Harland & Wolff (HARL) 2021年年度報告「LSE」.pdf

《Harland & Wolff (HARL) 2021年年度報告「LSE」.pdf》由會員分享，可在線閱讀，更多相關《Harland & Wolff (HARL) 2021年年度報告「LSE」.pdf（86頁珍藏版）》請在三個皮匠報告上搜索。

1、Harland&Wolff Group Holdings plcA N N U A L R E P O R T A N D F I N A N C I A L STAT E M E N T S 2020/21Harland&Wolff is an infrastructure operator engaged in the development and operation of strategic maritime assets across the United Kingdom.Founded in 1861 by Sir Edward James Harland and Gustav W

2、ilhelm Wolff in Belfast,we have grown into a multisite business that spans three UK nations,collaborates internationally,operates two of the largest drydocks in Europe and holds one of the UKs largest fabrication footprints.Steeped in history and heritage,our portfolio includes work on some of the m

3、ost iconic ships,including the famous RMS Titanic,RMS Olympic and HMHS Britannic,right through to the SS Canberra for P&O and the Myrina tanker the first supertanker built in the UK.From our earliest days,our success has been attributed to introducing innovations which disrupted the industry.We cont

4、inue to innovate and disrupt as we pioneer twenty-first century offshore and maritime engineering with daring ingenuity.WHO WE ARECautionary note regarding forward-looking statementsStatements in this Annual Report,including those regarding the possible or assumed future or performance of Harland&Wo

5、lff or its industry,as well as any trend projections or statements about Harland&Wolff or managements beliefs or expectations,may constitute forward-looking statements.Forward-looking statements involve known and unknown risks,uncertainties,and other factors many of which are beyond the controls of

6、Harland&Wolff.These may cause the actual results,performance,or achievements of the Group to be materially different from any future results,performance or achievements expressed or implied by such forward-looking statements.No assurance is given that any forward-looking statements will prove to be

7、correct.The information and opinions contained in this Annual Report do not purport to be comprehensive,are provided as at the date of the Annual Report and are subject to change without notice.Except as required by the AIM Rules and applicable law,Harland&Wolff undertakes no obligation to update or

8、 change any forward-looking statements to reflect events occurring after the date such statements are published.01A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FOverview02 A Year of Growth and Momentum04 Group Highlights06 Senior Leadership Team07 Purpose and Ethos 08 Group at a Glance10

9、Chairmans StatementStrategic Report13 Strategic Report Navigation14 Chief Executive Officers Statement 16 Our Marketplace 18 Operations Review21 Section 172(1)Statement22 Chief Financial Officers Statement24 Our Principal Risks and Uncertainties25 Going Concern Statement Governance27 Governance Navi

10、gation28 Board of Directors30 Corporate Governance Statement36 Directors Report38 Audit Committee Report39 Remuneration,Nomination and Corporate Governance Committee Report40 Directors ResponsibilitiesFinancial Statements43 Financial Statements Navigation44 Independent Auditors Report49 Consolidated

11、 Statement of Comprehensive Income50 Consolidated Statement of Financial Position51 Company Statement of Financial Position52 Consolidated Statement of Changes in Equity53 Company Statement of Changes in Equity54 Consolidated Statement of Cash Flows55 Company Statement of Cash Flows56 Notes to the F

12、inancial Statements83 Company InformationFurther investor information Previous annual/interim reports,investor presentations and other shareholder information can be found on our website.harland- V E R V I E WO V E R V I E WA YEAR OF GROWTH AND MOMENTUMA strong foundation for long-term successFrom a

13、 gas storage project to multiple maritime and onshore/offshore fabrication sites,we have evolved into a revenue-generating strategic infrastructure operator and developer.The UK is an island nation that has a strong maritime heritage currently experiencing a shipbuilding renaissance.The National Shi

14、pbuilding Strategy refresh comes as Government seeks to make the UK a maritime superpower once again.Harland&Wolff is perfectly positioned to boom and thrive off the back of this renewed focus,with its unrivalled UK drydock capacity and multiple sites.Harland&Wolff is shaking up UK shipbuilding with

15、 a diverse new business strategy that will see it win projects across five distinct markets:defence,cruise&ferry,commercial maritime,energy and renewables.02H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/21O V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T

16、A T E M E N T SA D D I T I O N A L I N F O R M A T I O NWE OFFER A UNIQUE PROPOSITIONDelivering value in the short-term Harland&Wolff played an integral role during the pandemic to keep essential shipping routes open Our ship repair services in Belfast have turned vessels around on time and on budge

17、t,ensuring high client satisfaction.Our unparalleled UK drydocking capacity and capability With a four-site operation,we can bring fabrication projects to fruition sooner whilst minimising riskEnsuring success in the long-term Our strong track record will continue to differentiate Harland&Wolff in t

18、he UK Defence market to deliver on time and to budget Our sites are ideally positioned to supportwind farm fabrication projects around the UK We will continue to invest in our proposition by modernising our facilities,processes and technology and upskilling our employees to enhance efficiency and pr

19、ovide a competitive edge.Our Belfast yard boasts two of the largest drydocks in Europe and our Appledore yard can accommodate undercover dry dockings for smaller vessels,allowing us to take advantage of low competition market conditions on the two niche ends of the shipbuilding and repair market.WE

20、HAVE A SOLID STRATEGYDelivering value in the short-term Our strong track record of delivery has resulted in repeat and growing business We capitalised on the lack of large vessel drydocking capacity during the pandemic and welcomed large cruise liners and commercial vessels.We have made good progres

21、s against our strategic priorities,having activated all five of our markets and seen sparks fly in every yard for the first time.Ensuring success in the long-term Our strategy will see us take advantage of markets with strong long-term growth prospects such as renewable fabrication and defence.As an

22、 agile,innovative,and commercially minded business in a very archaic UK market,we have some unique advantages.We are disrupting UK shipbuilding to put British shipbuilding back on the world map.18mGroup revenue generated Over60 dockings across the Group despite Covid-19 disruption WE HAVE A STRONG E

23、THOSDelivering value in the short-term We have engaged high-performing people working together as a driven and focused team.We prioritise safety,holding safety moments at the beginning of every board meeting.Our strong performance can be attributed to the strength and skill of our people.Ensuring su

24、ccess in the long-term We are investing in passing on UK shipbuilding and maritime engineering skills and experience to the next generation.We continue to invest in the growth and wellbeing of our employees and ensure they are fully engaged to drive our long-term growth ambitions.Our ambition to be

25、pioneering is underpinned by encouraging and rewarding good ideas and better ways of doing things.Over150k invested in employee health and wellbeing35 apprentices recruited A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F F03GROUP HIGHLIGHTSFINANCIAL&COMMERCIALWORKFORCE Cash Generating Proje

26、cts6+200%201920192019202020202020202120212021084021050.2641020201920202021015Number of employees across the Group400+400%Revenue streams5+9,900%Contracted Future Revenues 20 million+400%O V E R V I E WO V E R V I E W04H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/2105A N N U A L R E P O R

27、T 2 0 2 0/21 H A R L A N D&W O L F FO V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NTHE YEAR IN PICTURESWINDFARM CONTRACTAPPRENTICES ON SITEPRINCE OF WALES VISITBELFAST FULL FOR THE FIRST TIMEFIRST SPARKS FL

28、Y IN ARNISHISSUANCE OF FULL MARINE LICENSE FOR GAS STORAGE PROJECTP&O CRUISES&VIRGIN VOYAGES WORK WONFORMER FIRST SEA LORD JOINS BOARDROBOTIC WELDERS INSTALLED IN BELFASTVIKING CRUISE SHIPSBIFAB ACQUISITIONSAPPLEDORE ACQUISITIONO V E R V I E W06H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0

29、/21SENIOR LEADERSHIP TEAMALLAN SMITHDirector of ShipbuildingTOM HARTGeneral Manager(Appledore)SEENA SHAHHead of Marketing&CommunicationsMARK LAWTHERDirector of Defence&Government VesselsJOHN WOODGroup CEOARUN RAMANGroup CFOPHIL GRAYGroup Head of Business SystemsGRAHAM COUSERDirector of Cruise,Ferry&

30、Maritime and Interim General Manager(Belfast)AMANDA MCCLELLANDGroup Head of FinanceALBERT ALLANGeneral Manager(Arnish)SERGE SEHMIGroup Head of LegalMATT SMITHGroup Commercial Director of Renewables&General Manager(Methil)KELLY OROURKEGroup Director of Human ResourcesPURPOSE AND ETHOSThe successful i

31、mplementation of our strategy is critical to the delivery of the Groups purpose and is underpinned by the values and behaviours that shape our culture and the way that we conduct our business.OUR PURPOSE Pioneering twenty-first century offshore and maritime engineering with daring ingenuity.OUR ETHO

32、SOur ethos binds our crew together.It permeates how we work,how we communicate and what we do.CURIOUSWe embrace the futureDiscovering new and better ways of doing things excites usAGILEWe adaptMaking change work for us and our clientsENGAGEDWe make things happenSatisfied only when the job is doneEVO

33、LVINGWe innovate and evolveInvesting in our talent,technology,processes and facilitiesCONFIDENTWe disrupt the marketTaking our strengths and forging new paths fearlesslyPERFORMINGWe build success storiesDelivering results and exceeding client expectationsO V E R V I E WS T R A T E G I C R E P O R TG

34、 O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NA N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F F0708H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/21O V E R V I E WOUR SITESBELFASTThe 81-acre flagship Belfast site is able to take som

35、e of the worlds largest vessels and projects.It boasts two of the largest drydocks in Europe with the main building dock separated by an intermediate dock gate allowing for simultaneous wet/dry work.The site is also home to two iconic goliath gantry cranes,direct deep-water access,over 30,000m cover

36、ed fabrication halls and substantial uncovered laydown area which provides unique opportunities for largescale fabrication projects.APPLEDOREWithin close proximity to the Southwest and Celtic Sea,Harland&Wolff(Appledore)spans over two distinct locations,the Bidna Drydock Facility and the Newquay Out

37、fitting Quay.Boasting 30,000m2 on 28.84 acres,the site features a 118m long covered drydock and ample quayside space for loadout.More than 300vessels have been built here including military craft,bulk carriers,LPG carriers,superyachts,ferries,and oil-industry support vessels.ARNISHThis Outer Hebride

38、an yard with unrestricted access to the Atlantic Ocean and North Channel can manufacture tubular components with an annual capacity of 50,000 tonnes of steel tubulars.Contained within a secured 20,000m2 area with purpose-built fabrication and assembly halls.The facility can roll materials up to 150m

39、m thick,including super duplex steel and has unrestricted open sea access.METHILSituated on the north bank of the 9-mile-wide Firth of Forth estuary,Harland&Wolff(Methil)is home to one of Europes largest fabrication halls.Featuring unrestricted access to the open sea with access to two load-out quay

40、s,each with a capacity of 20,000 tonnes over the quay,the site covers an area of almost 165,000m,with covered fabrication areas of more than 20,000m and open areas of more than 144,750m2 for assembly and storage.09A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FO V E R V I E WS T R A T E G

41、 I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NIslandmagee Gas Storage ProjectFollowing the energy crisis and unfolding Russia-Ukraine conflict,the case for a UK and Ireland gas storage project has never been stronger.A combination of

42、 long and short duration gas storage is the only way to protect against price and supply volatility that will inevitably continue and grow.As the journey to net zero accelerates,it is our view that natural gas will act as the transitional fuel of choice whilst moving towards a green energy mix.This

43、will not be a quick process and it is likely to take a couple of decades(if not many)to occur.Whats more,salt cavern gas storage is unique,in that it will likely be the cornerstone of any meaningful hydrogen development.Currently,numerous end-user technologies are being developed;however,the key wil

44、l be access to mass and large-scale production and storage.It is likely that at some point in the future(subject to further approvals)the caverns will transition over to hydrogen storage.There are a lot of unknowns at this point including the pace of technological and commercial development but when

45、 there is a shift from gas to hydrogen,we believe that the caverns will be able to solve at least one aspect of the hydrogen commercialisation conundrum.10H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/21O V E R V I E WNow,two years since Covid-19 reached these shores,restrictions are being

46、 lifted,our lives are returning to normal and despite the current horrors in Ukraine-there is a sense of hope for the future across British society.I would like to place on record my appreciation for the admirable efforts of the entire Harland&Wolff workforce who have achieved so much together throu

47、gh these extraordinary times.Strong FoundationsOver the last year,our team has reactivated the sites we acquired in 2019(Belfast),2020(Appledore)and 2021(Methil&Arnish)and taken the key steps necessary to ensure we are prepared for the long-term.In addition to advancement at Islandmagee of the vital

48、 gas storage project that will provide security of gas supplies for the UK,we have seen Harland&Wolff grow to become a fully-functioning four-site fabrication and ship repair business.The team is fabricating for a major wind farm project in Methil,is rolling super duplex steel structures in Arnish,a

49、nd is building a pontoon in Appledore in addition to filling the Belfast shipyard on several occasions a wonderful sight not seen since the last century.Our FutureAs vessel dockings increase and major bid processes reach maturity over the coming months,we are well placed to continue moving the busin

50、ess forward,ramping up our revenue generation.With our strategy of serving five markets across six services encompassing the lifecycle of an asset,I am confident that we will achieve formidable growth in the medium-term and sustain a vibrant business in the long run.Proud of our history,we are also

51、nimble proponents of change.Whilst I am proud of our diversity&inclusion,I am keen to see us extend our environmental,sustainability and governance(ESG)efforts.Among other initiatives where we are already having an impact for good,we are proud of our apprenticeship programme and the Harland&Wolff We

52、lding Academy that will provide solid career paths for people in parts of our country that are in the vanguard for levelling-up.Post the balance sheet date,we made a few announcements relating to landmark events for the company;the Green Corporate Debt deal worth$70 million is the first that the Gro

53、up has ever entered into and will go to boost the cash reserves for our growing capital needs;the two barge fabrication contracts that Belfast has secured from the Cory Group that will set the fabrication halls in Belfast in motion and will go a long way in preparation for much larger fabrication pr

54、ogrammes in the future;and finally,the award of the M55 Regeneration Programme,marking a watershed moment for the Group as our first and formal entry into the defence market.These events are a clear demonstration of the capabilities of the Group and I am delighted that all the hard work put in over

55、the last two years is finally paying off.We aim to finish 2022 in a much stronger position and with a sizeable order book going into 2023.Board of DirectorsWe have seen two changes to our Board during the year.In August we welcomed former First Sea Lord Sir Jonathon Band to the Board.Sir Jonathon br

56、ings to our Board his wealth of experience in the defence and cruise sectors and is already contributing greatly to the ongoing success of Harland&Wolff.In September 2021,my predecessor as Chairman,Clive Richardson,stepped down.We are very grateful for all he did during his time with the company.Fur

57、ther development of our Board is in train for 2022 as we gear up for the very significant commercial expansion that is well underway.Committed to serving all our stakeholders,we are clear in our vision and firm in our purpose.Buoyed always by your unstinting support,we are confident of building a br

58、illiant future.Malcolm Groat Chairman12 August 2022CHAIRMANSSTATEMENTAs I write this years statement,my first as chairman,I would like to reflect on how different times are from when we prepared last years annual report.We were then in the midst of the pandemic with all of the challenges that it add

59、ed to the lives of our growing team at Harland&Wolff.Two acquisitions7.65m(2020:5.25m)Asset base3 drydocks4 fabrication halls256 acres of real estate00 Read our Corporate Governance Report on pages 27 to 41.WE ARE WELL PLACED TO CONTINUE MOVING THE BUSINESS FORWARD,RAMPING UP OUR REVENUE GENERATION.

60、Malcolm Groat ChairmanO V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O N11A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FS T R A T E G I C R E P O R T12H A R L A N D&W O L F F A N N U A L R E P O R

61、T 2 0 2 0/21O V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O N13A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FO V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A

62、T E M E N T SA D D I T I O N A L I N F O R M A T I O NSTRATEGICREPORT14 Chief Executive Officers Statement16 Our Marketplace18 Operations Review21 Section 172(1)Statement22 Chief Financial Officers Statement24 Our Principal Risks and Uncertainties25 Going Concern Statement14H A R L A N D&W O L F F A

63、 N N U A L R E P O R T 2 0 2 0/21S T R A T E G I C R E P O R TWe live in interesting times,with substantial changes to the micro and macro environments since our last report.However,as I write this statement,I have a sense of optimism and much promise.Weare seeing the rewards of the hard work that h

64、as been undertaken by the entire team since 2019.As the world recovers from the ravages of Covid-19,we are faced with new challenges;that of war on the European doorstep,spiralling inflation,an impending energy crisis and supply chain delays.Yet,despite all these short to medium-term challenges,the

65、Harland&Wolff Group of Companies is in a position,stronger than it has ever been in its history.The statistics speak for themselves;we have taken ourselves from a one-project non-revenue generating company in 2019 to a Group that has one of the largest fabrication footprints in the UK,and from zero

66、revenues in December 2019 to 18.51million by the end of 2021.Our revenues for the period ended 31December 2021 stood at 18.51 million representing a very material increase over the previous reporting period(17-month period ended 31 December 2021 compared to 12-month period ended 31July 2020).By any

67、standards,we still have much to achieve.Given the contracted revenue flow already generated in 2022 for FY22 and FY23,we can reasonably expect FY22 revenues to be in the region of 65 million-75 million which is consistent with the guidance provided to the market.Our contracted revenues for FY23 have

68、 already exceeded 40 million at the date of this report.We are seeing significant traction in contract fruition going into Q422 and beyond,giving us confidence of achieving further growth and I have outlined our targets at the end of my review.We have seen very healthy growth to our business since 2

69、020 and key achievements include:1.Contracted backlog increase from 2m to 110m(based on management estimates)2.Largest single contract size increased from c600,000 to 55million 3.Employees have grown from 45 to peaking at 1100 4.Debt facility moving from zero to$70million5.From two markets in play t

70、o contract awards across all five markets6.Uncontracted pipeline of opportunities increased from zero to 8.16bn(unweighted)and 1.36bn(weighted)over a five-year period7.Growth from one semi-operational shipyard and fabrication facility to four fully operational assets generating revenues.We are confi

71、dent of the above trends continuing and we continue to pursue opportunities aggressively yet with the pragmatism of picking and choosing carefully the projects on which we bid.Whilst we eventually secured our Marine Licence for the Islandmagee gas storage project,we were advised that the local prote

72、st group(s)had submitted a judicial review application immediately after the award of the licence.Having sought legal opinion,we have been advised that the application has little chance of success.The judicial review hearing is expected in Q422 and we await its completion.There have been numerous ch

73、anges in the funding environment for this project and it provides us with a number of options as we continue dialogue with interested parties.Whilst the economics of the project remain encouraging,we are equally enthused by the level of interest we have received in relation to an outright sale of th

74、e project.The time to extract maximum value for this project will be after any successful outcome of the judicial review.In the event that the judicial review does not find in our favour,we have alternative technical solutions that do not require a Marine Licence and will mean that the project will

75、not be stalled again.In our 2020 report,I set out some key goals which I have listed below.Indeed,Covid-19 and the ongoing judicial review slowed the process of achieving these goals within the desired and set timescales.However,as we move into 2022 and ahead,we are starting to see some very positiv

76、e trends and endorsements.CHIEF EXECUTIVE OFFICERS STATEMENTAs we complete our extended reporting period,which now fully aligns reporting of sales targets,budgets and our multi-site operations to a 31December year end,it is the time to reflect on our journey since our last annual report dated 31 Jul

77、y 2020.Revenue increased 18.51mby the end of 2021Backlog increased110m00 Read our Corporate Governance Report on pages 27 to 41.OUR GOAL IS TO BE A 500 MILLION PER ANNUM TURNOVER COMPANY WITHIN FIVE YEARS.John Wood Group Chief Executive Officer15O V E R V I E WS T R A T E G I C R E P O R TG O V E R

78、N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NA N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FObjectiveResultObtain the Marine Licence and take FID on the Islandmagee gas storage project Marine licence obtained.FID has not been taken due to a judici

79、al review being undertaken,the advice we have is favourable to the company and we expect a positive outcome during Q422.Ensure cash breakeven for the whole of the Harland&Wolff Group Covid-19 reduced contract values significantly with vessel owners undertaking only a minimum amount of work.Commence

80、fabrication projects in Harland&Wolff and obtain a new vessel build order or a block fabrication order Whilst slightly later than expected we are now fabricating vessels in our Belfast facility for Cory barges with the recent wins.Commencement of fabrication and demonstrating capability is key to co

81、ntinuing to build up our backlog.Identify and establish an entry point into the renewable energy industry as a project developer After the full effects of Covid-19 became clear the business took a strategic direction to conserve funds and stick to the core business of shipyards and fabrication and n

82、ot look at further diversification.Continue to build a high performing team that operates in a safe and environmentally friendly manner The team across the Group continues to build in proportion to revenue increase.We are keen to ensure overheads are kept under control.We have worked tirelessly to a

83、cquire,upgrade and refurbish our four facilities during the pandemic to ensure that we are in the fully operational position that we are in today.The next part of our journey is converting our pipeline of opportunities to contracts.Our goal is to be a 500 million per annum turnover company within fi

84、ve years.The key to this growth is ensuring that we have enough working capital and a calibrated capital investment programme to meet the growing needs of the facilities.Whilst we have undertaken several equity raises over the past few years,our growing reputation,sizeable contract wins and a track

85、record of delivery have all enabled us to explore other options of financing the business,such as corporate debt and other options such as the Export Development Guarantee Scheme that we have access to for export oriented contracts.Whilst we have been successful in raising debt,at our stage of devel

86、opment,it has not been a cheap option and we are mindful of that.However,securing our first major debt deal of$70 million was a major success and has put us on the map for refinancing at a later date.Whilst our five markets are awash with opportunities,our biggest operational inhibitor is not having

87、 a large enough skills base to deal with the growth coming through.It was pleasing to reverse a trend of decline when we employed our first intake of 35 apprentices last year.We will be looking to increase our total number of apprentices to over 100 during the next academic year.We are effectively,b

88、uilding for the future and taking this route is critical to ensure enough skills are available as we continue to grow the business.It was encouraging to see the establishment of the National Shipbuilding Office and the publication of the thirty-year plan,as well as the increased licensing rounds in

89、the renewable market.We envisage defence spending will continue to increase globally over the next decade.In the past year,we have proven the strategy and have demonstrated that the pipeline can be converted.Whilst a lot has been achieved,there remains a tremendous volume of work that still requires

90、 to be undertaken to deliver on our strategic plan.The other large market is cruise.With new cruise vessel builds coming to a near halt,this market throws up significant potential to undertake refurbishment and conversion projects that are high in value and in margin.Accordingly,we have set ourselve

91、s the following financial and operational targets:Deliver FY23 revenues of 100 million-120 million in order to achieve cash break-even.Continue to build the multi-year backlog of contracted revenue going into 2024.Develop further in-house engineering capability and capacity whilst continuing to buil

92、d and enter into joint venture deals and partnerships with prime contractors.Position the company to capitalise on financing options like the Home Shipbuilding Credit Guarantee scheme and fully utilise export credit guarantees to provide substantial working capital for the company.Comply with our ta

93、rgets of reducing our carbon footprint and ensure that we maximise social and economic benefits to the communities in which we operate.Finally,we are busy ramping up delivery capability but whilst doing so,we must celebrate some of the operational successes achieved to date.As we grow,our Board also

94、 needs to grow.Our chairman and non-executive director have been working hard to recruit further board members and this will provide a further boost to the team.Clearly,as a Board,we take the view that the share price performance does not reflect the value of the business that we have built,nor the

95、opportunities that we have to grow.Our aim is to deliver on that growth opportunity and to build an increasingly large and sustainable business that delivers value for all of our stakeholders.Health,safety and environment firstThere were no reportable health,safety or environmental incidents during

96、the financial year.John WoodGroup Chief Executive Officer12 August 2022Note:Tick signifies objective achieved.A dot signifies an objective still to be achieved or eliminated due to changed strategy/market conditions.S T R A T E G I C R E P O R TS T R A T E G I C R E P O R TOUR MARKETPLACEENERGYDespi

97、te a move toward green energy,the UK Government recognises a continued need for natural gas as the transitional fuel of choice over the next few decades.As the UK looks to move away from imported gas and to increase domestic gas,the UK Government has set out a plan to launch a new licensing round fo

98、r North Sea oil and gas projects in Autumn 2022.As energy companies look to ramp up for this new burst of activity in the North Sea,our two Scottish yards in Arnish and Methil are ideally located to benefit from the inevitable fabrication,conversion and servicing works that will be required.Shifting

99、 trends toward clean energy coupled with stringent government regulations to minimise airborne emissions including sulphur and nitrous oxide will drive the global LNG bunkering market size.Having serviced two vessels in this market in 2021 and established strong relationships with many of the energy

100、 companies operating in the North Sea,Harland&Wolff is well positioned to support the renewed needs of the oil and gas energy market.CRUISE&FERRYAs vaccination numbers reached critical mass and international travel restrictions eased,we have started to see an upswing for a market that has struggled

101、with intermittent lockdowns over the last 24 months.Many cruising companies have managed to secure new financing and have been able to fund a financial restructure,demonstrating long-term confidence in the market.In the short-term,however,they remain cautious.With the slowdown that has occurred in t

102、he cruise market,orders for newbuilds have substantially reduced.This has left many cruise liners,who are wishing to offer a luxury onboard experience,with dated offerings.There now appears to be an emerging trend towards substantial upgrades and revitalisation projects on existing vessels.Harland&W

103、olffs Belfast shipyard is ideally placed to capitalise on these types of large projects whilst it continues to service smaller but regular ferry clients.COMMERCIAL MARITIMESupply chain problems have been well documented,whether its Covid-19-related restrictions,blocked shipping routes or increased d

104、emand.This has led to an increase in shipping costs and,as a result,companies are looking to increase their fleet sizes as well as increase the size of their ships.With megaships and new generation eco-freighters reducing the cost of shipping by four to six times and offering much improved efficienc

105、y,we believe there will be a growing demand in this area and our main building dock in Belfast is well equipped to capitalise on this.16H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/2117A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FO V E R V I E WS T R A T E G I C R E P O R TG

106、O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NO V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NDEFENCE&GOVERNMENT VESSELSThe UK Ministry of Defence has issued

107、an update to the“Defence Equipment Plan”for 2021-2031 and has projected a significant increase in naval spending over the next ten years.As part of its“Global Britain”policy and coupled with the establishment of a UK Government National Shipbuilding Office and the subsequent refreshed National Shipb

108、uilding Strategy which has,for the first time,brought all Government shipbuilding requirements into one 30-year pipeline worth 4 billion,this makes for a strong outlook for the UK Defence and Government vessel market.With the award of the M55 contract,Harland&Wolff is beginning to build its internat

109、ional profile within naval defence and has begun promising discussions with several NATO allies.RENEWABLESThe recent ScotWind leasing round announcement gave the green light to 17 projects covering just over 7,000km2 and will mean a multi-billion-pound investment into the Scottish renewables supply

110、chain.With two of our facilities located in Scotland,we are set to significantly benefit from this.Harland&Wolff has already built strong relationships with many of the winning developers and is well-placed to benefit from these new wind farm developments.Further such leasing round announcements for

111、 Ireland,England and Wales are likely.The opportunity of these leasing rounds coincides with a government policy change mandating local content in wind farm development.UK Government recently published the British Energy Security Strategy which set out ambitions for offshore wind of 50GWh by 2030,co

112、mbined with planning reforms which will cut the approval times for new offshore wind farms from four years to one year and an overall streamlining which will radically reduce the time it takes for new projects to reach construction stages.This means the renewables boom we have been preparing for wil

113、l soon be upon us.DECARBONISATION OF MARITIMEIn 2015,IMO and MARPOL introduced strict norms to reduce sulphur and nitrous content with the aim to reduce marine pollution.Technological advancements in vessel designs to reduce maintenance,enhance fuel efficiency and improve performance,reliability and

114、 safety are some of the key parameters which will stimulate demand.A strong order book for LNG-propelled vessels subject to the implementation of IMO Tier III norms will further complement the industry growth.As the UK Government looks to place British shipyards at the forefront of green shipbuildin

115、g,Harland&Wolff will look to capitalise on the growth opportunity here,having already built strong partnerships in this growth area.From clapping for carers and sounding the sirens for the first time in decades to a full yard,Belfast has come a long way over Covid-19.Ferry dockings have progressivel

116、y grown in complexity and contract value over the course of financial year 2020-2021,with the Belfast team proving time and time again that Harland&Wolff delivers on time and on budget.As the company moves to implement its business strategy of five markets,we have invested in facilities,processes,an

117、d infrastructure.In Autumn 2020,the Belfast yard achieve JOSCAR accreditation,demonstrating our readiness for defence contracts pre-empting a huge UK Government announcement declaring the largest military investment in 30years.2021 kicked off with the Viking cruise ships,marking the first time that

118、cruise ships have entered the yard since acquisition and putting Belfast on the cruise ship services map.As the year progressed,we saw the installation of a robotic welding arm demonstrating our commitment to implementing smart efficiencies and technological innovations.The Harland&Wolff brand celeb

119、rated 160 years and whilst the name is age-old,the new Harland&Wolff is always disrupting and evolving to embrace the future.We will always nod to the heritage,inviting the Prince of Wales to the yard to mark the special occasion but whilst remaining unafraid to do things differently.In September 20

120、21,we welcomed new apprentices into the yard for the first time in decades,realising the ambition of passing British shipbuilding skills on to the next generation.As the apprentices got settled in,we welcomed our second cruise contract with P&O Cruises and Virgin Voyages and successfully advanced th

121、rough to the next stage of the FSS competition.Harland&Wolff(Belfast)has begun to build a global reputation as a large-vessel-ready facility,capable of completing complex dockings on time and on budget and with the award of the Cory contracts to build 23 barges,we will see fabrication and shipbuildi

122、ng return to the home of British shipbuilding.The Appledore shipyard was acquired early into the 2020-21 financial year and was marked by a visit from the outgoing Prime Minister,who saw the potential in British shipbuilding and set out on a path to put it at the heart of government thinking establi

123、shing a National Shipbuilding Office that would work across Government departments to ensure and maximise on opportunities for British Shipyards.Upon acquisition,it was clear that investment into the Appledore shipyard was required.The dock gates had not been serviced in over half a century.We insta

124、lled a set-up team that was made up of some of our most experienced and talented hands to get the yard back to a state of operation as quickly as possible whilst also accepting vessels in need of repairs along the way.In September 2020,a careers day was held and it was clear that there was plenty of

125、 local talent who were itching to get back to the Appledore shipyard and bought into the business vision of sustainability through the five-market diversity and full life cycle of service offering.A small team grew organically as work packages grew in size,with apprentices joining the team in August

126、 2021,just as the MT Entsha conversion contract was won.MT Entsha was a gateway project to yard reactivation.It allowed the yard to rebuild shipbuilding and fabrication capability and marked the reopening of its fabrication halls and demonstrated its readiness to take on larger and more complex proj

127、ects.The successful delivery of this project led to the award of a 2 million fabrication contract for a Royal National Lifeboat Institution(RNLI)steel pontoon which,once complete,will replace the existing RNLI Tower Lifeboat Station based under Waterloo Bridge on the north bank of the River Thames.O

128、PERATIONS REVIEWBELFASTAPPLEDORES T R A T E G I C R E P O R T18H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/2119A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FIn February 2021,we went on to make our third acquisition,of which Methil makes up the larger of the two Scottish sites

129、.A small staff was in place already and our first task was to restructure the team to fit with our business model and vision,whilst mixing experienced hands with fresh new talent.Within a few months,we were announcing its first major fabrication contract win.The Saipem contract,worth around 26 milli

130、on,would require the fabrication and load-out of eight wind turbine generator(WTG)jacket foundations which would go on to service the EDF Renewables and ESB owned Neart na Gaoithe Offshore Wind Farm project located in the outer Firth of Forth in Scotland.With work due to commence in July,ramping up

131、to deliver this contract was always going to be challenging but our start-up team rose to the occasion and a full workforce was employed,major upgrade works took place and carefully selected new plant and equipment were acquired and installed.The upgrades include the installation of a UK-first pipe

132、profiling machine,technological upgrades and ground refurbishments.As work on the Saipem contract continues,the business development team has been enticing wind farm developers into the yard to see,first hand,all the changes to the facilities and to meet the new leadership in place.Potential clients

133、 have been pleasantly surprised by our improvements to the site and our ethos.Arnish is the smaller of the two Scottish sites but boasts a reputation for excellence in specialist welding with its specialist large rolling equipment.The site announced its first contract in October 2021.It would be for

134、 the fabrication of four suction piles for a sub-sea template of an energy project in the Black Sea.This key win marked Arnishs operational preparedness for the wider renewables and energy sectors.On award of this contract,the yard swiftly moved to full operations as work on its first external contr

135、act began and concluded the activation process of all four of Harland&Wolffs sites.METHILARNISHO V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NISLANDMAGEE GAS STORAGE PROJECTWe were advised that the Departme

136、nt of Agriculture,Environment and Rural Affairs(“DAERA”)formally made their recommendation on the Marine Licence to the Minister for DAERA,Mr Edwin Poots MLA in March 2021 and we were delighted that some months later in October2021,we were informed by DAERA that we would be issued the Environmental

137、Consent Decision,Marine Licence,reviewed Abstraction Licence and Discharge Consent and in November we were finally able to celebrate this milestone.For long-term shareholders and followers of this project,the wait has been long and arduous,and we have been delighted to see the licence granted.That s

138、aid,a judicial review has been launched by local protest groups with a court hearing later this year.Based on the scientific data that has been submitted to DAERA and after having sought legal opinion in the context of the judicial review,we believe that this application will be set aside by the cou

139、rt and enable us to progress further with the project.The project,whilst currently focussed on the storage of natural gas,has the capability,subject to regulatory approvals,to store large volumes of hydrogen.As the UK economy progressively transitions from natural gas to hydrogen,large scale hydroge

140、n storage will be critical for the success of this transition.We warmly welcomed the Northern Irelands Department for Economys energy transition report in which the vision is for Northern Ireland to be a world leader in hydrogen production and export.The report clearly recognises the value of large-

141、scale hydrogen storage.Should hydrogen ultimately become the fuel of choice for the wider economy,it will have demand and supply patterns(typical seasonal variations)that are similar to those observed in the natural gas markets.We continue to believe that lessons have to be learned from the failure

142、to check price natural gas price volatility and one of the widely recognised mechanisms to mitigate against such price and supply volatility is to have adequate domestic storage capacity.Our focus is now on holding discussions with key project investors and stakeholders around the projects financing

143、 that will lead to its Final Investment Decision.S T R A T E G I C R E P O R T20H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/21OPERATIONS REVIEW21A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F F21A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FO V E R V I E WS T R A T

144、E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NSECTION 172(1)STATEMENTThe following disclosure describes how the Directors have had regard to the matters set out in section 172(1)(a)to(f)and forms the Directors statement required u

145、nder section 414CZA of The Companies Act 2006.The matters set out in section 172(1)(a)to(f)are that a Director must act in the way they consider,in good faith,would be most likely to promote the success of the Company for the benefit of its members as a whole,and in doing so have regard(amongst othe

146、r matters)to:-the likely consequences of any decisions in the long term;-the interests of the companys employees;-the need to foster the companys business relationships with suppliers/customers and others;-the impact of the companys operations on the community and environment;-the companys reputatio

147、n for high standards of business conduct;and-the need to act fairly between members of the company.As set out above in the Strategic Report the Board remains focused on providing value for shareholders through the long term success of the Company.The means by which this is achieved is set out furthe

148、r below.Likely Consequences of any Decisions in the Long TermThe Statement From the Chairman,the Chief Executives Statement and the Strategic Review set out the Companys strategy.In applying this strategy,particularly in seeking new projects and developing current ones to deliver reserves and resour

149、ce growth,the Board assesses the long term future of our projects and investments with a view to shareholder return.The approach to general strategy and risk management strategy of the group is set out in the Statement of Compliance with the QCA Code of Practice.Interest of EmployeesThe Group has gr

150、own significantly since 2019 but we always strive to keep the Groups hierarchy as flat as possible.As a part of this Group culture,whilst employees are designated to their respective line managers,we encourage and welcome direct access to the Executive Directors on a daily basis and to the Chairman,

151、if necessary.The Group has a formal Employees Policy manual which includes processes for confidential report and whistleblowing.Need to Foster the Companys Business Relationships with Suppliers/Customers and OthersThe Group continuously interacts with a variety of suppliers and customers important t

152、o its success.The Group strives to strike the right balance between engagement and communication.Furthermore,the Company works within the limitations of what can be disclosed to the various stakeholders with regards to maintaining confidentiality of market and/or commercially sensitive information.O

153、ur suppliers are fundamental to ensuring that the Group can execute its business strategy on time and on budget.Using quality suppliers ensures that as a business we meet the high standards of performance that we expect of ourselves and vendor partners.Our management team work closely with our suppl

154、iers,via one on one meetings and where possible supplier site visits and facility reviews to ensure our suppliers are able to meet our requirements.Impact of the Companys Operations on the Community and EnvironmentThe Group takes its responsibility within the community and wider environment seriousl

155、y.Its approach to its social responsibilities is set out in the Statement of Compliance with the QCA Code of Practice.The Desirability of the Company Maintaining a Reputation for High Standards of Business ConductThe Directors are committed to high standards of business conduct and governance and ha

156、ve adopted the QCA Code of Practice.Where there is a need to seek advice on particular issues,the Board will consult with its lawyers and nominated advisers to ensure that its reputation for good business conduct is maintained.The Need to Act Fairly Between Members of the Company The Boards approach

157、 to shareholder communication is set out in the Statement of Compliance with the QCA Code of Practice.The Company aims to keep shareholders fully informed of significant developments in the Groups progress.Information is disseminated through Stock Exchange announcements,website updates and,where app

158、ropriate,video-casts.During 2021,the Company issued numerous stock exchange announcements on operational issues.All information is made available to all shareholders at the same time and no individual shareholder,or group of shareholders,is given preferential treatment.22H A R L A N D&W O L F F A N

159、N U A L R E P O R T 2 0 2 0/21Last year,we changed the companys financial reporting year from the 31 July to 31 December and consequently,we are reporting on a 17-month period to 31 December 2021.The reason for this change in the financial year was to align ourselves with our clients,most of whom ha

160、d a 31 December year end date.This change has helped us to structure commercial negotiations and contracts based on annual budgets set by the clients every year.The shipyard and fabrication business,like many others,has traditionally had a 31 December year end date.Therefore,from our own internal mo

161、nthly budgeting,forecasting and reporting point of view,it helped streamline various work processes to bring us in line with industry norms and make our metrics a lot more understandable internally.This report was originally due to have been published on or before 30 June 2022.However,owing to lack

162、of resources caused by Covid and a backlog of work that had built up due to the pandemic,we were granted an extension of time to publish on or before 30 September.I am pleased that we overcame these resource hurdles and have been able to publish the annual report well ahead of the expiration of the

163、extension date.For the 17-month period to 31 December 2021,we recorded revenues of 18.51million(2020:1.48 million),a material increase over the previous period.Gross profits were 5.22 million(2020:303,547)and were able to increase our gross margins to 28.22%(2020:20.48%)through a combination of oper

164、ational efficiencies and a mix of contracts across the five key markets that we target.For the financial year 2022,we expect to see a slight drop in the gross margins on account of wage and energy inflation as well as a change in the nature of contracts within our portfolio,i.e.,expanding our portfo

165、lio from predominantly cruise and ferry to commercial fabrication(Cory),renewables(Saipem)and defence(M55).Operating losses stood at 22.37 million(2020:9.18 million),and a substantial proportion of this was related to the recruitment of personnel across the board in preparation for bidding on large

166、value contracts across the five markets.Having gone through this growth spurt in 2021,weexpect to stabilise the number of personnel in the Group in 2022.We are still short of some critical skilled personnel in design,engineering,bidding and estimating and we hope to fill those gaps in FY22.Thenumber

167、 of employees has gone from 105 in 2020 to 410 in 2021 and a large proportion of them have been allocated to specific projects,costs for which will get captured within cost of sales and no longer be classified as“bench overheads”.Finally,our loss for the year before tax and other exceptional items s

168、tood at 25.50million(2020:10.41million).Weexpect to see higher revenues in FY22 and our stated guidance is gross revenues of between 65 million and 75 million.S T R A T E G I C R E P O R TCHIEF FINANCIAL OFFICERS STATEMENTI am delighted to write to shareholders and stakeholders to share my views on

169、the year gone past and the outlook for the future.We acquired the assets in Belfast in December 2019 with the first set of small contracts executed towards the end of December2019 and January 2020.The Covid-19 pandemic that then hit us and the rest of the world in March 2020 was a“black swan”event t

170、hat left all of us completely unprepared for what then ensued.We had to instantaneously revise all our operational and strategic plans with the single focus of ensuring that we kept the yard functioning and did not haemorrhage the critical and skilled labour force,either due to the pandemic or to de

171、lays in crucial contracts that were in the pipeline due to be executed in March/April 2020.Iwish to place my thanks to the entire workforce and personnel who kept the yard fully functioning through the pandemic-with their hard work,integrity and desire and it is this that has made this business a su

172、ccess for all.Raised before expenses+27.67mDebt deal secured$70m00 Read our Corporate Governance Report on pages 27 to 41.FOR THE YEAR ENDING 31 DECEMBER 2022,WE CONTINUE TO MAINTAIN OUR STATED GUIDANCE OF GENERATING BETWEEN 65 MILLION AND 75 MILLION IN REVENUES.Arun Raman Group Chief Finance Office

173、r23A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FO V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NDuring the period,we acquired the assets of the Appledore shipyard(25 August 2020)and the fabricat

174、ion assets in Methil and Arnish(12 February 2021).These acquisitions were strategic and have enabled us to have one of the largest fabrication footprints in the UK.We are now very well positioned to bid and win larger shipbuilding and fabrication contracts given the optionality that we are able to p

175、rovide to clients.The company undertook three equity raises during the 17-month period to 31December 2021.A sum of 7.40 million(before expenses)was raised in January 2021,a sum of 12.07 million(before expenses)in May 2022 and finally a sum of 8.20 million(before expenses)in December 2021.Asa growing

176、 company competing in markets dominated by other companies that are far larger than us,there is always a need for cash resources in order to compete for larger contracts not least in terms of experienced personnel.As we bid and win larger contracts,the challenge will be to create the optimal balance

177、 between equity and debt,and I am delighted to report that post the financial year-end in March 2022 we announced our first ever group-wide corporate debt deal for$70million with Riverstone Capital Partners,$35 million of which is a committed line and the balance$35 million being an uncommitted acco

178、rdion facility that can be activated upon the execution of material contracts.This debt facility has been utilised to retire all the existing debt obligations as at 31 December 2021 as well as to fund working capital and certain key capital expenditure across the Group.In June and July 2022,we annou

179、nced twoprogrammes for the build of twenty-three barges for the Cory Group,revenues for which would span FY22 and FY23.This is significant because we have started building our contracted order book for FY23 and will be going into the new financial year with a confirmed revenuestream.The two fabricat

180、ion contracts put together would generate c20 million in revenues,of which c15 million will be booked in FY23.Works on this project will take place in Belfast and will complete the process of activating our vast fabrication halls.Finally,in July again,we announced our first defence deal worth c55 mi

181、llion in relation to the M55 Regeneration Programme.This is a landmark deal for the Group and firmly establishes us within the realm of defence.This project is expected to run for 18 to 24 months and further underpins our contracted revenue streams going forward.For the year ending 31 December 2022,

182、wecontinue to maintain our stated guidance of generating between 65 million and 75 million in revenues.For FY23,we have already generated over 40 million of contracted revenues and will be lookingto aggressively bid and win further contracts going into Q3and Q422.As we move into the second half of F

183、Y22,we are faced with rising wage and energy inflation as well as the possibility of a global recession.Whilst interest rates have started rising,we have not been impacted as yet,given that the structure of the debt facility is already 50 basis points higher than current interest rates(SOFR floor of

184、 1%versus current SOFR rate of 0.50%).However,we could potentially be exposed to higher interest costs in the event the base interest rate breaches the 1%floor.As we make progress across the various contracts,we shall be looking at refinancing the existing debt facility on terms that are less expens

185、ive than the current terms.We frequently run a number of scenario analyses internally to assess ourselves on key metrics such as contract wins to bids ratio,gross margin comparisons across different bids,and quite importantly,longevity of projects to achieve the critical mass of baseload revenues.Wh

186、ilst the focus is on achieving long-term critical mass revenues,we need to consider the trade-off between short-term high margin projects and long-term lower margin projects.Our current gross margin is circa 27%-30%and largely driven by short-term cruise and ferry work.As we move into FY23,we expect

187、 to observe a change in the nature of projects within our portfolio,with defence and renewable projects becoming predominant.Both these markets provide stability of long run revenues albeit at lower margins compared to cruise and ferry.Asstated in the CEOs report we are currently targeting between 1

188、00 million-120 million of revenues in FY23 and on that basis and the assumption that our portfolio will consist of a high proportion of defence and renewables work,we are targeting cash break-even in FY23.It is important to caveat these estimates with certain realities;although our scenario analyses

189、 take into account a certain quantum of wage and energy inflation,it is very difficult to predict the impact of“black swan”events such as pandemics,wars,supply chain failures etc.on a set of business-as-usual scenarios.Whilst each of these“black swan”events may have an adverse impact on our business

190、-as-usual estimates,the quantum of impact is largely contingent on a number of factors that are beyond the control of the company.In order to achieve these levels of growth and revenues,leading,ultimately,to profitability,the company will need to make investments in plant,machinery,equipment and peo

191、ple.Therefore,the company has set up a dedicated treasury desk to administer loan agreements and maintain firm control on cash management.As previously stated,we will also look to maintain an appropriate balance in the overall structure of the balance sheet.Finally,I wish to thank all our shareholde

192、rs for the unstinting support that they have shown us through this period and also warmly welcome our new shareholders into the Harland&Wolff family.I look forward to sharing with you a series of progress updates in due course.Arun RamanGroup Chief Financial Officer12 August 2022OUR PRINCIPAL RISKS

193、AND UNCERTAINTIESS T R A T E G I C R E P O R T24H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/21The Board is responsible for the effectiveness of the Groups risk management activities and internal control processes.As a participant in the gas storage development,shipbuilding and heavy fabr

194、ication industries,the Group is exposed to a wide range of business risks in the conduct of its operations.The Group is exposed to financial,operational,strategic and external risks which are further described below.These risks are not exhaustive and additional risks or uncertainties may arise or be

195、come material in the future.A robust process of risk management and mitigation exists in the business and all risks associated with the Groups business have been fully assessed.RISK MANAGEMENTThe financial risk management objectives and policies of the company in relation to the use of financial ins

196、truments,and the exposure of the company and its subsidiary undertakings to its main risks,credit risk and liquidity risk are set out in note 25 to the financial statements.The principal risks and uncertainties relating to the Groups business and how we mitigate them are set out in subsequent paragr

197、aphs.FINANCING RISK-THE RISK OF NOT OBTAINING SUFFICIENT FINANCINGAccess to adequate working capital is critical to our ability to pursue our existing and future projects and to continue as a going concern.A deterioration of the capital markets may reduce our ability to raise new equity funding.We w

198、ork closely with our professional advisers and brokers to identify the optimum approach and timing to secure new equity financing to provide working capital.The Group seeks to manage risk for our shareholders by attracting investment through quality partners where possible thereby minimising our own

199、 commitments to pay project development costs.We do not make financial commitments unless such funding has been secured through joint venture partners or otherwise new investment in our projects or we have a high degree of confidence that it will be secured.STRATEGIC AND EXTERNAL RISKS-FAILURE TO MA

200、NAGE AND GROW THE BUSINESS WHILE CREATING SHAREHOLDER VALUE There is no assurance that the Groups gas storage development will be successful,however,this risk has been substantially reduced by successfully completing the Front End Engineering and Design(“FEED”)works for the Project.Whilst the gas st

201、orage project was the Companys only asset till December 2019,it represented a significant strategic risk should it not proceed to monetisation.Since the acquisition of four additional assets in 2019,2020 and 2021,and a strategic pivot into ship repairs and heavy fabrication,the Company has diluted t

202、his strategic risk substantially.The gas storage project continues to remain the Companys flagship energy infrastructure project but significantly less reliance is now placed on the success of this project from a Group-wide perspective.We place a premium on the recruitment and retention of suitably

203、skilled personnel,compliance with applicable legislation and careful management of cash resources and requirements.The successful progression of the Groups activities depends not only on technical success but also on the ability of the Group to obtain appropriate financing through equity or debt fin

204、ancing or disposing of interests in projects or via other means.We place great emphasis on regular communication with shareholders,including the release of announcements for the interim and annual results,and after significant developments.We seek to ensure that through such communications our share

205、holders are aware of our strategy and operations and that management has their continuing support.The companys system of Corporate Governance is set out in the Our Governance section of thisreport.OPERATIONAL RISKS-DAMAGE TO SHAREHOLDER VALUE,ENVIRONMENT,PERSONNEL OR COMMUNITIES CAUSED BY OPERATIONA

206、L FAILURES Harland&Wolff has restructured its board of directors and senior management team to include individuals with relevant skills to manage the operational risks of our projects and ensure they are progressed in the shortest possible timescales in a cost-effective manner.We have built up our c

207、ore competencies in project development and have developed excellent relationships with government and public stakeholders in the geographical areas in which we operate.POLITICAL RISKS CHANGES TO THE GEO-POLITICAL LANDSCAPE AND ECONOMIC EMBARGOES CAUSING TO CONTRACT DELAYS AND CANCELLATIONS Harland&

208、Wolff has its Belfast facility that is heavily dependent on repairs for the cruise and ferry market as well as the repairs and refurbishment of a number of commercial vessels.These vessels could have ownership or be registered in countries that are or likely to be subject to economic sanctions and e

209、mbargoes.The Company has a number of“Know Your Client”procedures in place prior to executing any contract.Whilst these procedures have been made as robust as possible,the Company is still subject to fines and penalties if a vessel that is subject to economic sanctions comes to the Belfast facility.A

210、 number of vessels that were for dry docking in FY22 have been turned away due to their ownership being the subject of economic sanctions.As geo-political tensions increase across the globe,the Company is exposed to rogue ownership of vessels and loss of business.Whilst ownership related issues are

211、being successfully mitigated,the Company is in a continuous process of replacing business lost due to economic sanctions with new business.Our management team works alongside strong and experienced joint venture partners in all projects and is supported by a highly effective network of carefully sel

212、ected service delivery specialists such as environmental consultants,fabrication and shipyard specialists and world class design engineers.In this way,we seek to mitigate the potential risk that we fail to be seen to be acting in a socially responsible manner and/or fail to maintain good local commu

213、nity relationsGOING CONCERN STATEMENTThe financial statements have been prepared on a going concern basis.The Groups assets are now generating revenue following the acquisitions of assets in Belfast,Appledore,Methil and Arnish under the Harland&Wolff umbrella.Operating cash outflows have been incurr

214、ed in the year and an operating loss has been recorded in the profit and loss account for the year.There is a baseload level of work flowing through the shipyard in Belfast with continuous ship repair and refurbishment activities in the Belfast Repair Dock.In addition,the Group has been able to win

215、smaller fabrication contracts in Appledore and Arnish throughout the year.The Methil facility is currently in the process of fabricating eight wind turbine generator jackets for the NNG project.Post the balance sheet date,the Group has announced that it has secured the build of eleven barges for the

216、 Cory Group valued at 8.40 million over a period of ten months and has also secured its first major defence contract with the refurbishment of the M55 Minehunter,the contract valued at circa 55 million and to be completed within 24 months.Additionally,there is a strong pipeline of opportunities acro

217、ss the five markets that the Group is involved in that management seeks to convert into firm contracts over the course of the next twelve months.However,given the uncertainty surrounding bid success and the relative lack of bid to success history,management has prepared a worst-case scenario for a p

218、eriod of twelve months from the date of the signing of these financial statements in respect of their going concern assumptions.This assumes no bid contract wins and that the sole revenue generated by the Group will arise from the existing contracts that are currently being fulfilled at the various

219、facilities within the Group.The scenario includes all expected costs associated with such works as well as the repayment of all liabilities that fall due within this twelve-month period and takes into account all cost savings and process efficiencies considered achievable.Based on this worst case fo

220、recast scenario the directors have a reasonable expectation that the Group has access to adequate resources to continue in operational existence for the foreseeable future.Thus,they continue to adopt the going concern basis of accounting in preparing the annual financial statements for the year ende

221、d 31 December 2021.Should the Group be unable to continue trading,adjustments would have to be made to reduce the value of the assets to their recoverable amounts,to provide for further liabilities which might arise and to classify fixed assets as current.O V E R V I E WS T R A T E G I C R E P O R T

222、G O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O N25A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F F26H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/21G O V E R N A N C EG O V E R N A N C E26H A R L A N D&W O L F F A N N U A L R E P O

223、 R T 2 0 2 0/21A D D I T I O N A L I N F O R M A T I O NF I N A N C I A L S T A T E M E N T SG O V E R N A N C EO V E R V I E WA N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F F27A D D I T I O N A L I N F O R M A T I O NF I N A N C I A L S T A T E M E N T SG O V E R N A N C ES T R A T E G I

224、C R E P O R TO V E R V I E W28 Board of Directors30 Corporate Governance Statement36 Directors Report38 Audit Committee Report39 Remuneration,Nomination and Corporate Governance Committee Report40 Directors ResponsibilitiesGOVERNANCE28H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/21G O V E

225、 R N A N C EBOARD OF DIRECTORSAt the financial year end,the Board comprised two executive directors and two non-executive directors whose background and experience are relevant to the companys activities.The directors are of the opinion that the Board with a new chairman with effect from March 2022

226、and a new non-executive director to be appointed in due course(in addition to the sitting non-executive director)will have a suitable balance and it is expected that non-executive directors undertake a minimum of 18 days a year including attending board meetings and sitting on committees.The Governa

227、nce section in this annual report sets out biographical details of each director and which directors the Board considers to be independent.The Board,through the directors,maintains regular contact with its professional advisers to ensure that the Board develops an understanding of the views of major

228、 shareholders about the company.The Board also intends to review the performance of the team as a unit to ensure that the members of the Board collectively function in an efficient and productive manner.All directors have access to the advice and services of the company secretary who is responsible

229、to the Board for ensuring that the Board procedures are followed and that the applicable rules and regulations are complied with.In addition,the company secretary will ensure that the directors receive appropriate training as necessary.The appointment and removal of the company secretary is a matter

230、 for the Board as a whole.Appointed:Interim Chairman September 2021 and appointed Chairman March 2022Malcolm has worked for many years as a consultant to companies in technology,natural resources and general commerce.Following an early career with PWC in London,he held CFO,COO,and CEO roles in estab

231、lished corporations including the construction firm now called Arcadis.Since 2004 Malcolm has served in non-executive director or chairman positions,today including Baronsmead Second Venture Trust PLC and Tomco Energy PLC.Malcolm is a Fellow of the Institute of Directors,Fellow of the Royal Society

232、for the Encouragement of Arts,Manufactures and Commerce,and Fellow of the Institute of Chartered Accountants in England and Wales.He holds university degrees from St Andrews(MA)and Warwick(MBA).MALCOLM GROATChairman Non-Executive Chairman I A R Appointed:August 2021 Sir Jonathon Band is a former Fir

233、st Sea Lord&Chief of Naval Staff of the Royal Navy during which period he created a new innovative Command Structure in addition to promoting the need for maritime investment and security.Sir Jonathon has also worked very closely with industry to promote and implement the Defence Industrial Strategy

234、,a UK government policy focused on the efficient allocation of military equipment and resources to the UK armed forces.Prior to his role as First Sea Lord,Sir Jonathon was Commander in Chief Fleet during which time,as Chief Operating Officer,he was responsible for the operational capability and depl

235、oyment of the Navys front line.Sir Jonathon is highly respected for his time spent supporting foreign and defence policies and for his crucial role in negotiating and building coalitions across NATO allies and Middle Eastern partners.Following his retirement from the Royal Navy,Sir Jonathon has held

236、 numerous non-executive positions at Lockheed Martin UK,Babcock International Group,National Museum of the Royal Navy and SurvitecGroupLtd.Sir Jonathon is currently a Non-Executive Director of Carnival Corporation,the NYSE&LSE listed global cruise operator.SIR JONATHON BANDNon-Executive Director I A

237、 R KEYE ExecutiveI IndependentA Audit CommitteeR Remuneration,Nomination and Corporate Governance Committee29A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FO V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A

238、 T I O NATTENDANCEThe Board and its Committees have a scheduled forward programme of meetings.This ensures that sufficient time is allocated to each relevant discussion and activity and the Boards time is used effectively.The table below shows the attendance of directors at the board and committee m

239、eetings held during the year.In addition to those scheduled meetings,unscheduled Board and Committee meetings were convened throughout the year as and when the need arose.The Board had regular dialogue with management during the early phase of the Covid-19 pandemic and held additional Board calls at

240、 this time.The additional Board meetings and Board calls were all quorate,and all directors received the relevant papers and provided the required approval.During the year,the Board also held strategy sessions during the Board meetings to review and refresh the companys strategic direction.The below

241、 table details the meetings number of meetings attended out of a possible number of meetings for each director.BoardAudit CommitteeRemuneration,Nomination and Corporate Governance CommitteeBoard MemberScheduled:10Scheduled:1Scheduled:4Executive DirectorsJohn Wood10 of 10NANAArun Raman10 of 10NANANon

242、-Executive DirectorsMalcolm Groat10 of 101 of 14 of 4Sir Jonathan Band (appointed 01/09/21)3 of 10NA2 of 4Clive Richardson(resigned 27/09/21)6 of 101 of 12 of 4Members of the Senior Leadership team and professional advisors attended board meetings by invitation as appropriate throughout the year.At

243、each board meeting,the Chief Executive Officer delivers a high-level update on the business,and the Board considers specific reports,reviews business and financial performance,as well as key initiatives,risks and governance.In addition,throughout the year,the Executive Team and other colleagues deli

244、ver presentations to the Board on proposed initiatives and progress on projects.John has enjoyed a distinguished career within the Oil and Gas sector,holding senior posts with BAE Systems,and was more recently the Global Head of Oil and Gas with Aurecon,a global engineering and advisory firm.He has

245、successfully undertaken projects in Australia,the USA,Africa,Europe and the UK,building up extensive experience delivering pre-FEED and FEED(Front End Engineering Design),FID(Final Investment Decision)and EPC(Engineering,Procurement and Construction)contracts involving storage and infrastructure dev

246、elopments.Prior to his appointment as Chief Executive Officer at InfraStrata plc(now known as Harland&Wolff Group Holdings plc),John worked as a consultant for the company and was closely involved in negotiating and agreeing FEED contracts for the Islandmagee gas storage facility with Costain,DEEP K

247、BB and WSP,as well as the appointment of Evan Passaris(Atkins)as a specialist in salt cavern gas storage.During that time,John managed all FEED related activities on behalf of the company.John is ideally suited to overseeing the operational areas of the Islandmagee gas storage project,given his weal

248、th of technical experience across a wide range of similar developments.He is a well-known and highly respected industry professional and has extensive experience of working with the Groups FEED partners.JOHN WOODExecutive DirectorE Arun has spent the past 20 years within the commodities and infrastr

249、ucture sector.While at Star Energy Group plc(now known as Petronas Energy Trading Ltd.),he was responsible for commercialising its 10 BCF Humbly Grove Underground Gas Storage Project,including the negotiation and commercial delivery of the Gas Storage Agreement with Vitol SA as the capacity offtake

250、client.He also negotiated and executed agreements with the National Grid in relation to physical gas flows between the Humbly Grove gas storage facility and the National Transmission System.On the trading side,Arun set up trading desks for natural gas,power and carbon emissions for the Group.Followi

251、ng on from there,Arun was hired by Vitol Services Ltd.in London where he was actively trading carbon emissions and other commodities.He specialises in commercial negotiations and monetising assets underpinned by commodity flows as well as trading of commodities around such assets.Aruns gas storage c

252、ommercialisation experience will provide valuable insight as the Group progresses with the Islandmagee Project.Arun is a qualified Chartered Accountant having completed his training with PricewaterhouseCoopers and Citibank N.A.in India.He has been a member of the Institute of Chartered Accountants o

253、f India for the last 17 years post qualification,and also holds the designation of Certified Internal Auditor awarded to him by the Institute of Internal Auditors,Florida,USAARUN RAMANExecutive DirectorE 30H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/21CORPORATE GOVERNANCE STATEMENT The B

254、oard has adopted the QCA Code in line with the London Stock Exchanges AIM Rules requiring all AIM quoted issuers to adopt and comply with a recognised corporate governance code.To see how we address the key governance principles defined in the QCA Code please refer to the below table.QCA Code Princi

255、ple ApplicationWhat we do and whyDeliver Growth1.Establish a strategy and business model which promote long-term value for shareholdersThe Board must be able to express a shared view of the companys purpose,business model and strategy.It should go beyond the simple description of products and corpor

256、ate structures and set out how the company intends to deliver shareholder value in the medium to long-term.It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future.The G

257、roups strategy is explained fully within our Chief Executives Strategic Report section.Our strategy is principally focused around four key areas:(i)identification of opportunities,primarily in the energy infrastructure sector;(ii)development of projects using the skills and experience of the company

258、s management team;(iii)monetisation of projects to deliver shareholder value;and(iv)identifying future energy-related projects,to ensure we have a balanced portfolio of projects at various stages of completion.The key challenges to the business and how these are mitigated are detailed further in thi

259、s Annual Report.2.Seek to understand and meet shareholder needs and expectationsDirectors must develop a good understanding of the needs and expectations of all elements of the companys shareholder base.The Board must manage shareholders expectations and should seek to understand the motivations beh

260、ind shareholder voting decisions.The company remains committed to listening and communicating openly with its shareholders to ensure that its strategy,business model and performance are clearly understood.Understanding what analysts and investors think about us and,in turn,helping these audiences un

261、derstand our business,is a key part of driving our business forward and we actively seek dialogue with the market.We do so via investor roadshows,attending conferences and our regular reporting.The Board recognises the AGM as an important opportunity to meet shareholders.The directors are available

262、to listen to the views of shareholders informally immediately following the AGM.The Board recognises the importance of good corporate governance and have chosen to apply the QCA Code.The QCA Code was developed by the Quoted Companies Alliance(the“QCA”),the independent membership organisation that ch

263、ampions the interests of small to mid-size quoted companies,in consultation with a number of significant institutional small company investors,as a suitable corporate governance code applicable to AIM companies.As stated by the QCA,good corporate governance is about“having the right people(in the ri

264、ght roles),working together,and doing the right things to deliver value for shareholders as a whole over the medium to long-term”.This is achieved through a series of decisions made by the Board,which needs to be kept dynamic,diverse and engender a consistent corporate culture throughout the Harland

265、&Wolff Group Holdings plc group of companies(the“Group”).Our values are based on“Doing the right thing”for our people,suppliers,shareholders and other stakeholders.The Board believes this is vital to creating a sustainable,growing business and is a key responsibility of the Group.This culture suppor

266、ts the Groups objectives to grow the business through acquiring and retaining customers.It is the Boards job to ensure that the Group is managed for the long-term benefit of all shareholders,with effective and efficient decision-making.Corporate governance is an important part of that job,reducing r

267、isk and adding value to our business.G O V E R N A N C E31A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FO V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NQCA Code Principle ApplicationWhat we do an

268、d whyThe AGM is the main forum for dialogue with retail shareholders and the Board.The notice of AGM is sent to shareholders at least 21 days before the meeting.The chairman and the executive directors attend the AGM and are available to answer questions raised by shareholders.For each vote,the numb

269、er of proxy votes received for,against and withheld is announced at the meeting.The results of the AGM are subsequently published on this website.The person at the company with principal responsibility for liaising with shareholders is Arun Raman.3.Take into account wider stakeholder and social resp

270、onsibilities and their implications for long-term successLong-term success relies upon good relations with a range of different stakeholder groups both internal(workforce)and external(suppliers,customers,regulators and others).The Board needs to identify the companys stakeholders and understand thei

271、r needs,interests and expectations.Where matters that relate to the companys impact on society,the communities within which it operates or the environment have the potential to affect the companys ability to deliver shareholder value over the medium to long-term,then those matters must be integrated

272、 into the companys strategy and business model.Feedback is an essential part of all control mechanisms.Systems need to be in place to solicit,consider and act on feedback from all stakeholder groups.Engaging with our stakeholders strengthens our relationships and helps us make better business decisi

273、ons to deliver on our commitments.The Board stays abreast of stakeholder insights into the issues that matter most to them and our business,which enables the Board to understand and consider these issues in decision-making.Aside from our shareholders and suppliers,our core management team is one of

274、our most important stakeholder groups and the Board closely monitors any feedback it receives from members of the team to ensure alignment of interests.For more information,please see our Directors Report under the principal risks and uncertainties section in this Annual Report.The Group encourages

275、feedback from all those organisations which it works or otherwise engages with.4.Embed effective risk management,considering both opportunities and threats,throughout the organisationThe Board needs to ensure that the companys risk management framework identifies and addresses all relevant risks in

276、order to execute and deliver strategy;companies need to consider their extended business,including the companys supply chain,from key suppliers to end-customer.Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take(ri

277、sk tolerance and risk appetite).The principal risks and uncertainties faced by the Group are detailed in this Annual Report.We detail the risks to the business,how these are mitigated and the change in the identified risk over the last reporting period.The Board considers risk to the business at Boa

278、rd meetings(which are scheduled to take place at least quarterly).Due to the recent changes at Board and management team level,Board meetings have taken place with increased frequency.Management is usually invited to attend the Board meetings,but are asked to leave any meetings when the Board wishes

279、 to discuss and/or otherwise resolve any Board-specific,confidential or sensitive matters.The company formally reviews and documents the principal risks to the business at least bi-annually.The Board and management team are responsible for reviewing and evaluating risk and the executive directors me

280、et at monthly intervals to review ongoing trading performance,discuss budgets and forecasts,and new risks associated with ongoing trading and projects.32H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/21G O V E R N A N C ECORPORATE GOVERNANCE STATEMENTQCA Code Principle ApplicationWhat we do

281、 and whyMaintain a Dynamic Management Framework5.Maintain the Board as a well-functioning,balanced team led by the chairThe board members have a collective responsibility and legal obligation to promote the interests of the company and are collectively responsible for defining corporate governance a

282、rrangements.Ultimate responsibility for the quality of,and approach to,corporate governance lies with the chair of the board.The Board(and any committees)should be provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight

283、.The Board should have an appropriate balance between executive and non-executive directors and should have at least two independent non-executive directors.Independence is a board judgement.The Board should be supported by committees(e.g.,audit,remuneration,nomination)that have the necessary skills

284、 and knowledge to discharge their duties and responsibilities effectively.Directors must commit the time necessary to fulfil their roles.The Board currently has two executive directors and two non-executive directors.The Board considers the non-executive director to be independent.The company has an

285、nounced the appointment of a new non-executive chairman,with effect from March 2022.The Board is satisfied that it has a suitable balance between independence on the one hand,and knowledge of the company on the other,to enable it to discharge its duties and responsibilities effectively.All directors

286、 are encouraged to use their independent judgement and to challenge all matters,whether strategic or operational.The Board intend to continue to assess and monitor the companys requirements in this regard and expects to review the situation on an ongoing basis.All directors receive regular and timel

287、y information relating to the Groups operational and financial performance.Relevant information is circulated to the directors in advance of meetings.In addition,minutes of the meetings of the directors are circulated to the Board for approval.The Board has a formal schedule of matters reserved to i

288、t and is supported by the Audit and Remuneration Committee.The Committees Terms of Reference are available below this table.The primary tasks of the CEO are as follows:(i)leads the development and execution of long-term corporate strategy;(ii)responsible for all day-to-day management decisions and i

289、mplementing corporate long and short-term plans;(iii)acts as a direct liaison between the Board and management team;and(iv)communicates on behalf of the company to internal and external stakeholders.The primary tasks of the CFO are as follows:(i)overseeing the administrative,financial,and risk manag

290、ement operations of the company(ii)developing financial and operational strategy,including the metrics linked to strategy;(iii)ongoing development and monitoring of control systems designed to preserve company assets;and(iv)reporting accurate financial results.The primary tasks of the chairman are a

291、s follows:(i)leads the Board and ensures its effective operation;(ii)providing support and supervision to the management team;and33A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FO V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I

292、 O N A L I N F O R M A T I O NQCA Code Principle ApplicationWhat we do and why(iii)monitoring and upholding corporate governance standards.The Boards role is to oversee and manage the Group,in as a responsible and efficient manner as possible.Broadly,the Board focuses on four key areas:(1)establishi

293、ng vision,mission and values;(2)setting strategy and structure;(3)delegating to management;and(4)exercising accountability to shareholders and being responsible to relevant stakeholders.Thecompany has the following committees:(i)Audit Committee and(ii)Remuneration,Nomination and Corporate Governance

294、 Committee6.Ensure that between them the directors have the necessary up-to-date experience,skills and capabilitiesThe Board must have an appropriate balance of sector,financial and public markets skills and experience,as well as an appropriate balance of personal qualities and capabilities.The Boar

295、d should understand and challenge its own diversity,including gender balance,as part of its composition.The Board should not be dominated by one person or a group of people.Strong personal bonds can be important but can also divide a board.As companies evolve,the mix of skills and experience require

296、d on the Board will change,and board composition will need to evolve to reflect this change.The Board is satisfied that,between the directors,it has an effective and appropriate balance of skills and experience,including in the areas of energy,engineering,finance,capital markets,innovation and inter

297、national trade.All directors receive regular and timely information on the Groups operational and financial performance.Relevant information is circulated to the directors in advance of meetings.The directors keep their skillsets up to date by attending relevant industry and professional events,as w

298、ell as receiving periodic updates from the companys professional advisers regarding regulatory developments.The directors service contracts are available for inspection at the companys registered office and at each AGM.All directors retire by rotation at regular intervals in accordance with the comp

299、anys Articles of Association.Appointment,removal and re-election of directors.The Board makes decisions regarding the appointment and removal of directors,and there is a formal,rigorous and transparent procedure for appointments.The companys Articles of Association require that one-third of the dire

300、ctors must stand for re-election by shareholders annually in rotation;that all directors must stand for re-election at least once every three years;and that any new directors appointed during the year must stand for election at the AGM immediately following their appointment.Independent advice All d

301、irectors are able to take independent professional advice in the furtherance of their duties,if necessary,at the companys expense.In addition,the directors have direct access to the advice and services of the Chief Financial Officer and Company Secretary.34H A R L A N D&W O L F F A N N U A L R E P O

302、 R T 2 0 2 0/21G O V E R N A N C EQCA Code Principle ApplicationWhat we do and why7.Evaluate Board performance based on clear and relevant objectives,seeking continuous improvementThe Board should regularly review the effectiveness of its performance as a unit,as well as that of its committees and t

303、he individual directors.The Board performance review may be carried out internally or,ideally,externally facilitated from time to time.The review should identify development or mentoring needs of individual directors or the wider senior management team.It is healthy for membership of the Board to be

304、 periodically refreshed.Succession planning is a vital task for boards.No member of the Board should become indispensable.The individual contributions of each of the members of the Board are regularly assessed to ensure that:(i)their contribution is relevant and effective;(ii)that they are committed

305、;and(iii)where relevant,they have maintained their independence.The Board intends to review the performance of the team as a unit to ensure that the members of the Board collectively function in an efficient and productive manner.One-third of the directors must stand for re-election by shareholders

306、annually in rotation and all directors must stand for re-election at least once every threeyears.Formore information,please see our Directors Report in the principal risks and uncertainties section of this AnnualReport.The Group encourages feedback from all those organisations which it works or othe

307、rwise engages with.8.Promote a corporate culture that is based on ethical values and behavioursThe Board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage.The policy set by the Board should

308、be visible in the actions and decisions of the chief executive and the rest of the management team.Corporate values should guide the objectives and strategy of the company.The culture should be visible in every aspect of the business,including recruitment,nominations,training and engagement.The perf

309、ormance and reward system should endorse the desired ethical behaviours across all levels of the company.The corporate culture should be recognisable throughout the disclosures in the annual report,website and any other statements issued by the company.The Chief Executive Officers Strategic Report d

310、etails the environmental values of the Group,where we outline our commitments to act in a socially responsible manner and maintain good local community relations.We have appointed Judith Tweed,who is the person principally responsible for managing and maintaining local community relations in Islandm

311、agee,Northern Ireland,to the board of directors of the Group subsidiary Islandmagee Storage Limited.The Board sees this as important for ensuring that the local community we work with realise how important we view our relations with the local community.The Group supports the growing awareness of soc

312、ial,environmental and ethical matters when considering business practices.9.Maintain governance structures and processes that are fit for purpose and support good decision-making by theBoardThe company should maintain governance structures and processes in line with its corporate culture and appropr

313、iate to its size and complexity;and capacity,appetite and tolerance for risk.The governance structures should evolve over time in parallel with its objectives,strategy and business model to reflect the development of the companyAs well as the information contained in this matrix,which identifies the

314、 Groups commitment to and application of the QCA Code,the Corporate Governance Statement in this Annual Report details the companys governance structures and why they are appropriate and suitable for it.CORPORATE GOVERNANCE STATEMENT35A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FO V E R

315、 V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NQCA Code Principle ApplicationWhat we do and whyBuild Trust10.Communicate how the company is governed and is performing by maintaining a dialogue with shareholders an

316、d other relevant stakeholdersA healthy dialogue should exist between the Board and all of its stakeholders,including shareholders,to enable all interested parties to come to informed decisions about the company.In particular,appropriate communication and reporting structure should exist between the

317、Board and all constituent parts of its shareholder base.This will assist the communication of shareholders views to the Board as well as the shareholders understanding of the unique circumstances and constraints faced by the company.It should be clear where these communication practices are describe

318、d(annual report or website).The company encourages two-way communication with its shareholders and responds quickly to all queries received.The chairman talks regularly with the Groups major shareholders and ensures that their views are communicated fully to the Board.The Board recognises the AGM/GM

319、 as an important opportunity to meet private shareholders.The directors are available to listen to the views of shareholders informally immediately following the AGM/GM.36H A R L A N D&W O L F F A N N U A L R E P O R T 2 0 2 0/21DIRECTORS REPORTThe directors present their report and the audited cons

320、olidated financial statements of Harland&Wolff Group Holdings plc(the“company”)for the period ended 31 December 2021.Harland&Wolff Group Holdings PlcRegistered Number 06409712Registered Office Address Fieldfisher Riverbank House,2 Swan Lane,London,United Kingdom,EC4R 3TTCountry of Incorporation Engl

321、and and WalesType Public Limited CompanySHARE CAPITALAt the date of this report 162,887,840 ordinary shares are issued and fully paid.Details of movements in share capital during the year are given in note 22 to the financial statements.RESULTS AND DIVIDENDS*The Group recognised cash revenue from co

322、ntinuing operations of 18,518,239(2020:1,482,081).Management and administrative expenses totalled 28,091,756(2020:9,482,379).The Group incurred a loss of 25,508,270(2020:loss of 10,409,873).The loss for 2021 when added to the cumulative losses of 39,865,126 brought forward and movements between rese

323、rves leaves a retained loss of 65,373,396 to be carried forward.The directors do not recommend the payment of a dividend(2020:Nil).*17-month period ended 31 December 2021 compared to 12-month period ended 31July2020.DIRECTORSThe following were directors of the company during the period ended 31 Dece

324、mber 2021 and at the date of this report:Malcolm Groat(appointed Interim Chairman on 27September 2021,Chairman on 18 March 2022)Sir Jonathan Band(appointed on 1 September 2021)John Wood Arun Raman Clive Richardson was also a director during the period and resigned on 27 December 2021DIRECTORS INDEMN

325、ITIESAll directors benefit from the provisions of individual directors Personal Indemnity insurance policies.Some of the current directors have been granted share options in the company and details can be found in note 9 to the financial statements.DIRECTORS AND SIGNIFICANT SHAREHOLDINGS The directo

326、rs of the company held the following beneficial shareholdings as at the date of this report.Ordinary shares of 1p eachNumber%John Wood671,0600.41Arun Raman183,6540.11On 14 January 2019,a total of 350,000 options were granted to JohnWood.The Options become exercisable in three tranches as follows:as

327、to one third after one year;as to one third after two years;and as to one third after three years.Upon each vesting date,half of the Options vested are exercisable at a price of 150p per share and half are exercisable at nominal value of 1ppershare.On 15 January 2020,a total of 300,000 options were

328、granted to ArunRaman.The Options become exercisable in three tranches as follows:as to one third in 2020;as to one third in 2021;and as to one third in 2022.Upon each vesting date,half of the Options vested are exercisable at a price of 150p per share and half are exercisable at nominal value of 1p

329、per share.G O V E R N A N C E37A N N U A L R E P O R T 2 0 2 0/21 H A R L A N D&W O L F FO V E R V I E WS T R A T E G I C R E P O R TG O V E R N A N C EF I N A N C I A L S T A T E M E N T SA D D I T I O N A L I N F O R M A T I O NThe company has also received notification of the following interests

330、in 3%or more of the companys issued share capital as at 18 July 2022.The holdings and percentages presented are at the date of notification.ShareholderOrdinary Shares as%of Issued Share CapitalKillik Asset Management13.71%Hargreaves Lansdown Asset Management10.82%Lombard Odier Asset Management7.67%I

331、nteractive Investors6.94%Walker Crips Group6.78%Kav Sigaroudinia5.74%Pentwater Capital Management4.86%Allianz Global Investors4.82%Sankofa Strategic Equity Fund Ltd3.22%Ravenscroft2.74%RELATIONS WITH SHAREHOLDERSCommunication with shareholders is given high priority and the company,therefore,communi

332、cates regularly with shareholders including the release of announcements for the interim and annual results and after significant developments.The Annual General Meeting,which this year is being held on 6 September 2022 at 12.00 p.m.,is normally attended by all directors.Shareholders are invited to

333、ask questions on matters including the Groups operations and performance and to meet with the directors after the formal proceedings have ended.The Board recognises the ongoing importance of communication with shareholders at this time.Accordingly,shareholders are encouraged to ask questions,and these should be emailed to investorharland- before 12.00 p.m.on 2 September 2022;please include a share