaro Asset Management Limited 1,471,066 2.91 Direct

(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

Ordinary

shares %

Nature of

holding

Odyssean Investment Trust 2,520,000 5.00 Direct

Governance112 Annual Report 2022 – James Fisher and Sons plc

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.

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 tCO

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.

2020-21 2021-22

UK Non-UK UK Non-UK

SECR

tCO

e MWh tCO

e MWh

Fugitive Emissions (Scope 1) 32 0 79 0 27 0 36 0

Mobile Combustion (Scope 1) 31,843 115,79 6 49,593 180,013 27, 4 9 5 99,989 49,189 178,310

Stationary Combustion (Scope 1) 926 4,312 360 1,488 639 3,026 216 950

Purchased Energy (Scope 2) 852 3,917 1,026 2,756 675 3,407 832 2,18 2

Scope 1 & 2 Total 33,653 124,025 51,058 184,257 28,836 106,422 50,273 181,442

Business travel by car (Scope 3) 179 717 7 23 227 914 397 1,488

Scope 1 & 2 + business travel

by car (Scope 3) 33,832 124,742 51,065 184,280 29,063 107,33 6 50,670 182,930

Business travel (Scope 3) 2,217 0 1,201 0 1,504 409 5,778 0

Commuting (Scope 3) 232 917 68 264 671 2,755 2,696 10,314

Fuel- and energy-related activities

(Scope 3) 7,670 0 11,416 0 6,623 0 11,448 0

Upstream leased assets (Scope 3) 12,980 20,670 6,024 22,029 19,625 73,495 9,881 35,775

Waste generated in operations

(Scope 3) 27 0 166 0 437 0 1,146 0

Water (Scope 3) 0.2 0 2 0 9 0 3 0

Scope 3 excluding business

travel by car (Scope 3) 23,126. 2 21,587 18,877 22,293 28,869 76,659 30,952 46,089

Total tCO

e 56,958.2 69,942 57, 932 81,622

Tot al MWh 146,329 206,573 183,995 229,019

Scope 1 & 2 + business

travel by car (Scope 3) CO

intensity ratio (tCO

e/£m

revenue) 68 103 57 99

Scope 1, 2 & 3 CO

e intensity

ratio (tCO

e/£m revenue) 115 142 113 160

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.

Governance 113James Fisher and Sons plc – Annual Report 2022

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.

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 tCO

e, to 84,711 tCO

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

Governance114 Annual Report 2022 – James Fisher and Sons plc

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

Governance 115James Fisher and Sons plc – Annual Report 2022

Financial statements116 Annual Report 2022 – 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 vs 2021

Recurring risks Revenue recognition



Impairment of goodwill



Parent company impairment of investments



Event driven New: Going concern



Independent auditor’s report

to the members of James Fisher and Sons plc

Financial statements 117

James Fisher and Sons plc – Annual Report 2022

2 Material uncertainty related to going concern

THE RISK OUR RESPONSE

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.

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.

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 statements118 Annual Report 2022 – 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).

Independent auditor’s report cont.

to the members of James Fisher and Sons plc

Financial statements 119

James Fisher and Sons plc – Annual Report 2022

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.

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.

Financial statements120 Annual Report 2022 – 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.

Independent auditor’s report cont.

to the members of James Fisher and Sons plc

Financial statements 121

James Fisher and Sons plc – Annual Report 2022

The components within the scope of our work accounted for the following percentages of the Group’s results:

Number of

components

Group

Revenue

Group profit

before tax Group total assets

Audits for group reporting purposes 13 (2021: 15) 75% (2021: 85%) 75% (2021: 75%) 78% (2021: 83%)

Specified procedures for group reporting purposes 2 (2021: 2) 3% (2021: 2%) 0% (2021: 1%) 4% (2021: 2%)

Total 15 (2021: 17) 78% (2021: 87%) 75% (2021:76%) 82% (2021: 85%)

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 statements122 Annual Report 2022 – 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.

Independent auditor’s report cont.

to the members of James Fisher and Sons plc

Financial statements 123

James Fisher and Sons plc – Annual Report 2022

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 statements124 Annual Report 2022 – James Fisher and Sons plc

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 statements 125

James Fisher and Sons plc – Annual Report 2022

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 statements126 Annual Report 2022 – James Fisher and Sons plc

Notes

Year ended

31 December

2022

Tot al

£m

Year ended

31 December

2021

restated*

Total

£m

Continuing operations

Revenue 3 4 7 8 .1 44 2.4

Cost of sales (35 0.9) (338.8)

Gross profit 1 2 7. 2 10 3 . 6

Administrative expenses (10 4 .4) (1 18.9)

Impairment of trade and other receivables 29 0.3 ( 7. 3)

Share of post-tax results of associates 16 1. 6 1. 9

Operating profit/(loss) 4 2 4.7 (20. 7)

Finance income 7 0 .7 0. 3

Finance expense 7 (10. 9) (8.5)

Profit/(loss) before taxation 14 . 5 (28.9)

Income tax 8 (5. 5) 0.8

Profit/(loss) for the year from continuing operations 9.0 (2 8 .1)

Loss for the year from discontinued operations, net of tax 5 (19. 8) (0 .1)

Loss for the year (10 . 8) (28. 2)

Attributable to:

Owners of the Company (11 .1) (2 7. 8)

Non-controlling interests 0.3 (0.4)

(10 . 8) (28. 2)

Loss per share pence pence

Basic 10 (2 2 .1) (5 5. 2)

Diluted 10 (2 2 .1) (5 5. 2)

Profit/(loss) per share – continuing activities pence pence

Basic 10 1 7. 4 (55.0)

Diluted 10 1 7. 4 (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.

Consolidated income statement

for the year ended 31 December 2022

Consolidated statement of other comprehensive income

for the year ended 31 December 2022

Financial statements 127James Fisher and Sons plc – Annual Report 2022

Notes

Year ended

31 December

2022

£m

Year ended

31 December

2021

£m

Loss for the year (10 . 8) (28. 2)

Other comprehensive income:

Items that will not be classified to the income statement

Actuarial gain in defined benefit pension schemes 23 7.1 6.3

Tax on items that will not be reclassified (1. 3) (0.5)

5.8 5.8

Items that may be reclassified to the income statement

Exchange differences on foreign currency net investments 8.8 (2. 6)

Effective portion of changes in fair value of cash flow hedges 29 3.6 (2. 6)

Effective portion of changes in fair value of cash flow hedges in joint ventures 16 0.4 0.3

Net changes in fair value of cash flow hedges transferred to income statement 0.6 0.3

Tax on items that may be reclassified 8 (1 .1) 0.4

12 . 3 (4. 2)

Total other comprehensive income for the year 1 8 .1 1. 6

Total comprehensive income for the year 7. 3 (26 .6)

Attributable to:

Owners of the Company 6.9 (2 6 .1)

Non-controlling interests 0.4 (0.5)

7. 3 (26 .6)

Financial statements128 Annual Report 2022 – James Fisher and Sons plc

Group Company

Notes

31 December

2022

£m

31 December

2021

restated*

£m

31 December

2022

£m

31 December

2021

£m

Non-current assets

Goodwill 12 11 6 . 3 13 3 . 5 – –

Other intangible assets 13 8.2 13. 3 – –

Property, plant and equipment 14 11 9 . 7 12 2 . 2 1.1 1.4

Right-of-use assets 15 52 .3 41. 8 1.0 1.3

Investment in joint ventures 16 8 .7 8.0 – –

Investments in subsidiaries 17 – – 456.5 486.3

Other investments 17 1.4 1. 4 1.4 1.4

Retirement benefit surplus 23 5.5 – 5.5 –

Other receivables 19 0 .7 4 .1 – –

Deferred tax assets 9 8 .4 9.6 – 1.0

3 21. 2 333.9 465.5 491.4

Current assets

Inventories 18 49. 8 4 9.0 – –

Trade and other receivables 19 14 8 . 2 15 3 . 3 22.2 6.9

Assets held for sale 20 36.2 10 .7 – –

Cash and cash equivalents 27 53 .6 6 8.0 0.4 11.7

2 8 7. 8 2 8 1. 0 22.6 18.6

Current liabilities

Trade and other payables 21 (12 2 . 4) (1 39.5) (27. 2) (19.5)

Provisions 22 (5.3) (2. 0) – –

Liabilities associated with assets held for sale 20 (16 . 3) – – –

Current tax 8 (1. 9) (4.5) – –

Borrowings 27 (6 7. 4) (33.6) (45.3) (20.3)

Lease liabilities 27 (13 . 2) (9.9) (0.2) (0.2)

(226. 5) (189.5) (72.7) (40.0)

Net current assets 61. 3 9 1. 5 (5 0.1) (21.4)

Total assets less current liabilities 382 .5 425 .4 415.4 470.0

Non-current liabilities

Other payables 21 (0.5) (1. 3) – –

Provisions 22 (1.4) (1 .1) – –

Retirement benefit obligations 23 (0.4) (1. 9) (0.2) (1.4)

Cumulative preference shares 30 (0 .1) (0 .1) (0.1) (0.1)

Borrowings 27 (121. 8) (17 3 . 9) (121.8) (173.9)

Lease liabilities 27 (3 9 .7) (3 6 .1) (1.3) (1.4)

Deferred tax liabilities 9 (0.3) (0 .4) (0.8) –

(164.2) (2 14 . 8) (124.2) (176.8)

Net assets 218 . 3 210 . 6 291.2 293.2

Equity

Called up share capital 30 12 . 6 12 . 6 12.6 12.6

Share premium 26.8 26. 8 26.8 26.8

Treasury shares (0.6) (0.6) (0.6) (0.6)

Other reserves (6.8) (20.4) 3.6 –

Retained earnings 18 5 . 8 19 1. 5 248.8 254.4

Total shareholders equity 2 1 7. 8 20 9.9 291.2 293.2

Non-controlling interests 0.5 0 .7 – –

Tot al equit y 218 . 3 210 . 6 291.2 293.2

* 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

Consolidated and Company statement of financial position

at 31 December 2022

Financial statements 129James Fisher and Sons plc – Annual Report 2022

Group Company

Notes

31 December

2022

£m

31 December

2021

restated*

£m

31 December

2022

£m

31 December

2021

restated*

£m

(Loss)/profit for the year (10 . 8) (28. 2) (11.6) 12.2

Tax (credit)/charge 4 .7 (0.8) (0.5) (0.2)

Adjustments to reconcile (loss)/profit before tax to net cash flows

Depreciation and amortisation 41 .1 4 4. 2 0.8 1.0

Impairments 2 0 .7 38.4 27.7 2.0

Loss on remeasurement to fair value less costs to sell 5 13 . 3 – – –

Net finance expense/(income) 10. 3 8.3 (6.1) (5.2)

(Gain)/loss on disposal of businesses, net of disposal costs (2 .5) 0. 2 – –

Other non-cash items (1.7) (1. 0) 0.1 0.6

Decrease/(increase) in inventories (3. 2) (2.7) – –

Decrease/(increase) in trade and other receivables 2.5 (5 .1) (3.9) (1.7)

(Decrease)/increase in trade and other payables (1.9) 11 . 8 5.2 8.6

Defined benefit pension cash contributions less service cost 0 .1 (2. 2) 0.3 (1.9)

Cash generated from operations 52 .6 6 2. 9 12.0 15.4

Income tax payments (8 .1) ( 7. 9 ) (0.1) ( 0.1)

Cash flow from operating activities 44.5 5 5.0 11.9 15.3

Investing activities

Dividends from joint venture undertakings 1.7 1. 6 – –

Proceeds from the disposal of a subsidiary, net of cash disposed 26 1 5 .1 6.2 – –

Proceeds from the disposal of property, plant and equipment 2.2 14 . 7 – –

Finance income 0.8 0.3 14.7 11.4

Acquisition of subsidiaries, net of cash acquired 25 (2.6) (1 .1) – –

Loans advanced to subsidiaries – – (34.8) (49.9)

Loans repaid from subsidiaries – – 32.8 69.3

Acquisition of property, plant and equipment (31.7) (28 .2) (0.4) (0.3)

Development expenditure (1. 3) (1 .5) – –

Cash flows from/(used in) investing activities (15 . 8) (8 .0) 12.3 30.5

Financing activities

Proceeds from the issue of share capital – 0 .1 – 0.1

Finance costs (7 .5) (5.6) (7.2 ) (4.7)

Acquisition of non-controlling interests (NCI) 25 (1. 5) – – –

Net purchase of own shares by Employee Share Ownership Trust – (0.5) – (0.5)

Purchase of own shares for LTIP vesting – (0.5) – (0.5)

Capital element of lease repayments (14 . 5) (13 .7) (0.2) (0.2)

Proceeds from borrowings 16 6 .0 20 5.0 166.0 205.0

Repayment of borrowings (18 2 . 6) (2 1 0.9) (182.5) (210.7)

Cash flows used in financing activities (4 0 .1) (2 6 .1) (23.9) (11.5)

Net increase in cash and cash equivalents 28 (11 . 4) 20.9 0.3 34.3

Cash and cash equivalents at 1 January 27 34.5 13 . 5 (8.6) (42.9)

Net foreign exchange differences 2.5 0 .1 – –

Cash transferred to asset held for sale 5 (2. 8) – – –

Cash and cash equivalents at 31 December 27 22.8 3 4.5 (8.3) (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).

Consolidated and Company cash flow statement

for the year ended 31 December 2022

Financial statements130 Annual Report 2022 – James Fisher and Sons plc

capital

£m

premium

£m

Retained

earnings

£m

Other

reserves

£m

Treasury

£m

Tot al

shareholders

equity

£m

Non-

controlling

interests

£m

Tot al

equity

£m

At 1 January 2021 12. 6 2 6 .7 2 14 . 6 (1 6.5) (0.2) 2 3 7. 2 0 .7 2 3 7. 9

Loss for the year – – ( 2 7. 8) – – (2 7. 8 ) (0.4) (2 8. 2)

Other comprehensive income – – 5.8 (4 .1) – 1. 7 (0 .1) 1. 6

Contributions by and distributions

to owners:

Remeasurement of non-controlling

interest put option – – – 0. 2 – 0.2 – 0.2

Changes in ownership interest without

a change in control – – (0 .7) – – (0.7) 0.5 (0. 2)

Share-based payments – – 0. 3 – – 0.3 – 0. 3

Tax effect of share-based payments – – (0 .1) – – (0 .1) – (0 .1)

Purchase of shares by ESOT – – – – (0.5) (0.5) – (0.5)

Notional purchase of own shares – – (0.5) – – (0.5) – (0.5)

Arising on the issue of shares – 0 .1 – – – 0 .1 – 0 .1

Transfer – – ( 0 .1) – 0 .1 – – –

At 31 December 2021 12 . 6 26.8 1 91. 5 (20.4) (0.6) 209. 9 0.7 210 . 6

Loss for the year – – (11 .1) – – (11 .1) 0.3 (10 . 8)

Other comprehensive income – – 5.8 12. 2 – 18 . 0 0 .1 1 8 .1

Contributions by and distributions

to owners:

Remeasurement of non-controlling

interest put option – – – 1. 4 – 1. 4 – 1. 4

Changes in ownership interest without

a change in control – – (0.9) – – (0.9) (0.6) (1 .5)

Share-based payments – – 0. 5 – – 0.5 – 0. 5

At 31 December 2022 12 . 6 26.8 18 5 . 8 (6.8) (0.6) 2 17. 8 0.5 218 . 3

Other reserve movements

Other reserves

Translation

reserve

£m

Hedging

reserve

£m

Put option

liability

£m

Tot al

£m

At 1 January 2021 (14 . 3) 0. 5 (2.7) (1 6.5)

Other comprehensive income (2. 6) (1 .5) – (4 .1)

Remeasurement of non-controlling interest put option – – 0.2 0.2

At 31 December 2021 (16 . 9) (1. 0) (2.5) (20.4)

Other comprehensive income 8 .7 3.5 – 12. 2

Remeasurement of non-controlling interest put option – – 1. 4 1. 4

At 31 December 2022 (8.2) 2 .5 (1 .1) (6.8)

Consolidated statement of changes in equity

for the year ended 31 December 2022

Financial statements 131

James Fisher and Sons plc – Annual Report 2022

capital

£m

premium

£m

Retained

earnings

£m

Hedging

reserves

£m

Treasury

£m

Tot al

shareholders

equity

£m

At 1 January 2021 12.6 26.7 236.7 1.9 (0.2) 27 7.7

Profit for the year – – 12.2 – – 12.2

Other comprehensive income – – 5.9 (1.9) – 4.0

Contributions by and distributions

to owners:

Share-based compensation – – 0.3 – – 0.3

Tax effect of share-based compensation – – (0.1) – – ( 0.1)

Purchase of shares by ESOT – – – – (0.5) (0.5)

Notional purchase of own shares – – (0.5) – – (0.5)

Arising on the issue of shares – 0.1 – – – 0.1

Transfer on disposal of shares – – ( 0.1) – 0.1 –

At 31 December 2021 12.6 26.8 254.4 – (0.6) 293.2

Loss for the year – – (11.6) – – (11.6)

Other comprehensive income – – 5.5 3.6 – 9.1

Contributions by and distributions

to owners:

Share-based compensation – – 0.5 – – 0.5

At 31 December 2022 12.6 26.8 248.8 3.6 (0.6) 291.2

Company statement of changes in equity

for the year ended 31 December 2022

Financial statements132 Annual Report 2022 – James Fisher and Sons plc

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.

31 Dec 2021

As reported

£m

Adjustment

£m

Adjustment

£m

31 Dec 2021

Restated

£m

Prepayments 9.8 – 0.8 10.6

Contract assets 60.3 (4.8) – 55.5

Current trade and other receivables 157. 3 (4.8) 0.8 153.3

Current assets 285.0 (4.8) 0.8 281.0

Contract assets 6.0 – (6.0) –

Non-current other receivables 10.1 – (6.0) 4.1

Non-current assets 339.9 – (6.0) 333.9

Accruals (72.0) – 5.2 (66.8)

Other payables (15.2) 4.8 – (10.4)

Current liabilities (199.5) 4.8 5.2 (189.5)

Total assets less current liabilities 425.4 – – 425.4

Notes to the financial statements

Financial statements 133

James Fisher and Sons plc – Annual Report 2022

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:

Group consolidated

cash flow statement

31 Dec 2021

As reported

£m

31 Dec 2021

Restated

£m

Decrease/(increase) in trade and other receivables (11.2) (5.1)

Cash flow from operating activities 48.9 55.0

Acquisition of property, plant and equipment (22.1) (28.2)

Cash flows from/(used in) investing activities (1.9) (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.

Group consolidated

cash flow statement

Company

cash flow statement

31 Dec 2021

As reported

£m

31 Dec 2021

Restated

£m

31 Dec 2021

As reported

£m

31 Dec 2021

Restated

£m

Proceeds from borrowings 84.0 205.0 – 205.0

Repayment of borrowings (89.9) (210.9) (5.7) (210.7)

Cash flows used in financing activities (26.1) (26.1) (11.5) (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.

Company

cash flow statement

31 Dec 2021

As reported

£m

31 Dec 2021

Restated

£m

Loans advanced to subsidiaries – (49.9)

Loans repaid from subsidiaries 19.4 69.3

Cash flows from/(used in) investing activities 30.5 30.5

Financial statements134 Annual Report 2022 – James Fisher and Sons plc

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 statements 135

James Fisher and Sons plc – Annual Report 2022

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 statements136 Annual Report 2022 – James Fisher and Sons plc

2. ALTERNATIVE PERFORMANCE MEASURES CONT.

2.1 Underlying operating profit cont.

Continuing operations

Dis-

continued

operations

£m

Tot al

underlying

results

£m

2022

Continuing

operations

reported

£m

Amortisation

of acquired

intangible

assets

£m

Impairment

charges/

(reversals)

£m

Specific

trade

receivables

provision

£m

Re-

structuring

£m

Disposal of

businesses

and assets

£m

Other/Tax

£m

Underlying

results

£m

Revenue 478.1 – – – – – – 478.1 42.8 520.9

Cost of sales (350.9) – (4.5) – – (0.9) – (356.3) (43.3) (399.6)

Gross profit 127. 2 – (4.5) – – (0.9) – 121.8 (0.5) 121.3

Administrative expenses (104.4) 2.1 5.2 – 1.7 (2.5) 1.7 (96.2) (6.9) (103.1)

Impairment of trade

receivables 0.3 – – (1.1) – – – (0.8) – (0.8)

Share of post-tax

results of associates 1.6 – – – – – – 1.6 0.1 1.7

Operating profit/(loss) 24.7 2 .1 0.7 (1.1) 1.7 (3.4) 1.7 26.4 (7. 3) 19.1

Finance income 0.7 – – – – – – 0.7 – 0.7

Finance expense (10.9) – – – – – – (10.9) (0.1) (11.0)

Profit/(loss) before

taxation 14.5 2.1 0.7 (1.1) 1.7 (3.4) 1.7 16.2 (7.4) 8.8

Income tax (5.5) – – – – – 0.8 (4.6) 0.8 (3.8)

Profit/(loss) for the

year from continuing

operations 9.0 2 .1 0.7 (1.1) 1.7 (3.4) 2.5 11.6 (6.6) 5.0

Discontinued

operations

(Loss)/profit for the

year from discontinued

operations, net of tax (19.8) – – – – – – (19.8) 19.8 –

Profit/(loss) for

the year (10.8) 2.1 0.7 (1.1) 1.7 (3.4) 2.5 (8.3) 13.3 5.0

Operating margin (%) 5.2% 5.5% −17.0% 3.7%

Segmental underlying

operating profit is

calculated as follows:

Marine Support 10.1 1.5 (0.8) (1.1) 0.4 (2.4) 0.2 7.9

Specialist Technical (2.6) 0.1 1.8 – 1.3 – – 0.6

Offshore Oil 14.7 0.5 – – – – – 15.2

Tankships 9.9 – (0.3) – – (1.0) – 8.6

Corporate (7.4) – – – – – 1.5 (5.9)

Continuing 24.7 2.1 0.7 (1.1) 1.7 (3.4) 1.7 26.4

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).

Notes to the financial statements cont.

Financial statements 137

James Fisher and Sons plc – Annual Report 2022

2. ALTERNATIVE PERFORMANCE MEASURES CONT.

2.1 Underlying operating profit cont.

Continuing operations

Dis-

continued

operations

£m

Total

underlying

results

£m

2021

Continuing

operations

reported

restated

£m

Amortisation

of acquired

intangible

assets

£m

Impairment

charges

£m

Specific

trade

receivables

provision

£m

Litigation

£m

Disposal of

businesses

and assets

£m

Other/Tax

£m

Underlying

results

£m

Revenue 442.4 – – – – – – 442.4 51.7 49 4.1

Cost of sales (338.8) – 11.0 – – – – (327. 8) (45.8) (373.6)

Gross profit 103.6 – 11.0 – – – – 114.6 5.9 120.5

Administrative expenses (118.9) 2.9 27.5 – 3.1 (0.1) – (85.5) (6.0) (91.5)

Impairment of trade

receivables ( 7. 3 ) – – 4.3 – – – (3.0) – (3.0)

Share of post-tax

results of associates 1.9 – – – – – – 1.9 0.1 2.0

Operating

profit/(loss) (20.7) 2.9 38.5 4.3 3.1 (0.1) – 28.0 – 28.0

Finance income 0.3 – – – – – – 0.3 – 0.3

Finance expense (8.5) – – – – – – (8.5) (0.1) (8.6)

Profit/(loss)

before taxation (28.9) 2.9 38.5 4.3 3.1 (0.1) – 19.8 (0.1) 19.7

Income tax 0.8 – – – – – (10.9) (10.1) – (10.1)

Profit/(loss) for the

year from continuing

operations (28.1) 2.9 38.5 4.3 3.1 (0.1) (10.9) 9.7 (0.1) 9.6

Discontinued

operations

(Loss)/profit for the

year from discontinued

operations, net of tax ( 0.1) – – – – – – (0.1) 0.1 –

Profit/(loss) for

the year (28.2) 2.9 38.5 4.3 3.1 (0.1) (10.9) 9.6 – 9.6

Operating margin (%) –4.7% 6.3% 0.1% 5.7%

Segmental underlying

operating profit is

calculated as follows:

Marine Support (21.0) 2.3 18.3 2.4 3.1 (0.1) – 5.0

Specialist Technical 7.1 0.1 2.8 – – – – 10.0

Offshore Oil (5.2) 0.5 13.9 1.9 – – – 11.1

Tankships 1.3 – 3.5 – – – – 4.8

Corporate (2.8) – – – – – – (2.8)

Continuing (20.6) 2.9 38.5 4.3 3.1 (0.1) – 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 statements138 Annual Report 2022 – James Fisher and Sons plc

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.

2022

£m*

2021

£m

Underlying operating profit 26.4 28.0

Depreciation and amortisation 40.3 44.2

Less: Depreciation on right-of-use assets (12.2) (13.2)

Amortisation of acquired intangibles (2 .1) (2.9)

IFRS 16 impact removed 0.2 (1.8)

Covenant EBITDA 52.6 54.3

* Excludes discontinued operations.

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.

2022

£m

2021

£m

Net borrowings (Note 28) 185.8 185.6

Guarantees 2.3 8.4

Less: right-of-use operating leases (46.0) (38.2)

Underlying Net borrowings 142 .1 155.8

Covenant EBITDA 52.6 54.3

Leverage 2.7 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.

2022

£m

2021

£m

Net assets 218.3 210.6

Less right-of-use assets (52.3) (41.8)

Plus net borrowings 185.8 185.6

Capital employed 351.7 354.4

Add: amortisation of customer relationships 1.7 2.4

353.4 356.8

Underlying operating profit 19.1 28.0

Notional tax at the underlying effective tax rate (5.1) (14.3)

14.0 13.7

Average capital employed 355.1 37 7.4

Return on average capital employed 3.9% 3.6%

Notes to the financial statements cont.

Financial statements 139

James Fisher and Sons plc – Annual Report 2022

2. ALTERNATIVE PERFORMANCE MEASURES CONT.

2.4 Underlying Capital employed and Return on Capital Employed (ROCE) cont.

The four divisional ROCE’s are detailed below:

Year ended 31 December 2022

Marine

Support

£m

Specialist

Technical

£m

Offshore

Oil

£m

Tankships

£m

Net assets 119.4 83.9 102.8 34.0

Less right-of-use assets (6.3) (3.0) (4.0) (38.1)

Plus net borrowings 9.9 3.3 4.4 33.8

Capital employed 123.0 84.1 103.3 29.7

Add: amortisation of customer relationships 1.6 0.1 – –

124.6 84.2 103.3 29.7

Underlying operating profit 7.9 (6.7) 15.2 8.6

Average capital employed 123.2 91.2 101.7 32 .1

Return on average capital employed 6.4% -7.4% 14.9% 26.8%

Year ended 31 December 2021

Marine

Support

£m

Specialist

Technical

£m

Offshore

Oil

£m

Tankships

£m

Net assets 114.8 97.7 100.0 36.0

Less right-of-use assets (6.1) (6.2) (4.6) (23.6)

Plus net borrowings 10.6 6.6 5.1 22.2

Capital employed 119.3 98.1 100.5 34.5

Add: amortisation of customer relationships 2.6 0.1 – –

121.9 98.2 100.5 34.5

Underlying operating profit 5.0 9.9 11.1 4.8

Average capital employed 142.5 101.1 108.5 32.9

Return on average capital employed 3.5% 9.8% 10.2% 14.7%

2.5 Interest cover

2022

£m

2021

£m

Interest receivable on Short-term deposits less interest payable on bank loans 8.1 6.0

Finance lease interest 0.1 0.1

Arrangement fees (1.0) (1.2)

Covenant interest 7.2 4.9

Underlying net operating profit 26.4 28.0

IFRS 16 impact removed (0.7) (1.6)

25.7 26.4

Interest cover 3.5 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.

2022

£m

2021

£m

Loss attributable to owners of the Company (11.1) (27. 8)

Adjusting items 1.7 48.7

Tax on adjusting items 0.8 (10.9)

Underlying profit attributable to owners of the Company (8.6) 10.0

Basic weighted average number of shares (Note 10) 50,345,989 50,345,477

Diluted weighted average number of shares (Note 10) 50,367,147 50,356,037

Underlying basic earnings per share (17.1) 20.0

Underlying diluted earnings per share (17.1) 20.0

Financial statements140 Annual Report 2022 – James Fisher and Sons plc

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

Marine

Support

£m

Specialist

Technical

£m

Offshore

Oil

£m

Tankships

£m

Corporate

£m

Continuing

Total

£m

Discontinued

Total

£m

Total

£m

Segmental revenue 224.6 68.2 106.7 78.9 – 478.4 43.9 522.3

Inter-segmental sales (0.1) (0.1) (0.1) – – (0.3) (1.1) (1.4)

Revenue 224.5 68 .1 106.6 78.9 – 478.1 42.8 520.9

Underlying operating profit/(loss) 7.9 0.6 15.2 8.6 (5.9) 26.4 (7.3) 19.1

APMs (see Note 2) 2.2 (3.2) (0.5) 1.3 (1.5) (1.7) (13.3) (15.0)

Operating profit/(loss) 10.1 (2.6) 14.7 9.9 (7.4) 24.7 (20.6) 4.1

Finance income 0.7 – 0.7

Finance expense (10.9) – (10.9)

Profit/(loss) before tax 14.5 (20.6) (6.2)

Income tax (5.5) 0.8 (4.7)

Profit/(loss) for the year 9.0 (19.8) (10.8)

Assets and liabilities

Segmental assets 188.1 114.4 131.4 86.5 63.6 584.0 16.3 600.3

Investment in joint ventures 2.4 3.4 2.8 – – 8.7 – 8.7

Total assets 190.5 117. 8 134.2 86.5 63.6 592.7 16.3 609.0

Segmental liabilities (71.2) (34.0) (31.4) (52.5) (185.3) (374.4) (16.3) (390.7)

119.3 83.8 102.8 34.0 (121.7) 218.3 – 218.3

Other segmental information

Capital expenditure 9.6 4.6 8.9 4.0 – 27.1 0.3 27.4

Depreciation and amortisation 11.0 5.6 11. 2 12.1 0.4 40.3 0.8 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.

Notes to the financial statements cont.

Financial statements 141James Fisher and Sons plc – Annual Report 2022

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:

Within 1

year

£m

1 – 2

years

£m

2 – 3

years

£m

3 – 4

years

£m

4 – 5

years

£m

years

£m

Operating lease receivables 3.7 2 .1 2.2 2.3 2.4 2.6

Year ended 31 December 2021

Marine

Support

£m

Specialist

Technical

restated*

£m

Offshore Oil

£m

Tankships

£m

Corporate

£m

Continuing

Total

restated*

£m

Discontinued

Total

restated*

£m

Total

£m

Segmental revenue 214.7 81.8 86.5 60.1 – 4 4 3.1 52.8 495.9

Inter-segmental sales (0.2) (0.3) (0.2) – – (0.7) (1.1) (1.8)

Revenue 214.5 81.5 86.3 60.1 – 442.4 51.7 494.1

Underlying operating profit/(loss) 5.0 10.0 11.1 4.8 (2.8) 28.1 (0.1) 28.0

APMs (see Note 2) (26.0) (2.9) (16.3) (3.5) – (48.7) – (48.7)

Operating (loss)/profit (21.0) 7.1 (5.2) 1.3 (2.8) (20.6) (0.1) (20.7)

Net finance expense (8 .1) (0.2) (8.3)

Loss before tax (28.7) (0.3) (29.0)

Income tax 0.6 0.2 0.8

Loss for the year (28.1) (0.1) (28.2)

Assets and liabilities

Segmental assets 189.7 118 .9 124.2 75.1 73.4 581.3 35.9 617. 2

Investment in joint ventures 2.6 3.0 2.2 – – 7. 8 0.2 8.0

Total assets 192.3 121.9 126.4 75.1 73.4 58 9.1 36.1 625.2

Segmental liabilities (77.4) ( 37.8 ) (26.4) (39.2) (211.3) (392.1) (22.5) (414.6)

114.9 8 4.1 100.0 35.9 (137.9) 197.0 13.6 210.6

Other segmental information

Capital expenditure 6.1 2.4 6.3 4.3 – 19.1 0.3 19.4

Depreciation and amortisation 12.3 5.1 12.1 12.4 0.5 42.4 1.8 44.2

* 2021 results are restated due to a business classified as discontinued operations – see Note 5.

Financial statements142 Annual Report 2022 – James Fisher and Sons plc

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 Rest of Europe

Middle East,

Africa & Americas Asia Pacific Total

2022

£m

2021

£m

2022

£m

2021

£m

2022

£m

2021

£m

2022

£m

2021

£m

2022

£m

2021

£m

Continuing

Revenue

Segmental revenue 165.1 146.2 65.3 54.7 155.5 136.3 92.5 106.0 478.4 4 4 3.1

Inter-segmental sales (0.3) (0.4) – – – (0.3) – – (0.3) (0.7)

Group revenue 164.8 145.8 65.3 54.7 155.5 136.0 92.5 106.0 478 .1 442.4

Discontinued

Revenue

Segmental revenue 43.6 52.6 – – – – 0.3 0.2 43.9 52.8

Inter-segmental sales (1.1) (1.1) – – – – – – (1.1) (1.1)

Group revenue 42.5 51.5 – – – – 0.3 0.2 42.8 51.7

Continuing

Segmental non-current assets 209.9 213.6 40.9 44.0 26.8 26.6 34.9 33.0 312.5 317. 2

Segmental current assets 177.0 183.7 7.1 5.1 53.2 44.9 34.2 30.4 271.5 26 4.1

Segmental assets 386.9 397. 3 48.0 49.1 80.0 71.5 69.1 63.4 584.0 581.3

Investment in joint ventures 0.3 0.1 3.1 2.4 0.2 0.3 5.1 5.0 8.7 7. 8

Segmental liabilities (314.1) (321.8) (8.0) (8.0) (36.1) (46.0) (16.2) (16.3) (372.8) (39 2.1)

73.1 75.6 43.0 43.5 4 4.1 25.8 58.1 52.1 218.3 197.0

Discontinued

Segmental non-current assets – 15.0 – – – – – – – 15.0

Segmental current assets 16.3 20.9 – – – – – – 16.3 20.9

Segmental assets 16.3 35.9 – – – – – – 16.3 35.9

Investment in joint ventures – – – – – – – 0.2 – 0.2

Segmental liabilities (16.3) (22.5) – – – – – – (16.3) (22.5)

– 13.4 – – – – – 0.2 – 13.6

4. OPERATING PROFIT

Detailed below are the key amounts recognised in arriving at operating profit for continuing operations:

2022

£m

2021

£m

Amortisation of intangible assets (Note 13) 5.2 7.4

Depreciation of property, plant and equipment (Note 14) 23.3 23.6

Depreciation of ROU assets (Note 15) 12.6 13.2

Impairment charges/(reversals):

Goodwill and intangible assets (Notes 12 and 13) 4.6 29.2

Tangible fixed assets, including ROU assets (Note 14 and 15) 1.1 9.3

Vessel held for sale (Note 20) (5.4) –

Staff costs (Note 6) 145.8 136.4

(Gain)/loss on disposal of businesses, net of disposal costs (Note 26) (2.5) 0.2

Costs of material litigation – 3.1

Notes to the financial statements cont.

Financial statements 143

James Fisher and Sons plc – Annual Report 2022

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:

2022

£m

2021

£m

Audit of the financial statements of the parent 0.6 0.5

Half year review 0.1 0.1

Local statutory audits of subsidiaries 3.8 1.4

Total fees payable to Group auditor 4.5 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

2022

£m

2021

£m

Revenue 43.9 52.8

Inter-segmental sales (1.1) (1.1)

42.8 51.7

Expenses (50.1) (51.8)

Loss before taxation (7.3) (0.1)

Income tax 0.8 –

Loss from operating activities after tax (6.5) (0.1)

Loss on remeasurement to fair value less costs to sell (13.3) –

Income tax on loss on remeasurement to fair value less costs to sell – –

Loss for the year from discontinued operations (19.8) (0.1)

Attributable to:

Owners of the Company (19.8) (0.1)

Non-controlling interests – –

(19.8) (0.1)

Cash flows from/(used in) discontinued operations

2022

£m

2021

£m

Net cash from operating activities (3.1) 1.1

Net cash from investing activities (5.0) (1.1)

Net cash from financing activities – –

Net cash flows for the year (8.1) –

Financial statements144 Annual Report 2022 – James Fisher and Sons plc

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:

2022

£m

Property, plant and equipment 2.3

Inventories 0.7

Trade and other receivables 10.5

Cash and cash equivalents 2.8

Assets held for sale 16.3

Trade and other payables (13.7)

Lease liabilities (2.2)

Taxation (0.3)

Liabilities associated with assets held for sale (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:

2022

£m

2021

£m

Wages and salaries 127.3 119.8

Social security costs 12.8 11.6

Pension costs 5.2 4.7

Share-based compensation 0.5 0.3

145.8 136.4

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:

2022

Number

2021

Number

Production and Engineering 1,608 1,637

Sales 213 190

Administration 789 799

Seafarers 37 36

2,647 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

2022

£m

2021

£m

Short-term employee benefits 2.9 2.4

Share-based payments 0.3 0.2

3.2 2.6

Key management personnel include the Board of Directors of the Company and other senior members of the management team.

Notes to the financial statements cont.

Financial statements 145James Fisher and Sons plc – Annual Report 2022

7. NET FINANCE EXPENSE

2022

£m

2021

£m

Finance income:

Interest receivable on short-term deposits 0.7 0.3

Finance expense:

Bank loans and overdrafts (8.8) (6.3)

Net interest on pension obligations – (0.1)

Unwind of discount on right-of-use lease liability (2 .1) (2.1)

Total expense (10.9) (8.5)

Net finance expense – continuing operations (10.2) (8.2)

8. TAXATION

(a) The tax charge is based on profit for the year and comprises:

2022

£m

2021

£m

Current tax:

UK corporation tax (1.2) (0.7)

Overseas tax (6.3) (6.0)

Adjustment in respect of prior years:

UK corporation tax 0.5 1.3

Overseas tax 0.2 (0.3)

Total current tax (6.8) (5.7)

Deferred tax:

Origination and reversal of temporary differences:

Current year

UK corporation tax 0.7 8.3

Overseas tax (0.3) –

Prior year

UK corporation tax 0.9 (0.6)

Overseas tax – (1.2)

Tax expense on continuing operations (5.5) 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:

2022

£m

2021

£m

Current tax:

Foreign exchange losses on internal loans (0.4) –

Contributions to defined benefit pension schemes 0.4 0.5

Deferred tax:

Actuarial gain on defined benefit pension schemes (1.7) (1.0)

Relating to derivatives (0.7) 0.4

(2.4) (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 statements146 Annual Report 2022 – James Fisher and Sons plc

8. TAXATION CONT.

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:

2022

£m

2021

£m

Profit/(loss) before tax 14.5 (28.9)

Tax arising from interests in joint ventures 0.1 0.3

14.6 (28.6)

Tax on profit/(loss) at UK statutory tax rate of 19% (2021: 19%) 2.8 (5.4)

Tonnage tax relief/(expense) on vessel activities (0.8) 0.6

Expenses not deductible for tax purposes 1.6 4.2

(Over)/under provision In prior years:

Current tax (0.7) (1.0)

Deferred tax (0.9) 1.8

Higher tax rates on overseas income 2.8 1.8

Non-taxable income (0.8) (0.3)

Impact of change of rate 0.1 1.1

Movement on unrecognised deferred tax 1.5 (3.3)

5.6 (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:

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Assets

Retirement benefits – 0.5 – 0.4

Property, plant and equipment 3.3 4.0 – –

Share-based payments – – – –

Derivative financial instruments – 0.1 – 0.1

Losses carried forward 6.4 3.4 – –

Temporary differences 1.1 1.6 0.6 0.5

10.8 9.6 0.6 1.0

Liabilities

Retirement benefits (0.7) – (0.8) –

Property, plant and equipment – – – –

Intangible assets (1.4) (0.4) – –

Derivative financial instruments (0.6) – (0.6) –

(2.7) (0.4) (1.4) –

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.

Notes to the financial statements cont.

Financial statements 147

James Fisher and Sons plc – Annual Report 2022

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:

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Balance at 1 January 9.2 3.4 1.0 2.8

Charged to comprehensive income (2.4) (0.6) (2.3) (0.5)

Charged to equity – (0.1) – (0.1)

Credited to income statement 1.3 6.5 0.5 (1.2)

Balance at 31 December 8.1 9.2 (0.8) 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:

Group

2022

£m

2021

£m

Deferred tax assets (3.0) 4.6

Deferred tax liabilities:

Property, plant and equipment 0.7 (7.5)

Intangible assets 1.0 (3.6)

Deferred income tax credit (1.3) (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:

2022

£m

2021

£m

Loss after tax attributable to shareholders (11.1) (27. 8)

Financial statements148 Annual Report 2022 – James Fisher and Sons plc

10. EARNINGS PER SHARE CONT.

Weighted average number of shares

2022

Number of

2021

Number of

Basic weighted average number of shares 50,345,989 50,345,477

Potential exercise of share-based payment schemes 21,158 10,560

Diluted weighted average number of shares 50,367,147 50,356,037

Earnings per share pence pence

Basic earnings per share (22 .1) (55.2)

Diluted earnings per share (2 2.1) (55.2)

Earnings per share – continuing operations pence pence

Basic earnings per share 17.4 (55.0)

Diluted earnings per share 17.4 (55.0)

Earnings per share – discontinued operations pence pence

Basic earnings per share (39.5) 0.2

Diluted earnings per share (39.5) 0.2

11. DIVIDENDS PAID AND PROPOSED

There were no dividends paid or proposed in either 2022 or 2021.

12. GOODWILL

Reconciliation of carrying amount

JFD

£m

Scantech

£m

Fendercare

£m

Multiple

units without

significant

goodwill

£m

Tot al

£m

At 1 January 2021 32.7 23.4 16.7 93.7 166.5

Impairment – – – (27.5) (27.5)

Disposals – – – (3.9) (3.9)

Exchange differences (0.4) (0.5) – (0.7) (1.6)

At 31 December 2021 32.3 22.9 16.7 61.6 133.5

Impairment – – – (4.4) (4.4)

Disposals – – – ( 7.1) (7.1)

Discontinued operations – – – (8.1) (8 .1)

Reallocation between CGUs 0.9 – – (0.9) –

Exchange differences 0.9 0.2 0.3 1.0 2.4

At 31 December 2022 34.1 23.1 17.0 42 .1 116.3

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.

Notes to the financial statements cont.

Financial statements 149

James Fisher and Sons plc – Annual Report 2022

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:

Headroom

Discount rate

(post-tax)*

Five-year average

revenue growth rate

Terminal value

growth rate

2022

£m

2021

£m 2022 2021 2022 2021 2022 2021

JFD 35.6 74.1 14.7% 10.5% 3.2% 17. 3 % 2.6% 1.8%

Scantech 39.8 24.1 12.9% 10.0% 7.0% 2.0% 2.6% 1.8%

Fendercare 49.3 81.5 15.3% 11.4% 2.7% 8.4% 2.6% 1.8%

Multiple units without significant

goodwill 183.5 288.5 14.1% 10.3% 12.8% 4.2% 2.6% 1.8%

Total 308.2 468.2

* 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 statements150 Annual Report 2022 – James Fisher and Sons plc

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

Development

costs

£m

Intellectual

property

£m

Customer

relationships

£m

Tot al

£m

Cost

At 1 January 2021 29.2 9.8 18.7 57.7

Additions 1.5 – – 1.5

Acquisitions – 0.7 – 0.7

Disposals (1.6) – (1.0) (2.6)

Exchange differences 0.1 (0.1) (0.2) (0.2)

At 31 December 2021 29.2 10.4 17. 5 5 7.1

Additions 1.2 – 0.1 1.3

Transfer (2.0) – (0.3) (2.3)

Disposals (4.8) (0.1) – (4.9)

Exchange differences 0.1 0.2 0.5 0.8

At 31 December 2022 23.7 10.5 17.8 52.0

Amortisation

At 1 January 2021 18.8 5.2 13.6 37. 6

Charge for the period 3.9 1.1 2.4 7.4

Impairment 1.7 – – 1.7

Disposals (1.6) – (1.0) (2.6)

Exchange differences ( 0.1) – (0.2) (0.3)

At 31 December 2021 22.7 6.3 14.8 43.8

Charge for the period 2.3 1.2 1.7 5.2

Impairment 0.2 – – 0.2

Transfer (1.1) – (0.3) (1.4)

Disposals (4.5) (0.1) – (4.6)

Exchange differences 0.2 0.1 0.3 0.6

At 31 December 2022 19.8 7.5 16.5 43.8

Net book value at 31 December 2022 3.9 3.0 1.3 8.2

Net book value at 31 December 2021 6.5 4.1 2.7 13.3

Net book value at 31 December 2020 10.4 4.6 5.1 20.1

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).

Notes to the financial statements cont.

Financial statements 151

James Fisher and Sons plc – Annual Report 2022

14. PROPERTY, PLANT AND EQUIPMENT

Group

Vessels

£m

Assets

under

construction

£m

Property

£m

Plant and

equipment

£m

Total

£m

Cost:

At 1 January 2021 137.9 4.1 35.7 215.2 392.9

Additions 5.4 3.0 0.3 10.7 19.4

Reclassifications (28.8) (2.3) 1.2 1.1 (28.8)

Disposals (31.9) (1.1) (1.7) (11.5) (46.2)

Exchange differences (0.9) (0.1) (0.1) (2.4) (3.5)

At 31 December 2021 81.7 3.6 35.4 213.1 333.8

Additions 4.1 9.7 0.5 13.1 27.4

Reclassifications 0.3 (3.6) (5.7) (2.9) (11.9)

Disposals (20.7) (0.2) (4.2) (12.8) (37. 9 )

Exchange differences 0.6 – 1.0 4.5 6.1

At 31 December 2022 66.0 9.5 27.0 215.0 317.5

Depreciation:

At 1 January 2021 82.6 – 13.6 138.5 234.7

Provided during the year 5.1 – 1.7 16.8 23.6

Provision for impairment 3.5 – 1.6 – 5.1

Reclassifications (18.1) – – – (18.1)

Disposals (20.1) – (1.3) (9.8) (31.2)

Exchange differences (0.6) – (0.1) (1.8) (2.5)

At 31 December 2021 52.4 – 15.5 143.7 211.6

Provided during the year 5.8 – 1.5 16.0 23.3

Provision for impairment (0.3) – 0.9 0.1 0.7

Reclassifications – – (1.1) (5.0) (6.1)

Disposals (19.3) – (4.2) (11.9) (35.4)

Exchange differences 0.3 – 0.6 2.8 3.7

At 31 December 2022 38.9 – 13.2 145.7 197.8

Net book value at 31 December 2022 27.1 9.5 13.8 69.3 119.7

Net book value at 31 December 2021 29.3 3.6 19.9 69.4 122.2

Net book value at 31 December 2020 55.3 4.1 22.1 76.7 158.2

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 statements152 Annual Report 2022 – James Fisher and Sons plc

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

Vessels

£m

Plant and

equipment

£m

Tot al

£m

Cost:

At 1 January 2021 – 38.4 38.4

Additions 0.9 1.4 2.3

Disposals – (0.8) (0.8)

Exchange differences – (0.7) (0.7)

At 31 December 2021 0.9 38.3 39.2

Additions – 1.8 1.8

Disposals – (1.4) (1.4)

Exchange differences – 0.4 0.4

At 31 December 2022 0.9 39.1 40.0

Depreciation:

At 1 January 2021 – 22.5 22.5

Provided during the year 0.2 2.5 2.7

Disposals – (0.7) (0.7)

Exchange differences – (0.4) (0.4)

At 31 December 2021 0.2 23.9 24.1

Provided during the year 0.2 2.5 2.7

Disposals – (0.8) (0.8)

Exchange differences – 0.2 0.2

At 31 December 2022 0.4 25.8 26.2

Net book value at 31 December 2022 0.5 13.3 13.8

Net book value at 31 December 2021 0.7 14.4 15.1

Net book value at 31 December 2020 – 15.9 15.9

Company

Vessels

£m

Property

£m

Plant and

equipment

£m

Total

£m

Cost:

At 1 January 2021 10.5 2.3 3.5 16.3

Additions 0.1 – 0.2 0.3

At 31 December 2021 10.6 2.3 3.7 16.6

Additions – – 0.3 0.3

Disposals (10.6) – – (10.6)

At 31 December 2022 – 2.3 4.0 6.3

Depreciation:

At 1 January 2021 7.8 1.6 3.0 12.4

Provided during the year 0.5 0.1 0.2 0.8

Provision 2.0 – – 2.0

At 31 December 2021 10.3 1.7 3.2 15.2

Provided during the year 0.2 0.1 0.2 0.5

Disposals (10.5) – – (10.5)

At 31 December 2022 – 1.8 3.4 5.2

Net book value at 31 December 2022 – 0.5 0.6 1.1

Net book value at 31 December 2021 0.3 0.6 0.5 1.4

Net book value at 31 December 2020 2.7 0.7 0.5 3.9

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.

Notes to the financial statements cont.

Financial statements 153

James Fisher and Sons plc – Annual Report 2022

15. RIGHT-OF-USE ASSETS

Group

Vessels

£m

Property

£m

Plant and

equipment

£m

Total

£m

Cost:

At 1 January 2021 26.6 24.6 2.0 53.2

Additions 25.4 2.6 0.2 28.2

Disposals – (2.1) (0.5) (2.6)

Exchange differences ( 0.1) (0.3) – (0.4)

At 31 December 2021 51.9 24.8 1.7 78.4

Reclassifications – (3.0) (0.1) (3.1)

Additions 21.6 3.0 0.7 25.3

Disposals – (3.6) (0.1) (3.7)

Exchange differences 1.2 0.6 – 1.8

At 31 December 2022 74.7 21.8 2.2 98.7

Depreciation:

At 1 January 2021 as reported 13.1 7.6 0.6 21.3

Provided during the year 8.4 4.4 0.4 13.2

Provision for impairment 4.2 – – 4.2

Disposals – (1.5) (0.5) (2.0)

Exchange differences – (0.1) – (0.1)

At 31 December 2021 25.7 10.4 0.5 36.6

Provided during the year 7. 6 4.6 0.4 12.6

Provision for impairment – 0.4 – 0.4

Reclassifications – (1.2) (0.1) (1.3)

Disposals – (3.0) (0.1) (3.1)

Exchange differences 0.8 0.4 – 1.2

At 31 December 2022 3 4.1 11.6 – 46.4

Net book value at 31 December 2022 40.6 10.2 1.5 52.3

Net book value at 31 December 2021 26.2 14.4 1.2 41.8

Net book value at 31 December 2020 13.5 17.0 1.4 31.9

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:

2022

£m

2021

£m

Short-term leases 0.2 0.2

Low value leases – –

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 statements154 Annual Report 2022 – James Fisher and Sons plc

16. INVESTMENT IN ASSOCIATES AND JOINT ARRANGEMENTS

Details of the Group’s joint ventures and associated undertakings are set out on page 195.

2022

£m

2021

£m

Investment in joint ventures 6.2 6.0

Loans to associate 2.5 2.0

8.7 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:

2022

£m

2021

£m

Current assets 15.5 9.8

Non-current assets 16.8 17.5

Current liabilities (4.6) (1.7)

Non-current liabilities (21.5) (19.6)

6.2 6.0

Revenue 13.0 11.4

Cost of sales (10.1) (8.4)

Administrative expenses (1.3) (1.0)

Profit from operations 1.6 2.0

Net finance expense 0.2 0.3

Profit before tax 1.8 2.3

Tax (0.1) (0.3)

Profit after tax 1.7 2.0

Profit after tax:

Continuing 1.6 1.9

Discontinued 0.1 0.1

1.7 2.0

Segmental analysis of profit after tax:

Marine Support 1.1 1.4

Specialist Technical 0.6 0.6

1.7 2.0

Movement on investment in joint ventures:

At 1 January 6.0 5.5

Provision against investments (0.5) –

Profit for the year 1.7 2.0

Dividends received (1.7) (1.6)

Share of fair value gains on cash flow hedges 0.4 0.3

Exchange adjustments 0.3 (0.2)

At 31 December 6.2 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.

Notes to the financial statements cont.

Financial statements 155

James Fisher and Sons plc – Annual Report 2022

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.

Subsidiary undertakings

Company

£m

Loans

£m

Tot al

£m

Cost:

At 1 January 2021 137.1 409.5 546.6

Additions 3.2 – 3.2

Net movement on loans to subsidiaries – (22.6) (22.6)

At 31 December 2021 140.3 386.9 527. 2

Additions 0.2 – 0.2

Net movement on loans to subsidiaries – (3.2) (3.2)

Utilisation of provision – (40.5) (40.5)

At 31 December 2022 140.5 343.2 483.7

Amount provided:

At 1 January and 31 December 2021 0.4 40.5 40.9

Provided in the year 25.7 1.1 26.8

Utilisation of provision – (40.5) (40.5)

At 31 December 2022 26.1 1.1 27.2

Net book value at 31 December 2022 114.4 342 .1 456.5

Net book value at 31 December 2021 139.9 346.4 486.3

Equity investments (shares)

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 statements156 Annual Report 2022 – James Fisher and Sons plc

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.

Notes to the financial statements cont.

Financial statements 157

James Fisher and Sons plc – Annual Report 2022

18. INVENTORIES

Group

2022

£m

2021

£m

Work in progress 10.1 6.5

Raw materials and consumables 11.2 12.5

Finished goods 28.5 30.0

49.8 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

Group Company

2022

£m

2021

restated*

£m

2022

£m

2021

£m

Trade receivables 68.7 64.3 – –

Amounts owed by group undertakings – – 3.6 0.9

Amounts owed by joint venture undertakings 1.5 1.8 – –

Other non-trade receivables 18.2 21.1 17.2 5.4

Contract assets 45.7 55.5 – –

Prepayments 14.1 10.6 1.4 0.6

Current trade and other receivables 148.2 153.3 22.2 6.9

* See Note 1.

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Contract assets 0.6 – – –

Other non-trade receivables 0.1 4.1 – –

Non-current other receivables 0.7 4.1 – –

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 statements158 Annual Report 2022 – James Fisher and Sons plc

21. TRADE AND OTHER PAYABLES

Current liabilities

Group Company

2022

£m

2021

restated*

£m

2022

£m

2021

£m

Trade payables 42.6 45.0 5.2 4.4

Amounts owed to group undertakings – – 12.4 11.6

Amounts owed to joint venture undertakings 0.2 – – –

Taxation and social security 4.9 6.7 0.9 0.3

Other payables 14.8 10.4 3.0 3.2

Accruals 51.4 66.8 5.7 –

Deferred consideration – 1.6 – –

Contract liabilities 8.5 9.0 – –

122.4 139.5 27.2 19.5

* See Note 1.

Non-current liabilities

2022

£m

2021

£m

2022

£m

2021

£m

Other payables 0.5 1.3 – –

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

Cost of material

litigation

£m

Warranty

£m

Other

£m

Group

Total

£m

At 1 January 2021 – 1.6 – 1.6

Provided during the year 2.0 – – 2.0

Released to income statement – (0.5) – (0.5)

At 31 December 2021 2.0 1.1 – 3.1

Provided during the year – 1.3 2.3 3.6

At 31 December 2022 2.0 2.4 2.3 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.

Notes to the financial statements cont.

Financial statements 159

James Fisher and Sons plc – Annual Report 2022

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:

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Shore staff 5.5 (1.0) 5.5 (1.0)

MNOPF (0.4) (0.9) (0.2) (0.4)

MNRPF – – – –

5.1 (1.9) 5.3 (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 statements160 Annual Report 2022 – James Fisher and Sons plc

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:

2022 2021

Inflation (%) 3.15 3.40

Rate of increase of pensions in payment – Shore staff (%) 3.05 3.25

Discount rate for scheme liabilities (%) 4.80 1.85

Expected rates of return on assets (%) 4.80 1.85

Post-retirement mortality: (years)

Shore staff scheme

Current pensioner at 65 male 21.9 21.8

Current pensioner at 65 female 23.5 23.4

Future pensioner at 65 male 23.3 23.3

Future pensioner at 65 female 25.1 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

Change in

assumption

Change in

deficit

Shore staff scheme

Discount rate Increase of 0.5% Decrease by 4.8%

Rate of inflation Increase by 0.5% Increase by 3.9%

Rate of mortality Increase in life Increase by 3.5%

expectancy of 1 year

MNOPF

Discount rate Increase of 0.5% Decrease by 4.5%

Rate of inflation Increase by 0.5% Increase by 2.2%

Rate of mortality Increase in life Increase by 3.1%

expectancy of 1 year

MNRPF

Discount rate Increase of 0.5% Decrease by 5.4%

Rate of inflation Increase by 0.5% Increase by 2.0%

Rate of mortality Increase in life Increase by 2.1%

expectancy of 1 year

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:

Group Company

At 31 December 2022

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

Fair value of scheme assets* 52.3 65.9 20.2 138.4 52.3 33.0 7. 2 92.5

Present value of scheme liabilities (46.8) (61.1) (18.3) (126.2) (46.8) (30.6) (6.6) (84.0)

Effect of asset ceiling – (5.2) (1.9) (7.1) – (2.6) (0.6) (3.2)

Net pension surplus/(liabilities) 5.5 (0.4) – 5.1 5.5 (0.2) – 5.3

Group Company

At 31 December 2021

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Total

£m

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Total

£m

Fair value of scheme assets* 65.8 97.2 29.0 192.0 65.8 48.6 10.4 124.8

Present value of scheme liabilities (66.8) (87.5) (26.1) (180.4) (66.8) (43.8) (9.4) (120.0)

Effect of asset ceiling – (10.6) (2.9) (13.5) – (5.2) (1.0) (6.2)

Net pension liabilities (1.0) (0.9) – (1.9) (1.0) (0.4) – (1.4)

Notes to the financial statements cont.

Financial statements 161

James Fisher and Sons plc – Annual Report 2022

23. 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:

2022

£m

2021

£m

Investment funds: Diversified alternatives (unquoted) 18.7 24.3

Investment funds: Liability driven investments (2022: quoted, 2021: unquoted) 12.6 11.0

Investment funds: Absolute return bonds (unquoted) 12.8 12.9

Investment funds: Asset backed securities (2022: quoted, 2021: unquoted) 0.3 14.6

Investment funds: other (unquoted) 4.9 2.0

Cash or liquid assets 3.0 1.0

52.3 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

Group Company

At 31 December 2022

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

Past service cost – – 1.5 1.5 – – 0.6 0.6

Expenses 0.1 0.2 0.3 0.6 0.1 0.1 0.1 0.3

Interest cost on benefit obligation 1.2 1.6 0.4 3.2 1.2 0.8 0.2 2.2

Return on scheme assets (1.2) (1.8) (0.5) (3.5) (1.2) (0.9) (0.2) (2.3)

Interest cost on the asset ceiling – 0.2 0.1 0.3 – 0.1 – 0.1

0.1 0.2 1.8 2.1 0.1 0.1 0.7 0.9

At 31 December 2021

Expenses 0.1 – – 0.1 0.1 – – 0.1

Interest cost on benefit obligation 0.9 1.3 0.4 2.6 0.9 0.6 0.1 1.6

Return on scheme assets (0.8) (1.3) (0.4) (2.5) (0.8) (0.6) (0.1) (1.5)

0.2 – – 0.2 0.2 – – 0.2

The actual return on the Shore staff plan assets is a loss of £11.9m (2021: gain of £4.2m).

Financial statements162 Annual Report 2022 – James Fisher and Sons plc

23. RETIREMENT BENEFIT OBLIGATIONS CONT.

Group Company

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

At 1 January 2022 1.0 0.9 – 1.9 1.0 0.4 – 1.4

Expense recognised in the

income statement 0.1 0.2 1.9 2.2 0.1 0.1 0.7 0.9

Contributions paid to scheme (1.6) (0.5) – (2.1) (1.6) (0.2) – (1.8)

Remeasurement gains and losses (5.0) (0.2) (1.9) (7.1) (5.0) (0.1) (0.7) (5.8)

At 31 December 2022 (5.5) 0.4 – (5.1) (5.5) 0.2 – (5.3)

At 1 January 2021 8.8 1.3 0.2 10.3 8.8 0.6 0.1 9.5

Expense recognised in the

income statement 0.2 – – 0.2 0.2 – – 0.2

Contributions paid to scheme (1.6) (0.5) (0.2) (2.3) (1.6) (0.2) (0.1) (1.9)

Remeasurement gains and losses (6.4) 0.1 – (6.3) (6.4) – – (6.4)

At 31 December 2021 1.0 0.9 – 1.9 1.0 0.4 – 1.4

(d) Changes in the present value of the defined benefit obligation are analysed as follows:

Group Company

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

At 1 January 2022 66.8 98.1 29.0 193.9 66.8 49.0 10.4 126.2

Asset ceiling adjustment* – (10.6) (2.9) (13.5) – (5.2) (1.0) (6.2)

66.8 87.5 26.1 180.4 66.8 43.8 9.4 120.0

Past service cost – – 1.5 1.5 – – 0.6 0.6

Interest cost 1.2 1.6 0.4 3.2 1.2 0.8 0.2 2.2

Remeasurement loss/(gain):

Actuarial loss arising from

scheme experience 1.3 2.7 1.1 5.1 1.3 1.3 0.4 3.0

Actuarial (gain)/loss arising from

changes in demographic assumptions 0.1 (1.4) (0.1) (1.4) 0.1 (0.7) (0.1) (0.7)

Actuarial gain arising from changes

in financial assumptions (19.5) (24.6) (9.0) (53.1) (19.5) (12.3) (3.3) (3 5.1)

Net benefits paid out (3.1) (4.7) (1.7) (9.5) (3.1) (2.3) (0.6) (6.0)

At 31 December 2022 46.8 61.1 18.3 126.2 46.8 30.6 6.6 84.0

At 1 January 2021 71.7 100.5 31.1 203.3 71.7 50.3 10.7 132.7

Expenses 0.1 – – 0.1 0.1 – – 0.1

Interest cost 0.9 1.3 0.4 2.6 0.9 0.6 0.1 1.6

Remeasurement (gain)/loss:

Actuarial gain arising from

scheme experience – (3.2) (2.3) (5.5) – (1.7) (0.4) (2.1)

Actuarial gain arising from changes

in demographic assumptions (0.1) – – (0.1) ( 0.1) – – (0.1)

Actuarial gain arising from changes

in financial assumptions (2.6) – – (2.6) (2.6) – – (2.6)

Net benefits paid out (3.2) (0.5) (0.2) (3.9) (3.2) (0.2) – (3.4)

At 31 December 2021 66.8 98.1 29.0 193.9 66.8 49.0 10.4 126.2

* Adjusted to separate the asset ceiling – see (e) below.

Notes to the financial statements cont.

Financial statements 163

James Fisher and Sons plc – Annual Report 2022

23. RETIREMENT BENEFIT OBLIGATIONS CONT.

(e) Changes in the effect of the asset ceiling are analysed as follows:

Group Company

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

As at 1 January 2022 – (10.6) (2.9) (13.5) – (5.2) (1.0) (6.2)

Interest – (0.2) (0.1) (0.3) – (0.1) – (0.1)

Change in adjustment in excess

of interest – 5.6 1.1 6.7 – 2.7 0.4 3.1

As at 31 December 2022 – (5.2) (1.9) (7.1) – (2.6) (0.6) (3.2)

(f) Changes in the fair value of the plan assets are analysed as follows:

Group Company

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

Shore

staff

£m

MNOPF

£m

MNRPF

£m

Tot al

£m

At 1 January 2022 65.8 97. 2 29.0 192.0 65.8 48.6 10.4 124.8

Expenses (0.1) (0.2) (0.3) (0.6) (0.1) (0.1) (0.1) (0.3)

Return on scheme assets recorded

in interest 1.2 1.8 0.5 3.5 1.2 0.9 0.1 2.2

Remeasurement loss/(gain):

Return on plan assets excluding

interest income (13.1) (28.7) (7.3) (49.1) (13.1) (14.3) (2.7) (3 0.1)

Contributions by employer 1.6 0.5 – 2.1 1.6 0.2 – 1.8

Net benefits paid out (3.1) (4.7) (1.7) (9.5) (3.1) (2.3) (0.5) (5.9)

At 31 December 2022 52.3 65.9 20.2 138.4 52.3 33.0 7. 2 92.5

At 1 January 2021 62.9 99.2 30.9 193.0 62.9 49.7 10.6 123.2

Return on scheme assets recorded

in interest 0.8 1.3 0.4 2.5 0.8 0.6 0.1 1.5

Remeasurement loss/(gain):

Return on plan assets excluding

interest income 3.7 (3.3) (2.3) (1.9) 3.7 (1.7) (0.4) 1.6

Contributions by employer 1.6 0.5 0.2 2.3 1.6 0.2 0.1 1.9

Net benefits paid out (3.2) (0.5) (0.2) (3.9) (3.2) (0.2) – (3.4)

At 31 December 2021 65.8 97. 2 29.0 192.0 65.8 48.6 10.4 124.8

(g) History of experience gains and losses

Shore staff

2022

£m

2021

£m

2020

£m

2019

£m

2018

£m

Fair value of scheme assets 52.3 65.8 62.9 58.9 53.3

Defined benefit obligation (46.8) (66.8) (71.7) (59.3) (57.9)

Surplus/(deficit) in scheme 5.5 (1.0) (8.8) (0.4) (4.6)

Remeasurement gain/(loss):

Return on plan assets excluding interest income (13.1) 3.7 5.7 6.5 (1.7)

Remeasurement (loss)/gain on scheme liabilities (18.1) (2.7) 14.7 2.2 (0.3)

MNOPF

Group

2022

£m

2021

£m

2020

£m

2019

£m

2018

£m

Fair value of scheme assets 65.9 97. 2 99.2 103.8 103.7

Defined benefit obligation (61.1) (98.1) (100.5) (107. 2 ) (108.8)

Asset ceiling (5.2) – – – –

Deficit in scheme (0.4) (0.9) (1.3) (3.4) (5.1)

Financial statements164 Annual Report 2022 – James Fisher and Sons plc

23. RETIREMENT BENEFIT OBLIGATIONS CONT.

(g) History of experience gains and losses cont.

MNOPF

Company

2022

£m

2021

£m

2020

£m

2019

£m

2018

£m

Fair value of scheme assets 33.0 48.6 49.7 52.0 52.5

Defined benefit obligation (30.6) (49.0) (50.3) (54.2) (56.1)

Asset ceiling (2.6) – – – –

Deficit in scheme (0.2) (0.4) (0.6) (2.2) (3.6)

MNRPF

Group

2022

£m

2021

£m

2020

£m

2019

£m

2018

£m

Fair value of scheme assets 20.2 29.0 30.9 28.7 24.9

Defined benefit obligation (18.3) (29.0) (31.1) (30.7) (31.3)

Asset ceiling (1.9) – – – –

Deficit in scheme – – (0.2) (2.0) (6.4)

MNRPF

Company

2022

£m

2021

£m

2020

£m

2019

£m

2018

£m

Fair value of scheme assets 7.2 10.4 10.6 9.6 8.6

Defined benefit obligation (6.6) (10.4) (10.7) (10.4) (10.9)

Asset ceiling (0.6) – – – –

Deficit in scheme – – (0.1) (0.8) (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:

Sharesave scheme LTIP awards

Group

2022

Number WAEP

2021

Number WAEP

2022

Number

2021

Number

Outstanding at 1 January 284,653 £10.67 449,898 £9.86 386,413 309,021

Granted during the year 640,834 £3.24 70,868 £11.0 6 1,242,218 19 3,115

Forfeited during the year (247,836) £8.57 (138,703) £11.91 (244,807) (115,723)

Exercised – £0.00 ( 97,410 ) £5.44 – –

Outstanding at 31 December 677,651 £4.41 284,653 £10.67 1,383,824 386,413

Exercisable at 31 December 12,154 £14.09 44,428 £ 8.19 – –

Notes to the financial statements cont.

Financial statements 165

James Fisher and Sons plc – Annual Report 2022

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.

Sharesave scheme LTIP awards

Company

2022

Number WAEP

2021

Number WAEP

2022

Number

2021

Number

Outstanding at 1 January 66,100 £9.15 166,276 £7.03 246,450 196,441

Granted during the year 55,811 £3.24 5,952 £11.0 6 590,599 121,253

Forfeited during the year (49,013) £7. 57 (8,718) £11.49 (192,223) (71,244)

Exercised – £0.00 ( 97,410 ) £5.44 – –

Outstanding at 31 December 72,898 £5.55 66,10 0 £ 9.15 644,826 246,450

Exercisable at 31 December 12,154 £14.09 44,428 £ 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:

2022 2021

Dividend yield (%) 1.6% 1.6%

Expected life of option (years) 3 – 7 3 – 7

Share price at date of grant £3.72 – £3.80 £10.74 – £11.04

Expected share price volatility (%) 40.0% 40.0%

Risk-free interest rate (%) 1.60% – 1.76% 0.14% – 0.39%

Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price.

Financial statements166 Annual Report 2022 – James Fisher and Sons plc

25. BUSINESS COMBINATIONS

Year ended 31 December 2022

On 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 2021

On 2 June, the Group purchased Subsea Engenuity Ltd for a consideration of up to £0.7m. £0.4m was paid on completion with a further £0.3m

of 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 BUSINESSES

Year ended 31 December 2022

On 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:

£m

Consideration received 9.4

less 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 payables 1.5

Lease liabilities 0.4

Net assets disposed (7.5)

Costs in relation to businesses sold (0.9)

Gain on disposal 1.0

Cash flow from the disposal of businesses

Cash received 9.4

Cash and cash equivalents disposed (0.6)

Costs in relation to businesses sold (0.9)

7.9

Notes to the financial statements cont.

Financial statements 167

James Fisher and Sons plc – Annual Report 2022

26. 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:

£m

Consideration received 4.9

Less net assets disposed:

Goodwill (1.0)

Other intangible assets (0.1)

Inventories (1.1)

Trade and other receivables (1.2)

Cash and cash equivalents (0.5)

Trade and other payables 0.9

Net assets disposed (3.0)

Costs in relation to businesses sold (0.4)

Gain on disposal 1.5

Cash flow from the disposal of businesses

Cash received 4.9

Cash and cash equivalents disposed (0.5)

Costs in relation to businesses sold (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:

£m

Consideration received 4.2

Less net assets disposed:

Goodwill (3.0)

Other intangible assets (0.1)

Trade and other receivables (0.7)

Cash and cash equivalents (0.5)

Trade and other payables 0.6

Net assets disposed (3.7)

Costs in relation to businesses sold (0.5)

Gain on disposal –

Cash flow from the disposal of businesses

Cash received 4.2

Cash and cash equivalents disposed (0.5)

Costs in relation to businesses sold (0.5)

3.2

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.

Financial statements168 Annual Report 2022 – James Fisher and Sons plc

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:

£m

Consideration received 5.7

less net assets disposed:

Goodwill (3.9)

Property, plant and equipment (0.2)

Right-of-use assets (0.2)

Trade and other receivables (1.1)

Cash and cash equivalents (0.2)

Trade and other payables 0.5

Lease liabilities 0.2

Net assets disposed (4.9)

Costs in relation to businesses sold (0.3)

Gain on disposal 0.5

Cash flow from the disposal of businesses

Cash received 5.7

Cash and cash equivalents disposed (0.2)

Costs in relation to businesses sold (0.3)

5.2

On 31 December 2021, the Group disposed of 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:

£m

Consideration received 1.2

less net assets disposed:

Property, plant and equipment (1.0)

Right-of-use assets (0.6)

Trade and other receivables (1.2)

Cash and cash equivalents (0.1)

Trade and other payables 0.5

Lease liabilities 0.7

Net assets disposed (1.7)

Costs in relation to businesses sold (0.2)

Loss on disposal (0.7)

Cash flow from the disposal of businesses

Cash received 1.2

Cash and cash equivalents disposed (0.1)

Costs in relation to businesses sold (0.2)

0.9

On 16 November 2021, Subtech Group Holdings Pty Ltd sold 51% of its 100% shareholding in Subtech South Africa Pty to Thembani Shipping Pty

Ltd (21%) and Tacenda Consulting Pty Ltd (30%). Cash proceeds were £0.2m and costs of disposal were £0.1m.

Notes to the financial statements cont.

Financial statements 169

James Fisher and Sons plc – Annual Report 2022

27. LOANS AND BORROWINGS

Current liabilities

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Overdrafts 30.8 33.5 8.7 20.3

Bank loans 36.6 0.1 36.6 –

Lease liabilities 13.2 9.9 0.2 0.2

80.6 43.5 45.5 20.5

Non-current liabilities

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Bank loans 121.8 173.9 121.8 173.9

Lease liabilities 39.7 36.1 1.3 1.4

161.5 210.0 123.1 175.3

Bank loans

Loans analysed by currency are repayable as follows:

At 31 December 2022

Group Company

Currency GBP BRL Total GBP

Due within one year 67.4 – 67.4 45.3

Due between one and two years 121.8 – 121.8 121.8

189.2 – 189.2 167.1

At 31 December 2021

Group Company

Currency GBP BRL Total GBP

Due within one year 33.5 0.1 33.6 20.3

Due between one and two years 39.0 – 39.0 39.0

Due between two and five years 134.9 – 134.9 134.9

207.4 0.1 207. 5 194.2

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:

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Cash at bank and in hand 53.6 68.0 0.4 11.7

Overdrafts (30.8) (33.5) (8.7) (20.3)

22.8 34.5 (8.3) (8.6)

Financial statements170 Annual Report 2022 – James Fisher and Sons plc

28. RECONCILIATION OF NET BORROWINGS

Net debt comprises interest bearing loans and borrowings less cash and cash equivalents.

31 December

2021

£m

Cash

flow

£m

Other

non cash**

£m

Transfers

£m

Exchange

movement

£m

31 December

2022

£m

Cash and cash equivalents* 34.5 (11.4) – (2.8) 2.5 22.8

Cash – classified within Assets held for sale – – – 2.8 – 2.8

Debt due within one year (0.1) – – (36.5) – (36.6)

Debt due after one year (174.0) 16.6 (1.0) 36.5 – (121.9)

(174.1) 16.6 (1.0) – – (158.5)

Lease liabilities (46.0) 14.5 (17.8) – (3.6) (52.9)

Net borrowings (185.6) 19.7 (18.8) – (1.1) (185.8)

31 December

2020

£m

Cash

flow

£m

Other

non cash**

£m

Transfers

£m

Exchange

movement

£m

31 December

2021

£m

Cash and cash equivalents* 13.5 20.9 – – 0.1 34.5

Debt due within one year (0.2) 0.1 – – – ( 0.1)

Debt due after one year (178.9) 5.8 (0.9) – – (174.0)

(179.1) 5.9 (0.9) – – (174.1)

Lease liabilities (32.5) 13.7 (27. 0 ) – (0.2) (46.0)

Net borrowings (19 8.1) 40.5 (27. 9 ) – (0.1) (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).

Notes to the financial statements cont.

Financial statements 171

James Fisher and Sons plc – Annual Report 2022

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:

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Receivables 127.2 147. 3 13.9 6.1

Cash at bank and in hand 53.6 68.0 0.4 11.7

Interest rate swaps used for hedging:

Assets 3.8 0.1 3.8 0.1

Forward exchange contracts used for hedging:

Assets 3.1 0.1 3.1 0.1

187.7 215.5 21.2 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:

Group

2022

gross

£m

Allowance

£m

2021

gross

£m

Allowance

£m

Not past due 37.3 – 40.6 –

Past due 43.2 (11.8) 42.4 (19.0)

80.5 (11.8) 83.0 (19.0)

Gross trade receivables are analysed:

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Not yet due 37. 3 40.6 – –

Overdue 1 to 30 days 17.7 12.5 – –

Overdue 31 to 60 days 3.7 5.8 – –

Overdue 61 to 90 days 2.5 2.2 – –

Overdue 91 to 180 days 5.8 4.3 – –

Overdue more than 180 days 13.5 17. 6 – –

80.5 83.0 – –

The movement in the provision for impairment of trade receivables is as follows:

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Balance at 1 January 19.0 19.5 – –

On disposal of subsidiaries (0.2) – – –

Provided in the year (0.3) 7.3 – –

Written off (8.4) ( 7. 8) – –

Exchange differences 1.7 – – –

11.8 19.0 – –

Financial statements172 Annual Report 2022 – James Fisher and Sons plc

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

Carrying

amount

£m

Contractual

cash flows

£m

Within 1

year

£m

1 – 2

years

£m

2 – 3

years

£m

3 – 4

years

£m

4 – 5

years

£m

Greater

than

5 years

£m

Non-derivative financial liabilities

Unsecured bank loans and overdrafts 189.2 (204.7) (78.7) (126.0) – – – –

Lease liabilities 52.9 (57.4) (14.2) (12.0) (9.4) (4.9) (4.1) (12.8)

Trade and other payables 122.9 (122.9) (122.9) – – – – –

Derivative financial liabilities

Interest rate swaps used for hedging – (3.0) (0.6) (0.6) (0.6) (0.6) (0.6) –

Outflow on forward exchange contracts

used for hedging: (2.6) (58.6) (58.6) – – – – –

362.4 (446.6) (275.0) (138.6) (10.0) (5.5) (4.7) (12.8)

At 31 December 2021

£m £m £m £m £m £m £m £m

Non-derivative financial liabilities

Unsecured bank loans and overdrafts 207. 5 (221.0) (38.9) (44.2) (137.9 ) – – –

Lease liabilities 46.0 (5 3.1) (12.5) (10.6) (8.5) ( 7. 4) (3.9) (10.2)

Trade and other payables 150.8 (150.8) (150.8) – – – – –

Derivative financial liabilities

Interest rate swaps used for hedging 0.1 (0.3) (0.3) – – – – –

Outflow on forward exchange contracts

used for hedging: 0.5 (33.0) (33.0) – – – – –

404.9 (458.2) (235.5) (54.8) (146.4) (7. 4) (3.9) (10.2)

Notes to the financial statements cont.

Financial statements 173

James Fisher and Sons plc – Annual Report 2022

29. FINANCIAL INSTRUMENTS CONT.

Capital management cont.

(b) Liquidity risk cont.

At 31 December 2022

Company

Carrying

amount

£m

Contractual

cash flows

£m

Within 1

year

£m

1 – 2

years

£m

2 – 3

years

£m

3 – 4

years

£m

4 – 5

years

£m

Greater

than

5 years

£m

Non-derivative financial liabilities

Unsecured bank loans and overdrafts 167.1 (182.6) (56.6) (126.0) – – – –

Lease liabilities 1.5 (1.5) (0.3) (0.3) (0.3) (0.1) (0.1) (0.4)

Trade and other payables 17.4 (17.4) (17.4) – – – – –

Derivative financial liabilities

Interest rate swaps used for hedging – (3.0) (0.6) (0.6) (0.6) (0.6) (0.6) –

Outflow on forward exchange contracts

used for hedging: (2.6) (58.6) (58.6) – – – – –

183.4 (26 3.1) (133.5) (126.9) (0.9) (0.7) (0.7) (0.4)

At 31 December 2021

£m £m £m £m £m £m £m £m

Non-derivative financial liabilities

Unsecured bank loans and overdrafts 194.2 (198.4) (16.3) (44.2) (137.9) – – –

Lease liabilities 1.6 (2.6) (0.3) (0.3) (0.3) (0.3) (0.3) (0.9)

Trade and other payables 7.4 (7.4) ( 7.4) – – – – –

Derivative financial liabilities

Interest rate swaps used for hedging 0.1 (0.3) (0.3) – – – – –

Outflow on forward exchange contracts

used for hedging: 0.5 (33.0) (33.0) – – – – –

203.8 (241.7) (5 7. 3 ) (44.5) (138.2) (0.3) (0.3) (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:

31 December 2022

USD

EUR

NOK

SGD

AUD

NGN

Trade receivables 59.6 3.0 0.1 0.1 0.1 91.7

Cash at bank and in hand 1.4 (0.8) – 1.9 – 34.0

Trade payables (7.3) (4.4) (11.7) (0.6) – (6.7)

Gross balance sheet exposure 53.7 (2.2) (11.6) 1.4 0.1 119.0

Forecast sales 179.9 7.2 – – – 411.7

Forecast purchases (65.1) (14.5) (0.5) – – (380.6)

Gross exposure 168.5 (9.5) (12 .1) 1.4 0.1 15 0.1

Forward exchange contracts (81.8) 0.2 – – – –

Net exposure 86.7 (9.3) (12 .1) 1.4 0.1 15 0.1

Financial statements174 Annual Report 2022 – James Fisher and Sons plc

29. FINANCIAL INSTRUMENTS CONT.

Capital management cont.

31 December 2021

USD

EUR

NOK

SGD

AUD

NGN

Trade receivables 54.0 1.8 – – 0.3 107.1

Cash at bank and in hand 2.8 1.5 0.1 0.7 – 9.4

Trade payables (8.2) (2.9) (10.8) (0.2) (0.3) (12.3)

Gross balance sheet exposure 48.6 0.4 (10.7) 0.5 – 104.2

Forecast sales 145.4 9.7 0.7 – – 333.0

Forecast purchases (55.1) (15.0) – – – (83.0)

Gross exposure 138.9 (4.9) (10.0) 0.5 – 354.2

Forward exchange contracts (44.7) 0.2 – – – –

Net exposure 94.2 (4.7) (10.0) 0.5 – 354.2

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.

2022 2021

Equity

£m

Income

statement

£m

Equity

£m

Income

statement

£m

US Dollar (1.9) (5.1) (2.4) (3.4)

Other (0.3) 0.1 (0.4) –

(2.2) (5.0) (2.8) (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:

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Fixed rate instruments

Financial liabilities (0.1) (0.1) (0.1) ( 0.1)

Variable rate instruments

Financial assets 53.6 68.0 0.4 11.7

Financial liabilities (189.1) (207.5) (130.5) (194.2)

(135.5) (139.5) (130.1) (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:

2022

Income

statement

£m

2021

Income

statement

£m

Variable rate instruments (1.3) (1.4)

Interest rate swap 0.5 0.7

Cash flow sensitivity (0.8) (0.7)

Notes to the financial statements cont.

Financial statements 175

James Fisher and Sons plc – Annual Report 2022

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:

2022 2021

Group Note

Carrying

value

£m

Fair

value

£m

Carrying

value

£m

Fair

value

£m

Liabilities carried at amortised cost

Unsecured bank loans and overdrafts 27 (189.1) (192.6) (207.5) (202.8)

Trade and other payables 21 (122.9) (122.9) (150.8) (150.8)

Leases 27 (52.9) (52.9) (46.0) (46.0)

Preference shares 30 (0.1) (0.1) (0.1) (0.1)

(365.0) (368.5) (404.4) (399.7)

Company

Liabilities carried at amortised cost

Unsecured bank loans and overdrafts 27 (167.1) (170.5) (194.2) (189.6)

Trade and other payables 21 (17.4) (17.4) ( 7.4) ( 7. 4)

Leases 27 (1.5) (1.5) (1.6) (1.6)

Preference shares 30 (0.1) (0.1) (0.1) (0.1)

(186.1) (189.5) (203.3) (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:

Level 2 Level 3

Group

2022

£m

2021

£m

2022

£m

2021

£m

Financial assets measured at fair value

Forward exchange contracts – cash flow hedges 3.1 0.1 – –

Interest rate swaps – cash flow hedges 3.8 0.1 – –

Call option – – 0.8 –

6.9 0.2 0.8 –

Financial liabilities measured at fair value

Forward exchange contracts – cash flow hedges (2.6) (0.5) – –

Interest rate swaps – cash flow hedges – ( 0.1) – –

Financial liabilities not measured at fair value

Unsecured bank loans and overdrafts (192.6) (202.8) – –

Leases (52.9) (46.0) – –

(248.1) (249.4) –

(241.1) (249.2) 0.8

Financial statements176 Annual Report 2022 – James Fisher and Sons plc

29. FINANCIAL INSTRUMENTS CONT.

Capital management cont.

(e) Fair values cont.

Fair value hierarchy cont.

Level 2

Company

2022

£m

2021

£m

Financial assets measured at fair value

Forward exchange contracts – cash flow hedges 3.1 0.1

Interest rate swaps – cash flow hedges 3.8 0.1

6.9 0.2

Financial liabilities measured at fair value

Forward exchange contracts – cash flow hedges (2.6) (0.5)

Interest rate swaps – cash flow hedges – (0.1)

Financial liabilities not measured at fair value

Unsecured bank loans and overdrafts (170.5) (189.6)

(173.1) (190.2)

(166.2) (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:

Call option

2022

£m

Balance at 1 January 2022 –

Purchase cost 0.8

Balance at 31 December 2022 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.

Notes to the financial statements cont.

Financial statements 177

James Fisher and Sons plc – Annual Report 2022

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:

Maturity

Exchange

rate

Fair value

£m

Sell

US Dollar $81.8m January 2023 – December 2023 1.23 0.5

Buy

Euro €0.2m January 2023 – December 2023 1.10 –

At 31 December 2021, the Group and Company held forward currency contracts designated to hedge future commitments in US Dollars and Euro.

The terms of the contracts are as follows:

Maturity

Exchange

rate

Fair value

£m

Sell

US Dollar $44.7m January 2022 – December 2022 1.37 (0.4)

Buy

Euro €0.2m January 2022 – December 2022 1.10 –

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:

Amount Fair value

2022

£m

2021

£m Maturity

Fixed rate

2022

£m

2021

£m

Sterling interest rate swaps 50.0 75.0 29 October 2027 2.1% – 3.1% 3.8 –

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 statements178 Annual Report 2022 – James Fisher and Sons plc

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:

Group Company

Current assets

2022

£m

2021

£m

2022

£m

2021

£m

Foreign currency forwards – cash flow hedges 3.1 0.1 3.1 0.1

Interest rate swaps – cash flow hedges 3.8 0.1 3.8 0.1

Total current derivative financial instrument assets 6.9 0.2 6.9 0.2

Group Company

Current liabilities

2022

£m

2021

£m

2022

£m

2021

£m

Foreign currency forwards – cash flow hedges (2.6) (0.5) (2.6) (0.5)

Interest rate swaps – cash flow hedges – ( 0.1) – ( 0.1)

Total current derivative financial instrument liabilities (2.6) (0.6) (2.6) (0.6)

30. SHARE CAPITAL

Allotted, called up and fully paid

25p Ordinary shares

£1 Cumulative

Preference shares

In millions of shares 2022 2021 2022 2021

In issue at 1 January and at 31 December 50.4 50.4 0.1 0.1

2022

£m

2021

£m

2022

£m

2021

£m

Issued share capital 12.6 12.6 0.1 0.1

The preference shareholders are entitled to receive 3.5% cumulatively per annum, payable in priority to any dividend on the ordinary shares. The

ordinary shareholders are entitled to receive dividends as declared from time to time by the Directors.

Shares all carry equal voting rights of one vote per share held. They also have the right to attend and speak at general meetings, exercise voting

rights and appoint proxies. Neither type of share is redeemable. In the event of a winding-up order the amount receivable in respect of the cumulative

preference shares is limited to their nominal value. The ordinary shareholders are entitled to an unlimited share of the surplus after distribution to the

cumulative preference shareholders.

Treasury shares

2022

£m

2021

£m

47,855 (2021: 54,571) ordinary shares of 25p 0.6 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.

Notes to the financial statements cont.

Financial statements 179

James Fisher and Sons plc – Annual Report 2022

31. COMMITMENTS AND CONTINGENCIES

Capital commitments

At 31 December, capital commitments for which no provision has been made in these accounts amounted to:

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

6.0 1.6 – –

Contingent liabilities

(a) In the ordinary course of the Company’s business, counter indemnities have been given to banks in respect of custom bonds, foreign exchange

commitments and bank guarantees.

(b) A Group VAT registration is operated by the Company and six Group undertakings in respect of which the Company is jointly and severally liable

for all amounts due to HM Revenue & Customs under the arrangement.

(c) 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 statements180 Annual Report 2022 – James Fisher and Sons plc

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:

Services to

parties

£m

Sales to

parties

£m

Purchases

from related

parties

£m

Amounts

owed by

parties

£m

Amounts

owed to

parties

£m

FCM businesses 2022 – 0.5 0.5 0.2 0.1

2021 – 0.6 0.7 0.1 0.7

First Response Marine 2022 – – – 1.2 –

2021 – – – 1.0 –

JFD Domeyer 2022 – 0.3 – – –

2021 – 0.6 – 2.1 –

Pleat Mud Coolers AS 2022 – 0.4 0.2 – –

2021 – 0.3 0.2 0.9 –

Wuhu Divex Diving Systems 2022 – – – 0.1 –

2021 0.5 3.9 – 0.2 –

JF Technologies LLC 2022 – – – – –

2021 – – – – –

Company

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).

Notes to the financial statements cont.

Financial statements 181

James Fisher and Sons plc – Annual Report 2022

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 statements182 Annual Report 2022 – James Fisher and Sons plc

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.

Notes to the financial statements cont.

Financial statements 183

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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 statements184 Annual Report 2022 – James Fisher and Sons plc

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 5 years or over the expected period of product sales, if less

Intellectual property 3 to 20 years

Patents and licences 5 years or over the period of the licence, if less

Other intangibles 5 years

(a) Goodwill arising on a business combination

Goodwill arising on the acquisition of a subsidiary represents the excess of the aggregate of the fair value of the consideration over the aggregate fair

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.

Notes to the financial statements cont.

Financial statements 185

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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 40 years

Leasehold improvements 25 years or the period of the lease, if shorter

Plant and equipment Between 5 and 20 years

Vessels Between 10 and 25 years

No depreciation is charged on assets under construction.

Residual values of vessels are set initially at 20% of purchase cost or fair value at acquisition, which the Directors believe to be an approximation of

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 statements186 Annual Report 2022 – James Fisher and Sons plc

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 statements 187

James Fisher and Sons plc – Annual Report 2022

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 statements188 Annual Report 2022 – James Fisher and Sons plc

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 statements 189

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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 statements190 Annual Report 2022 – James Fisher and Sons plc

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 statements 191

James Fisher and Sons plc – Annual Report 2022

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 statements192 Annual Report 2022 – James Fisher and Sons plc

Subsidiaries and associated undertakings

NAME OF COMPANY ADDRESS

GROUP

PERCENTAGE OF

EQUITY CAPITAL

JF STS (Guernsey) Ltd St Peter Port

100%***

Maritime Engineers

(Asia Pacific) Pte Ltd

Singapore, 508929

100%

Maritime Engineers

Pty Ltd

Henderson, Australia

100%

Martek Marine Limited Barrow-in-Furness

100%

Martek-Marine

(Asia Pacific) Pte Ltd

1 Raffles Place, Tower 2,

Level #19-61 & #20-61,

Singapore 048616

100%

James Fisher

Renouvelables

3 rue de France Comte,

CS50311, Hauts de

Quimpcanpoix, 5103,

Cherbourg, France

100%

Namibia Subtech Diving

and Marine (Proprietary)

Limited

Shop 48, Second Floor,

Old Power Station

Complex, Armstrong Street,

Windhoek, Namibia

100%

Rotos 360 Limited Barrow-in-Furness

100%

Servicos Maritimos

Continental S.A.

Rio de Janeiro, Brazil

90%

Strainstall International

for Project Engineering

LLC

Blg 3141, Street Anas Bin

Malik, 8292, Al Malqa Dist.

Riyadh, Saudi Arabia

100%

Strainstall Malaysia Sdn

Bhd

Ground Floor, 8,

Lorong Universiti B,

Section 16, 46350 Petaling

Jaya Selangor Darul Ehsan,

Malaysia

100%

Strainstall Singapore

Pte Ltd

25 North Bridge Road,

Level 7, Singapore, 179104

100%

Subtech (Pty) Ltd Briardene, South Africa

100%

Subtech (Pty) Ltd –

Mozambique branch

Rua da Educacao, No. 38,

Matola, Mozambique

100%

Subtech Diving &

Marine Tanzania

Limited

The Slipway Road, Msasani

Peninsula, Dar Es Salaam,

United Republic of Tanzania

100%

Subtech Marine (Pty)

Limited

PO Box 90757,

Shop 48, Old Power Station

Complex, Armstrong Street,

Windhoek, Namibia

70%

Subtech Marine R2S

Offshore LLC

Floor 1, Building 81,

Zone 36, Street 362,

Al Jazira Al Arabiya Street,

Al Messila Area, Doha, Qatar

49%

Subtech Middle East

Saudi Company

Office 102, Al Jazira

Building, Al Khobar,

Saudi Arabia

100%

Subtech Norte Lda Rua de Se no 114, Distrito

Urbano 1, Bairro Central,

Maputo City, Mozambique

100%

NAME OF COMPANY ADDRESS

GROUP

PERCENTAGE OF

EQUITY CAPITAL

Marine Support

Deep Sea Operation &

Maintenance Co. Ltd

Al Khobar City,

PO Box 2716, Al Olaya,

3447, Saudi Arabia

100%

EDS HV Management

Limited

Barrow-in-Furness

100%

Electricity Distribution

Services Limited

Barrow-in-Furness

100%

Fender Care

(Changshu) Limited

Room 1211, Building 4,

Huifeng Times Plaza,

No 22 Huanghe Road,

Changshu City, Jiangsu,

215500, China

100%

Fender Care Limited Barrow-in-Furness

100%

Fender Care Marine

(Asia Pacific) Pte Ltd

Singapore

100%

Fender Care Marine

(Gibraltar) Limited

28 Irish Town, Gibraltar 100%

Fender Care Marine Ltd Barrow-in-Furness

100%

Fender Care Marine

Ltd, Agencia Chile –

Chile branch

El Trovador 4280, Apt 1205,

Las Condes, Santiago,

253-389, Chile

100%

Fender Care Marine

Products (Asia Pacific)

Pte Limited

Singapore

100%

Fender Care Marine

Sohar LLC

Al Batinah Region,

PO Box 37, Sohar, 327

70%

Fendercare Australia

Pty Ltd

8D Sparks Road, Henderson

WA 6166, Australia

100%

Fendercare Servicos

Marinhos do Brasil Ltda

Avenida Feliciano Sodre

325, Centro, Niteroi,

Rio De Janeiro,

CEP: 24030-012, Brazil

100%

Hughes Marine

Engineering Limited

Barrow-in-Furness

100%

Hughes Sub Surface

Engineering Limited

Barrow-in-Furness

100%

James Fisher Asset

Information Services

Limited

Barrow-in-Furness

100%

James Fisher Ghana

Limited

HNO No.1, East Legon,

Telley, Tesa Link,

Otsokrikri Street,

East Legon, Accra, Ghana

49%

James Fisher Marine

Services Limited

Barrow-in-Furness

100%

James Fisher Maritime

Deutschland GmbH

Stadthausbrucke 8, 20355

Hamburg, Germany

100%

James Fisher Rumic

Limited

Barrow-in-Furness

100%*

JCM Scotload Ltd Barrow-in-Furness

100%

Financial statements 193

James Fisher and Sons plc – Annual Report 2022

NAME OF COMPANY ADDRESS

GROUP

PERCENTAGE OF

EQUITY CAPITAL

Subtech Offshore Ocra (Mauritius) Limited,

Level 2, Max City Building,

Remy Ollier Street, Port

Louis, Mauritius

100%

Subtech South Africa

(Pty) Ltd

Briardene, South Africa

90%

Specialist Technical

Cowan Manufacturing

Pty Limited

BDO Tax (WA) Pty Ltd,

‘BDO’, 38 Station Street,

Subiaco, WA6008, Australia

100%

Divex Asia Pacific Pty

Ltd

Bibra Lake, Australia

100%

Divex FZE PO Box 261749, Jebel Ali

Free Zone, Dubai, United

Arab Emirates

100%

Divex Limited Westhill

100%

High Technology

Sources Limited

Barrow-in-Furness

100%

James Fisher Defence

Italy SRL

Via Giulio Caccini, 100198,

Rome, Italy

100%

James Fisher Defence

Limited

Barrow-in-Furness

100%

James Fisher Defence

North America Limited

Suite 808, 1220 North

Market Street, Wilmington

DE 19801, United States

100%

James Fisher Nuclear

Limited

Oldmeldrum

100%

James Fisher

Singapore Pte Ltd

Singapore 508929

100%

JF Nuclear Limited Barrow-in-Furness

100%

JFD Australia Pty Ltd c/o BDO, Mia Yellagonga,

Tower 22, Level 9, 5 Spring

Street, Perth, WA, 6000

100%

JFD Limited Westhill

100%

JFD Ortega B.V. Vliegveldstraat 100,

B515, Technology Base,

Enschede, Netherlands

100%

JFD Singapore Pte Ltd Singapore, 508929

100%

JFD South Africa (Pty)

Limited

c/o Mazars,

Mazars House, Rialto Road,

Grand Moorings Precinct,

Century City, Cape Town,

SA 7441, South Africa

100%

JFD Sweden AB Rindovagen, Rindo Vastra,

185 41 Vaxholm, Sweden

100%

NAME OF COMPANY ADDRESS

GROUP

PERCENTAGE OF

EQUITY CAPITAL

Offshore Oil

Buchan Technical

Services Limited

Barrow-in-Furness

100%

James Fisher Marine

Services Malaysia Ltd

Level 1, Lot 7, Block F,

Sanguking Commercial

Building Jalan Patau-Patau,

87000 Labuan FT, Malaysia

100%

James Fisher Marine

Services Middle East

Limited FZCO

PO Box 371072, Dubai,

United Arab Emirates

100%

James Fisher MFE

Limited

Barrow-in-Furness

100%

James Fisher Offshore

Limited

Oldmeldrum

100%*

James Fisher Offshore

Malaysia Sdn Bhd

Room A, Ground Floor,

Lot 7, Block F, Saguking

Commercial Building Jalan

Patau-Patau, 87000 Labuan

FT, Malaysia

100%

James Fisher Personnel

S.A. de C.V.

Ciudad de Mexico, D.F.,

Mexico

100%

James Fisher

Subsea Excavation

Incorporated

21559 Provincial Boulevard,

Katy TX 77450,

United States

100%

James Fisher Subsea

Excavation Mexico S.A.

de C.V.

Ciudad de Mexico, D.F.,

Mexico

100%

James Fisher Subsea

Excavation Pte Limited

133 Cecil Street,

#16-01, Keck Seng Tower,

Singapore, 069535

100%

JF Singapore Holdings

PTE Ltd

137 Telok Ayer Street,

#05-02, Singapore 068602

100%

RMSPumptools FZE 1-153, THUB, Dubai Silicon

Oasis, Dubai, United Arab

Emirates

100%

RMSPumptools Limited Barrow-in-Furness

100%

RMSPumptools Saudi

Industrial Company

2397, Unit Number 8,

al Khobar, 34632-6282,

Saudi Arabia

100%

Scan Tech AS Stavanger

100%

Scan Tech Personell AS Stavanger

100%

Scan Tech Produckt

Personell AS

Stavanger

100%

Scantech Offshore

do Brasil Comercio E

Servicos Ltda

R 01 223, Lote 146 Quadra

02, Balneario das Garcas,

Rio das Ostras, 28.898-268,

Brazil

100%

Scantech Offshore

Limited

Barrow-in-Furness

100%*

Scantech Offshore

Pty Ltd

Henderson, Australia

100%

Subsea Engenuity

Limited

Oldmeldrum

100%

Financial statements194 Annual Report 2022 – James Fisher and Sons plc

Subsidiaries and associated undertakings cont.

NAME OF COMPANY ADDRESS

GROUP

PERCENTAGE OF

EQUITY CAPITAL

Tankships

Cattedown Wharves

Limited

Barrow-in-Furness

100%

Everard (Guernsey) Ltd St Peter Port

100%

F.T. Everard Shipping

Limited

Barrow-in-Furness

100%

F.T. Everard & Sons

Limited

Barrow-in-Furness

100%*

James Fisher (Crewing

Services) Limited

Barrow-in-Furness

100%*

James Fisher

(Guernsey) Limited

St Peter Port

100%***

James Fisher (Shipping

Services) Limited

Barrow-in-Furness

100%*

James Fisher Crewing

(CY) Limited

115 Griva Digeni, Trident

Centre, Limassol, 3101,

Cyprus

100%

James Fisher Everard

Limited

Barrow-in-Furness

100%

James Fisher Maritime

Limited

Karaiskaki, 13, 3032,

Limassol, Cyprus

100%

Onesimus Dorey

(Shipowners) Ltd

St Peter Port

100%*

Scottish Navigation

Company Limited

Oldmeldrum

100%

NAME OF COMPANY ADDRESS

GROUP

PERCENTAGE OF

EQUITY CAPITAL

Holding Companies

EDS HV Group Limited Barrow-in-Furness

100%

Fender Care Marine

Solutions Limited

Barrow-in-Furness

100%

James Fisher

(Aberdeen) Limited

Barrow-in-Furness

100%*

James Fisher and Sons

Nigeria Limited

7th Floor, 1 Kingsway Road,

Falomo, Ikoyi, Lagos, Lagos

State, Nigeria

99%*

James Fisher Holdings

UK Limited

Barrow-in-Furness

100%*

James Fisher Hong

Kong Limited

Level 17, Silvercord Tower 2,

30 Canton Road, Tsim Sha

Tsui, Kowloon, Hong Kong

100%

James Fisher Nuclear

Holdings Limited

Barrow-in-Furness

100%*

James Fisher

Properties Limited

Oldmeldrum

100%

James Fisher Servicos

Empresariais Ltda

Rua 01 No 223, Quadra 02,

Lote 146-part, Balneario das

Garcas, Brazil

100%

James Fisher Subtech

Group Limited

Barrow-in-Furness

100%*

James Fisher Tankships

Holdings Limited

Barrow-in-Furness

100%*

JF Australia Holding

Pty Ltd

Bibra Lake, Australia

100%

JF Overseas Limited Barrow-in-Furness

100%*

Martek Holdings

Limited

Barrow-in-Furness

100%

Strainstall Group

Limited

Barrow-in-Furness

100%*

Subtech Group

Holdings (Pty) Ltd

Briardene, South Africa

100%

Financial statements 195

James Fisher and Sons plc – Annual Report 2022

Associated undertakings and significant holdings in undertakings other than subsidiary undertakings

NAME OF COMPANY ADDRESS

GROUP

PERCENTAGE OF

EQUITY CAPITAL

Marine Support

Eurotestconsult Limited County Laois, Ireland

50%

Eurotestconsult UK

Limited

Ruby House,

40A Hardwick Grange,

Woolston, Warrington,

Cheshire, WA1 4RF

50%

FC Viking Sdn.Bhd Suite 6.01, 6th Floor,

Plaza See Hoy Chan Jalan

Raja Chulan, 50200,

Kuala Lumpur, Malaysia

49%

Fender Care Benelux

B.V.

Torontostraat 20,

3197 KN, Rotterdam Botlek,

Netherlands

50%

Fender Care Marine

LLC

Fujairah Port,

PO Box 5198, Fujairah,

United Arab Emirates

49%**

Fender Care Marine SA

(Pty) Ltd

Unit 4, Thembani House,

41 Brand Road, Glenwood,

Durban, 4001, South Africa

49%**

Fender Care Marine

Services LLC

G013, GH-1, Industrial City

of Abu Dhabi (ICAD-1),

Mussafeh, PO Box 45628,

Abu Dhabi,

United Arab Emirates

49%**

Fender Care Middle

East LLC

Plot 146/16, Emirates

Industrial City, Sajja Industrial

Area, PO Box 25896,

Sharjah,

United Arab Emirates

49%**

Fender Care Omega

(Middle East) FZC

E-LOB Office No. E-69G-20,

PO Box 51602, Hamriyah

Free Zone – Sharjah, United

Arab Emirates

50%

Fendercare Marine

Ghana Limited

11 Aduemi Close, North

Kaneshie, Accra, Ghana

50%

Fendercare Marine

Omega India Private

Limited

JA 1104 – 1106, DLF Tower

– A, Jasole District Centre,

New Delhi, 11044, India

50%

James Fisher (Angola)

Limitada

67 Rua Damiao de Gois,

Alvalade, Borough, District

of Maianga, Ingombota

Municipality, Angola

49%*

James Fisher Angola

UK Limited

Barrow-in-Furness

50%

James Fisher Ghana

Limited

HNO No.1, East Legon,

Telley, Tesa Link,

Otsokrikri Street, East

Legon, Accra, Ghana

49%

James Fisher Nigeria

Limited

2nd Floor, Architects Place, 2

Idowu Taylor Street, Victoria

Island, Lagos, Nigeria

100%

Nuclear

Decommissioning

Limited

3 Sovereign Square,

Sovereign Street, Leeds,

LS1 4ER

25%

Strainstall Laboratories

WLL

PO Box 2255, Office No.70,

Barwa Commercial Avenue,

Doha, Qatar

49%**

NAME OF COMPANY ADDRESS

GROUP

PERCENTAGE OF

EQUITY CAPITAL

Strainstall Middle East

LLC

PO Box 111007Jebel Ali

Industrial Area 1, Dubai,

United Arab Emirates

49%**

Strainstall Testing Lab

LLC

PO Box 62579, Abu Dhabi,

United Arab Emirates

49%**

Subtech Offshore

Services Nigeria Limited

Plot 15, Block 110, Henry

Ojogho Crescent, Off Road

69, Lekki Phase 1, Lagos,

Nigeria

100%

Specialist Technical

First Response Marine

Pte Ltd

16 Benoi Road, 629889,

Singapore

50%

James Fisher

Technologies LLC

5821 Langley Avenue,

Loveland, Colorado, 80538,

USA

49%

JFD Domeyer GmbH Konsul-Smidt-Str. 15,

28217, Bremen, Germany

50%

Wuhu Divex Diving

System Limited

No.58 Yongchang Road,

Jiujiang District, Wuhu City,

Anhui Province, PR China

49%

1 Fisher House, PO Box 4, Barrow-in-Furness, Cumbria, LA14 1HR.

2 North Meadows, Oldmeldrum, Aberdeenshire, AB51 0GQ.

3 JFD, Westhill Industrial Estate, Enterprise Drive, Westhill, Aberdeen,

AB32 6TQ.

4 4th Floor, West Wing, Trafalgar Court, Admiral Park, St Peter Port, Guernsey,

GY1 2JA.

5 Finnestadsvingen 23, 4029 Stavanger, Norway.

6 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., M exi co.

* Held by the Parent Company (all other subsidiaries are held by an

intermediate subsidiary).

** Consolidated as subsidiary undertakings.

*** Held by nominee shareholders.

Financial statements196 Annual Report 2022 – James Fisher and Sons plc

Group financial record

for the five years ended 31 December

2022

£m

2021

£m

Restated*

2020

£m

2019

£m

2018

£m

Revenue

Marine Support 224.5 214.5 249.4 311.6 274.3

Specialist Technical 68 .1 81.5 130.4 149.4 156.5

Offshore Oil 106.6 86.3 78.0 88.2 70.0

Tankships 78.9 6 0.1 60.4 6 7.9 60.7

Continuing operations 478.1 442.4 518.2 617.1 561.5

Discontinued operations 42.8 51.7 – – –

Total 520.9 49 4.1 518.2 617.1 561.5

Underlying operating profit

Marine Support 7.9 5.0 10.1 24.5 26.8

Specialist Technical 0.6 10.0 14.0 18.4 21.4

Offshore Oil 15.2 11.1 11. 2 14.2 6.8

Tankships 8.6 4.8 8.0 12.0 9.9

Common costs (5.9) (2.8) (2.8) (2.8) (2.8)

Continuing operations 26.4 28.1 40.5 66.3 62.1

Discontinued operations (7. 3) (0.1) – – –

Total 19.1 28.0 40.5 66.3 62.1

Net finance costs (10.3) (8.3) (9.0) (7.8) (6.0)

Underlying profit before taxation 8.8 19.7 31.5 58.5 56.1

APMs (1.7) (48.7) (84.0) (10.7) (0.7)

Loss on remeasurement to fair value less costs to sell (13.3) – – – –

(Loss)/profit before taxation (6.2) (29.0) (52.5) 47. 8 55.4

Taxation (4.6) 0.8 (4.8) (11.1) (10.1)

(Loss)/profit after taxation (10.8) (28.2) ( 57. 3 ) 36.7 45.3

Intangible assets 124.5 146.8 186.6 215.2 197.5

Property, plant and equipment 119.7 122.2 158.2 210.6 145.4

Right-of-use assets 52.3 41.8 31.9 27.9 –

Investment in associates and joint ventures 10.0 9.4 8.9 9.9 9.6

Working capital 69.2 62.5 66.6 107. 5 96.3

Assets/(liabilities) held for sale 17.1 10.7 – – –

Contingent consideration – – (1.7) (8.2) (6.0)

Pension obligations 5.1 (1.9) (10.3) (5.8) (16.1)

Taxation 6.2 4.7 (4.2) (10.7) (6.7)

Capital employed 404.1 396.2 436.0 546.4 420.0

Net borrowings 139.8 147.4 175.0 203.0 113.6

Lease liabilities 46.0 38.2 23.1 27.4 –

Equity 218.3 210.6 237.9 316.0 306.4

404.1 396.2 436.0 546.4 420.0

Earnings per share pence pence pence pence pence

Basic (22.1) (55.2) (114. 2) 73.1 89.5

Diluted (22 .1) (55.2) (114.2) 72.7 88.9

Dividends declared per share – – 8.0 11.3 31.6

Operating margin (%) 3.7% 5.7% 7.8% 10.7% 11.0%

Return on capital employed (%) 3.9% 3.6% 6.7% 11.3% 12.2%

Leverage 2.7 2.9 2.8 2.7 1.9

Dividend cover (times) – – 6.0 8.2 2.5

* 2021 results are restated due to a business classified as discontinued operations – see Note 5.

Financial statements 197

James Fisher and Sons plc – Annual Report 2022

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

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

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

James Fisher and Sons plc

T: +44 (0) 1229 615 400

F: +44 (0) 1229 836 761

E: enquiries@james-fisher.com

W: www.james-fisher.com