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2022-12-31-accounts

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THE SCOTT BADER COMMONWEALTH LIMITED FINANCIAL STATEMENTS For the year ended 31 DECEMBER 2022

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THE SCOTT BADER COMMONWEALTH LIMITED

COMPANY INFORMATION

For the year ended 31 December 2022

Company registration number: 496082
Charity registered number: 206391
Registered office: Wollaston Hall
Wollaston
Wellingborough
Northamptonshire
NN29 7RL
Charity Trustees: Andrew Bell
Agne Bengtsson
David Black
David Harris
Hansi Manning
Paul Smith
Richard Tapp
Benjamin Penney
Gillian Shapiro
Solicitors HCR Hewitsons
Lancaster House
Nunn Mills Road,
Northampton,
Northamptonshire
NN1 5GE,
Shoosmiths
The Lakes
Northampton
NN4 7SH
Bankers Unity Trust Bank Plc
4 Brindley Place, Brunswick Street
Birmingham
B1 2JF
CAF Bank Limited
25 Kings Hill Avenue
Kings Hill
West Malling
Kent
ME19 4JQ
Scottish Widows
PO Box 883
Leeds LS1 9TY
Auditor RSM UK Audit LLP
The Pinnacle
170 Midsummer Boulevard
Milton Keynes
Buckinghamshire
MK9 1BP

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THE SCOTT BADER COMMONWEALTH LIMITED

CONTENTS

For the year ended 31 December 2022

PAGE
Report of the Trustees 2-16
Trustees’ Responsibilities Statement 17
Independent Auditor’s Report 18-20
Group and Charity statements of financial activities 21
Group and Charity balance sheets 22
Group cash flow statement 23
Notes to the financial statements 24-56

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

DIRECTORS AND TRUSTEES

The trustees who are also the Directors of the charity present their Annual Report and the Accounts of The Scott Bader Commonwealth Limited (the Charity ), for the year ended 31 December 2022.

The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (January 2019).

The trustees who served in the year and subsequent appointments, were:

Date of Appointment Date of Resignation
Andrew Bell
Agne Bengtsson
David Black
Jessica Clark 31.03.2023
Robert Gibson 31.03.2023
David Harris
Hansi Manning
Paul Smith
Richard Tapp 01.04.2022
Benjamin Penney 01.04.2023
Gillian Shapiro 01.05.2023

STRUCTURE; GOVERNANCE and MANAGEMENT

Scott Bader Company Limited (SBCL) was founded by Ernest Bader in the 1920s as a merchant in chemicals. In 1951 he and others gave the ownership of the shares in the Company to Scott Bader Commonwealth Limited (SBCW) a charitable company limited by guarantee, thereby setting up what is known to everyone who works at SBCL as ‘The Commonwealth’.

The holding of the shares of SBCL is now known as a ‘programme related investment’ and The Commonwealth’s ownership structure is specifically referred to in the Charity Commission’s Legal Underpinning document relating to charities and investment matters.

Originally the Charity was governed by its Memorandum and Articles of Association as adopted on incorporation on 1 June 1951 and subsequently amended in 1967, 2007, 2010 and 2022.

The Charity is a membership organisation, and everyone employed by the SBCL or any of its subsidiaries may become a member of the Charity (a Commonwealth Member). The average number of persons employed by SBCL during 2022 was 767 people across 7 manufacturing sites and 18 offices worldwide and 609 are Commonwealth Members.

As there are no outside shareholders, Commonwealth Members “hold the wealth in common”. The intention of the founder was to create a company whose well-being is entrusted to those who work in it, with democratic involvement.

When colleagues join SBCL they are Associate Members of the Commonwealth and following the successful completion of a year’s service are invited to apply to become a full Commonwealth Member. This means that they become a member, holding in common with other members, the shares of SBCL. It is the responsibility of everyone that works for the company to ensure that it continues to exist in the long term for current and future generations.

Profitability is important to ensure that the company can continue to operate, but adherence to the Guiding Principles and how that profit is achieved is paramount. There is a provision in the Constitution to ensure that the company is not just operated for the benefit of the colleagues that work for it, so a minimum amount must also be provided to the Charity to support charitable causes.

The objects of the Charity are:

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

There are two ways in which the above objects are achieved which is through the democratic governance structure of Scott Bader. Commonwealth Members can stand for election to the below governance groups and by making grants to charities and other not-for profit organisations locally, nationally, and internationally.

This structure of self-governance provides significant additional dimensions to business and employment relationships and interaction with the wider community. It means that:

The Commonwealth Board (CWB)

The Trustees are responsible to ensuring that the Charity is run in accordance with Charity law. The CWB does not get involved in the day-to-day running of the business, The Group Board of the Company and its CEO, Kevin Matthews, CFO, Neil Miller and the wider Group Leadership Team have responsibility for the management of the Company and for overseeing that itis:

The CWB is consulted on topics such as future business strategies, acquisitions, and the distribution of profits. The CWB also monitors the development of industrial democracy within the SBCL group.

There is a maximum of 9 members of the CWB.

Briefing and consultation of employees

Industrial democratic practice is a major part of employee engagement, and all those who work for the Company are consulted on decisions that may affect their interests in accordance with Scott Bader’s Constitution. It is the policy of Scott Bader that participation in decision-making is implemented at all levels.

Recognising that access to appropriate information is a necessary prerequisite to effective participation and consultation, the Group's monthly financial results and full year forecasts are shared with Commonwealth Members and colleagues. Members of The Scott Bader Commonwealth, membership of which is open to all who work on a permanent basis within the Group and who make a commitment to work according to the guiding principles expressed in the Constitution, have the opportunity to elect three of their number to serve for three years as members of the Board of Directors of Scott Bader Company Limited.

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

Recruitment, appointment, and training new Trustees

The Guardian Trustees are selected by a Joint Nomination Committee, (JNC) comprised of members from the CWB, GMB and Group Board. All candidates are provided with an explanation of the aims and objectives of the role and the time commitment involved in being a Guardian Trustee. The JNC is responsible for identifying and nominating for the approval of the SBCW, SBCL and Global Members Board, candidates to fill the Guardian Trustee role. Upon appointment they are confirmed as Commonwealth Members.

All Trustees, (appointed or elected) are provided with a handbook which contains information relating to their duties as a charity trustee, charity policies, financial reports, previous meeting minutes, and the articles of association for SBCW, SBCL and the rules of the GMB. In addition to this a specific induction plan is designed to meet the needs of the individual to give them a more detailed understanding of how the Charity operates; the businesses and strategy of SBCL and how the governance works.

Periodic formal training on the responsibilities of being a Trustee is provided and was previously provided by the Employee Ownership Association in January 2022. Trustees are also encouraged to identify any specific training needs they require.

Trustee Remuneration

Although some of the Trustees are employed by SBCL or one of its subsidiaries none of the Trustees receive any remuneration for their work f the Charity.

Key management personnel remuneration is set by the SBCL remuneration committee, for colleagues employed by the Company only and is paid in line with best practice an external Executive Salary Benchmark Review, conducted by Willis Towers Watson was completed prior to the 2022 Salary review.

Office Administration

The Trustees are supported in their role by two colleagues from the Commonwealth Office and will take external advice when required. The infrastructure of the office (IT requirements etc) is provided by SBCL.

The day-to-day activities of the Charity are delegated by the CWB to the Commonwealth Office. There is also a Charity Sub-Committee who are responsible to decide on which charities to support and to authorise the payment of donations. The Sub-Committee is required to report to the CWB on a quarterly basis on the decisions they have made.

In addition to the above there are 5 Commonwealth Co-ordinators who are appointed/elected from each of our larger sites to assist with Commonwealth related matters e.g Charity activities, Membership, and local democracy issues. They perform these duties in addition to their role within the company.

Other sub-committees are formed on a needs basis to deal with issues that may arise.

Conflicts of Interest

The charity has a written conflict of interest policy for all trustees in line with statutory guidance.

ACTIVITIES IN 2022

Achievements and Performance against the Objectives set - Grant-making

The income of the Charity is achieved through the work of the individuals employed by the Scott Bader Group by way of a donation of profits and is used to make grants to charitable organisations around the world, whose purposes are in line with the Charitable objects. The Trustees approve the annual grant giving focus areas, which are reported on later.

As mentioned earlier, the CWB has delegated the grant giving responsibility to the Charity Committee and this Committee meets quarterly to agree which charities to support and the amount to be funded to the Charity. The decisions taken are shared with the CWB quarterly.

There are various ways that charities become aware that they can apply to the Charity for funding. This is by networking, by word of mouth from previous recipients and by the information shared on the Scott Bader website.

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

To help with management of the applications received, the Charity’s general policy is that it will not fund requests solely in support of animals, individuals in need, travel and adventure schemes, art projects, sports clubs, general appeals, and the construction of buildings in the UK.

Prospective applicants are required to submit their applications for funding via a grant management tool called OPTIMY. This grant management tool was introduced to simplify and streamline the grant making process.

The Charity ran four application cycles in 2022, welcoming applications to our grant programmes listed below. Demand for funding remained strong, we received circa 300 applications during the year compared with circa 250 in 2021.

Following our assessment processes, the Charity made grants totalling approximately £382k in 2022, compared to £331k in 2021. A breakdown of the amount spent under each of grant programmes areas in 2022 is provided in Note 9.

The Charity seeks to ensure that grants are used effectively and for the charitable purposes for which the funds have been given. We keep formal reporting requirements simple and proportionate and share the information received with the Charity Committee. From time to time, we meet with grantees and prospective grantees to strengthen networking and to help the Charity learn more about the specific subject areas or reflect on its own practice and priorities.

The Charity is also a member of the Association of Charitable Foundations (ACF) and National Council for Voluntary Organisations (NCVO). Both organisations provide training courses and helpful information on good practice.

Activities for the Public Benefit

To check that the charities we support meet the public benefit requirement, the Trustees decided it would be prudent to include a section within the online application form requesting applicants to provide a short summary of how they meet this requirement.

To ensure ongoing awareness of the Charity Commission’s guidance on public benefit all Trustees are provided with information about this in their handbook.

Having regard to this guidance the Trustees consider Public Benefit at two levels 1) in relation to the shareholding in SBCL and 2) the activities of the Charity.

Glocal Funds

A budget is set for all the companies in the Scott Bader Group (the allocation is currently determined as a set figure per site with an additional sum proportionate to the number of Commonwealth Members at each location). Each location can determine how they wish to utilise their allocation provided it complies with the Charity Policy and is approved by the Charity Committee of the Commonwealth Board.

To help prospective applicants we guide them to apply for funding for projects that enable them to support projects to help address social and environmental issues important to where they are situated.

Some Locations choose to run a Nomination Scheme whereby each Commonwealth Member has an allocation to nominate to a charity (or charities) of their choice.

Commonwealth Community Hardship Fund

A Budget is set annually.

This fund was first introduced in 2020 in support of the COVID-19 pandemic. It was agreed to reduce the amount available for 2022 and to prioritise applications for funding that were specifically required for PPE equipment and vaccination rollouts.

Life President’s Fund

A Budget is set annually.

This fund is used to support charities chosen by the Life President, 10 charities received grants, totalling £7,500 in 2022 and 2021.

Research Grants –Two research grants were provided to the following:

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

  1. Ownership at Work - How to map and measure the social and environmental impact of employee ownership.

  2. Employee Ownership Association - To provide the evidence that EO organisations make a difference compared to other types of business ownership.

2022 Grant Expenditure

Grant Expenditure £’000
2022		 £’000
2021
Glocal Funds 322 178
CommonwealthCommunityHardshipFund 37 145
Life President’s Fund 8 8
ResearchGrants 15 -
382 331

Breakdown of Expenditure by %

The grants awarded were targeted at several areas of intervention, including Poverty, Environment, Youth Well-being, Disability, Education, Disadvantage, and Health. A breakdown of these intervention areas and a description of some of the projects supported internationally are provided below.

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

The Charity seeks to ensure that grants provided have been used effectively and for the charitable purposes for which they were granted by reviewing the evaluation reports submitted by the charities on completion of their projects.

The Trustees are still of the opinion that dividing the charity’s income in the way described above continues to enable the charity to support a diverse range of activities with a relatively small amount of money. However, this is dependent on the profitability of the company, but mechanisms exist to ensure that the charity’s income will increase in line with increased profitability.

INVESTMENT

The charity has an asset in the form of a property known as Keep House, 124 High Street, Wollaston NN29 7RJ. This is a Grade II listed stone-built farmhouse and is situated on the Wollaston site. The refurbishment of the property was completed in February 2020 and full occupancy of this building by local charities has been achieved. By providing this facility the CWB is enabling these charities to continue the excellent work they do in the local community.

The income generated from Keep House during 2022 was £35.8K, compared to £33.1K in 2021, this will be used for the general refurbishment of the building and will enable the CWB to source and progress local project and partnership opportunities.

An open market appraisal in November 2021, by an independent valuer with a recognised and relevant professional qualification, gave a value of £495k for this property and the Trustees do not believe that there has been a material change in value since the valuation.

Community Projects and Partnerships

To extend its strategic, objective, and charitable activities in Northamptonshire, the Commonwealth Board will now work with the local community to develop projects and partnerships to further utilise Keep House. Where appropriate, crosssector partners will be engaged to maximise project opportunities, scale, and collective impact.

Cash

Currently the Charity holds a modest amount in deposit accounts, which are reviewed annually to ensure best return. However, for ease of administration e.g. bank transfer payments in the UK and overseas, the majority of cash is held on deposit by SBCL on behalf of the Charity under a Bare Trust agreement.

Financial Controls

The Financial Controls Policy, which also includes the delegation of authority and segregation of duties, is reviewed annually. The Trustees consider that the procedures and systems in place are robust and are followed diligently by all parties concerned.

Fundraising Activities

The charity relies on surpluses generated by wholly owned trading subsidiary companies to be able to carry out grantmaking to meet the charitable objectives and does not undertake any fundraising activities with the public. No professional fundraisers have been engaged and no fund raising has been undertaken on behalf of the Charity. No complaints have been received in relation to fundraising activities.

Environmental Care

In 2020 SBCL established a baseline year for our Scope 1 & Scope 2 carbon footprint, making a commitment to reduce this by 60% over a 5-year period. The Operational Sustainability Team was replaced with an SBCL EESG Board Committee and Steering Group in Autumn 2022 to ensure that the business has the right strategy and goals aligned across the group, to deliver environmental performance improvements.

Scott Bader historically has purchased electricity from low carbon suppliers in the UK, France and Croatia, and over the past year have expanded this to include Dubai, and South Africa. Further auditing has been undertaken at SBCL’s Croatian site to further reduce SBCL’s carbon impacts. The renewable energy certificates for these sites allows SBCL to report zero CO2 for the Scope 2 market emissions in these locations bringing a significant reduction for the market-based reporting across the group. However, in line with the GHG Protocol Corporate Standard, SBCL report both market-based and location-based emissions for Scope 2 CO2.

SBCL have not included Scope 1 emissions from company owned and company leased vehicles as they believe these to be immaterial given the small number of vehicles. SBCL do not manage scope 3 emissions, but are active in working towards

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

this, they have some level of controls in place and teams being built toward this goal in regulatory affairs/product stewardship. SBCL have been guided by GRI 302 and GRI 305 in the collection and reporting of our energy consumption and CO2 emission data.

2022

ENERGY CONSUMPTION ENERGY CONSUMPTION SB UK SB UK GROUP GROUP
LOCATION
BASED		 MARKET
BASED		 LOCATION
BASED		 MARKET
BASED
Non-Renewable(GJ) 74,185 52,412 177,842 128,628
Renewable(GJ) 167 21,940 3,683 41,230
Total(GJ) 74,352 181,525
GREENHOUSE GAS EMISSIONS SB UK GROUP
Scope 1(TeCO2e) 2,668 2,668 7,166 7,166
Scope 2(TeCO2e) 1,284 0 3,839 577
Scope 1 and Scope 2(TeCO2e) 3,952 2,668 11,005 7,743
INTENSITY FACTOR SB UK GROUP
Energy
Intensity		 MJ/Te ofproduct 2,244 1,438
GJ/full time employee 234 225
MJ/£000's revenue 885 595
Carbon
Intensity
(market		 kgCO2e/Te ofproduct 81 61
TeCO2e/full time employee 8 10

based)		 kgCO2e/£000's revenue 32 25

2021

ENERGY CONSUMPTION ENERGY CONSUMPTION SB UK SB UK GROUP GROUP
LOCATION
BASED		 MARKET
BASED		 LOCATION
BASED		 MARKET
BASED
Non-Renewable(GJ) 80,424 54,018 201,419 157,793
Renewable(GJ) 151 26,557 3,004 46,629
Total(GJ) 80,575 204,422
GREENHOUSE GAS EMISSIONS SB UK GROUP
Scope 1(TeCO2e) 2,778 2,778 8,204 8,204
Scope 2(TeCO2e) 1,557 0 4,116 2,249
Scope 1 and Scope 2(TeCO2e) 4,335 2,778 12,320 10,452
INTENSITY FACTOR SB UK GROUP
Energy
Intensity		 MJ/Te ofproduct 2,142 1,541
GJ/full time employee 417 291
MJ/£000's revenue 906 757
Carbon
Intensity
(market		 kgCO2e/Te ofproduct 74 79
TeCO2e/full time employee 14 15

based)		 kgCO2e/£000's revenue 31 39

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

PLANS FOR THE FUTURE

Future Developments

SBCL will focus on building upon and integrating the recent investments in the USA and India.

The impact of Brexit has been felt across the business with increased work required to ensure ongoing compliance. These additional administrative requirements continue to be a cost for SBCL, however the impact of this has been limited through proactive planning.

SBCL continues to experience raw material supply shortages due to disrupted supply chains; the response has included expanding the range of suppliers, increasing stock levels where needed and increasing production flexibility.

SBCL remains in a strong financial position, with a number of opportunities offering strong potential for growth. The Group Leadership Team is focused on the key projects that will unlock this growth and deliver the changes required to achieve 2036 vision. There are future plans to:

These plans will help the continued success of the business and thus provide stability for charitable purposes and for the people that work at Scott Bader.

Going Concern

The performance of SBCL for the year to date is in line with expectations, reflecting a strong order book despite subdued economic indicators, and thus the Group continues to trade profitably.

Given continuing economic uncertainty, performance forecasts to 30 June 2024 have been generated under a variety of scenarios, including the application of prudent, worst-case assumptions. Having considered the financial forecasts, the Directors of SBCL remain confident that the Scott Bader Group will be sufficiently well capitalised for the foreseeable future.

A review of the Constitution was undertaken during 2020/21 and the changes proposed were formally accepted by the Commonwealth Members at the AGM in May 2022. The Constitutional review has brought into focus the crucially important principles and practice of how the Commonwealth Board works to discharge its responsibilities at the centre of Scott Bader. This exercise has enabled us to emerge stronger and with renewed confidence and vigour.

As a result of the review the CWB trustees have concluded that improvements are necessary in the way the board itself operates and it intends to implement the following improvements over the next two years:

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

Internal Measures

% of eligible colleagues who are Commonwealth Members % of volunteering days used % of colleagues voting in AGM % of colleagues voting in Elections Total amount donated year to date

Guiding principles / Business Oversight Measures

Guiding principles - Resilience and Longevity

Cash Financial performance against budget and PY Working capital Capex spend and CAPEX/depreciation ratio

Guiding principles – Responsible Innovation

Percentage of roles filled with internal promotions vs external Staff Turnover

Colleague satisfaction (from Colleague survey)

Guiding principles – Fair Trading

Customer Complaint Percentage

Guiding principles – Environmental Sustainability

Reportable Environmental Incidents

Guiding principles – International presence EO conferences attended Formal EO Interactions - UK

STRATEGIC REPORT

Principal Activities

The principal activity of the SBCL Group which sits beneath the Charity continued to be that of the production and distribution of chemicals and related products.

The shareholding in SBCL

The CWB receives information about the performance and management of SBCL at each meeting to enable it to monitor and review the effectiveness of holding the shares as a social investment.

The Trustees are of the opinion that the self-governing representative structure of Scott Bader is of public benefit because wherever it operates colleagues know that the company must:

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

Involvement of Commonwealth Members

You can see from the below graph the impact of COVID pandemic had on this scheme. However now that the COVID restrictions are being lifted globally, more colleagues are beginning to use their time to volunteer for worthy causes. During 2022, 635 volunteering hours, were recorded on our HR Oracle platform. This is an increase of over 55% compared to the previous year. There are plans to maximise on this opportunity in 2023.

Some of the activities undertaken by our colleagues are shown below.

Ecology

Business

Humanity

Adherence to the Guiding Principles contained in the Constitution

Information is shared regularly between the three Group Governance bodies, (the Commonwealth Board, the Group Board and the Global Members’ Board) and enables input to support the strategic direction. This, together with attendance as observers at both SBCL and the Global Members’ Board meetings enable the Guardian Trustees to monitor, on behalf of the CWB, that the business is managed in accordance with the Guiding Principles as set out in the Constitution, which is a major contributing factor to Scott Bader achieving its charitable objects.

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

Risk Report

The Trustees have developed a more robust approach to managing the risks to which the charity is exposed to ensure that appropriate controls are in place to provide reasonable assurance against the risks identified. The Trustees undertake a quarterly review of the risk register, which assigns the management of the risks to specific individuals and recommends actions to be taken, where necessary, to manage their likelihood or impact. Risks are added to the register as they arise and are reported and discussed at the quarterly board meetings.

The Charity’s main source of income is by payment of a dividend or a donation from SBCL. There is a provision in the Articles of Association of SBCL to ensure that there is a minimum amount paid to the Charity each year (1% of the annual staff salary cost of the Scott Bader Group), the Trustees do not consider this to be a major risk, unless the performance of the Company becomes so precarious that payment of the donation might threaten the very existence of the Scott Bader group.

Principal Risks & Uncertainties

The Charity’s key risks are summarised below:

Risk / Uncertainty Mitigation
1. There is a risk to the charity to
continue operating due to lack of
funding, therefore unable to
achieve charitable objectives &
constitutional requirements		 There is a formula in place to donate a minimum of 1% of the group’s salary cost or
5% of the eligible PBT (whichever is the greater). However, SBCL should budget for
minimum payment required to be paid to the Charity. Financial information is reported
on a quarterly basis to the Commonwealth Board on the performance of SBCL so it
would be reported if the operating company is at risk.
There is a second income stream generated from Keep House and there is a view to
explore other similar projects in other global locations as well as other income options
such as endowments
2. There is a risk of a skills gap for
Trustees on the Commonwealth
Board resulting in the non-
compliance with Charity and
Company Law.		 All Board Members are provided with the relevant Guidance from Charity
Commission on their duties and responsibilities.
A skills analysis has been introduced and we refer to this when recruiting new
Guardian Trustees. In addition, Induction folders are provided upon appointment,
which includes a copy of Constitution, financial reports, minutes, agendas and policies
and yearly training is also provided for the Trustees.
3. There is a potential risk of loss of
funds for the Charity, leading to
reputational risk		 The following Internal controls in place to mitigate against this.
Detailed quarterly reports are prepared comparing expenditure vs budget.
All cheques/bank transfers are authorised by two people, one of which needs to be a
Trustee.
Bank accounts are reconciled monthly.
Policies are reviewed on a yearly basis by the Charity Committee, prior to submission
to the full Commonwealth Board for approval.
4. There is a risk of potential
miscommunications and (cyber
security) risk of interception of
shared sensitive business
information.		 All sensitive data is stored and shared via Diligent Boards which is a board management
software and is part of the Diligent Governance Cloud.
5. There is a risk of under
occupancy of Keep House / not
achieving objectives to utilise the
Keep House space, using CWB
cash to fund the building & utility
costs		 This is monitored regularly at the ongoing Keep House committee meetings. Keep
House is currently fully occupied.

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

Reserves

Reserves are held to provide financial protection for Scott Bader Commonwealth Limited (SBCW) as a going concern, to protect its operations from being adversely affected by unanticipated events. Unanticipated events are identified in the SBCW risk register. However, given that the primary source of income is from the dividend or donation received from Scott Bader Company Limited (SBCL) this does create a risk for the charity.

The charity reserves at 31 December 2022 were £1,937k (2021 : £2,034k) of which £1,450k (2021 : £1,547k) are held as unrestricted income funds.

The Trustees reviewed the Reserves Policy in March 2023 and agreed that reserves will be held for the following purposes:

The remaining funds which will be administered as per the funding budget agreed by the CWB for 2023.

The Trustees consider this approach to be reasonable in the light of the need for the money to readily available for expenditure against the budget and in the unlikely event that no donation is received from SBCL. Grants will only be awarded to charities upon receipt of funds from SBCL. The group reserves held at 31 December 2022 were £114,093k (2021 : £114,865k), these are held to provide working capital for the group.

Business Performance of SBCL

Whilst the CWB does not get involved in the day-to-day management of SBCL it receives updates at every Commonwealth Board meeting from the CEO Kevin Matthews, and the CFO Neil Miller on the performance of the group. In addition, members of the Group Leadership are invited to attend a CWB meeting on an annual basis to provide an update on their business areas. During 2022 the CWB met with Julie Thorburn, the Group HR Director, Andrew Cottrell the Group Operations Director and Mark Cooper, Group Chief Technology Officer, The Commonwealth Board is also informed of any key issues from the Company Member of the Board.

Having discussed and reviewed the business performance for 2022, the Trustees were pleased to note that:

In July 2022 the Group acquired the commercial operations of Satyen Polymers Pvt Ltd in India. This investment supports the strategic aim of growth in India, seen as a key growth area for the Composites market; local manufacturing also meets the Made in India requirement for that market.

The strategy included entering into a third-party tolling agreement with Satyen Polymers Manufacturing Pvt Ltd, as the Group assesses options around the build out of a suitable manufacturing footprint.

Annual sales increased by £34m (+13%), despite a small 5% reduction in volumes, which was driven by the unprecedented increases in raw material prices.

The ongoing conflict in Ukraine led to disrupted supply chains and inflation in raw materials, energy and other costs, this combined with the general volatile economic climate created a challenging business environment resulting in decreased Operating Profit.

Strong price management meant the Group were able to push the majority of raw material inflation seen in the period through into the sales price.

Other operating costs increased year-on-year by £0.9m from £14.6m to £15.5m reflecting ongoing investment in the business to build out operational and commercial capabilities as the foundation for future growth.

Balance Sheet

Working capital management was a challenge in 2022 with the record high raw material prices and supply chain disruption leading to an increase in working capital requirements.

Overall net cash decreased from £24m to £0.2m in the year driven by the ongoing strategic investment programme in both capital expenditure and the acquisition in India (£21.4m) and also the inflation in working capital (£10.4m) driven by the increase in raw materials and the need for higher stock levels due to supply chain disruption.

Page 13

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

Despite the challenges in the period the Group maintained the investment in its growth strategy and its focus on product mix. Positive performance in Q1 of 2023 maintains sufficient liquidity to manage its operations and provide headroom for increased working capital requirements. The outlook for 2023 see a combination of tight working capital and cash management while continuing to invest the cashflow from operations in supporting the growth of the business.

Additionally, the Group’s Revolving Capital Facility (RCF) with NatWest was extended to a 5-year term and increased to $20m in March 2023 providing the Group with significant additional funds for working capital should it be needed. The Group has in excess of £30m receivables and £35m inventories which are currently free of security for financing and remain available to raise working capital facilities.

Investment in US operations

During 2021, the Group acquired a 110,000 square foot industrial unit in Mocksville, North Carolina. 2022 has seen the first stage of the build process to create a US hub for Customer Service, Quality Lab, Distribution, and Manufacturing facility for Gel Coats and Adhesives.

As construction began in July 2022, starting with the offices and labs, a core team (Site Lead, HR, Finance, Production, Quality, SHE, Maintenance, and S&OP) was established in parallel to support the site once it begins to commission volumes in Q2 2023, following the installation of vessels and mixers in November 2022.

This facility will increase the operational capacity of the Group and fundamentally improve the Group’s ability to deliver its products across the Americas region once online.

IT improvements

IT improvements continued apace through 2022, successfully building out the systems architecture and company blueprint in line with the stated objective of modernising the ERP system to become “evergreen” in nature. With this phase complete the Group has taken a strategic decision to focus on attaining in the short term some of the operational opportunities to improve how the Group utilises the current ERP system. These include:

This will allow the Group to realise some of the benefits of the project earlier than anticipated and has the additional benefit of allowing increased investment into business critical SHE capital projects in 2023.

Completion of the Constitutional Review

The Constitutional Review was completed in 2022 and provides the Commonwealth and wider Group stakeholders with precise guidance on the purpose of each of the governing boards and how they interrelate. Available in more than 4 languages, it improves the governance by providing further transparency on the interactions and accountability between bodies.

Diversity and inclusion

Diversity, inclusion and mutual respect was added to our Guiding Principles during the recent Constitution review where Scott Bader aims to provide an inclusive, diverse and mutually respectful culture and environment where everyone is treated equally and given equal opportunities regardless of their race, age, gender, sexuality, disability, culture or individual differences through all stages of the colleague lifecycle from recruitment, through onboarding, training and development. To help achieve and monitor this, the business intends to go for certification to ISO 30415 in 2023. As part of this process a Diversity & Inclusion Council has been formed, made up of colleagues from around the group to help define, review and continually improve our policies, practices and behaviours in this field.

A Diversity & Inclusion Policy and Framework has been shared with all the governance groups, which have all approved and committed to fully support our implementation of a fully diverse and inclusive environment for all.

Employment of Disabled Persons

It is the Group's policy to offer equal opportunities to disabled persons applying for vacancies, having regard to their aptitudes and abilities in relation to the posts for which they apply. Our Interview, onboarding process and Learning and Development processes are non discriminating against any visible or non-visible disability. We make every effort to ensure our workplaces are suitable and accessible to all colleagues regardless of any visible or non-visible disability they may have and we have policies in place to address any changes in a person’s physical abilities.

Page 14

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

Regular Diversity and inclusion training takes places at all levels of the business.

Employee, Environment, Social & Governance Committee

A Group Sustainability Committee was established in 2020 and Chaired by Steven Brown until he stepped down as Community Director in June 2022. At this point a decision was taken by the Board of SBCL to widen the remit to encompass Employee, Environment, Social and Governance (EESG) matters. To ensure these matters are considered within the Board decision making process, a Board EESG Committee was set up with a Terms of Reference to guide its work. In tandem, a revised EESG Steering Team has been put in place by the Executive Leadership Team with membership from across the Group, including representation from both Global Members Board (GMB) & the Commonwealth, to work closely with the EESG Board Committee, to inform the Committee’s work and to support execution against its objectives.

The EESG Steering Team held two meetings and the Board EESG Committee held one formal meeting. To guide the work moving forwards, the EESG Steering Team is working through the process to help identify a small number of tangibles, stretching but achievable targets over the next 2-3 years that can enable the organisation to move forward and ultimately meet the 2036 vision.

Stakeholder Engagement

Our core values remain at the heart of the Company to ensure we work co-operatively and collaboratively across our colleagues, customers to deliver excellence, and to conduct ourselves in a fair, honest and ethical way.

SBCL is mindful of its broader commitments to stakeholders. Internally this includes the pledge to brief and consult colleagues for significant decisions, the employment of disabled persons, offering equal opportunities to all, as well as ensuring we work co-operatively and collaboratively. Externally this commitment covers broader corporate responsibility, the conduct of business with honesty, integrity, and fairness at all times, and also our impact on the environment through publication of metrics.

Section 172 (1) statement

The Scott Bader Constitution sets out the principles, values and behaviours by which we operate. Although the Commonwealth Board is not involved in the day-to-day running of the business, it does have responsibility for ensuring the company adheres to the Guiding Principles. Although the Constitution pre-dates this section of the Companies Act, the principles meet the requirements of Section 172 Companies Act 2006.

In keeping with the requirements of section 172 of the Companies Act which requires the Commonwealth Board to take into consideration the interests of stakeholders in its decision making, this section provides information about the Board’s approach to engagement with stakeholders, namely: Colleagues and the wider community and environment.

Decision making at the Board

Throughout 2022 the Commonwealth Board continued to engage with the Group Board and a number of subcommittees in order to fulfil the responsibilities for oversight. The Board also monitors the development of industrial democracy within Scott Bader.

Engaging with Others

Our core values remain at the heart of the Company to ensure we work co-operatively and collaboratively across our colleagues, customers to deliver excellence, and to conduct ourselves in a fair, honest and ethical way. Colleagues are expected to take personal responsibility to do their best for the Company and in so doing, colleagues commit to the principles of common trusteeship and to making the Company a successful and sustainable organisation. Our core values have been refreshed and will be embedded in our colleague practices.

Industrial democratic practice is a major part of colleague engagement, and all those who work in the Company are consulted on decisions that may affect their interests in accordance with Scott Bader’s Constitution. It is the policy of Scott Bader that colleague participation in decision making is implemented at all levels

- Long term sustainability

We aim to make sufficient profit to sustain the SBCL’s commercial vitality. This is balanced against the needs of our colleagues, customers and the community to ensure that we are conducting all our business relationships with integrity. The long-term sustainability of SBCW is at the forefront of decision-making, particularly in response to the challenging conditions that SBCL faces with raw material supply shortages.

Page 15

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REPORT OF THE TRUSTEES (INCORPORATING THE STRATEGIC REPORT) TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

Community and environment

Our founder established Scott Bader Commonwealth Limited to be a force for good in society. We are driven to make a difference and create social impact, using the skills and resources within the group to support where help is needed. We support our communities via a number of ways as highlighted throughout this report with the ambition to improve the lives of those most vulnerable and enabling our colleagues the opportunity to make a difference locally.

Environmental care

SBCL will take reasonable steps to minimise any detrimental impact the Company’s operations may have on the environment. An environmental provision was originally established in SBCL as a future payment for the required restitution of land when the relevant subsidiary companies vacate the premises currently occupied. The provision is expected to be utilised over 10 years although there is no intention to leave any of the affected sites.

SBCL focus on energy usage and how they generate energy and aspires to have all its manufacturing sites audited against ISO 14001, with 5 out of 6 sites already certified. The Group recognises that the production of electricity is a major contributor to CO2 emissions. Further detail is reported in the Scott Bader Company Limited’s Annual Report.

Independent auditors

RSM UK Audit LLP have indicated their willingness to continue in office and a resolution concerning their re-appointment will be proposed at the Annual General Meeting.

In so far as the Trustees are aware:

Trustees’ and officers’ liability insurance

The Trustees (who are also directors of The Scott Bader Commonwealth Limited for the purposes of company law) are insured against the costs of successfully defending any actions brought for negligence in the performance of their duties as Directors.

The Board of Trustees approved this report and, the Strategic Report in their capacity as directors on 24[th] May 2023.

Signed on behalf of the Trustees by:

Andrew Bell Paul Smith Trustee Trustee

Page 16

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TRUSTEES’ RESPONSIBILITIES STATEMENT

For the year ended 31 December 2022

Trustees’ responsibilities statement

The Trustees who are also the directors of the Scott Bader Commonwealth Limited (for the purpose of company law) are responsible for preparing the Trustees’ Report including the Strategic Report and the Director’s Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

The Trustees powers and responsibilities are defined in the Articles of Association of SBCW in furtherance of which SBCW has and may exercise the power to exercise oversight of the Scott Bader Group to ensure appropriate governance risk and compliance processes are in place to ensure the long-term success of the business.

Under company and charity law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the group and the charitable company for that period.

In preparing those financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Page 17

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

Opinion

We have audited the financial statements of The Scott Bader Commonwealth Limited (the ‘parent charitable company’) and its subsidiaries (the ‘group’) for the year ended 31 December 2022 which comprise the Group and Charity Statements of Financial Activities (incorporating an income and expenditure account), Group and Charity Balance Sheets, Group Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s or parent charitable company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the Report of the Trustees other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the Report of the Trustees. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Page 18

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the Directors’ Report or the Strategic Report included within the Trustees’ Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Statement of Trustees’ responsibilities set out on page 17, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group’s and parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or parent charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team and component auditors:

Page 19

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE SCOTT BADER COMMONWEALTH LIMITED

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, Charities SORP (FRS 102), Companies Act 2006, Charities Act 2011, the parent charitable company’s governing document and tax legislation. We performed audit procedures to detect noncompliances which may have a material impact on the financial statements which included reviewing the financial statements including the Trustees’ Report, remaining alert to new or unusual transactions which may not be in accordance with the governing documents, inspecting correspondence with local tax authorities and evaluating advice received from internal and external advisors.

The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to health and safety and environmental compliance. We performed audit procedures to inquire of management and those charged with governance whether the group is in compliance with these laws and regulations and inspected correspondence with licensing or regulatory authorities.

The group audit engagement team identified the risk of management override of controls and revenue recognition as the areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business, review of accounting policies in relation to revenue recognition and sample testing revenue.

All relevant laws and regulations identified at a Group level and areas susceptible to fraud that could have a material effect on the consolidated financial statements were communicated to component auditors. Any instances of noncompliance with laws and regulations identified and communicated by a component auditor were considered in our group audit approach.

A further description of our responsibilities for the audit of the financial statements is provided on the Financial Reporting Council’s website at http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

GARETH JONES (Senior Statutory Auditor) For and on behalf of RSM UK Audit LLP, Statutory Auditor Chartered Accountants The Pinnacle 170 Midsummer Boulevard Milton Keynes Buckinghamshire MK9 1BP

15 June 2023

Page 20

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THE SCOTT BADER COMMONWEALTH LIMITED

GROUP AND CHARITY STATEMENTS OF FINANCIAL ACTIVITIES (incorporating an income and expenditure account)

For the year ended 31 December 2022

Group
2022
Unrestricted
2021
Unrestricted
Notes
£’000
£’000
Income from:
Donation
-
-
Other trading activities:
Commercial trading operations
304,520
270,266
304,520
270,266
Investment income
5
363
203
Total income
4
304,883
270,469
Expenditure on:
Raising funds:
Commercial trading operations
(302,469)
(261,541)
Charitable activities
9
(387)
(336)
Total expenditure
6
(302,856)
(261,877)
Net income excluding joint
venture income
2,027
8,592
Share of net income from joint
ventures
197
280
Net income before tax for the
financial year
2,224
8,872
Tax payable
10
(237)
(1,174)
Net income before net losses on
investments
1,987
7,698
Net losses on investments
-
(30)
Net income
1,987
7,668
Attributable to the owner
1,966
7,637
Attributable to Non-Controlling
Interest
21
31
Net income
1,987
7,668
Other recognised gains / (losses):
Actuarial (loss) / gain on defined
benefit pension
23
(10,054)
1,183
Change in value of hedging
instrument
90
44
Currency translation differences
4,692
(992)
Deferred tax on other recognised
gains and losses
2,513
(292)
Net movement in funds
(772)
7,611
Attributable to the owner
(793)
7,580
Attributable to the NCI
21
31
Net movement in funds
(772)
7,611
Total funds brought forward
25
114,865
107,254
Total funds carried forward
25
114,093
114,865
*Unrestricted funds include designated funds and movement on these funds can be se		 Charity
2022
Unrestricted
2021
Unrestricted
£’000
£’000
305
552
-
-
305
552
42
37
347
589
-
-
(444)
(408)
(444)
(408)
(97)
181
-
-
(97)
181
-
-
(97)
181
-
(30)
(97)
151
-
-
-
-

(97)
151
-
-
-
-
-
-
-
-
(97)
151
-
-
-
-
(97)
151
2,034
1,883

1,937
2,034
en in note 25.		 Charity
2022
Unrestricted
2021
Unrestricted
£’000
£’000
305
552
-
-
305
552
42
37
347
589
-
-
(444)
(408)
(444)
(408)
(97)
181
-
-
(97)
181
-
-
(97)
181
-
(30)
(97)
151
-
-
-
-

(97)
151
-
-
-
-
-
-
-
-
(97)
151
-
-
-
-
(97)
151
2,034
1,883

1,937
2,034
en in note 25.
552
37
589
-
(408)
(408)
181
-
181
-
181
(30)
151
-
-
151
-
-
-
-
151
-
-
151
1,883
2,034

The accompanying accounting policies and notes form an integral part of these financial statements.

Page 21

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THE SCOTT BADER COMMONWEALTH LIMITED

GROUP AND CHARITY BALANCE SHEETS At 31 December 2022

Notes
Fixed assets
Intangible fixed assets
12
Tangible fixed assets
13
Investment property
15
Interests in joint ventures
14/15
Current assets
Stocks
16
Debtors
17
Debtors greater than one year
18
Cash at bank and in hand
Current liabilities
Creditors: amounts falling due within one year
19
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more than one
year
20
Provisions
22
Net assets excluding pension asset
Pension asset
23
Net assets
Reserves:
General reserve funds
Unrestricted income funds
25
Designated funds
Fair Value Reserve
25
Non-Controlling interest
Non – Controlling interest
25		 Group
2022
2021
£’000
£’000
7,768
272
58,143
48,729
495
495
414
591
66,820
50,087

38,279
32,898
51,398
49,498
2,499
-
21,611
32,421
113,787
114,817

65,129
59,933

48,658
54,884
115,478
104,971

1,372
1,366
7,521
5,536
8,893
6,902

106,585
98,069

7,508
16,796

114,093
114,865


113,554
114,347

487
487

52
31

114,093
114,865		 Charity
2022
2021
£’000
£’000
-
-
-
-
495
495
-
-
495
495

-
-
1,089
1,352
-
-
405
235
1,494
1,587

52
48

1,442
1,539
1,937
2,034

-
-
-
-
-
-

1,937
2,034

-
-

1,937
2,034


1,450
1,547

487
487

-
-

1,937
2,034		 Charity
2022
2021
£’000
£’000
-
-
-
-
495
495
-
-
495
495

-
-
1,089
1,352
-
-
405
235
1,494
1,587

52
48

1,442
1,539
1,937
2,034

-
-
-
-
-
-

1,937
2,034

-
-

1,937
2,034


1,450
1,547

487
487

-
-

1,937
2,034
-
1,352
-
235
1,587
48
1,539
2,034
-
-
-
2,034
-
2,034
1,547
487
-
2,034

The financial statements on pages 21 to 56 were approved by the board of Trustees on 24th May 2023 and signed on their behalf by

Andrew Bell Paul Smith Trustee Trustee

Company number: 496082

The accompanying accounting policies and notes form an integral part of these financial statements.

Page 22

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THE SCOTT BADER COMMONWEALTH LIMITED

GROUP CASH FLOW STATEMENT

For the year ended 31 December 2022

Notes
Net cash (used in) / provided by operating activities
26
Taxation paid
Net cash used in operating activities
Cash flows from investing activities
Purchase of tangible assets
Purchase of intangible assets
Proceeds from disposals of tangible assets
Dividends received from joint ventures
Rental income received
Interest received
Net cash used in investing activities
Cash flows from financing activities
Repayment of bank loans
New bank loans
Interest paid
Net cash generated from / (used in) financing activities
Net decrease in cash and cash equivalents
Effect of exchange rates on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Cash and cash equivalents consist of:
Cash at bank and in hand
Bank overdrafts
Cash and cash equivalents at the end of the year
2022
£’000
£’000
(1,224)
(3,105)
(4,329)
(13,297)
(8,092)
105
368
36
50
(20,830)
-
7,802
(328)
7,474

(17,685)
1,916
26,012
10,243

21,611
(11,368)
10,243		 2021
£’000
£’000
857
(1,633)
(776)
(13,006)
-
4
96
-
187
(12,719)
(590)
-
(95)
(685)
(14,180)
(473)
40,665
26,012
32,421
(6,409)
26,012		 2021
£’000
£’000
857
(1,633)
(776)
(13,006)
-
4
96
-
187
(12,719)
(590)
-
(95)
(685)
(14,180)
(473)
40,665
26,012
32,421
(6,409)
26,012
(14,180)
(473)
40,665
26,012
32,421
(6,409)
26,012

The accompanying accounting policies and notes form an integral part of these financial statements.

Page 23

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

1. STATEMENT OF COMPLIANCE

Scott Bader Commonwealth Limited is a private company, limited by guarantee, incorporated in England and Wales and domiciled in England. The company number is 496082 and the registered office is Wollaston Hall, Wollaston, Wellingborough, Northamptonshire, NN29 7RL.

The financial statements have been prepared in compliance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Principles activities are noted on page 10.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated and separate financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

These financial statements are prepared on a going concern basis, under the historical cost convention, as modified by the measurement of certain financial assets and liabilities measured at fair value.

The charitable company constitutes a public benefit entity as defined by FRS102.

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group and Company accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.

Reduced disclosures

In accordance with FRS 102, the Charity has taken advantage of the exemptions from the following disclosure requirements:

Going Concern

When assessing the going concern principle for the Commonwealth, considerations of the Trustees include, but are not limited to the following in relation to SBCL; the Financial position of the Group as at 31st December 2022, the most recent cash position, the projected cashflows and the availability and headroom of the financing facilities across the group.

During this challenging period the Group Leadership Team (GLT) has generated forecasts to 30 June 2024 under a variety of scenarios, and these include particularly prudent, worst case assumptions. On the basis of these forecasts, the Trustees remain confident that the Group will be sufficiently well capitalised for the foreseeable future.

Having considered the financial forecasts, the Trustees are confident that the Scott Bader Group, and therefore the Commonwealth, remains a going concern, and that the results within this document represent a true and fair view of the position of the Group.

The accounts are prepared on the going concern basis.

Page 24

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

2. ACCOUNTING POLICIES (CONTINUED)

Group financial statements and basis of consolidation

These financial statements consolidate the results of the Charity and all its subsidiary undertakings made up to 31 December.

A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures.

In the group financial statements, joint ventures are accounted for using the equity method.

Where a subsidiary has different accounting policies to the Group, adjustments are made to those subsidiary financial statements to apply the Group’s accounting policies when preparing the consolidated financial statements.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation. Adjustments are made to eliminate the profit or loss arising on transactions with associates to the extent of the Group’s interest in the entity.

Foreign currency

(i) Functional and presentation currency

The Group financial statements are presented in pound sterling and rounded to thousands. The Charity’s functional and presentation currency is the pound sterling.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at periodend exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.

(iii) Translation

The trading results of Group undertakings are translated into sterling at the average exchange rates for the year. The assets and liabilities of overseas undertakings, including goodwill and fair value adjustments arising on acquisition, are translated at the exchange rates ruling at the year end. Exchange adjustments arising from the retranslation of opening net assets and from the translation of the profits or losses at average rates are included in other recognised gains and losses.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the Group and value added taxes.

The Group recognises revenue when (a) the significant risks and rewards of ownership have been transferred to the buyer; (b) the Group retains no continuing involvement or control over the goods; (c) the amount of revenue can be measured reliably; (d) it is probable that future economic benefits will flow to the entity.

(i) Sale of goods

The risks and rewards of ownership of goods are deemed to have been transferred when the goods are shipped to, or picked up by the customer.

(ii) Interest income

Interest income is recognised using the effective interest rate method.

(iii) Rental income

Rental income is recognised on a straight line basis over the life of the rental period.

Page 25

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2. ACCOUNTING POLICIES (CONTINUED)

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

Revenue recognition (continued)

(iv) Voluntary income

Voluntary income including donations, gifts and grants that provide core funding or of a general nature are recognised where there is entitlement, receipt is probable and the amount can be measured with sufficient reliability.

Employee benefits

The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined benefit and defined contribution pension plans.

(i) Short term benefits

Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

(ii) Defined contribution pension plans

The Group operates a number of country-specific defined contribution plans for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

(iii) Defined benefit pension plan

The Group operates a defined benefit plan for certain UK employees. This scheme was closed to future accrual from 1 April 2006. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

The asset recognised in the balance sheet in respect of the defined benefit plan is the fair value of the plan assets at the reporting date less the present value of the defined benefit obligation at the reporting date.

The defined benefit obligation is calculated using the projected unit credit method. Annually the Group engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating the estimated period of the future payments (‘discount rate’).

The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Group’s policy for similarly held assets. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other recognised gains and losses. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as ‘Remeasurement of net defined benefit asset’.

The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:

(a) the increase in pension benefit liability arising from employee service during the period; and

(b) the cost of plan introductions, benefit changes, curtailments and settlements.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as ‘Interest payable and similar charges’.

(iv) Other retirement benefits

Scott Bader France is required by French law to provide a lump sum to employees on retirement, based on length of service with the employer. The provision is calculated according to French government assumptions of life expectancy and a standard discount rate. The provision is applied to those employees with less than 15 years until retirement because it is assumed that some employees will leave before reaching retirement age.

(v) Annual bonus plan

The Group operates a number of annual bonus plans for employees. An expense is recognised in the profit and loss account when the Group has a legal or constructive obligation to make payments under the plans as a result of past events and a reliable estimate of the obligation can be made.

Page 26

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2. ACCOUNTING POLICIES (CONTINUED)

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

Taxation

Taxation expense for the period comprises current and deferred tax recognised in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items in other recognised gains and losses. In this case tax is also included in other recognised gains and losses.

Current or deferred taxation assets and liabilities are not discounted.

(i) Current tax

Current tax is the amount of income tax payable in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the period end.

(ii) Deferred tax

Deferred tax arises from timing differences that are differences between taxable profits and total net income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements.

Deferred tax is recognised on all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

(iii) Deferred tax in business combinations

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

(iv) Offsetting deferred tax assets and liabilities

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority.

Business combinations and goodwill

Business combinations are accounted for by applying the purchase method. The cost of a business combination is the fair value of the consideration given, liabilities incurred or assumed and of equity instruments issued plus the costs directly attributable to the business combination. Where control is achieved in stages the cost is the consideration at the date of each transaction.

On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be measured reliably, in which case the value is incorporated in goodwill. Where the fair value of contingent liabilities cannot be reliably measured they are disclosed on the same basis as other contingent liabilities.

Goodwill recognised represents the excess of the fair value and directly attributable costs of the purchase consideration over the fair values to the Group’s interest in the identifiable net assets, liabilities and contingent liabilities acquired.

On acquisition, goodwill is allocated to cash-generating units (‘CGU’s’) that are expected to benefit from the combination.

Goodwill is amortised over its expected useful life. Where the Group is unable to make a reliable estimate of useful life, goodwill is amortised up to a period of 0 to 10 years. Goodwill is assessed for impairment when there are indicators of impairment and any impairment is charged to the income statement.

Page 27

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2.

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

ACCOUNTING POLICIES (CONTINUED)

Intangible assets

Intangible assets are stated at cost or fair value at acquisition date less accumulated amortisation and accumulated impairment losses. Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives, of up to 10 years, in line with the Directors’ assessment of the beneficial period.

Goodwill 0 – 10 years
Technology 0 – 10 years
Customer Lists 0 – 10 years

Tangible fixed assets and depreciation

Tangible assets are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives .

(i) Land & buildings

Land and buildings are stated at cost (or deemed cost for land and buildings held at valuation at the date of transition to FRS 102) less accumulated depreciation and accumulated impairment losses.

Leasehold properties are amortised in equal instalments over the lesser of the unexpired term of the relevant lease or fifty years, except that premiums paid or receivable on the acquisition of leasehold properties applicable to rental benefits are written off over the period to the first open market rent review.

(ii) Plant and machinery and fixtures, fittings, tools and equipment

Plant and machinery and fixtures, fittings, tools and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

(iii) Depreciation and residual values

Land is not depreciated. Depreciation on other assets is calculated, using the straight-line method, to allocate the depreciable amount to their residual values over their estimated useful lives, as follows:

Freehold buildings 50 years Short leasehold land and buildings over the lease period Plant and equipment 3-20 years Motor vehicles 4-5 years

Assets in the course of construction are stated at cost. These assets are not depreciated until they are available for use.

Impairment of fixed assets

An assessment is made at each reporting date of whether there are indications that a fixed asset may be impaired or that an impairment loss previously recognised has fully or partially reversed. If such indications exist, the Group estimates the recoverable amount of the asset or, for goodwill, the recoverable amount of the cash-generating unit to which the goodwill belongs.

Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher of fair value less costs to sell and value-in-use, are recognised as impairment losses. Impairments of revalued assets are treated as a revaluation loss. All other impairment losses are recognised in profit or loss.

Any impairment loss recognised for goodwill is not reversed. For fixed assets other than goodwill, recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Reversals of impairment losses are recognised in profit or loss or, for revalued assets, as a revaluation gain. On reversal of an impairment loss, the depreciation or amortisation is adjusted to allocate the asset’s revised carrying amount (less any residual value) over its remaining useful life.

Leased assets

At inception the Group assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement.

Page 28

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2. ACCOUNTING POLICIES (CONTINUED)

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

Leased assets (continued)

(i) Finance leased assets

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases.

Finance leases are capitalised at commencement of the lease as assets at the fair value of the leased asset or, if lower, the present value of the minimum lease payments calculated using the interest rate implicit in the lease.

Where the implicit rate cannot be determined the Group’s incremental borrowing rate is used. Incremental direct costs incurred in negotiating and arranging the lease, are included in the cost of the asset.

Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets are assessed for impairment at each reporting date.

(i) Finance leased assets (continued)

The capital element of lease obligations is recorded as a liability on inception of the arrangement. Lease payments are apportioned between capital repayment and finance charge, using the effective interest rate method, to produce a constant rate of charge on the balance of the capital repayments outstanding.

(ii) Operating leased assets

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease.

(iii) Lease incentives

Incentives received to enter into a finance lease reduce the fair value of the asset and are included in the calculation of present value of minimum lease payments.

Incentives received to enter into an operating lease are credited to the profit and loss account, to reduce the lease expense, on a straight-line basis over the period of the lease.

The Charity has taken advantage of the exemption in respect of lease incentives on leases in existence on the date of transition to FRS 102 (1 January 2014) and continues to credit such lease incentives to the profit and loss account over the period to the first review date on which the rent is adjusted to market rates.

Investments

Charity Investment in subsidiaries and joint ventures are held at cost less accumulated impairment losses. Group Investments in joint ventures are stated in the group balance sheet at the group's share of their net assets. The group's share of profits less losses of joint ventures is included in the group statement of financial activities.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell. Stocks are recognised as an expense in the period in which the related revenue is recognised.

Cost is determined on the first-in, first-out (FIFO) method. Cost includes the purchase price, including taxes and duties and transport and handling directly attributable to bringing the stock to its present location and condition. The cost of manufactured finished goods includes design costs, raw materials, direct labour and other direct costs and related production overheads (based on normal operating capacity).

At the end of each reporting period stock are assessed for impairment. If an item of stock is impaired, the identified stock is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the profit and loss account. Where a reversal of the impairment is required the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the profit and loss account.

Page 29

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2. ACCOUNTING POLICIES (CONTINUED)

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts.

Provisions and contingencies

(i) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount of the obligation can be estimated reliably.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations might be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as a finance cost.

(ii) Contingencies

Contingent liabilities are not recognised, except those acquired in a business combination. Contingent liabilities arise as a result of past events

Contingent assets are not recognised. Contingent assets are disclosed in the financial statements when an inflow of economic benefits is probable.

Financial instruments

The Group has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances and investments in commercial paper are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

Financial assets are derecognised when

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables, bank loans, loans from fellow Group companies and preference shares that are classified as debt, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Page 30

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2. ACCOUNTING POLICIES (CONTINUED)

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

(ii) Financial liabilities (continued)

Bills of exchange are recognised at face value and recorded at amortised cost until the date of maturity and the payment against it is realised.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless they are included in a hedging arrangement, in which case they flow through Other Comprehensive Income.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

(iii) Offsetting

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Research and development costs

Expenditure on research and development is written off as incurred.

Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Charity and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the Trustees for particular purposes. If applicable, the aim and use of each designated fund is set out in the notes to the financial statements. All funds are general except for the fair value reserve which is a designated fund.

Resources expended

Expenditure is recognised when a liability is incurred. Contractual arrangements are recognised as goods or services are supplied. Other payments are recognised when a constructive obligation arises that results in the payment being unavoidable.

Investment property

Investment properties are initially recognised at cost which includes purchase cost and any directly attributable expenditure. Investment properties are carried at fair value with changes in fair value being recognised in the SOFA through the Fair Value Reserve.

Page 31

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATION UNCERTAINTY

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

(i) Impairment of debtors (note 17)

The Group makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.

(ii) Provisions (note 22)

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount of the obligation can be estimated reliably. These provisions require management’s best estimate of the costs that will be incurred based on legislative and contractual requirements. In addition, the timing of the cash flows and the discount rates used to establish net present value of the obligations require management’s judgement.

(iii) Defined benefit pension scheme (note 23)

The Group has obligations to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on a number of factors, including; life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. Management estimates these factors in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends.

(iv) Accruals for customer claims

Accruals are made for customer claims to the extent that they are expected to be payable based upon the historical pattern of customer claims and any known uninsured product liability.

4.

ANALYSIS OF TOTAL INCOME

ANALYSIS OF TOTAL INCOME
Note
External turnover of Scott Bader Company Limited and its subsidiaries

Rental income
Investment income
5
Donation from Scott Bader Company Limited
 Group
2022
2021

£’000
£’000
304,520270,267
7
15

356
187
-
-
304,883
270,469		 Charity
2022
2021
£'000
£'000
-
-
36
33
6
4
305
552
347
589
304,883 270,469 347

External turnover of Scott Bader Company Limited and its subsidiaries by geographical market is analysed below:

UK and Eire
Continental Europe
Rest of World		 2022
£’000
51,706
135,202
117,612
304,520		 2021
£’000
56,422
100,136
113,709
270,267

Page 32

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

5.

6.

7.

INVESTMENT INCOME

Interest receivable and similar income
ANALYSIS OF TOTAL RESOURCES EXPENDED
Staff costs (including related costs)
Other trading costs
Charitable activities		 Group
2022
2021
£’000
£’000
356
187
356
187
Group
2022
2021
£’000
£’000
40,885
40,957
261,584
220,584
387
336
302,856
261,877		 Charity
2022
2021
£’000
£’000
6
4
6
4
Charity
2022
2021
£’000
£’000
-
-
-
-
444
408
444
408
302,856

ANALYSIS OF TOTAL RESOURCES EXPENDED

NET INCOMING RESOURCES

NET INCOMING RESOURCES
Group
2022 2021
Net incoming resources is stated after charging / (crediting) the following items: £’000 £’000
Research and development
4,376		 3,825
Depreciation and amortisation 5,959 5,262
Net interest on DB Pension Scheme (306) (175)
Profit on disposal of tangible assets 33 45
Impairment of trade receivables 185 (147)
Impairment of inventory 722 606
Operating lease charges 2,753 1,416
Foreign exchange loss / (gain) 510 (461)
Auditor's remuneration:
Fees payable to the Charity's auditors:
-
for the audit of the Charity's financial statements		 22 38
-
for the audit of the Charity's subsidiaries		 274 301
Other non-audit fees **79 ** 144

The audit fees of the Charity itself are paid by Scott Bader Company Limited.

8.

INTEREST AND SIMILAR ITEMS
Interest payable and similar charges:
Interest expense on bank loans and overdrafts
Interest expense on other loans
Total interest expense on financial liabilities not measured at fair value through profit/loss
Total interest payable and similar charges		 Group
2022
2021
£’000
£’000
307
89
21
6
328
95
328
95		 Group
2022
2021
£’000
£’000
307
89
21
6
328
95
328
95
95
95

Page 33

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9. EXPENDITURE ON CHARITABLE ACTIVITIES

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

The Scott Bader Commonwealth Limited has a policy of making grants to organisations and not individuals. Information about the charitable donations (grants) made by The Scott Bader Commonwealth Limited is given below. As advised earlier in the report, funds are made available to all the companies in the Scott Bader Group (proportionate to the number of people employed at each location). Via small Charity committees (if they choose) they then submit applications via the grant management tool OPTIMY, which was introduced to simplify and streamline the grant making process.

The Trustees are aware that some locations prefer to support the same charities year on year, but consider it is acceptable to form long term relationships with the charities that they consider are looking after the welfare of those less fortunate in the communities where they operate.

Commonwealth Community Hardship Fund

Charity Name
EducAid Sierra Leone (H)
Friars Multi Academy Trust (E)
Friends of Kipkelion (H)
Global Giving UK (P)
Health Improvement Project Zanzibar (H)
Nicodemus (Dis’ad)
Northamptonshire Community Foundation (P)
Teeside Hospice (H)
Zimbabwe Educational Trust (H)
UK Fund
Charity Name
UK Nomination Scheme
Small donations to support small local charities with their fund-
raising activities
Base 51 (YW)
Children’s Hospital Pyjamas (YW)
Christians Against Poverty (P)
Downs Syndrome Association (Dis)
Happy & Healthy Trust (E)
Happy Space UK (YW)
Home Start Daventry & South Northants (Dis’ad)
Light House Women’s Aid (YW)
Living Paintings (Dis)
Natural Breaks (Dis)
Oxfordshire Youth (YW)
Read For Good (Dis’ad)
Rush2TheDen (YW)
Smart CJS (P)
Sonshine Club (Dis)
Souster Youth (YW)
Speakers for Schools (E)
Step by Step (Dis)
Technology Awareness Group (YW)
Teen Action (E)
The Compassionate Friends (Dis’ad)
The Country Trust (E)
The Vayyu Foundation (En)		 2022
£’000
4.0
4.0
3.0
2.0
4.0
3.0
10.0
3.0
4.0
37.0
2022
£’000
36.0
1.0
7.0
2.0
2.0
5.0
3.0
5.0
9.0
2.0
2.0
4.0
5.0
3.0
1.0
4.0
4.0
4.0
2.0
1.0
4.0
4.0
1.0
5.0
4.0
120.0		 2021
£’000
145.1
2021
£’000
62.6

Page 34

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

9. EXPENDITURE ON CHARITABLE ACTIVITIES (CONTINUED)

Dublin

Charity Name
Nomination Scheme

France
Charity Name
Small donations
Baby Basics (Dis’ad)
Contact (Dis)
Drama Expressions for Children (YW)
Federation Somme Secours Populaire (P)
For Senegal (H)
Grandir Sans Cancer (H)
La Bonne Casse (E)
Oakfield Easton Maudit (E)
Relais Social (Dis’ad)
SOUC (E)
Croatia
Charity Name
Association Firefly (H)
International Association of Natural Health (H)
Izaberi Zivot (En)
Mali Zmaj (E)
MS Pilates (H)
Association of Blood Donors (H)
South Africa
Charity Name
1000 Hills Community Helpers (H)
African Wanderers Football Club Academy (YW)
Christel House (E)
Elangabini School (E)
Focus On iThemba (E)
FoodForwardSA (P)
Hammarsdale Cato Ridge Development Programme (En)
Little Elephant Training Centre Early Education (En)
Mathematics Specialist (E)
Solomons Haven (P)
The Loved Ones of God Family Care Centre (P)
Vumelani Creche & Pre-School (E)		 2022
£’000
1.0
1.0
2022
£’000
4.0
1.0
5.0
5.0
2.0
5.0
1.0
8.0
5.0
9.0
1.0
46.0
2022
£’000
10.0
3.0
3.0
10.0
2.0
3.0
31.0
2022
£’000
5.0
1.0
3.0
1.0
2.0
3.0
2.0
4.0
1.0
3.0
2.0
1.0
28.0		 2021
£’000
3.9
3.9
2021
£’000
21.7
2021
£’000
17.3
2021
£’000
16.0

Page 35

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

9. EXPENDITURE ON CHARITABLE ACTIVITIES (CONTINUED)

Dubai

Charity Name
Frank Water (Dis’ad)
Help in Need (E)
MAAN Education & Health Development Organisation (En)
Maharshi Karve Stree Shikshan Samstha (E)
Naya Qadam Trust (P)
Reed Foundation (E)
Royal Commonwealth Society for the Blind (E)
Ruchika Social Service Organisation (YW)
SOS Children’s Village Philippines (E)
The Rainbow Centre Sri Lanka (E)
Trust for the Rehabilitation for the Paralysed (Dis)
Germany
Charity Name
Artze Ohne Grenzen (H)
China
Charity Name
Shanghai Charity Foundation (Dis)
USA
Charity Name
Nomination Scheme
Small donations
Spain
Charity Name
Ong Gra De Blat (P)
Czech Republic
Charity Name
Czech Blind United (Dis)
Helppes Centrum (Dis)
Nadace Jedlickova Ustavu (Dis)		 2022
£’000
10.0
3.0
8.0
3.0
3.0
2.0
2.0
2.0
2.0
2.0
2.0
39.0
2022
£’000
3.0
3.0
2022
£’000
7.0
7.0
2022
£’000
4.0
7.0
11.0
2022
£’000
4.0
4.0
2022
£’000
2.0
1.0
2.0
5.0		 Page 36
2021
£’000
22.9
2021
£’000
2.8
2021
£’000
4.3
2021
£’000
6.0
2021
£’000
3.0
2021
£’000
3.8

����������������������������������������������������������

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

9. EXPENDITURE ON CHARITABLE ACTIVITIES (CONTINUED)

Canada

Charity Name
Centre D’ecoute et de Prevention Suicide Drummond (H)
Comptoir Alimentare Drummond (H)
Fondation Le Tremplin (E)
Fondation Rene Verrier (H)
La Tablee Populaire (P)
Loeys-Dietz Syndrome Foundation, Canada (H)
Australia
Charity Name
Fight MND (H)
JET Australia Foundation Limited (E)
Japan
Charity Name
Global Giving UK (En)
Sweden
Charity Name
BarncancerFonden (H)
Falkenbergs Fontanhus (Dis)
President’s Fund
Charity Name
10 grants provided totalling
Research Grants
Charity Name
Ownership at Work
EOA Knowledge Programme		 2022
£’000
2.0
2.0
2.0
2.0
2.0
4.0
14.0
2022
£’000
3.0
2.0
5.0
2022
£’000
3
3.0
2022
£’000
4.0
1.0
5.0
2022
£’000
8.0
8.0
2022
£’000
5
10
15.0		 2021
£’000
8.3
2021
£’000
2.5
2021
£’000
-
2021
£’000
3.8
2021
£’000
7.5
7.5
2021
£’000
-

Page 37

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9.

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

EXPENDITURE ON CHARITABLE ACTIVITIES (CONTINUED)

Total direct charitable expenditure
Governance costs
Total direct charitable expenditure		 2022
£’000
382.0
5.0
387.0		 2021
£’000
331.0
5.0
336.0

10. TAXATION

The Commonwealth is registered as a Charity and as such is exempt from Corporation Tax. However tax is payable by Scott Bader Company Limited and its subsidiaries.

a) Tax expense included in profit or loss
Current tax:
– UK Corporation tax on profits for the year
– Foreign corporation tax on profits for the year
– Adjustment in respect of prior periods
Group current tax
Share of joint ventures’ current tax
Total current tax
Deferred tax:
– Change in tax rate
– Origination and reversal of timing differences
– Adjustment in respect of prior periods
Group and total deferred tax
Group current tax
Group deferred tax
Group tax on profit on ordinary activities
b) Tax expense included in other comprehensive income
Deferred tax:
– Change in tax rate
– Origination and reversal of timing differences
Total tax credit / (expense) included in other comprehensive income		 2022
£’000
(1)
483
(1,413)
(931)
-
(931)
(81)
(229)
1,478
1,168
(931)
1,168
237
2022
£’000
603
1,910
2,513		 2021
£’000
603
1,613
813
3,029
-
3,029
566
(781)
(1,640)
(1,855)
3,029
(1,855)
1,174
2021
£’000
-
(292)
(292)

Page 38

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

10. TAXATION (CONTINUED)

(c) Reconciliation of tax charge

The tax assessed for the year is lower (2021: lower) than the standard rate of corporation tax in
the UK 19% (2021: 19%). The differences are explained below:
Total net income before tax for the financial year
Profit on ordinary activities at standard rate of corporation taxation in the UK: 19% (2021:
19%)
Effects of:
Foreign subsidiary profits within zero tax rate regime
Other adjustments in respect of foreign tax rates
(Income) / Expenses not deductible for tax purposes
Unrecognised deferred tax
Re-measurement of deferred tax (change in tax rate)
Adjustment in respect of prior periods
Group tax on profit on ordinary activities:
2022
£’000
2,224

423

(215)
49
(275)
271
(81)
65
237		 2021
£’000
8,872
1,686
(557)
311
107
(111)
566
(828)
1,174

The Effective Tax Rate (ETR) of the Group (excluding adjustments in respect of prior periods) decreased by 11.2% to 7.4% (2021: 18.6%).

11. ANALYSIS OF STAFF COSTS

Charity does not have its own employees or staff costs. Following are disclosures for the Group.

Wages and salaries
Staff bonuses
Other staff benefits
Social security costs
Pension costs - payments to defined contribution schemes
Other retirement provisions
Redundancy		 2022
£’000
31,561
401
1,706
4,782
1,915
-
520
40,885
2021
£’000

25,684

4,944

3,132

3,855

2,008

(46)

1,380
40,957

Expenses reimbursed to the Trustees in the year were £4.1k (2021: £1.7k), relating to travel and subsistence for 5 Trustees (2021: 4).

The directors of the Charity do not receive remuneration in their role as directors of the Charity. Employee elected directors receive remuneration for their operational roles in the Scott Bader Group company that they are employed, with the amount received noted below for their period as Trustee:

Basic Salary
Pension contributions and other benefits
Bonuses		 2022
£’000
134
-
26
160		 2021
£’000
183
5
18
206

Page 39

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

11. ANALYSIS OF STAFF COSTS (CONTINUED)

The remuneration of key management personnel of the Group was £1,963,000 (2021: £1,888,000). This includes Directors’ remuneration noted above. Key management personnel are defined by their involvement within the day-today decision making of the Group strategy and comprise of the Group Leadership Team (GLT) and Regional Business Leaders. There are no trustees to whom retirement benefits are accruing.

The number of employees whose total employee benefits exceeded £60,000 during the year for the charitable group was:

£60,001 - £70,000
£70,001 - £80,000
£80,001 - £90,000
£90,001 - £100,000
£100,001 - £110,000
£110,001 - £120,000
£120,001 - £130,000
£130,001 - £140,000
£140,001 - £150,000
£150,001 - £160,000
£160,001 - £170,000
£170,001 - £180,000
£180,001 - £190,000
£190,001 - £200,000
£200,001 - £210,000
£210,001 - £220,000
£270,001 - £280,000
£370,001 - £380,000
£390,001 - £400,000		 2022
Number
33
22
17
14
7
2
2
4
1
1
2
1
1
1
-
-
-
2
-
110		 2021
Number
105
27
18
11
6
5
7
5
3
2
2
2
1
-
1
1
1
-
1
198
The average number of persons employed during the period by geographical area was
as follows:
UK and Eire
Continental Europe
Rest of World
The average number of persons employed by the Group by activity was as follows:
Administration
Research & Development
Manufacturing & Distribution
Sales & Marketing		 2022
Number
328
219
220
767
2022
Number
109
53
453
152
767		 2021
Number
298
207
198
703
2021
Number
95
46
429
133
703

Page 40

����������������������������������������������������������

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

12. INTANGIBLE FIXED ASSETS

Group
Cost at 1 January 2022
Additions
Disposals
Reclassification
Difference on exchange
Cost at 31 December 2022
Accumulated Amortisation at 1 January 2022
Charge for the year
Disposals
Reclassification
Difference on exchange
At 31 December 2022
Net book value at 31 December 2022
Net book value at 31 December 2021		 Goodwill
£’000
1,456
221
-
-
75
1,752
1,255
115
-
29
16
1,415
337
201		 Customer
lists
£’000
-
1,308
-
-
-

Technology

£’000
1,066
6,563
(6)
(251)
10

7,382
995
376
(6)
(203)
-

1,162

6,220
71		 Group Total
£’000
2,522
8,092
(6)
(251)
85
1,308 10,442
-
97
-
-
-		 2,250
588
(6)
(174)
16
97 2,674
1,211 7,768
- 272

Assets in the course of construction and on which depreciation has yet to commence are included in the cost of Technology to the value of £1,906,000 (2021: Nil).

Amortization has been included within expenditures on commercial trading operations.

Page 41

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

13. TANGIBLE FIXED ASSETS

Group
Cost or valuation
At 1 January 2022
Additions
Disposals
Reclassification
Difference on exchange
At 31 December 2022
Accumulated Depreciation:
At 1 January 2022
Charge for the year
Disposals
Difference on exchange
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021		 Land and Buildings
Freehold
Short
leasehold
£’000
£’000
39,911
4,833
1,252
258
(59)
-
-
-
554
544
41,658
5,635
18,578
2,711
900
309
(50)
-
508
308
19,936
3,328


21,722
2,307
21,333
2,122		 Plant and
equipment
£’000

86,830
11,596

(201)

77

2,984

101,286
61,635
4,135
(140)
1,776

67,406


33,880
25,195		 Motor
vehicles
£’000

422
191

(151)

-

32

494
343
30
(149)
36

260


234
79		 Total

£’000

131,996

13,297

(411)

77

4,114

149,073
83,267
5,374
(339)
2,628

90,930

58,143
48,729

Assets in the course of construction and on which depreciation has yet to commence are included in the cost of Plant & Equipment to the value of £12,201,000 (2021: £4,466,000). Freehold land of £5,347,000 (2021: £6,437,000) is not depreciated.

14. SUBSIDIARY UNDERTAKINGS

The Commonwealth is the registered holder of the whole of the share capital of Scott Bader Company Ltd 100,000 shares of 50p each. Of these the Commonwealth holds 10,000 shares on behalf of the Guardian Trustees who have additional responsibilities to their role as Charity Trustees as set out in the Trustees' Report.

These 10,000 shares are referred to in the Articles of The Scott Bader Commonwealth Limited as Guardian Trustee Shares. Special voting rights in relation to these shares are exercised under Articles 27 and 68 of the Articles of Association of The Scott Bader Commonwealth Limited. These relate to any resolution to alter the Articles of Association of either The Scott Bader Commonwealth Limited or Scott Bader Company Ltd or to dispose of or direct the disposal of any shares in Scott Bader Company Limited.

The shares were given to the Commonwealth in 1951 and 1963 by Ernest Bader and his family in order to place Scott Bader Company Limited in common ownership where it would be directed and managed not only for the benefit of those working in the Company but also for the wider community and for future generations.

Since, under Article 14 of the Scott Bader Commonwealth Limited articles, The SBCW Board shall have no power to dispose of any Shares in SBCL or any other Subsidiary or to exercise or direct the exercise of the votes or carry out any other responsibilities attached to any such Shares. The SBCW Members and the Guardian Trustees shall exercise such powers and any such other responsibilities in accordance with these Articles.

Page 42

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

14. SUBSIDIARY UNDERTAKINGS (CONTINUED)

Subsidiary undertakings

The group holds 100% of the issued shares of all subsidiaries in the below table and, except where noted, these are held by the Company. None of the subsidiaries are listed on a recognised stock exchange and all have been included in the consolidation.

Company Country of
incorporation and
principal country
of operation		 Company
Registration
Number		 Nature of
Business		 Registered Office
Scott Bader
Company Limited
Scott Bader UK
Limited
Scott Bader SAS
Scott Bader Middle
East Ltd
(Incorporated in
Jersey)1
Scott Bader d.o.o.2
Scott Bader (Pty)
Ltd1
Scott Bader ATC
Inc.
Scott Bader
Scandinavia AB1
Scott Bader Eastern
Europe1
Scott Bader Iberica
SL1
Scott Bader Inc3
Scott Bader
(Shanghai) Trading
Company Ltd
Scott Bader Japan
KK
Synthetic Resins
Limited
Boldhelp Limited
Scott Bader Brazil
Limited		 Great Britain
Great Britain
France
United Arab
Emirates
Croatia
South Africa
Canada
Sweden
Czech Republic
Spain
USA
China
Japan
Great Britain
Great Britain
Great Britain		 00189141
4562724
631 720 497
States of Jersey:
Registration No.:
55367
JAFZA:
Registration No.:
173909
80008643
1993 000 466 07
1168859909
556399-5322
250 45 580
ESB 62948450.
Tomo
34949/Folio 0202
2310546
91310000664387
9063
3020001128001
00282663
03793984
08549866		 Corporate Head
office
Manufacturer of
resins
Manufacturer of
resins
Manufacture of
resins
Manufacture of
resins
Manufacture of
resins
Manufacturer of
adhesives
Distributor of
resins
Distributor of
resins
Distributor of
resins
Distributor of
resins
Distributor of
resins
Distributor of
resins
Intermediate
holding
company
Intermediate
holding
company
Intermediate
holding
company		 Wollaston Hall, Wollaston,
Wellingborough, Northants, NN29 7RL
Wollaston Hall, Wollaston,
Wellingborough, Northants, NN29 7RL
65 Rue Sully, 80000 Amiens
One The Esplanade, St Helier, Jersey, JE
3QA, Channel Islands
Radnička cesta 173 i, 10000 Zagreb
1 Lubex Road, PO Box 1539, Hillcrest
3650, Hammarsdale, Kwazulu Natal, South
Africa
2400, Canadien Street #303,
Drummondville (Qc), J2C 7W3, Canada
BOX 202, 31123 Falkenberg
Evropska 2588/33a, Dejvice, 160 00 Praha
6
Avda. Corts Catalanes, 8, 08173 Sant Cugat
del Valles-Barcelona
Registered Agent Solutions, Inc., 9E.
Loockerman Street, Suite 311, Dover, DE
19901
Room2402, Hitch Plaza 488 Wuning Road
(South) Shanghai China
Nisso Bldg#18, Export Office#708, 3-7-18,
Shin-Yokohama, Kohoku-ku, Yokohama,
Kaagawa, Japan
Wollaston Hall, Wollaston,
Wellingborough, Northants, NN29 7RL
Wollaston Hall, Wollaston,
Wellingborough, Northants, NN29 7RL
Wollaston Hall, Wollaston,
Wellingborough, Northants, NN29 7RL

Page 43

����������������������������������������������������������

NOTES TO THE FINANCIAL STATEMENTS

14.

THE SCOTT BADER COMMONWEALTH LIMITED

For the year ended 31 December 2022

SUBSIDIARY UNDERTAKINGS (CONTINUED)

Company Country of
incorporation
and principal
country of
**operation **		 Company
Registration
Number		 Nature of
Business		 Registered Office
Scott Bader North
America Inc1		 USA 2310544 Intermediate
holding
company		 Registered Agent Solutions, Inc., 9E.
Loockerman Street, Suite 311, Dover, DE
19901
Scott Bader Community
Fund Trustee Limited		 Great Britain 01282834 Corporate
trustee		 Wollaston Hall, Wollaston,
Wellingborough,Northants,NN29 7RL
Scott Bader Ireland Ltd Ireland 694646 Distributor of
resins		 7a Dunboyne Industrial Est, Dunboyne,
Co. Meath,Ireland
Scott Bader Australia Pty
Ltd1		 Australia 640312170 Distributor of
resins		 P.O. Box 1124
Bibra Lake, Western Australia 6965
Australia
Scott Bader Private
Limited		 India U24290MH2022
PTC383674		 Distributor of
resins		 307, Floor-3 Plot-267
A to Z Industrial Estate
Ganpatrao Kadam Marg
Lower Parel
Mumbai, Mumbai City, Maharashtra,
400013,India
Scott Bader
Manufacturing Private
Limited		 India U24100MH2022
PTC388973		 Manufacturer
of resins		 307, Floor-3 Plot-267
A to Z Industrial Estate
Ganpatrao Kadam Marg
Lower Parel
Mumbai, Mumbai City, Maharashtra,
400013,India
Scott Bader AsiaPac
Holdco Pte.Ltd.		 Singapore 202209091H Intermediate
holding
company		 600 North Bridge Road 323-01
Parkview Square
188788
Singapore

1 held by Synthetic Resins Limited, 2 held by Boldhelp Limited, 3 held by Scott Bader North America Inc

The group holds 80% of the issued shares of the subsidiary in the below table, held by the Company. This subsidiary is not listed on a recognised stock exchange.

Company Country of
incorporation
and principal
country of
operation		 Company
Registration
Number		 Nature of
Business		 Registered Office
Polymer Mimetics
Limited		 Great Britain 12598928 Research Wollaston Hall, Wollaston,
Wellingborough, Northants, NN29 7RL

The Group’s dormant companies have not been listed in the above table.

Page 44

����������������������������������������������������������

14. SUBSIDIARY UNDERTAKINGS (CONTINUED)

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

Joint Ventures

Company Country of incorporation
and principal country of
operation		 Registered Office
Novascott Especialidades
Quimicas Ttda (JV)1		 Brazil Rodovia Gobernador Mario Covas, no 600, sala 48, Lote
Tabajara, Serra do Anil, CEP 29.147-030, City of Cariacisa/ES,
Brazil
Satyen Scott Bader LLP (JV)
previously Satyen Scott Bader
Private Limited		 India 307, A-Z Industrial Premises G K Marg, Lower Parel Mumbai
Mumbai City MH 400013 IN

1 shares held by Scott Bader Brazil Limited

All joint ventures manufacture and distribute compounded polyester resins and are 50% owned by the group, except where noted above these shares are held directly by the Company.

Subsidiary results

A summary of the results of the subsidiaries is shown below:

Turnover
Other operating income
Direct and indirect overheads
Group operating profit
Share of operating profit in joint ventures
Total operating profit: group and share of joint ventures
Interest receivable and similar income
Interest payable and similar charges
Profit before taxation on ordinary activities
Taxation on profit on ordinary activities
Profit for the financial year		 2022
£'000
303,976
597
(302,476)
2,097
197
2,294
356
(328)
2,322
(237)

2,085		 2021
£'000
270,039
286
(262,006)
8,319
280
8,599
187
(95)
8,691
(1,174)
7,517
A summary of the 2022 results of the key subsidiaries is shown below: SB UK SB SAS SB ME
£'000 £'000 £'000
Total Assets 55,872 25,040 33,575
Total Liabilities (18,536) (10,197) (13,356)
Gross Turnover 89,832 65,995 78,010
Raw material and consumables (59,252) (51,162) (55,010)
Profit for the financial year 1,048 585 1,130

Page 45

����������������������������������������������������������

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

15. INVESTMENTS

Balance at 1 January
Share of profits retained
Dividend received
Difference on foreign exchange
Loss on investments
Balance at 31 December
Investment property historical cost:
The investment property is owned by the charity:
Cost at 1 January and at 31 December		 Group
Joint
Ventures
2022
2021
£’000
£’000
591
615
197
280
(368)
(96)
(6)
(208)
-
-
414
591		 Group and
Charity
Investment
Property
2022
2021
£’000
£’000
495
525



-
(30)
495
495
2022
2021
£’000
£’000
8
8

The investment property was valued by an independent valuer with a recognised and relevant professional qualification and with recent experience in the location and category of the investment property being valued, Harwoods Chartered Surveyors & Estate Agents, in November 2021, on the basis of open market value. The valuation was arrived at by reference to the estimated amount for which the asset would be expected to exchange between two independent parties on an arms-length basis using available market evidence and local market knowledge.

16.

GROUP STOCKS

GROUP STOCKS
Raw materials and consumables
Finished goods and goods for resale		 2022
£’000

18,267
20,012		 2021
£’000
11,634
21,264
38,279 32,898

There is no material difference between the balance sheet value of stock and its replacement cost.

17.

DEBTORS

DEBTORS
Trade debtors
Amounts owed by group undertakings
Corporation tax recoverable
Deferred tax asset
Other taxation recoverable
Other debtors
Prepayments and accrued income		 Group
2022
2021
£’000
£’000
42,572
44,597
-
-
3,096
72
712
-
535
1,794
1,342
1,311
3,141
1,724		 Charity
2022
2021
£’000
£’000
-
-
1,089
1,352
-
-
-
-
-
-
-
-
-
-
51,398 49,498 1,089 1,352

Trade debtors are stated after provisions for impairment of £483,000 (2021: £289,000). Recorded within other debtors is derivative financial instrument with the value of £32,000 (2021: £(58,000)). Movement in the year was gain of £90,000 (2021: £44,000). Note 24 provides additional detail.

Page 46

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

18.

DEBTORS GREATER THAN ONE YEAR

DEBTORS GREATER THAN ONE YEAR
Deferred tax asset Group
2022
2021
£’000
£’000
2,499
-		 Charity
2022
2021
£’000
£’000
-
-
2,499 - - -

Note 22 provides additional detail.

19.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Bank loans and overdrafts
Trade creditors
Amounts owed to group undertakings
Bills of exchange payable
Corporation tax
Other taxation and social security
Other creditors
Accruals and deferred income		 Group
2022
2021
£’000
£’000

19,633
6,872
37,081
40,909
-
-
51
337
269
1,274
2,770
1,742
1,674
1,033
3,651
7,766
65,129
59,933		 Charity
2022
2021
£’000
£’000
-
-
-
-
52
48
-
-
-
-
-
-
-
-
-
-
52
48
52 48

Amounts owed by the Group through an overdraft facility amounted to £11,368,000 as at 31 December 2022 (2021: £6,409,000). The facility is denominated in various currencies with the net overdraft balance on any individual currency incurring a charge of 1.25%. The bank has a charge over the assets of the companies in relation to the overdraft.

20.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Loans
Within one to two years
Within two to five years
In five years or more
Derivative financial instruments
Within two to five years		 Group
2022
£’000
2021
£’000
471
408
901
875
-
25
1,372
1,308
-
58
1,372
1,366		 Group
2022
£’000
2021
£’000
471
408
901
875
-
25
1,372
1,308
-
58
1,372
1,366

1,308

58

1,366

Page 47

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

21. LOANS AND OTHER BORROWINGS

Loans repayable, included within creditors, are analysed as follows:

Due within one year or on demand
Bank Loans and overdrafts
Due after more than one year
Bank Loans and overdrafts
Total borrowings
Maturity of financial liabilities:
In one year or less, or on demand
In more than one year, but not more than two years
In more than two years, but not more than five years
In more than five years
Details of loans not wholly repayable within five years are as follows:
Loans with interest payable over 60 months		 Group
2022
£’000
2021
£’000
19,633
6,872

1,372
1,308
21,005
8,180
19,633
6,872
471
408
901
875
-
25
21,005
8,180
Group
2022
£000
2021
£000
-
25
-
25		 Group
2022
£’000
2021
£’000
19,633
6,872

1,372
1,308
21,005
8,180
19,633
6,872
471
408
901
875
-
25
21,005
8,180
Group
2022
£000
2021
£000
-
25
-
25

25

£9,449k (2021: £1,452k) of Group borrowings are secured by fixed and floating charges over the Group’s assets.

Other Group bank loans

Scott Bader Company Limited had drawn $10,000,000 (£8,265,000) (2021: $0) under a revolving credit facility (RCF). The RCF had an interest rate of 5.93% and is secured under a fixed and floating charge across a number of UK entities. The revolving credit facility (RCF) provides the Scott Bader Company with the ability to borrow funds as needed. The availability of the RCF has been extended to March 2028 following a renegotiation of the facility in Q1 2023.

Other bank loans include loans from three French banks which are denominated in Euros and are all repayable by quarterly instalments with the final payments being due in July 2026. The initial total value of loans taken out in 2014 was €4,000,000 and as at 31 December 2022 the outstanding amount was €1,339,000 (£1,185,000) (2021: €1,695,000 (£1,242,000)). They are all secured by a charge over the Group’s trading subsidiary in France. These loans have variable rates and during 2022 they ranged from 1.16% to 2.94%. They are included within the above bank loans across maturity buckets.

An additional loan with a French bank was taken out in 2018 and the balance as at 31 December 2022 is €125,000 (2021: €284,000). This loan is payable in monthly instalments with the final payment due in August 2023. The loan is unsecured, and the interest rate is fixed at 0.73%.

The charity has provided a loan of £552,000 to the Group. The loan is unsecured, carries a variable interest rate of 1.25% above SONIA per annum and is payable in 5 instalments with the final payment due in August 2023. The terms of the loan is documented in accordance with the advice of the Commonwealth’s solicitors

Page 48

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

22. GROUP PROVISIONS FOR LIABILITIES

Group
At 1 January 2022
Foreign exchange impact
Amounts charged to the profit and loss account
Amounts used during the year
Amounts charged to OCI
At 31 December 2022		 Environmental
£’000
1,110
3
330
-
-
1,443
Leaving
Provisions

£’000
2,193

-

160

-

-

2,353		 Retirement
Benefits

£’000
2,140

30

(369)

(66)

-

1,735		 Deferred
Tax

£’000
93

(22)

1,168

53

(2,513)

(1,221)		 Total

£’000
5,536
11
1,289
(13)
(2,513)
4,310

The provision for deferred taxation is disclosed as debtors falling due within one year £712k (2021: £nil) (Note 17) and debtors falling due in 2 to 5 years £2,499 (2021: £nil) (Note 18) totalling £3,211,000 (2021: £ Nil) and a Provision for liabilities and charges of £1,990,000 (2021: £93,000) making the total provision £7,521,000 (2021: £5,536,000).

Environmental :

The environmental provision was originally established in Scott Bader Company Limited as a future payment for the required restitution of land when the relevant subsidiary companies vacate the premises currently occupied. The provision is expected to be utilised over 10 years although there is no intention to leave any of the affected sites. The provision was estimated using the reports as provided by an independent third-party specialist.

Leaving provisions:

The leaving provision is established in Scott Bader Middle East as a payment based on local requirements when employees leave the business. The provision is expected to be utilised as current employees leave the business between 2020 and 2049.

Retirement benefits:

a) £1,145,000 (2021: £1,442,000) relates to ‘quasi pension’ commitments given to former employees.

The provision is expected to be utilised over the expected lives of the former employees and their spouses between 2021 and 2037.

b) £590,000 (2021: £697,000) relates to French statutory retirement benefits payable to France based employees of the Group. The provision is expected to be utilised between 2021 and 2033.

Deferred taxation:

The deferred tax liability consists of the following liabilities / (assets):

Excess of capital allowances over depreciation
Short term timing differences
Post-employment benefits
Losses		 2022
£’000
1,606
(698)
1,877
(4,006)
(1,221)		 2021
£’000
(412)
(949)
4,199
(2,745)
93

Page 49

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23. GROUP POST EMPLOYMENT BENEFITS

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

(a) Defined benefit scheme

For UK employees Scott Bader UK operates a defined benefit scheme with assets held in a separately administered fund. The scheme provides retirement benefits on the basis of members’ final salary. The plan is administered by an independent trustee, who is responsible for ensuring that the plan is sufficiently funded to meet current and future obligations.

The date of the most recent actuarial valuation as at 31 December 2019 revealed a funding shortfall of £4,101,000 (31 December 2016: shortfall of £13,560,000). If the Scheme is in deficit on a Technical Provisions basis calculated by the Scheme Actuary in accordance with the Scheme’s Statement of Funding Principles, further contributions are expected into the Scheme through 2023 to a level of £460,000 p.a. (£38,333.33 per month).

Contributions:

Contributions to the escrow account are currently suspended following the improvement in the Scheme’s funding level at the 2019 actuarial valuation. This can be recommenced if the position deteriorates. For any remaining funds as at December 2028, the funds may either be returned to the company or paid to the pension fund depending on investment performance and the funding position in 2028.

The 31 December 2019 actuarial valuation figures have been updated to the balance sheet in order to assess the additional disclosures required under section 28 of FRS102 as at 31 December 2022. This update was done by an independent qualified actuary, using the following major assumptions:

2022 2021
Rates of increase in salaries n/a n/a
Rate of increase in 5% LPI pensions in payment 3.20% 3.40%
Rate of increase in 5% LPI pensions with 3.5% underpin in payment 3.80% 3.90%
Rate of increase in pensions in deferment 2.20% 2.50%
Discount rate 4.90% 1.80%
Inflation assumption 3.20% 3.50%
Assumed life expectancies on retirement at age 60: 2022 2021
Years Years
Retiring today Males 26.4 26.3
Females 29.1 29.0
Retiring in 10 years Males 27.0 26.9
Females 29.8 29.7

Page 50

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

23. GROUP POST EMPLOYMENT BENEFITS (CONTINUED)

Reconciliation of scheme assets and liabilities:
At 1 January 2022
Remeasurement gains / (losses)
- Experience gains on liabilities
- Changes to demographic assumptions
- Actuarial gain
- Return on plan assets excluding interest income
Net remeasurement gains
Benefits paid
Employer contributions
Interest income/(expense)
At 31 December 2022
The fair values of the plan assets were:
Equities
Gilts and LDI funds
Corporate Bonds
Cash & net current assets		 Assets
£’000
150,268
-
-
-
(51,424)
(51,424)
(5,565)
460
2,659
96,398		 Liabilities
£’000

(133,472)
(3,780)
(91)
45,241
-
41,370
5,565
-
(2,353)
(88,890)
2022
£’000
5,136
61,489
24,377
5,396
96,398		 Total
£’000
16,796
(3,780)
(91)
45,241
(51,424)
(10,054)
-
460
306
7,508
2021
£’000
9,857
110,600
25,124
4,687
150,268

(b) Defined contribution schemes

Following the closure of the defined benefit scheme in the UK to new entrants, all employees, in countries where the state pension provision is not considered sufficient, have the opportunity to benefit from a defined contribution scheme provide by their local employer.

Group
The amount recognised as an expense for these defined contribution schemes was: 2022 2021
£000 £000
Current period contributions 1,913 1,992

Page 51

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

24. FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS
Group
Notes 2022 2021
£000 £000
Financial assets / (liabilities) measured at fair value through profit or loss:
Derivative financial instruments 17 & 19 32 (58)

Group:

Derivative financial instruments – Interest rate swaps

The Group has entered into two interest rate swaps to receive interest at EURIBOR and pay interest at a fixed 1.46/1.49%. The two swaps are based on a principal amount of 3,500,000 EUR, equal to loans held with two French banks, and they mature in 2026/2027 on the same date as the bank loans to which they relate.

The instruments are used to hedge the Group’s exposure to interest rate movements on the two bank loans. The fair value of the interest rate swaps is £32k (2021: £(58k)).

Cash flows on both the loan and the interest rate swaps are paid quarterly until 2026/2027. During the financial year a hedging gain of £90k (2021: £44k) was recognised in other comprehensive income for changes in the fair value of the interest rate swap.

25. ANALYSIS OF MOVEMENT IN FUNDS

GROUP
At 1 January 2021
Net movement in funds
Loss on Investments
Revaluation transfer
At 1 January 2022
Net movement in funds
At 31 December 2022		 Fair Value
Reserve
(Designated
Fund)
£000
532
-
(30)
(15)
487
-
487		 Unrestricted
income
funds
£000

106,722

7,610

-
15
114,347

(793)

113,554
Non –
Controlling
interest
£000

-

31

-

-
31
21

52
Total

£000

107,254

7,641

(30)

-
114,865

(772)

114,093

Fair Value Reserve (Designated Fund)

Land and buildings and plant and equipment were re-valued at 29 December 1989. The Fair Value Reserve is a designated fund meaning that the fund cannot be distributed unless the properties are sold or the Directors are first assured that the properties maintain at least their previous market value.

CHARITY
At 1 January 2021
Net movement in funds
Loss on Investments
At 1 January 2022
Net movement in funds
At 31 December 2022		 Fair Value
Reserve
£000
517
-
(30)
487
-
487		 Unrestricted
income
funds
£000
1,366
181
-
1,547
(97)
1,450		 Non –
Controlling
interest
£000
-
-
-
-
-
-
Total

£000

1,883

181

(30)

2,034

(97)

1,937

Page 52

����������������������������������������������������������

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

25. ANALYSIS OF MOVEMENT IN FUNDS (CONTINUED)

GROUP
For the year ended 31 December 2021
Intangible fixed assets
Tangible fixed assets
Investments
Net current assets
Long term liabilities
Provisions
Pension asset
CHARITY
For the year ended 31 December 2021
Intangible fixed assets
Tangible fixed assets
Investments
Net current assets
Long term liabilities
Provisions
Pension asset
GROUP
For the year ended 31 December 2022
Intangible fixed assets
Tangible fixed assets
Investments
Net current assets
Long term liabilities
Provisions
Pension asset
CHARITY
For the year ended 31 December 2022
Intangible fixed assets
Tangible fixed assets
Investments
Net current assets
Long term liabilities
Provisions
Pension asset		 Fair Value
Reserve
£000
-
-
487
-
-
-
-
487
Fair Value
Reserve
£000
-
-
487
-
-
-
-
487
Fair Value
Reserve
£000
-
-
487
-
-
-
-
487
Fair Value
Reserve
£000
-
-
487
-
-
-
-
487		 Unrestricted
income
funds
£000
272
48,729
599
54,853
(1,366)
(5,536)

16,796
114,347
Unrestricted
income
funds
£000
-
-
8
1,539
-
-

-
1,547
Unrestricted
income
funds
£000
7,768
58,143
422
48,606
(1,372)
(7,521)

7,508
113,554
Unrestricted
income
funds
£000
-
-
8
1,442
-
-

-
1,450		 Non –
Controlling
interest
£000
-
-
-
31
-
-
-
31
Non –
Controlling
interest
£000
-
-
-
-
-
-
-
-
Non –
Controlling
interest
£000
-
-
-
52
-
-
-
52
Non –
Controlling
interest
£000
-
-
-
-
-
-
-
**- **
Total

£000

272

48,729

1,086

54,884

(1,366)

(5,536)

16,796
114,865

Total

£000

-

-

495

1,539

-

-

-
2,034

Total

£000

7,768

58,143

909

48,658

(1,372)

(7,521)

7,508
114,093

Total

£000

-

-

495

1,442

-

-

-
1,937

Page 53

����������������������������������������������������������

26. NOTES TO THE CASHFLOW STATEMENT

THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

a) Reconciliation of net incoming resources to net cash provided by operating activities

Net Income for the financial year
Interest payable
Interest receivable
Rental Income received
Taxation
Share of operating profit in joint ventures
Loss on disposal of fixed assets
Depreciation and amortisation
Exchange difference
Contributions to UK defined benefit pension scheme
(Increase) in stocks
Decrease / (increase) in debtors
(Decrease) / increase in creditors
Increase / (decrease) in provisions
Net cash (used in) / from operating activities		 2022
£'000
1,987
328
(356)
(36)
237
(197)
(33)
5,962
1,355
(460)
(5,381)
1,836
(6,554)
88
(1,224)		 2021
£'000
7,698
(187)
95
-
1,174
(280)
(45)
5,262
211
(230)
(13,055)
(9,367)
9,188
393
857

b) Analysis of changes in net debt

Group At 1
January
2022		 At 1
January
2022		 Cash
flows		 Cash
flows		 Exchange
rate
movement		 Exchange
rate
movement		 At 31
December
2022
Cash and Equivalents: 32,421
(6,409)		 (10,810)
(4,959)
Cash - 21,611
Overdraft - (11,368)
26,012 (15,769) - 10,243
Borrowings: (7,802)
-
Borrowings - repayable within one year (463)
(1,308)		 - (8,265)
Borrowings - repayable after oneyear (64) (1,372)
(1,771) (7,802) (64) (9,637)
Net Cash 24,241 (23,571) (64) 606

Page 54

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

27. GROUP CONTINGENT LIABILITIES

Group:

Pension Scheme Funding: Scott Bader Company Limited entered into a guarantee in March 2007 with Scott Bader Pension Scheme Trustees Limited whereby the Company guaranteed that the Scott Bader UK Limited pension scheme would be 105% funded on an S179 valuation should the principal employer, Scott Bader UK Limited, fail to fulfil its agreed obligations to the Pension Trustees.

28.

GROUP CAPITAL AND OTHER COMMITMENTS

a) Contracts for future capital expenditure not provided in the financial statements – Property,
plant and equipment
No expenditure has been incurred although contracts have been placed
b) future minimum lease payments under non-cancellable operating leases for each of the
following periods:
Not later than one year
Later than one year and not later than five years
Later than five years
Group
2022
£’000
522
Group
2022
£’000
1,711
2,779
1,757
**6,247 **		 Group
2021
£’000
1,601
Group
2021
£’000
1,240
2,440
1,381
5,061

The Commonwealth has no operating lease commitments at 31 December 2022 (2021: Nil).

29. RELATED PARTIES

Group

The Company has granted manufacturing licences to Satyen Scott Bader, one of the Group’s joint ventures during the year. Revenue of £197k (2021: £281k) was recognised.

The Company received dividends from Novascott Especialidades Quimicas Ttda of £368k (2021: £96k), one of the Group’s joint ventures, during the year.

For both Group’s joint ventures at the year-end £Nil (2021: £Nil) was outstanding.

The Group has provided a capital contribution to Polymer Mimetics Limited of £1,343,000 (2021: £431,000).

Charity

The Commonwealth received a donation from SBCL in the amount of £305,000 (2021: £552,000). In addition, the Commonwealth reimbursed SBCL, at cost, for management services provided in the year of £46k (2021: £45k). The net year-end balance of money owed by SBCL to The Commonwealth was £1,037k (2021: £1,304k).

30. LEGAL STATUS OF THE SCOTT BADER COMMONWEALTH LTD

The Scott Bader Commonwealth Ltd is a company limited by guarantee without shares and a registered Charity. The liability of each member in the event of winding up is limited to 5p.

Page 55

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THE SCOTT BADER COMMONWEALTH LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2022

31. ACQUISITION OF SCOTT BADER INDIA

On 1 July 2022, the Group acquired control of Scott Bader Private Limited through the purchase of 100% of the share capital for total consideration of INR 11,00,000 (£12,000) via its newly incorporated Singapore entity Scott Bader AsiaPac Holdco Pte. Ltd. In parallel, but via separate agreement, the Group, via Scott Bader Private Limited, acquired the trade and assets of Satyen Polymers Private Limited and Satyen Scott Bader LLP (held as a joint venture by the Group). This was for a total consideration of INR 69,78,85,000 (£7,327,000). Both acquisitions have been accounted for using the ‘purchase method’ as described under FRS 102 19.7.

Scott Bader Private Limited is incorporated in India and their principal activities, following the acquisition of trade and assets of Satyen Polymers Private Limited and Satyen Scott Bader LLP, is the manufacture and sale of chemical products.

As a result of the acquisition, the Group expects to increase its sales to customers in India. The goodwill of INR 2,10,85,000 (£221,000) arising from the acquisition is attributable to the expertise of the workforce and economies of scale expected from combining the operations into the Group. Management have estimated the useful life of the goodwill to be 10 years in line with the Directors’ view of the period of benefit.

The exchange rate used on the date of acquisition was £1/INR 95.2519. The following table summarises the consideration paid by the Group, the fair value of assets acquired and liabilities assumed at the acquisition date.

Intangible assets
Tangible assets
Stocks
Debtors
Total assets
Creditors
Total liabilities
Net assets acquired
Goodwill
Total consideration
Satisfied by:
Cash
Deferred consideration
Contingent consideration
Directly attributable costs
Total consideration		 Fair value
INR‘000
556,600
2,600
64,900
175,200
799,300
(121,400)
(121,400)
677,900
21,085
698,985
640,800
38,078
1,000
19,107
698,985		 Fair value
£’000
5,843
27
681
1,842
8,393
(1,275)
(1,275)
7,118
221
7,339
6,728
400
10
201
7,339

No adjustments arose on acquisition other that those detailed below relating to the deferred consideration.

The deferred consideration has been recognised after discounting the amount for the time value of money. INR 4,00,00,000 (£420,000) was paid on 23 December 2022 and amounts of INR 19,22,000 (£20,000) recognised in finance costs relating to the unwinding of the discount.

From the date of the acquisition to 31 December 2022 Scott Bader Private Limited contributed £810,000 and £(161,000) to the Group’s revenues and profit before tax respectively.

Page 56