Inspecs Group PLC

Always
 looking
 forward

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Cover

1.  L.A.M.B.

2.  CAT

3.  BOTANIQ®

4.  O’Neill

5.	 Titanflex

6.  Barbour

Business  
overview

p05

Titanflex

Our strategy

p10

Savile Row Titanium

Environmental, Social 
and Governance

p24

Barbour

Innovation

p32

Liberty

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Company Overview
01  Highlights  

Strategic Report
03  Chairman’s review

05  Business overview

07  Our business model

10  Our strategy

11  Chief Executive Officer’s review

15  Market overview

16  Chief Financial Officer’s review 

23  Key performance indicators

24  Environmental, Social and Governance

32 

Innovation

35  Section 172 statement

37  Risk management

Governance
42  Corporate Governance statement

43  How the Board operates

49  Senior Management 

50  Audit and Risk Committee Report

53  Remuneration and Nomination Committee Report

57  Environmental, Social and Governance Committee Report

58  Directors’ Report 

62  Statement of Directors’ Responsibilities

Financial Statements
64 

 Independent Auditor’s Report to the Members  
of INSPECS Group plc

73  Consolidated Income Statement

73 

 Consolidated Statement of Other Comprehensive Income 

74  Consolidated Statement of Financial Position

75  Consolidated Statement of Changes in Equity

75  Consolidated Statement of Cash Flows

76  Notes to the Consolidated Financial Statements

114  Company Balance Sheet

115  Company Statement of Changes in Equity

116  Notes to the Company Financial Statements

126   Appendix 1 – Comparative information in GBP

129  Company Information and Advisers

 
 
 
 
 
 
 
 
 
 
 
H I G H L I G H T S

INSPECS is a leading 
provider of eyewear 
solutions to the global 
eyewear market. 

From the largest optical chains to individual consumers we offer 
eyewear, lenses, combined packages and low vision optical aids.
The Group has continued to expand, and our work in 2022 
is already creating new opportunities in distribution and 
growth prospects for 2023.

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01

Revenue

$248.6m

Adjusted Underlying EBITDA

$19.2m

2022

2021

2020

$248.6m

$246.5m

$47.4m

2022

2021

2020

Gross margin

49.2%

2022

2021

2020

Eyewear units sold

10.7m

2022

2021

2020

Loss after tax

$(7.8)m

49.2%

47.0%

43.3%

2022

2021

2020

Cash flows from operating activities

$12.4m

10.7m

10.4m

4.9m

2022

2021

2020

Basic and diluted loss per share

Adjusted PBT diluted EPS

$(0.08)

$0.08

2022

2021

2020

$(0.08)

$(0.05)

$(0.13)

2022

2021

2020

BOTANIQ®

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$19.2m

$27.6m

$5.8m

$(7.8)m

$(5.4)m

$(8.9)m

$12.4m

$24.9m

$0.4m

$0.08

$0.17

$0.04

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Our Strategy

p10

Day

Environmental, 
Social and 
Governance

p24

Radley

03  Chairman’s review 

05  Business overview

07  Our business model

10  Our strategy

11  Chief Executive Officer’s review 

15  Market overview

16  Chief Financial Officer’s review 

23  Key performance indicators 

24  Environmental, Social and Governance

32 

Innovation

35  Section 172 statement 

37  Risk management

Strategic  
Report

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C H A I R M A N ’ S   R E V I E W

In my first review as Chairman, I would like 
to start by thanking Lord Ian MacLaurin for 
his help and support during his tenure as 
INSPECS Group’s Chairman. Ian’s long career 
and extensive experience of the business world 
supported us through our IPO and helped us 
navigate the turbulent COVID waters.

Robin Totterman, Chairman

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Ian kindly extended his tenure with us from June 
until 1 December 2022, when Richard Peck replaced 
me as Chief Executive Officer, and I assumed 
the role of Executive Chairman. Along with the 
rest of the Board, I am deeply grateful for Ian’s 
immeasurable contribution.

Board changes
I am delighted that Richard Peck, an industry veteran who joined 
the INSPECS Board as a Non-Executive Director following our 
IPO in February 2020, assumed the role of CEO in December 
2022. Richard’s knowledge of the Group, along with his 
deep understanding of the sector, has allowed him to hit the 
ground running.

I am pleased that Hugo Adams and Shaun Smith joined as 
Non-Executive Directors in December 2022. Hugo’s significant 
experience in the retail sector and a proven track record of 
delivering growth for purpose-led consumer brands, paired with 
Shaun’s extensive plc experience in finance with international 
manufacturing and retail groups, will be invaluable through the 
next stage of the Group’s growth.

Navigating challenging market conditions
2022 was, in many ways, another extraordinary year. We had 
to contend with the well-documented challenging business 
environment and experienced supply chain issues driven by 
ongoing COVID restrictions, rising energy prices and general 
scarcity of raw materials. In addition, the macroeconomic 
outlook and consumer confidence most notably deteriorated in 
Germany, a key territory for us, which is reflected in the Group’s 
order intake being down on the previous year.

However, I am pleased to say the Group was able to raise its 
Gross Profit Margin from 47.0% in 2021 to 49.2% in 2022 due to 
increased pricing on new product and continued focus on the 
control of its supply chain costs. 

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C H A I R M A N ’ S   R E V I E W  CONTINUED

Our UK lens business, Norville, required 
more time to turn the business into a solid 
performing addition to the Group. As a 
result, management has implemented a 
cost saving programme at the factory that 
helped to narrow losses in Q4. We expect 
the losses at Norville to reduce significantly 
in 2023, but its engineering excellence 
continues to assist our business as a whole. 

Investment progress
Construction of the Group’s new factory in 
Vietnam will commence in the second half 
of 2023. Planning and development remains 
on-going for the factory in Portugal. We 
expect to see significant increases in our 
own factory-made products in 2024, driving 
growth for the medium term.

INSPECS continues to develop cutting-
edge products and technology with our 
innovations arm, Skunkworks, driving growth 
throughout the Group, and we expect to 
see ongoing positive results from the team’s 
hard work. Our design teams, situated in 
key locations across the globe, keep our 
offerings fresh and diverse.

Outlook
Following a year of consolidation, we 
now have a solid platform on which to 
build. The outlook for the Group and the 
eyewear sector remains positive despite 
the many headwinds we have encountered 
throughout the year. We continue to be 
mindful of global economic forces, as well 
as uncertain consumer demand, particularly 
in Europe, but feel well placed to provide 
attractive products at competitive prices. 
The balance of our worldwide presence, 
particularly our US operations, bolsters our 
positive outlook. We continue to invest in 
the business to enable the Group to deliver 
further growth.

Robin Totterman
Chairman

03 May 2023

+1%

Revenue growth

Top right: Brendel

Bottom right: 
Tura Product Development

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+6% 

Gross profit growth

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B U S I N E S S   O V E R V I E W

M I S S I O N

Our strategic aim is to build a highly 
respected global eyewear company 
that delivers long‑term value for 
our stakeholders. 

To deliver a highly profitable and globally aligned 

eyewear group that creates a dynamic platform for 

growth, through our commitment to product, innovation, 

people and planet to 2030 and beyond.

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BOTANIQ®

To offer the best affordable, desirable and 

innovative eyewear.

Achieved through our core values

Purpose
We aspire to be a first class provider of 
global vision related solutions

Growth
We will underpin our growth by 
expanding the capability and synergies 
of our core business units 

Professionalism
We will act with professionalism and 
Integrity in all our business activities

Customer Focus
We expect to meet all our customers’ 
eyewear needs

Excellence
We will continue to evaluate how 
we can improve on what we do

Community
We will support our environment 
and the communities where 
we operate

Leadership
We endeavour to inspire our 
colleagues and ensure there are 
opportunities for our employees 
to thrive

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W H O   W E   A R E

We are vertically integrated 
from design, to frame and lens 
manufacturing, sales, marketing 
and distribution.

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Design, Brands, Sales, Marketing 
and Distribution

Eyewear and Lens 
manufacturing

U S A

CAT

C O M P E T I T I V E   E D G E

•  Strong key account 
customer base

•  Range of ‘low vision 

aid’ products

•  Strong independent 

•  Patented intellectual 

customer base

property (IP)

•  Manufacturing capabilities of 

lenses and frames 

•  Robust network of 
talented employees

•  28 licensed brands and 
18 proprietary brands

•  Worldwide distribution

•  Dedicated research 

and development team

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O U R   B U S I N E S S   M O D E L   –   W H AT   W E   D O

Design

Our design teams around the world follow the 
latest trends in the market and get inspiration 
from a variety of industries, including consumer 
fashion and beyond. 

Our design teams are principally in the UK, USA, 
Germany, Portugal and Sweden. 

Our drivers of success
Robust network of talented employees

Dedicated research and  
development team

Manufacture

Our product development teams work with 
our in-house design teams before passing 
designs on to our production teams. The Group 
now has manufacturing plants in Vietnam, 
China, UK and Italy.

Our drivers of success
Manufacturing capabilities of lenses 
and frames

Market

Distribute

Our marketing teams work in tandem with 
brand owners and brand managers to bring 
products to the market.

Through our network of 75,000 optical and retail 
outlets across 80 countries our products are 
sold both in well-known high street chains and 
independent opticians globally.

Our drivers of success
Blend of proprietary brands and 
licensed brands

Patented intellectual property (IP)

Range of ‘low vision aid products’

Our drivers of success
Strong key account customer base

Strong independent customer base

5

35

5.3m

28

Design studios

Designers

Frames supplied by Group factories

Licensed Brands

18

Proprietary 
Brands

10.7m

Distributed eyewear units

Our growth opportunities
Maximising Group resources and expertise

Research and development department 
developing innovative new eyewear 
channels such as gaming and 
specialist lenses

Our growth opportunities
Further expansion of our 
manufacturing capabilities

Our growth opportunities
Travel retail markets around the globe 
and smart eyewear

Our growth opportunities
Use our worldwide distribution platform to 
increase penetration of our brand portfolio

Increased distribution in Asian  
Pacific markets

Savile Row Gold

Eschenbach Lab

Mini

Eschenbach Warehouse

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L I C E N S E D   B R A N D   P O R T F O L I O

Targeted consumer brands are selected with potential to grow 
market share in a geographical region or for broader global 
distributions. We are specialists in working with brand owners 
in partnership, to help deliver growth for both parties.

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08

O’Neill

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P R O P R I E TA R Y   B R A N D S

Targeting specific market segments with our proprietary brand 
offer, we elevate group-owned patents and manufacturing 
techniques by building a brand around them and successfully 
taking them to market.

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Titanflex

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O U R   S T R AT E G Y

Growth 
opportunities

INSPECS’ continued growth confirms 
its position as one of the world’s 
leading eyewear companies.

Our model to achieve sustained and balanced  
growth for the benefit of all stakeholders is based  
on six main drivers.

Eschenbach Product 
Development

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1.
Use our worldwide  
distribution platform to increase 
penetration of our brand portfolio

•  The Group has successfully taken 

Superdry, Botaniq, O’Neill and Savile 
Row Titanium onto our worldwide 
distribution network 

•  Further cross brand integration planned

2.
Increase distribution in 
Asian Pacific markets

3.
Travel retail markets  
around the world

•  142% increase in sales across Asia to $8.0m 

in 2022 from $3.3m in 2021

•  Targeted increases and 
development planned

•  Significant growth opportunities have 
been identified and pursued post 
COVID around the globe

Humphrey’s

4.
Maximising Group  
synergies, resources and expertise

5.
Further expansion of our 
manufacturing capacities

•  Consolidation of offices and warehouses  
in Asia and the UK completed in FY22

•  Further targeted consolidation synergies

•  Third Vietnam facility to begin construction 
in the second half of 2023, increasing 
frame capacity in Vietnam to 12 million

6.
Research and development 
department developing  
innovative new eyewear channels

•  First commercial revenues generated FY22

•  Targeting significant growth

•  Production targeted for major retailers 

and eyewear distributors

•  Portugal plant under negotiation

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C H I E F   E X E C U T I V E   O F F I C E R ’ S   R E V I E W

Having been on the Board of INSPECS as a  
Non‑Executive Director since IPO, I was 
delighted to assume the role of CEO on 
1 December 2022. This was certainly a year 
of two halves in which the Group delivered a 
strong first half followed by a weaker second, 
owing to challenging market conditions.

Richard Peck, CEO

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Despite these challenges, we are pleased that we delivered total 
revenue of $248.6 million and adjusted underlying EBITDA of 
$19.2 million. 

During the first half of the year, we saw a good financial 
performance, with increases in both revenue and profit as a 
result of the ongoing integration of the Group’s businesses and 
increased distribution reach around the globe. However, the 
second half of the year was marked by a number of external 
challenges, including weakened market confidence in one of our 
primary markets, Germany, as a result of the conflict in Ukraine. 
We also faced significant headwinds from exchange rate 
fluctuations, as well as increases in raw materials, energy and 
shipping costs. In addition, the continuing COVID-19 restrictions 
mainly in China and Vietnam presented ongoing challenges to 
our manufacturing operations.

Lenses
Our lens business suffered a decrease in external revenue 
from $7.5m in 2021 to $4.3m in 2022, a reduction of 43%. 
Towards the end of 2021, the Group relocated its Norville lens 
manufacturing business from its old site at Magdala Road to a 
new state-of-the-art facility in Quedgeley, Gloucester. Whilst 
the construction of the new factory was completed on time and 
within budget, the relocation of the sensitive equipment from 
the old factory to the new one caused significant disruption in 
manufacturing capability, which in turn caused operating losses 
in the lenses segment to increase significantly, from $2.7m in 
2021, to $5.0m in 2022. Our first priority was to calibrate the 
machinery and ensure that the quality and lead time of the 
product came back within industry standards, and this was 
achieved in the latter half of 2022. During Q4 of 2022, our 
focus then turned to increasing our revenue and operational 
efficiency. This resulted in reduced losses in Q4 of 2022 which 
are expected to significantly reduce in 2023.

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C E O ’ S   R E V I E W  CONTINUED

Frames and Optics
Our frames and optics distribution business 
increased its external revenue from $211.5m in 
2021 to $214.7m in 2022, growth of 1.5%.

of our South Africa markets, and increased 
distribution in the Philippines. In 2023, the 
Group will continue to actively target further 
growth opportunities in this expanding market. 

UK: Our UK markets performed well in the 
second half of 2022. INSPECS’ strategy of 
replacing third-party distributors with own 
Group worldwide sales offices accelerated 
during the year and we expect this to continue 
to improve sales for the Group. The UK market 
remains positive so far in 2023 and we are 
continuing to increase our product distribution. 

Europe: Our European markets performed 
strongly in the first half of 2022. Towards the 
end of June 2022, we suffered headwinds 
principally in relation to a fall in consumer 
confidence which led to a reduction in our 
order intake in the latter half of 2022. Our cost 
base in Europe was also materially affected 
by the rapid decrease in the Euro against 
the Dollar which affected the operational 
performance of the business. 

North America: The US market remained 
stable in 2022. Our US companies are well 
positioned to increase revenue of Group 
products throughout 2023 and the eyewear 
market remains positive so far in 2023. Our US 
businesses are now fully engaged in selling 
leading brands such as Superdry, Radley and 
O’Neill, which were not available to them in 
earlier years.

Asia and Australia: In 2022, the Group 
continued to increase its distribution in Asian 
markets from a relatively low level, which was 
supported by the appointment of new agents 
for the Middle East. We saw increased growth 
in Australia and New Zealand, the reopening 

Wholesale
Our wholesale business which consists of our 
manufacturing facilities in Vietnam, China and 
Italy has had a good performance in 2022 with 
external revenue growth of 8%. We continue to 
invest in our facilities and expect construction 
of our new manufacturing facility in Vietnam 
to commence in the second half of 2023. 
Planning and development remains on-going 
for the factory in Portugal. These new facilities 
will allow us to increase production capacity, 
improve efficiency and bring new products 
to market more quickly. They will also be an 
important part of our efforts to expand into 
new markets and meet the growing demand for 
our products and services. The Board remains 
confident in the long-term strategic importance 
of these new facilities to our future growth and 
looks forward to works commencing.

Acquisitions
The Group made strong progress in integrating 
its most recent acquisitions, EGO Eyewear and 
BoDe Design, into the Group and putting our 
new brands to work across the organisation. In 
the first half of 2022, the Group continued with 
its acquisition strategy and identified further 
opportunities. This incurred significant legal 
and due diligence costs, however, due to the 
slowdown in our European markets and adverse 
currency exchange movements, together with 
continued losses at Norville, the Board took the 
decision to pause all acquisition processes in 
the second half of 2022. The Board continues 

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+3%

Eyewear units sales growth

to assess acquisition targets that would 
complement the Group’s existing portfolio 
and further enhance its proposition in 
the market. 

Top: Caterpillar

Middle left: Glemaud

Bottom left: Brendel

Bottom right: BOTANIQ®

+2.2pts

Gross profit margin growth

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C E O ’ S   R E V I E W  CONTINUED

Research and development 
Skunkworks, our research and development 
department, continues to develop an exciting 
and innovative business, supplying frames, 
lenses, and expertise to leading global 
technology firms. As a result, the business 
generated its first commercial revenues in 
2022, with further growth expected in 2023. 
The team’s focus on cutting edge technologies 
and new materials has been particularly 
successful and we are excited that several new 
product launches in frames and packaging will 
take place later this year.

Skunkworks has always been a key driver of 
innovation and growth within the business and 
we are confident that its continued success 
will play a significant role in driving our overall 
performance in the coming year. We are 
committed to investing in the development of 
new and innovative products and technologies 
and we believe that Skunkworks will be an 
important part of this effort.

Operational efficiencies
During the year, a number of cost reductions 
have been implemented to improve 
operational efficiencies. These included 
reductions in office space in Germany, the 
amalgamation of our two Hong Kong offices 
into one and the integration of International 
Eyewear Limited’s offices and warehouse 
operations with INSPECS Limited. 

The Group is also working on increased 
procurement efficiencies by consolidating our 
supply base where possible.

The integration of INSPECS Limited and 
International Eyewear Limited has subsequently 
strengthened INSPECS Limited’s capabilities in 
the independent UK eyewear market.

Market opportunity
Operating in a resilient growing market, 
selling optical frames, we are confident that 
our business model and strategy will enable 
us to capitalise on this growth. The push for 
proprietary brand products made in Vietnam 
and customers looking for new suppliers 
following consolidation of competitors, all plays 
to our strengths. Our global teams continue to 
work hard on synergising, from product design 
to manufacturing and ultimately distribution, 
meaning the Group is well placed to capitalise 
on future growth.

Environmental, Social & Governance 
Over the last 12 months our sustainability 
framework has been developed, clearly 
demonstrating the roadmap to our 
commitment to addressing critical 
environmental issues along with maintaining 
a positive environment for all our employees 
around the globe. Our focus on sustainable 
product and packaging is evident in the 
success of the Botaniq and O’Neill sustainable 
ranges. Our Group vision of ‘Always Looking 
Forward’ embeds itself into our Environmental, 
Social and Governance ‘ESG’, strategy and 
our purpose of innovation, commitment and 
integrity are reflected throughout. We consider 
ESG to be fundamental to the Group and 
further details regarding our sustainability 
framework are available on pages 24 to 31.

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Top left: Savile Row Gold

Bottom right: Jos

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C E O ’ S   R E V I E W  CONTINUED

CEO onboarding
Since taking over as CEO, I have focused on 
getting to know our business even better. 
I have met with many key customers and 
travelled to all of our major locations, travel 
restrictions allowing, including our showrooms 
and distribution centres in North America, 
our manufacturing factories in Vietnam and 
the UK, our sales and distribution facilities in 
Nuremberg, Germany, and our design centre 
in Lisbon, Portugal. My focus has been on 
building good working relationships with the 
key people at these locations and focusing on 
our revenues and costs to ensure a strong start 
to the new financial year.

A key strength of our Group has always been 
our people and I am very pleased with the 
standard and commitment of our teams in all 
of our territories. Our talented and dedicated 
employees are a key part of our success and 
I am confident that they will continue to drive 
our growth performance in 2023. Overall, I 
believe that our operations and management 
team are well positioned to navigate the 
challenges and opportunities that lie ahead, 
and I am committed to working closely with 
them to drive the continued growth and 
success of our Group.

Current trading
I am pleased to report that we have had good 
performance in Q1 2023 and are ahead of the 
same period in 2022. This was driven in part 
by a rebound in our European markets and 
continued growth in other markets.

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Outlook
Looking ahead, we are optimistic about the 
future growth and success of the Group. There 
are a number of exciting opportunities on the 
horizon, including the opening up of China, the 
upcoming launch of key brands, Barbour and 
Superdry in new markets like North America 
and Asia, and the strong performance of our 
proprietary brands; Titanflex, Humphrey’s, 
Botaniq, Savile Row and Jos. In addition, we 
have a good order book in our factories and 
are seeing synergies from making more of 
our own products in our own factories and 
combining locations across the world.

We will maintain our focus on driving revenues 
and controlling costs as we work to achieve 
our growth and profitability goals. We will also 
continue to invest in new technologies and 
innovations, as well as expanding our product 
offerings and services to meet the changing 
needs of our customers.

Overall, we are confident in our ability to 
navigate the challenges and opportunities that 
lie ahead, and we believe that our talented 
team and resilient business model will allow us 
to achieve continued success.

Richard Peck
Chief Executive Officer

03 May 2023

Top left: BOTANIQ®

Top right: Titanflex

Middle top left: Humphrey’s

Middle top right: Caterpillar

Middle bottom left: Division Meeting at INSPECS HQ

Middle bottom right: Viktor and Rolf

Bottom right: Savile Row Titanium

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M A R K E T   O V E R V I E W

During 2022, the eyewear 
market has not been immune to 
movements in the global economy. 
These movements include volatility 
in exchange rates, continued 
lockdowns and inflated prices.

Cost inflation of raw materials, shipping, distribution and operating costs 
continued to impact the eyewear industry. 

Adverse exchange movements have impacted several countries. 

Despite these impacts, the market remains resilient with strong 
growth forecast. 

The eyewear market is made up of spectacle lenses, eyewear frames, 
contact lenses and sunglasses.

Caterpillar

By 2027 the global eyewear market is 
expected to grow to

$168bn

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Highlights
•  Revenue in the Eyewear market amounted to US$122.0bn in 2022 and is forecast to 

grow to US$141.5bn in 2023. Following this, the market is expected to grow annually 
by 4.4% (CAGR 2023-2027).

•  The market’s largest segment is the Spectacle Lenses segment, followed by the 

Eyewear Frames segment, with market volumes of US$59.0bn and US$39.6bn 
respectively forecast in 2023.

• 

• 

• 

In the global comparison, most revenue is generated in the United States (US$33.8bn), 
followed by China (US $15.1bn) and Germany (US $8.5bn) forecast for 2023.

In relation to total population figures, per person revenues of US$18.43 are forecast 
to be generated in 2023 compared to US$16.02 generated in 2022. 

In the Eyewear market, volume is expected to amount to 10.7bn pieces by 2027 from 
8.5bn in 2022. 

•  The average volume per person in the Eyewear market is expected to amount to 

1.3 pieces in 2023.

•  By 2023, 85% of sales in the Eyewear market will be attributable to non-luxury goods.

(Source: Statista)

Global eyewear market value in US Dollars

2027

2026

2025

2024

2023

$168bn

$161bn

$154bn

$148bn

$142bn

Global Eyewear 
market
Market share by  
product (US$bn)

Contact Lenses  £15.73bn

Eyewear Frames  £34.31bn

Spectacle lenses  £50.87bn

Sunglasses 

£21.07bn

Source: Statista – Nov 2022

4.4%

Compound annual growth 
expected from 2023 – 2027

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C H I E F   F I N A N C I A L   O F F I C E R ’ S   R E V I E W

Whilst the Group had a positive H1 
with sales of $138.4m and an Adjusted 
Underlying EBITDA of $15.1m, the Group 
suffered from the continuing uncertainty 
in Ukraine and a slowdown in our 
European markets in H2. 

Chris Kay, CFO

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Combined with a rapidly decreasing Euro against the US Dollar, 
and continued losses at Norville, this meant our H2 performance 
was not in line with our expectations. 

The Group has taken action to reduce non-operational 
costs, and is working on strategic efficiencies across the 
Group to increase our key performance indicator of Adjusted 
Underlying EBITDA. 

Our FY22 results showed an increase in sales from $246.5m to 
$248.6m. The Group delivered Adjusted Underlying EBITDA 
of $19.2m (FY21: $27.6m). 

On a constant currency basis* our sales increased from $246.5m 
to $265.7m an increase of 8%.

Reported loss before tax of $9.5m (FY21: $9.1m) is after 
incurring a PPA release on inventory ($0.2m) (FY21: $6.0m), 
exchange adjustments on borrowings ($2.5m) (FY21: $5.4m) 
and impairment of intangible assets ($0.0m) (FY21: $3.4m). 

The Group along with its advisers, has discussed a change 
in the Group’s reporting currency for 2023. As such the Group 
will report its interim numbers to 30 June 2023 in Pounds 
Sterling, with a summary of the results in US Dollars for 
comparative purposes.

The Group delivered Adjusted 
Underlying EBITDA of

$19.2m

(FY21: $27.6m).

*  Constant exchange rates: figures at constant exchange rates have 
been calculated using the average exchange rates in effect for the 
corresponding period in the relevant comparative year.

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C F O ’ S   R E V I E W  CONTINUED

Revenue

Gross profit

Underlying operating expenses

Adjusted Underlying EBITDA

Share based payment expense

FY22
$’000

248,577

122,286

FY21
$’000

246,471

115,772

(103,083)

(88,216)

19,203

(1,729)

27,556

(1,484)

Depreciation, amortisation and impairment of intangible assets

(16,868)

(18,450)

Earnout on acquisitions

Loss on acquisitions in year

Purchase price adjustment

Operating (loss)/profit before non-underlying costs

Reconciliation to reported results

Operating (loss)/profit before non-underlying costs

Non-underlying costs

Exchange adjustments on borrowings

Share of associate profit/(loss)

Net finance costs

Loss before tax

Tax credit

Loss after tax

(1,909)

–

(164)

(1,467)

(1,467)

(1,814)

(2,528)

23

(3,695)

(9,481)

1,665

(7,816)

–

(90)

(5,991)

1,541

1,541

(2,588)

(5,418)

(10)

(2,657)

(9,132)

3,697

(5,435)

Revenue
Total revenue for the year was $248.6m, an increase of $2.1m from $246.5m in 2021. On 
a constant currency basis revenue increased from $246.5m to $265.7m, an increase of 8%. 
Excluding the acquisitions of BoDe Designs and EGO Eyewear in December 2021, revenue 
increased from $246.2m to $252.4m on a constant currency basis, an increase of 3%.

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Gross margin
The Group’s gross margin overall 
was 49.2% compared to 47.0% in 2021, 
an increase of 220 basis points from the 
previous year. This increase was partly due 
to the mix of sales between independent 
opticians and our traditional chain 
business. The Group has continued to be 
able to introduce price increases on new 
products and has continued to control costs 
across its supply chain where possible, 
resulting in an overall improvement 
in margins.

Adjusted Underlying EBITDA
The Group targets Adjusted Underlying 
EBITDA as its key operating performance 
indicator. Our Adjusted Underlying EBITDA 
decreased by $8.4m, from $27.6m to 
$19.2m, a decrease of 30% in 2022. The 
decrease was primarily caused by three 
main factors. Firstly, the continued losses at 
Norville. Secondly, the effects of the decrease 

in the value of the Euro against the Dollar, 
particularly in the first ten months of the year. 
Thirdly, a slowdown in our European markets. 
German consumer confidence fell to a 25 
year low in October 2022, and this impacted 
the order intake in Q3 and Q4 of 2022.

Operating expenses
Our operating expenses increased from 
$114.2m in 2021, to $123.8m in 2022. 
Excluding the acquisitions made in 2021, 
our total operating expenses increased 
from $114.1m to $117.0m, an increase of 
$2.9m or 3%. Our administrative expenses, 
excluding acquisitions, increased by 13%. 
This reflects the reversal of the reduced 
costs of the group in Q1 and Q2 of 2021 
due to COVID restrictions.

The Group has implemented a cost 
reduction strategy on non-operational 
costs in Q4 of 2022 to drive our Underlying 
EBITDA margin in the future.

Year Ended
31 December 2022
$’000

Acquisitions
EGO & BoDe 
$’000

Year Ended
31 December 2022
$’000

Adjusted  

248,577

122,286

7,783

61,552

54,418

12,842

3,734

62

2,318

4,440

235,735

118,552

7,721

59,234

49,978

Adjusted Year Ended  
31 December 2021 
excluding EGO  

& BoDe
$’000

Percentage 
change

246,233

115,744

7,792

62,111

-4%

2%

-1%

-5%

44,178

13%

123,753

6,820

116,993

114,081

3%

Revenue

Gross profit

Distribution

Wages & salaries

Administrative

Total operating 
expenses

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C F O ’ S   R E V I E W  CONTINUED

The table below sets out our operating costs, adjusted for the acquisitions of BoDe Design 
and EGO Eyewear, as a percentage of revenue. 

Adjusted Year Ended 
31 December 2022
$’000

Percentage
of revenue

Adjusted Year Ended
31 December 2021
$’000

Percentage
of revenue

235,735

118,552

7,721

59,234

49,978

–

50%

3%

25%

21%

246,233

115,744

7,792

62,111

44,178

–

47%

3%

25%

18%

Revenue

Gross profit

Distribution

Wages & salaries

Admin

Loss before tax
In 2022, the Group made a statutory loss before tax of $9.5m (FY21: loss $9.1m), an increase 
of $0.4m. The Group made an Adjusted Underlying EBITDA of $19.2m (FY21: $27.6m).

Key items impacting the current 
year’s results are as follows:

Depreciation and amortisation

The Group’s depreciation and amortisation 
charge is set out below. Amortisation costs 
principally arise on the capitalisation of 
customer relationships and order books 
on acquisitions.

31 December 
2022 
$m

31 December 
2021 
$m

Depreciation
Amortisation

Total

8.4
8.5

16.9

7.4
7.6

15.0

Exchange adjustments on borrowings

The exchange adjustment on borrowings 
primarily relates to intragroup loans, where 
the functional currency of the entities differs 
from the loan currency and presentational 
currency. This exchange adjustment also 
relates to the revolving credit facility held in 
Euros and USD. 

Share based payment expense
The Group has a LTIP scheme in place that 
vests over a period of three years from the 
date of the grant of the option at market 
value, and is subject to the continued 
employment of the individual over that 
period. The Group has recognised a 
non-cash charge of $1.7m in 2022 (FY21: 
$1.5m). The scheme is designed to give 
the equivalent of one year’s salary to an 
individual over that three year period. 
Details of all options granted are shown 
in note 32 to the accounts. No nil-cost 
options have been granted to date. The 
Remuneration and Nomination Committee 
is currently reviewing the option scheme 
with outside advisers.

Adjusted Underlying EBITDA

Non-cash adjustments 

1. Depreciation and amortisation

2. Purchase Price Allocation (‘PPA’) release on inventory

3. Intangible asset impairment

4. Exchange adjustments on borrowings

5. Share based payment expense

6. Earnout on acquisitions

7. Other

Sub-total

Non-underlying costs 

Net finance costs

Loss before tax 

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2022
$m

19.2

(16.9)

(0.2)

–

(2.5)

(1.7)

(1.9)

–

(4.0)

(1.8)

(3.7)

(9.5)

2021
$m

27.6

(15.0)

(6.0)

(3.4)

(5.4)

(1.5)

–

(0.1)

(3.8)

(2.6)

(2.7)

(9.1)

+8%

Revenue increase on a 
constant currency basis 

L.A.M.B.

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C F O ’ S   R E V I E W  CONTINUED

Earnout on acquisitions

Non-underlying costs

The acquisitions of EGO Eyewear and BoDe 
Designs in December 2021, both contain 
amounts due for contingent consideration, 
based on the performance of those 
businesses. In the year 2022, the amounts 
payable under the agreements amounted 
to $1.9m, and have been charged to the 
profit and loss account in accordance with 
IFRS 3. Further contingent consideration 
is expected to arise in 2023, and 2024, 
and will be subject to the performance of 
those businesses.

Net Finance Costs

Bank loan interest increased by $0.4m 
primarily due to rising interest rates 
during the year. The amortisation of loan 
transaction costs relates to the refinancing 
charges that are amortised over the period 
of the financing facilities available to 
the Group. 

The Group incurred $1.8m of non-underlying 
costs in 2022 (2021: $2.6m). During the year 
the Group incurred fees relating to potential 
acquisitions amounting to $1.1m. The Group 
also incurred restructuring costs of $0.5m 
which related to the amalgamation of our 
Hong Kong offices and the rationalisation of 
our warehousing facilities and offices in the 
UK following the integration of International 
Eyewear with INSPECS.

Prior year adjustment
Following the acquisition of EGO 
eyewear and BoDe design, a deferred 
consideration liability was created. 
Following a review in 2022 it has been 
determined that the contingent part of the 
deferred consideration is to be treated as 
remuneration. The deferred consideration 
creditor of $5.4m is no longer required. We 
have therefore restated our 2021 statement 
of financial position to reflect this. There 
is no profit or cash impact as a result of 
this adjustment.

Bank Loan Interest

Invoice Discounting

IFRS 16 lease interest 

Interest Receivable

Net Finance Cost

Amortisation of loan transaction costs

Total net finance costs

2022 $m

2021 $m

2.2

0.1

0.6

(0.1)

2.8

0.9

3.7

1.8

0.1

0.5

(0.1)

2.3

0.4

2.7

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Cash position
During the year, the Group generated $12.4m in cash flows from operating activities 
(2021: $24.9m). The cash generated from operating activities was reduced by an increase 
in working capital of $5.8m in 2022 as opposed to a reduction of $7.2m in 2021. The 
Group has used the cash generated to continue to invest in new plant and equipment, 
and to enhance the Group’s long-term growth strategy. An analysis of how the Group has 
deployed its free cash flow in the year is set out below.

Cash and cash equivalents at the beginning of year

Net cash from operating activities

Net cash used in investing activities

Net cash (used in)/from financing activities

(Decrease)/increase in cash and cash equivalents

Foreign exchange movements in the year

31 December
2022 
$’000

31 December 
2021 
$’000

29,759

5,077

(4,189)

(4,398)

(3,510)

550

23,776

20,017

(15,661)

1,704

6,060

(77)

Cash and cash equivalents including overdrafts at the year end

26,799

29,759

The breakdown of net cash used in investing activities is 

Purchase of intangible fixed assets

Purchase of property, plant and equipment

Acquisition of subsidiaries, net of cash acquired

Purchase of shareholding in associate

Interest received

(1,042)

(3,193)

–

(88)

134

(1,508)

(6,137)

(8,134)

–

118

Net cash used in investing activities

(4,189)

(15,661)

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Current asset ratio

The current asset ratio is a liquidity ratio that measures a company’s ability to pay its short-
term obligations, or those due within one year.

C F O ’ S   R E V I E W  CONTINUED

Working capital
The Group closely monitors its working capital position to ensure that it has sufficient 
resources to meet its day-to-day requirements and to fund further investing activities to 
supply its customer base. 

Debtors

Year ended 31 December 2022

Year ended 31 December 2021

Total

30 Days

60 Days

90 Days

Total

30 Days

60 Days

90 Days

Debtors ($)

27.4m 18.5m

4.7m

4.2m 29.4m 18.4m

6.6m

4.4m

Percentage

100

68

17

15

100

63

22

15

Inventory

Our sales to inventory ratio decreased from 4.4 to 4.3. The Group constantly monitors its 
working capital position, with a view to increase the sales to inventory ratio where possible.

Turnover

Inventory

Sales to inventory ratio

Loan Reclassification

31 December
2022 
$m

31 December 
2021 
$m

248.6

58.3

4.3

246.5

55.7

4.4

Current assets

Current liabilities

Ratio

Current assets

Current liabilities 

Loan in technical breach 

Adjusted current liabilities

Adjusted ratio

As at 31 December 2022, it was determined that INSPECS Limited, who holds the revolving 
credit facility on behalf of the Group, was in technical breach of its cashflow cover loan 
covenant. This has resulted in the reclassification of the loan balance ($45.7m) to a current 
liability in line with IAS 1. Subsequently, the bank has waived the cashflow cover and leverage 
covenants at 31 December 2022. The following ratios include an adjusted ratio to show the 
effect of this loan reclassification. On page 23 we include a KPI of adjusted net current assets. 
This reflects the Group’s current assets minus the adjusted current liabilities calculated to 
the right.

1.5

Adjusted current asset ratio

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Year ended 
31 December
2022 
$m

Year ended 
31 December 
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$m

127.2

129.4

1.0

131.1

82.9

1.6

Year ended 
31 December
2022 
$m

Year ended 
31 December 
2021 
$m

127.2

129.4

45.7

83.7

1.5

131.1

82.9

–

82.9

1.6

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C F O ’ S   R E V I E W  CONTINUED

Quick ratio

Net debt

The quick ratio is an indicator of a company’s short-term liquidity position, and measures 
a company’s ability to meet its short-term obligations with its most liquid assets.

The Group’s opening net debt, including and excluding lease liabilities, is shown below. 
During the year the Group increased its net debt excluding leases from $32.7m to $33.4m. 

Current assets

Less inventory

Current liabilities

Ratio

Year ended 
31 December
2022 
$m

Year ended 
31 December 
2021 
$m

127.2

(58.3)

68.9

129.4

0.5

131.1

(55.7)

75.4

82.9

0.9

As described above, the table below shows the effect of the movement of the bank loans 
to current, from due after one year.

The Group has significant cash reserves, resulting in the net debt position as set out below.

Cash at bank

Borrowings

Lease liabilities

Net debt

Net debt (excluding lease liabilities)

Year ended 
31 December
2022
$m

Year ended 
31 December 
2021
$m

26.8

(60.2)

(24.2)

(57.6)

(33.4)

29.8

(62.5)

(22.4)

(55.1)

(32.7)

Year ended 
31 December
2022 
$m

Year ended 
31 December 
2021 
$m

127.2

(58.3)

68.9

83.7

0.8

131.1

(55.7)

75.4

82.9

0.9

Current assets

Less inventory

Adjusted current liabilities

Adjusted ratio

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$26.8m

Cash at bank

Viktor & Rolf

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C F O ’ S   R E V I E W  CONTINUED

Financing
The Group finances its operation through the following facilities.

Group revolving credit facility

Term loans

Revolving credit facility USA

Invoice discounting

Total

Amount 
$m

37.0

18.7

10.0

3.0

68.7

Expires

October 2024

October 2024

1-year rolling

1-year rolling

Drawn at 
31 December 
2022 
$m

36.4

13.3

8.7

1.8

60.2

Leverage (using debt to equity ratio)

The Group’s leverage position is shown below including and excluding leasing finance:

Including leasing finance

Excluding leasing finance

Required ratio

2022

2.24

2.07

2.25

2021*

1.51

1.34

2.0

* 

 The Group’s 2021 leverage ratios have been restated, to reflect the agreement by HSBC that interest on 
property leases is excluded from the leverage calculation as agreed in October 2022. 

The Group’s leverage is constantly updated, and a rolling projection for 12 months is 
reviewed to ensure compliance with the Group’s covenants. In January 2023, the Group’s 
bankers HSBC, waived its leverage ratio requirement at the 31 December 2022 and 
raised its leverage test to 3.0 for the three quarters to 30 September 2023. The maximum 
leverage ratio requirement will reduce to 2.25 at 31 December 2023 and for subsequent 
quarters until the facility matures in October 2024.

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Earnings per share

Year ended 31 December 2022

Basic loss per share

Diluted loss per share

Adjusted PBT basic EPS

Adjusted PBT diluted EPS

Basic weighted 
average number 
of Ordinary Shares 
(‘000)

Total earnings/
(loss)
$’000

Earnings/(loss) 
per share
$

101,672

107,554

101,672

107,554

(7,816)

(7,816)

8,139

8,139

(0.08)

(0.08)

0.08

0.08

Dividend
The Group does not intend to pay a dividend for the year ended 31 December 2022. A 
dividend of $1.6m was paid during 2022 in respect of the year ended 31 December 2021.

Going concern
The Directors have undertaken a comprehensive assessment of the Group’s ability to trade 
out to 30 June 2024. Details of this are given in the Directors’ report on pages 60 and 61. 
Taking this into consideration, the Directors have a reasonable expectation that the Group 
and the Company have adequate resources to continue to trade throughout the review 
period. Therefore, the Directors continue to adopt the going concern basis in preparing 
the consolidated and Parent Company financial statements.

Chris Kay
Chief Financial Officer

03 May 2023

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K E Y   P E R F O R M A N C E   I N D I C AT O R S

Our business focuses on eight key performance 
indicators that are used by the Board and senior 
management to review future outcomes and the 
successful delivery of the Group’s overall strategy.

Revenue

$248.6m

Adjusted net current assets

$43.5m

Gross profit

$122.3m

Adjusted Underlying EBITDA

$19.2m

2022

2021

2020

+1%

$248.6m

$246.5m

$47.4m

2022

2021

2020

‑10%

$43.5m

$48.2m

$56.2m

2022

2021

2020

+6%

$122.3m

$115.8m

$20.5m

2022

2021

2020

‑30%

Gross profit margin

49.2%

2022

2021

2020

49.2%

47.0%

43.3%

+220 Basis points

Eyewear units sold

10.7m

2022

2021

2020

+3%

Adjusted PBT diluted EPS

Net cash from operating activities

$0.08

$5.0m

10.7m

10.4m

4.9m

2022

2021

2020

‑53%

$0.08

$0.17

$0.04

2022

2021

2020

‑75%

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$19.2m

$27.6m

$5.8m

$5.0m

$20.0m

$(0.75)m

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E N V I R O N M E N TA L ,   S O C I A L 
A N D G O V E R N A N C E

As detailed in our 2021 Annual 
Report, we have set out our 
goals to ensure we are doing 
the best we can for the planet, 
our customers, our employees 
and all our stakeholders. 

Planet
As a Group, our global offices to be carbon neutral by 2030 
(Scope 1 & Scope 2).

People
Each of our major operations to engage with 
local community projects each year.

Packaging
100% recyclable by 2025.

Product
Innovative development projects to increase 
our sustainable product offering.

Procurement
Collaborate with our key suppliers to integrate ESG best 
practice and enhance supply chain sustainability.

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Environmental

What we can do, what we will do and 
what we are doing to make INSPECS 
Group a leading environmentally 
responsible eyewear company.

For more on Environmental see pages 25 to 27

Social

We are committed to the continued 
building of our positive and 
inclusive culture.

For more on Social see pages 28 to 30

Governance

We want to make sure we always act in 
the best interests of our stakeholders in 
the business, improve our performance 
and unlock new opportunities. 

For more on Governance see page 31

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BOTANIQ®

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We have continued our tree planting initiative by 
working with Ecologi and their planting partners.  
Over 2,500 trees were planted in the UK in early 2023. 
Over time these trees will help to remove carbon from 
the atmosphere and contribute towards enhancing  
air quality. 

Environmental

We have set clear priorities 
for our business and continue 
to look for ways to improve 
as we evolve.

We have worked with Ecologi and First Climate 
on renewable energy projects in Sri Lanka and 
Vietnam to help towards offsetting our Group’s 
carbon emissions. The purpose of the projects is 
to generate clean electricity through the utilisation 
of wind energy and hydropower. Over and above 
the direct environmental benefits, the projects also 
create employment opportunities.

2022 has been a year where we have been 
able to embrace our ESG roadmap by building 
on our reporting data with Diginex and 
the entities across the group, taking steps 
to reduce our environmental impact and 
introducing new emission offsetting projects 
with Ecologi and First Climate.

Our ESG best practice is to integrate 
sustainability, so it becomes a seamless 
consideration in all that we do. With strong 
social and governance frameworks, we have 
the ability to offer sustainable solutions with 
packaging and product. With our collaboration 
throughout the Group, we are able to bring 
innovative environmental solutions to our 
customers to firmly cement our place in the 
future of sustainable eyewear. 

Its been really positive to be a part of adding 
back to the community and the world around 
us. The focus for our community projects for 
2022/2023 has been the environment and eye 
health (detailed on pages 28 and 29). 

As the world of ESG grows so does the 
understanding of our teams around the globe. 
We held our first ESG Committee meeting with 
two members of the Board, the Group ESG, 
Compliance and Risk Officer, and the Head 
of Innovations. Being able to work together 
to improve what we do and how we do it is a 
positive change for all our futures. We aim to 
support our employees, our customers and our 
key stakeholders to a world of always looking 
forward and building better. 

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The collation of our Group emission data 
commenced in a year where we were hit 
by the pandemic. Whilst the pandemic has 
changed the way we operate with more 
working from home options and fewer 
face-to-face meetings, we recognise the 
importance of travel. During 2023, we will 
continue to work with all our manufacturing 
and office sites to review how we can minimise 
emissions and costs to include recycling more, 
conscious travelling, targeted procurement 
and waste control. 

Our ESG framework is based on the core 
elements of the Global Reporting Initiative 
(GRI), the emissions data as per Streamlined 
Energy and Carbon Reporting (SECR), and 
in-line with the UN’s Sustainability goals. As 
we move into 2023 our focus will be building 
on our current framework for the Task Force 
for Climate-related Financial Disclosure 
(TCFD) reporting.

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E N V I R O N M E N TA L  CONTINUED

Streamlined Energy and Carbon Reporting (SECR) Greenhouse Gas emissions 
(tCO2e) and Consumption (kWh) Totals:

The total consumption (kWh) figures for energy supplies reportable are as follows: 

Global GHG emissions data

Scope 1

Combustion of fuel (stationary and mobile), process 
emissions and refrigerants

Scope 2

Electricity purchased and heat and steam generated for own use:

Unit

2022 2021 (Restated)

Utility and Scope

tCO2e

1,361.37

1,197.80

Fleet Transportation (Scope 1)**

Grid-Supplied Electricity (Scope 2)

Gaseous and other fuels (Scope 1)*

Business Transportation (Scope 3)**

Leased assets (Scope 3)***

Location based

Market based

Scope 3

tCO2e

tCO2e

3,154.93

3,186.69

Total

2,812.14

2,736.25

  Excludes refrigerants as the data cannot be converted to kWh. 

* 
**    Excludes non-car business travel as the data cannot be converted to kWh. 
*** Excludes water as the data cannot be converted to kWh.

2022 Consumption 
(kWh)

2021 Consumption 
(kWh) (Restated)

6,160,806

1,277,010

4,600,440

255,842

1,307,846

6,068,841

1,262,675

3,970,786

173,525

1,348,909

13,601,944

12,824,736

Business travel, water supply and treatment, transmission 
and distribution losses from purchased electricity, upstream 
leased assets

Total GHG emissions – location based

Total GHG emissions – market based

tCO2e

tCO2e

tCO2e

728.35

579.97

5,244.65

4,964.46

4,901.85

4,514.02

2021 scope 1 and scope 3 data has been re-stated to account for a reporting discrepancy which overstated fleet vehicle 
mileage for one of our sites along with their district heat and steam consumption figures for a leased building.

The location-based method reflects the average emissions intensity of grids on which energy consumption occurs (using 
mostly grid average emission factor data). The market-based method reflects emissions from electricity that companies 
have purposefully chosen, using source or supplier-specific emission factor where available.

The emissions stated are for our global operations that span the UK, Europe, United States of 
America and Asia. Our UK and offshore GHG emissions (location-based) for 2022 is 608.51 tCO2e. 

Our emissions data covers our subsidiaries where we have operational control. Unless otherwise 
stated, all figures cover the period from 1 January to 31 December 2022. The data in 2021 does 
not include EGO Eyewear and BoDe Design due to the timing of the acquisitions. 

Scope 1, 2 and 3 emissions (tCO2e): This reporting period vs previous 
reporting period 

1,361.4

1,197.8

Scope 1

2022

2021

Scope 2

2022

2021

Scope 3

2022

2021

728.4

579.97 

3,154.9

3,186.7

BOTANIQ®

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E N V I R O N M E N TA L  CONTINUED

Methodology
We have calculated our 2022 carbon footprint using the fundamental principles of the GHG 
Protocol, which is the internationally recognised standard for corporate carbon reporting. We 
have used a bottom-up consumption/activity-based approach to calculate emissions across all our 
sites globally. We calculate our direct emission figures using actual consumption data from smart 
meters, accurate meter readings and invoicing, access to this type of data is not always possible. 
Where data was not available, electricity and water consumption were estimated using a kWh or 
cubic meter per full time employee factor, 0.38% of total emissions reported is from estimated 
source data. 

SECR Commitment
In 2022, over 55% of our total global emissions were generated by our factories in Vietnam and 
China. Our factories have worked hard to identify opportunities to improve energy efficiency 
throughout 2022. Our factory in China upgraded less efficient machinery and equipment with new 
efficient models to reduce electricity consumption. Our factory in Vietnam installed LED lighting 
in their production area and installed electricity meters in each department to more accurately 
measure energy consumption. The energy consumption of each department will be closely 
monitored during 2023 and beyond, and improvement plans will be implemented where possible. 

As a Group we have continued with our focus on regular servicing and maintenance of 
equipment, installing LED lighting where possible and encouraging our teams to switch off lights 
and equipment when not in use. We are exploring other ways to improve the efficiency of the 
buildings we own and reduce energy loss. Building efficiency will remain a consideration for the 
Group when purchasing or leasing a space for the first time and when renewing any existing lease 
arrangements. We will continue to review our sites, particularly our factories, to ensure we are 
improving the efficiency of our processes. 

Intensity Ratio

Scope 1 and Scope 2  
Emissions per $1m turnover (tCO2e)

Scope 1 and Scope 2  
Emissions per full time equivalent employees (tCO2e)

2022

2021 (Restated)

18.17

2.59

17.79

2.62

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4,539 tCO2e 

offset through renewable  
energy projects

O’Neill

 Over

28,600

frames distributed to charities 
in 2022

BOTANIQ®

BOTANIQ®

O’Neill

2022 Carbon Emissions by Region

Europe

UK

China 

Vietnam 

Japan

USA

2.59

Emissions per full time 
equivalent employees (tCO2e)

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Social

We are committed to building a 
positive and inclusive culture.

Community

Our role in the community is very important to us. Our local community is a source of 
recruitment, supports our infrastructure, and being part of local projects helps us feel 
part of the community around us. Across the Group we have embarked on various 
projects in 2022/2023 to be able to give a little back. Here are a few examples. 

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Norville VCHP Partnership
Our manufacturing site in Gloucester 
works closely with Vision Care for 
Homeless People (VCHP), a UK-wide 
charity. Norville provides glazing for 
VCHP Gloucester Clinic and assists in 
pop-up clinics in surrounding areas. 
Norville supplies the lenses and 
glazes the frames to support people 
in the local community. The team at 
Norville are committed to assisting 
the charity in meeting the visual needs 
of homeless and vulnerable people in 
the community. 

Norville Lens Factory

INSPECS Ltd – The Conservation Volunteers (TCV) 
INSPECS collaborated with The Conservation Volunteers (TCV) to provide the team with the opportunity to 
volunteer in projects that benefit the local community. The INSPECS Limited team spent the day outdoors planting 
raised flower beds and preparing ground for a wildflower meadow at a community sports centre in Bristol, where 
they are currently implementing a green space for the local community to use and enjoy. Each of the team enjoyed 
giving back to the community whilst engaging with colleagues and being more connected with nature. 

Tura – Donation projects
In 2022, Tura worked with Canadian Vision Care 
(CVC) and donated 4,600 frames. CVC work with 
various projects in developing countries providing 
primary eye care to individuals around the world. This 
year Tura have also worked with ‘Bags of Love’ who 
have been established for 15 years helping children 
in crisis. Bags of Love provide children with essentials 
and toys and Tura are proud to be able to donate 
sunglasses for teens. 

Eschenbach Optik 
Eschenbach Optik is supporting the aid organisation 
BRILLEN-ohne-GRENZEN who distribute frames and 
sunglasses to help projects in developing countries 
across Africa, Asia and South America. At the end 
of 2022, Eschenbach delivered 24,000 frames, 
which included a wide range of children’s and 
adult’s eyewear, with an average retail value of over 
€1.4 million. 

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S O C I A L  CONTINUED

Collaboration

Great people, innovation and a hunger 
for excellence is at the heart of  
what we do. 

We already run a successful intern programme 
with Eschenbach at our Nuremberg offices. 
We seized the opportunity to expand on 
great people and new ideas and started 
work with the University of Bath in the UK 
this year. In our Group Skunkworks team, 
we have a Mechanical Engineering student. 
This placement is helping the team explore 
new product materials across their innovative 
project work, CAD modelling of new 
technologies, and sustainable packaging 
replacement concepts.

At our Norville site in Gloucester, we have 
a Chemical Engineering student who is 
working in the testing and coating labs and 
investigating new technologies and methods 
of application. This research and development 
work is proving to be extremely beneficial to 
the current processes. Building knowledge with 
the new manufacturing machinery is opening 
new opportunities within our Group.

We want to develop our inclusive culture and 
provide opportunities and accessible training 
where students can be themselves and bring 
new ideas to an environment where they feel 
supported. We look forward to exploring other 
opportunities in the future.

INSPECS & Eschenbach Co-Working

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INSPECS Finance Team Co-Working

Health & Safety

We all want to keep our employees and 
visitors safe. Running any business leads 
to an element of Health & Safety reporting 
and actions. At INSPECS we have four 
manufacturing sites and many distribution 
centres, so we work hard to keep all our sites 
safe. Health & Safety remains on the standing 
agenda for our Board meetings, and we 
continue our regular assessments and external 
reviews to ensure we comply with legislation 
and maintain a safe working environment. 

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Focus groups

We have already made significant steps 
forward with the team’s involvement in 
collecting emissions and social data for the 
Group’s ESG reporting. To continue with our 
collaboration for 2023, we will be setting 
up ‘focus’ groups. This will provide the 
opportunity for our teams to have a greater 
voice and grow our ideas to truly engage in a 
better environment for us all. Not only will the 
focus groups look at environmental projects, 
they will also review the social aspect of 
working for the Group and the possible new 
opportunities ahead. 

We continue to track all accidents internally 
and discuss these at Board level. For the 
purposes of our external reporting, we 
will continue to report using the RIDDOR 
classification standard across the Group. For 
2022, we had no significant incidents at any of 
our sites. All accidents are investigated, and 
refresher training provided as necessary along 
with any updates to our safety procedures.

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S O C I A L  CONTINUED

Diversity, Equity and Inclusion

Our employees represent different nationalities, cultures, backgrounds, gender and 
sexual orientations. 

We are determined to foster a culture of equity  
and mutual respect where all our employees feel 
valued and their contributions recognised. As 
a group we have a diverse workforce, and the 
Board will continue to engage in discussion for 
a greater balance in gender and ethnic diversity 
within our leadership teams. We have further 
enhanced our efforts to ensure an inclusive 
culture and have worked hard on our Code 
of Conduct to ensure a united policy where 
everyone is treated fairly and with respect. 

We will continue to listen to our employees 
and respond to employee needs on an 
ongoing and real-time basis.

The Group is an equal opportunity employer 
and follows all applicable laws. We value the 
contributions, perspectives, and talents of 
all the individuals in our global workforce. 
The Group will not allow any discrimination 
in any of its business operations nor engage 
with other organisations where such activity 
is detected. 

Retention and a balanced workforce is really 
important to us. Reviewing the employee 
mix indicators helps us asses our people 
management practices. 

Board
Total

2022

2021

Female

2022

2021

1

1

Male

2022

2021

7

6

6

5

Total employees
Total

2022

2021

Female

2022

2021

Male

2022

2021

1,732

1,672

1,160

1,187

572

485

INSPECS Development Team

Employee mix

Board 
Diversity  
2022

Board 
Diversity  
2021

Employee 
Diversity  
2022

Employee 
Diversity  
2021

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Male

Female

Length of 
service

38% < 2 years’ service

62% > 2 years’ service

Category

Age

60% Production

25% Operational sales

15% Administration

9% < 30 years

67% 30-50 years

24% > 50 years

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Governance

The Board plays a key role in 
developing the direction of 
ESG within the Group. 

BOTANIQ®

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ESG has been on the Board standing agenda since 2021. The ESG Committee has now 
been formed, with its first formal meeting in November 2022. 

The ESG Committee comprises of three 
Non-Executive Directors, Angela Farrugia 
(Chair), Hugo Adams and Christopher 
Hancock, along with the Group ESG, 
Compliance and Risk Officer, Angela Eman, 
and the Head of Innovations, Nick Youle. 
The committee will meet at least twice a 
year and draws on the expertise around 
the business as required. Key areas that the 
Committee will be focusing on:

•  Approach, development, strategy 

and implementation for ESG initiatives.

•  Review reporting and governance 
performance and execution. 

•  Advise on appropriate, relevant 

and effective polices and 
legislative requirements. 

•  Approve projects and investment 
in line with the ESG roadmap. 

In 2022, the Group completed a review 
of its Anti-bribery and corruption (ABC) 
policy and associated processes. The 
Group takes a zero-tolerance approach to 
bribery and corruption. We circulated our 
ABC questionnaire to the Board, executive 
team, senior teams and all those deemed 
necessary based on customer, supplier and 
third-party contact. A review of the data has 
been completed and targeted training will 
be provided during 2023 to continue our 
full compliance with the ABC policy. 

In line with governance controls and 
environmental reporting we are launching 
a trial in our UK head office and with 
INSPECS Ltd to use an app to record and 
report on expenses. With less paperwork 
and reduced manual data entry it will be a 
time efficient process for finance and will 
add greater control with clear authority 
checkpoints. It will also accurately capture 
the data for our emissions calculation, 
such as business travel data for scope 3 
emissions reporting. If successful, we will 
be able to roll this app out to other parts 
of the Group. 

We have developed our Group Code of 
Conduct and its associated polices. As the 
Group continues to evolve our commitment 
to upholding the highest ethical and 
legal standards remains paramount. Our 
Code of Conduct is designed to give 
guidance on our polices. We have a wide 
and diverse footprint, so the document is 
not set to cover everything but to give a 
Group guide and set out our principles. We 
expect everyone to promote a culture of 
transparency and an environment where we 
all feel comfortable raising questions and 
reporting concerns. 

BOTANIQ®

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Skunkworks 
INNOVATION

02

New Material  
Generation

03

Smart Eyewear 
Development

Continued investigations to develop new 
polymers for the eyewear industry and new 
packaging solutions

Further exploring opportunities within this arena, 
working in collaboration with multiple providers to 
gain a foothold within the field of technology

01

Innovative Eyewear Collections

Totally unique Gaming range consisting of 
original design work, technical features, highly 
specialised gaming lenses and packaging, all 
presented as a complete solution

04

Lens Technology

Utilising the 
knowledge and 
expertise at Norville to 
develop new concepts

05

ESG Support

Environmental, Social and Governance 
support regarding packaging solutions 
and community projects

We at INSPECS pride ourselves on 
our innovative approach. Creative 
evolution is at the forefront of 
everything we do. Unafraid to break 
the traditional status quo within 
the eyewear industry, INSPECS 
challenges both material and 
technological barriers, eliminating 
them through forward thinking 
design and radical cutting-
edge ideation. 

With the confidence to take on 
ambitious goals, coupled with 
the motivation to identify where 
things can be improved upon. 
INSPECS is an industry leading 
disruptor, focussed on ingenuity 
and originality. 

Our Skunkworks department 
has been focusing on five key 
categories this year.

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Continuous 
innovation
02

01

Innovative Eyewear 
Collections

New Material 
Generation

We have focused this year 
on a new packaging solution, 
developing a clear plastic 
substitute bag in response to 
the challenges surrounding our 
industry. We are very excited to 
continue the development of our 
eco packaging further, through 
user testing and certification. 

We have continued to develop 
our graphene innovation with 
prototypes developed in 2022 
which are currently being tested 
by the eyewear market. 

During the year Skunkworks has 
been developing a unique range 
of computer gaming frames with 
solutions to technical issues, 
utilising cutting-edge industrial 
design and material realisation.

This range is totally original and 
packed full of innovation, using 
techniques rarely seen in the 
eyewear world. The revolutionary 
design features are packaged as 
a complete solution, including 
packaging and a range of high-
tech bespoke lenses specific to 
the gamer. 

Emerging opportunities have led 
us into many new and interesting 
markets including dentistry. The 
dentistry brief required a complex 
chassis design and a new 
combination of material selection 
to realise the collection.

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03

Smart Eyewear 
development

During the year Skunkworks 
has been working with various 
smart eyewear technology 
companies, each with a unique 
approach to electronic frames. 
These include laser alignment 
modules, projection systems 
and waveguide technologies as 
well as, personal smart systems, 
collecting data of all kinds, from 
geo location to CO2 levels and 
eye tracking.

On 29 April 2022, INSPECS 
signed a memorandum of 
understanding (MOU) with 
Bosch Sensortec GmbH for the 
development of smart eyewear 
for a potential launch in 2024. 
During 2022, Skunkworks 
delivered its first commercial 
revenues for its continual smart 
eyewear development. 

04

05

Lens Technology

ESG Support

Continuous development, 
validation, certification and 
implementation of an industry 
leading packaging solution. 

We have begun community 
projects overseas, building 
relations between our factories 
and the local residents.

We have employed students 
from the local Bath University 
to work in both our expanding 
Skunkworks department and at 
our UK Lens facility, Norville. 

Realising the requirement for 
smart lens solutions, coupled 
with the skillset of our Norville 
technicians, we are developing 
multiple smart lenses. We are 
developing the technicalities 
of co-polymerisation via the 
mediums of glass, resins, and 
injection moulding materials. Our 
first innovative designed lenses 
achieved commercial sales in Q4 
of 2022 with continual growth 
expected in 2023. 

Exploring combinations of filters, 
processes and encapsulation 
techniques throughout 2022 
led to new innovative methods 
and further understanding the 
limitations of material boundaries.

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Collaboration

Our Skunkworks department is 
also firmly rooted within the internal 
design labs of multinationals, working 
alongside R+D teams developing highly 
complex frame concepts.

Collaboration with major global brands in developing frame concept 
models, lens material choices, sampling and production techniques is part of our 
day-to-day workstream.

Skunkworks projects are evaluated employing 
these four measures of understanding: 

Desirability
Are people waiting for/do people 
need this? Does it add value to 
the lives of our customers?

U M A N )

BILIT Y ( H

A
SIR
E
D

Viability
Is the supporting business 
model sustainable and can it 
be scaled?

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Y

 (

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)

Our goal is to implement our developments into our mainstream eyewear production.

INNOVATION

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Looking 
forward

• 

Integrate materials into the brands within the Group

• 

Implement our bespoke eco packaging solution into full production

•  Gain industry recognition for our work via competition entry

•  Collaborate further with university programmes and design briefs

•  Continue the development of further smart eyewear designs and technology

I

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 (I

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CT)

Integrity
How does our innovation 
impact society and the planet 
as a whole?

)
Y
G
O
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Y  (T E C

B I L I T

F E A S I

Feasibility
Will we be able to deliver our 
concept both technologically 
and operationally?

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S E C T I O N   1 7 2   S TAT E M E N T

The Board of INSPECS Group 
continues to uphold and develop 
the high standards of corporate 
governance already established.

The Directors believe they have acted at all times to promote the 
success of the Group for the benefit of its members as a whole. In doing 
so, the Board has considered the interests of a range of stakeholders 
impacted by the business, as well as having regard for the matters set 
out in s.172(1) of the Companies Act 2006. In line with the Section 
172 statement the Board considers the long-term effects of key 
decisions on all of our stakeholders. The Board’s commitment is to 
work in conjunction with the INSPECS Group strategy and understand 
the importance of governance. 

The Board recognises that effective engagement with a broad range 
of our stakeholders is essential for the long-term success of the business. 
The Board regularly considers the likely consequences of our strategy 
and long-term decision making, taking into account our suppliers, 
communities, employees, customers and the environment in which we 
operate. The Board engages with all areas of the business to gather data 
that is relevant to the decisions being made. Members of the Board also 
take part in Investor days, allowing them to communicate and promote 
the vision of the Group. In 2022, travel for the non-executive Directors 
was at a minimum due to COVID but in 2023 the Board will be visiting 
Germany and Portugal along with the UK sites to further engage with 
the Group. The Board has actively engaged in ensuring the Group takes 
into account climate change and the effect our operations have on the 
community and environment. 

Stakeholders considered  

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Our Employees 
The Board recognises that it is our people 
that ensure we fulfil our potential and 
execute our strategy. Over the course of 
2022, the Board received regular updates 
on topics of interest from the Group’s ESG 
and Risk Officer, CEO and CFO. The Board 
also visited Norville to meet with the team 
and have a guided tour of the new facility. 
At all times the Board members engage 
with employees across the Group and 
welcome open discussions. 

Training and career prospects

The Board encourages engagement with 
our teams so that effective communication 
continues to build and maintains trust. 
The Board ensures our team have open 
and transparent communication lines to 
influence change in relation to matters 
that affect them. The Group operates a 
Long-Term Incentive Plan for the senior 
management to maximise retention and 
secure the future leadership team. The 
Group actively encourages all employees to 
have access to further training to enhance 
their skills and develop their careers.

Health & Safety

Individual entities review Health & 
Safety monthly and report findings to 
the Group ESG, Compliance and Risk 
Officer. These findings are reviewed at 
each Board meeting and form part of the 
standing agenda.

Diversity and fair pay

The Group has high standards in relation 
to diversity and fair pay for all employees 
regardless of their age, disability, sex or 
ethnicity. Diversity, Equity and Inclusion 
will be included in the ESG focus groups 
for 2023 to ensure our team have an 
opportunity to discuss anything we can do 
differently. 

Our Investors
The Chair and members of the Board make 
themselves available to meet with investors 
and seek to understand and prioritise the 
issues that matter most. These include 
operational and financial performance, 
liquidity and dividend policies, risk 
management and ESG matters. The 
Executive Directors hold regular meetings 
with major shareholders, four being 
held in 2022, along with the Annual 
General Meeting. 

Demonstrate a clear investment case and 
strategy for continued sustained growth

The Group communicates through RNS 
releases, publication of the interim and 
annual accounts, and the website. 

Ensure good risk management and 
corporate governance

All Directors and senior executives have a 
shared governance and risk understanding. 
Our Audit and Risk Committee is in 
place with continual Board involvement 
in governance of key elements. Reports 
and Accounts are available at Companies 
House and on the Group’s website. 

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Communicate KPIs
Quarterly revenue numbers are released to 
the market via RNS, maintaining a relevant 
information flow to all stakeholders.

Continue our ethical behaviour in all 
business matters
We are committed to working with our 
suppliers, business partners and key 
stakeholders to ensure their business is ethical 
and responsible. Honesty and transparency are 
integral to our business operation.

Our Customers
The Board regularly receives operational 
updates, including customer metrics and 
feedback, from each of the businesses. 

Continue to create new well-
designed products
The Group design hubs are in the UK, Portugal, 
Germany, Hong Kong and the USA. They 
regularly engage directly with customers to 
create new and exciting ranges.

Deliver to our customers on time
Our communication with our customers 
and suppliers is key, especially while we 
navigate through turbulent political and 
economic unrest.

Demonstrate to our customers our traceable 
supply chain
The Group maintains independent audit 
facilities that are available to our chains to 
monitor and audit our factories at their request.

Engage in customer feedback to ensure 
continual improvement of our supply chain
The Group reviews its six-monthly or annual 
feedback reports from our global accounts and 
utilises these to help in constantly improving 
our performance.

Develop more sustainable products and 
packaging for our customer base
We continue to develop sustainable eyewear 
ranges which have won multiple awards. 
During 2022, the Group has continued to 
research and develop sustainable packaging 
solutions as detailed on page 33.

Our Communities
The Group operates globally and we operate 
in a responsible way, ensuring consideration 
to those around us and continuing to 
minimise our effect on the environment.

How we engage
The Group continues to design and develop 
products using recycled materials. We 
continue to develop our projects to offset 
our carbon footprint along with engaging in 
local community projects, as detailed within 
the ESG section on pages 24 to 31.

Fair trading and payment terms
The Group ensures that all suppliers are paid 
and treated equally and the Board reviews 
average supplier days.

Collaboration and long-term partnerships
We engage with our key suppliers for the long 
term and aim to create a partnership of supply.

Supplier engagement checks
We monitor key suppliers to ensure 
compliance with modern slavery laws. 

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Other Stakeholders
The Group operates in many 
jurisdictions throughout the world and 
at all times complies with regulation 
and legal requirements, engaging 
with both governmental, tax, and 
planning authorities. 

In accordance with Section 172 of the 
Companies Act 2006 the items listed 
demonstrate how the Board has fulfilled its 
duties. This provides a summary of the key 
stakeholders of the Group whom the Board 
considered and engaged with. Further 
information that demonstrates how the 
Directors have fulfilled their duties is shown 
within the Strategic Report and Directors’ 
Report. Any new member to the Board, as 
part of their induction, will receive training 
on the Section 172 statement and the 
Group’s risk framework along with all other 
aspects of the business. 

The Board of INSPECS believes that it 
has acted and made decisions in a way 
considered most likely to promote the 
success of the Group for the benefits of its 
members by following the key priorities 
stated right:

Key priorities for stakeholders:

•  Clear strategy and reporting of 
performance against plan. 

•  Strong governance and controls to 

mitigate risk. 

•  Positive impact and responsible 
behaviour in the communities 
where we operate whilst minimising 
environmental impacts.

•  Responsible employer, including pay 

and benefits, health and safety and the 
workplace environment. 

•  Consider the environment across the 

business, minimise pollution and waste 
and provide sustainable solutions. 

Key considerations:

1.  The likely long-term consequences of 

any decision.

2.  The interests of the Group’s employees.

3.  The need to foster the Group’s business 

relationships with suppliers, customers 
and others.

4.  The impact of the Group’s operations 

on the community and the environment.

5.  The Group’s desire to maintain a 

reputation for business conduct of the 
highest standard.

Zuma Rock

6.  The need to act fairly between 

members of the Group.

Zuma Rock

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R I S K   M A N A G E M E N T

Key decisions

Considerations

01 Board structure

To strengthen the Board and assist in the delivery 
of the Group’s strategic goals the Board recruited 
two additional Non-Executive Directors with strong 
finance and global consumer brand experience. 
The Board has been further enhanced with 
Richard Peck moving from a Non-Executive role 
to become CEO of the Group whilst retaining the 
experience of Robin Totterman who moves to the 
Executive Chair role.

02 Acquisitions

The Board reviewed the potential acquisitions 
that were underway in 2022 and, as a result 
of the slowdown of the European markets, 
continued losses at Norville and adverse exchange 
movements, it was considered prudent, despite 
costs incurred, to suspend acquisition activity. 

03 Expansion of manufacturing capability

The Board reviewed the working capital and cash 
flow implications of the timing of construction of 
new plant capacity. The Board decided that it was 
prudent to delay such investment in 2022. 

04 Dividend policy

The Board considered the required structure 
of the Board to meet investor expectations for 
the business and ensure appropriate corporate 
governance can be implemented at the Board 
level for the long-term benefit of the Group. 

The Board considered the liquidity of the Group 
and potential impacts on suppliers, customers and 
employees of the Group in continuing with these 
activities at the current time.

The Board considered the views of investors on 
the current focus of the Group and determined it 
would be appropriate to delay these activities.

The Board has reviewed the dividend policy of 
the Group and as the Group intends to continue 
with capital investment projects in Q3 of 2023 it 
does not expect to pay further dividends in the 
short term. 

The Board considered the current macroeconomic 
environment along with the future cash flow 
impact when making these decisions, along with 
the long-term consequences on the Group. 

05 ESG Committee

The Board established the Environmental, Social 
and Governance Committee in 2022. The Board 
recognised the importance of establishing a 
committee in order to be able to effectively set 
objectives, monitor performance and advise on 
appropriate policies. 

The Board considered the impact the Group’s 
operations were having on the community, and the 
environment, and how best to improve this. 

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The Board of INSPECS has 
overall responsibility for 
risk management.

Our Audit and Risk Committee reviews and identifies 
risks in our operations and ensures we are not exposed to 
unnecessary or poorly managed risks. Our Audit and Risk 
Committee, up until the 1 of December 2022 was made up of 
three Non-Executive Directors, Christopher Hancock, Chair, 
Lord MacLaurin and Richard Peck, along with support from 
our Chief Treasury Officer and our Group ESG, Compliance 
and Risk Officer. From the 1 of December 2022, with Richard 
Peck moving to CEO and the departure of Lord MacLaurin, 
we have two new Board members, Shaun Smith and Hugo 
Adams, appointed to the Committee, with Christopher 
Hancock remaining as Chair. 

Through our framework we identify material risks that may 
lead to a threat to our business. Each Group division has an 
Operational Risk Management Committee (OMC) formed with 
senior members of the entity and led by the MD/CEO. The 
OMC is responsible for identifying new risks and implementing 
controls and processes across their area of the business. 
The OMC reviews the risk framework at least twice a year 
and reports into the Group’s Risk Management Committee 
(GRMC), which is headed by the Chief Treasury Officer and the 
Group ESG, Compliance and Risk Officer and calls on both 
internal and external experts. The GRMC then reports to the 
Audit and Risk Committee and feeds back to the OMCs.

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We have detailed below the principal risks that the Group is 
exposed to. The risks detailed could have a material impact 
on the Group operationally and/or financially. Our internal Risk 
Framework covers production, sales, environmental and social 
risks, plus governance, finance, IT and political issues. The 
residual risk highlights the outlook for the year ahead.

PRINCIPAL RISK

PROBABILITY 
OF RISK 
OCCURRING

ESTIMATED 
IMPACT OF 
RISK EVENT 
OCCURRING

RESIDUAL 
RISK

Underperforming entities

MEDIUM

HIGH

REDUCING

Principal Risk

Potential consequences of risk event Mitigation

Underperforming entities

Market forces, or failure of 
internal trading strategies, may 
lead to either loss of revenue, 
increased costs, or failure to 
achieve budget in one or more 
entities. This could lead to 
reduced EBITDA, cash flow loss, 
reputational damage, covenant 
breach and a reduction in 
share price.

Macroeconomic risk of 
increasing inflation and 
interest rates.

Integrity of cash and material 
Group assets

Failure of mergers and/
or acquisitions

MEDIUM

MEDIUM

STABLE

MEDIUM

MEDIUM

STABLE

MEDIUM

HIGH

REDUCING

Event Occurrence Type

Internal & External risk

Climate change

HIGH

MEDIUM

INCREASING/
EMERGING

Ability to attract and retain 
key management and 
senior employees

MEDIUM

MEDIUM

INCREASING

Cyber threat

MEDIUM

HIGH

STABLE

Changes in geopolitical 
environment

HIGH

MEDIUM

INCREASING

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Macroeconomic risk of 
increasing inflation and 
interest rates

High rates of inflation and 
increasing interest rates may 
lead to the Group having 
insufficient liquidity, not having 
appropriate access to funds 
or being unable to meet our 
obligations as they fall due.

Event Occurrence Type

External – outside of our control

In the fourth quarter of 2022, there was 
increased focus on underperforming 
entities which has led to tightened 
controls and actions to reduce 
overheads. The outlook for 2023 is 
to increase sales and further stabilise 
the controls in place. We remain 
competitive by identifying new markets 
and reviewing competitor offerings. The 
Board reviews monthly management 
accounts and discusses any entities that 
are falling behind the agreed budget. 
The OMCs communicate regularly to 
the CEO and senior team to ensure 
changes in trading or failure to achieve 
the strategic goals are highlighted. 

These measures will allow early 
intervention to enable decisions 
to be made that can help 
improve performance.

Bank covenant tests are monitored 
by the Board monthly and reported 
to the bank on a quarterly basis. 
Regular budgeting and forecasting 
ensures working capital is sufficient 
for business requirements and 
rapid reaction to adverse business 
performance. We prepare a rolling 
strategic plan and cash flow. A 
number of different scenarios have 
been modelled to ensure we continue 
to be viable. The Group trades in 
multiple currencies thereby offsetting 
some of the effects of movement 
in currency.

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Principal Risk

Potential consequences of risk event Mitigation

Principal Risk

Potential consequences of risk event Mitigation

Integrity of cash and 
material Group assets

Due to the size of the 
organisation, and the multiple 
entities within the Group it 
is possible that there will be 
misappropriation of cash or 
group assets. In a worst-case 
scenario this could impact the 
Group’s ability to trade and 
impact the Group’s ability to 
meet forecasts. This could also 
lead to reputational damage 
and legal costs.

Climate change

The Group is introducing an internal 
audit function in 2023 to strengthen 
and test the controls already in place. 
These include multi-level authentication, 
banking through HSBCnet, where 
practical, to allow visibility of transactions 
and balances and full reviews of 
payments and expenses. 

Event Occurrence Type

Internal – within our control

Climate change is an 
emerging risk and has 
increased importance for all 
our stakeholders. There are 
increased physical risks around 
the globe, with increased 
rainfall leading to floods, 
heatwaves, storms and wildfires 
potentially affecting our sites 
and supply chains. Alongside 
the physical risk, customer 
behaviour changes may result 
in reduced sales of our existing 
eyewear products as consumers 
look for more sustainable 
choices. New sustainable 
product options may result 
in increased costs leading to 
reduced margins. 

Diversification of suppliers allows us 
to respond quickly to limit the impact 
should a climate event occur. With 
innovation and development from 
the Skunkworks team and the design 
teams around the business we are 
able to develop sustainable options 
for the future. Our pricing can be 
structured to mitigate most increased 
cost of materials because external 
studies have shown consumers 
will accept a small premium for 
sustainable products. Each year we 
review energy efficiencies and ways 
to reduce our carbon footprint. The 
landscape in this area continues to 
evolve and ESG issues will continue 
to be kept under review as part of our 
risk management processes.

Event Occurrence Type

External – outside of our control

Ability to attract and retain 
key management and 
senior employees

An inability to attract and retain 
skills required to effectively 
operate could threaten the 
delivery of our strategy and may 
impact our intended growth. 
A lack of diversity, equity and 
inclusion across our workforce 
could lead to our culture not 
being representative of the 
wider community in which 
we operate.

We review succession planning with 
the OMCs and with the Board. The 
senior team are part of a long-term 
incentive scheme to maximise retention 
and our Remuneration and Nomination 
Committee seeks to ensure rewards 
are commensurate with performance. 
We continue to create an inclusive 
workplace that attracts talent from 
diverse backgrounds. University 
placements have opened up new 
perspectives and the focus groups in 
2023 will provide an opportunity for a 
greater voice to grow ideas, engage 
employees and ensure our recruitment 
and strategies maintain a fair and 
equal workplace.

Event Occurrence Type

Internal – within our control

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Failure of mergers and 
acquisitions

We may fail to complete 
or properly integrate an 
acquisition or merger which 
could lead to high fees and 
governance may be negatively 
affected. An acquisition could 
cause covenant breach due 
to increased borrowing and 
insufficient EBITDA. There is 
a risk of failure to maximise 
potential synergies, resulting in 
unnecessary Group costs. 

For future acquisitions, improved 
initial planning and stringent review, 
prior to signing of engagement 
letters, will take place. The Board 
will follow a template to ensure due 
diligence covers the required areas, 
including ESG, financial reporting 
and controls, contracts and licence 
agreements, budget planning and 
legal documentation. The experience 
we have gained following our previous 
acquisitions has strengthened our 
comprehensive internal reviews 
and communication. These include 
working capital scenarios and strategy 
plans, agreed at Board level, to 
maximise potential integration.

Event Occurrence Type

Internal – within our control

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Principal Risk

Potential consequences of risk event Mitigation

Principal Risk

Potential consequences of risk event Mitigation

Cyber threat

Harm could be brought to the 
Group via an unauthorised 
access, corruption or 
destruction of data and/or 
ransomware causing inability 
to access systems, loss of data 
leading to a potential loss 
of revenue.

We are continually reviewing and 
assessing our cyber security protocols 
and tool sets across the Group 
to ensure we stay up to date with 
the evolving global threat to the 
landscape. Cyber risk insurance is 
kept up to date in all our Group 
entities and investment into new 
technologies and multiple cyber 
security accreditations is ongoing. 
All employees in our office sites 
receive regular security awareness 
training and testing.

Event Occurrence Type

Internal & External risk

Changes in geopolitical 
environment

We have operational and manufacturing 
presence in multiple global locations 
to improve resilience in product 
manufacturing and logistics. The 
expansion of our Vietnam manufacturing 
site and the planned Portugal 
manufacturing facility help to de-risk the 
impact of disruption. We regularly review 
supplier strategy and sourcing. We hold 
sufficient stock based on forecast sales 
and customer demands. We continue 
to plan and practice IT disaster recovery 
and business continuity. We undertake 
supplier diligence, and we take out 
relevant and appropriate insurance.

Disruption of the Group’s 
operations could cause failure 
to meet agreed customer 
commitments and damage 
our prospects of gaining 
future orders. Disruption 
could be caused by a range of 
events, for example: extreme 
weather or earthquakes which 
could increase in severity or 
frequency, given the impact of 
climate change; political events; 
geopolitical factors that lead 
to an unfavorable business 
climate; legislative changes; 
financial insolvency of a critical 
supplier; scarcity of materials; 
loss of data; fire; or infectious 
diseases or future pandemics. 
The consequences of these 
events could have an adverse 
impact on our employees, 
our operations or our external 
supply chain.

Event Occurrence Type

External – outside of our control

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Corporate Governance 
statement

p42

Barbour

O'Neill

How the Board 
operates

p43

Senior 
management

p49

Directors 
report

p58

Barbour

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Governance

42  Corporate Governance statement

43  How the Board operates

49  Senior Management

50  Audit and Risk Committee Report

53  Remuneration and Nomination Committee Report

57  Environmental, Social and Governance Committee Report

58  Directors’ Report

62  Statement of Directors’ Responsibilities

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C O R P O R AT E   G O V E R N A N C E   S TAT E M E N T

Corporate governance is important 
in promoting the values of the 
Group both internally to employees 
and externally to our stakeholders. 
The Board recognises and values 
the importance of good corporate 
governance and how it drives 
operational, financial practices 
and risk management.

Robin Totterman, Chairman

Dear stakeholder,

I am pleased to present the 
Corporate Governance Report for 
2022. This report should be read in 
conjunction with the report on page 
47, in which we have set out how 
we have complied with the QCA 
Corporate Governance Code. 

As I have outlined in my report on pages 3 
and 4, 2022 has been a difficult year for the 
Group with revenue marginally up on the 
previous year due to a slowdown in some 
of our key markets in the last few months of 
2022. Despite this, the Group has continued 
developing its strategy to grow the business 
in a sustainable manner.

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Governance
The Board believes that effective delivery 
of the Group strategy requires strong 
corporate governance supported by a 
robust structure that allows the Board to 
engage in constructive debate and be 
challenged by its members. This allows the 
Directors to make strategic decisions. The 
Board recognises the importance of having 
suitably qualified Non-Executive Directors 
who are independent in character and free 
from any relationship that could affect their 
judgement. Our Non-Executive team has 
been strengthened during the year with 
the addition of Shaun Smith, who has a 
strong background in finance, and Hugo 
Adams, who has extensive experience in 
operational matters. 

Richard Peck, who joined the Board as a 
Non-Executive Director in January 2020, 
stepped up to take the position of Group 
CEO from 1 December 2022. Richard 
has over 38 years of industry experience 
within eyewear. Angela Farrugia, who has a 
wealth of experience in relation to brands 
and consumer products, and Christopher 
Hancock who is a chartered accountant 
and has been involved in many corporate 
transactions over the years and is able to 
support our Executive Team on acquisitions.

The Board firmly believes that driving 
our long-term goals should not be at the 
expense or detriment of others with whom 
we engage or the environment in which we 
operate. We are committed to delivering 
our long-term goals for all stakeholders with 
as little impact as possible on the planet.

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CONTINUED

H O W   T H E   B O A R D   O P E R AT E S

The Board is responsible 
for the Group’s overall 
strategy and for the overall 
management of the Group. 

The Strategic Report outlines the key approach of the Board 
to ensuring and promoting the long-term sustainable growth of 
the Group for all shareholders.

See Pages 2 – 40

Engagement with our stakeholders
The Board is conscious that there are 
a number of stakeholders within our 
business and considers the interest of 
each of these stakeholder groups in its 
discussions. During the year we have 
had a comprehensive investor relation 
programme in place with the Executive 
Team carrying out a number of meetings 
with our shareholders during the year. Our 
Non-Executive Directors engage with our 
shareholders as appropriate and also with 
our auditors, nomad, and our corporate 
advisers. The Board continues to consider 
the likely impact of its strategy and long-
term decision making on its customers, 
suppliers, employees and communities.

The culture of the business is a key part of 
our growth strategy and the Non-Executive 
Directors have visited the Group’s operations 
where possible. Due to COVID restrictions 
they have not travelled overseas in 2022, 
however, significant travel to visit overseas 
operations is planned for 2023.

Looking ahead
Following our performance in the year 
to 31 December 2022, the Board is 
now focused on improving the business 
performance in 2023. Given the 
difficulties of managing the business 
during the uncertainty caused by the 
COVID pandemic and regretfully, the 
turmoil in Ukraine that happened in the 
Spring of 2022, the Board continually 
discusses our risk management structures 
as it is clear the Group needs to be 
prepared for uncertain times ahead. 
We have placed a significant emphasis 
during the year on the safety of our 
employees with further additional 
investments for COVID compliance, 
especially in our Asia facilities, 
communication training and employee 
welfare programmes. 

We have made significant progress in 
relation to our ESG reporting. The Group 
is actively engaged in reducing our 
carbon footprint and is now looking in 
some detail at our supply chain. 

We will continue to focus on delivering 
attractive long-term returns for 
shareholders, behaving responsibly to all of 
our stakeholders, employees, suppliers and 
customers and, importantly, the community 
in which our business operates. 

Robin Totterman
Chairman

03 May 2023

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The main matters for consideration by the 
Board include:

•  Financial reporting and financial 

controls Monitoring of health and 
safety across the Group

•  Approval of material contracts and 

Group expenditure

•  Communication with stakeholders
•  Financing and capital adequacy of 

the Group

•  Agreeing budgets and forecasts
•  Reviewing acquisitions
•  Oversight of the Executive Committee

Overview of governance structures
The Board structure is designed to 
ensure that it focuses on the Group 
strategy whilst at the same time 
monitoring its performance and 
reviewing the controls and risk of the 
Group. The Board considers that the 
governance structures allow for the 
operation of the Group in an open and 
straightforward culture without over-
delegation of responsibilities.

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44

Stakeholders

Board

The Board of Directors are responsible for overviewing the Group’s strategy and ensuring that it delivers long-term growth in a sustainable manner for 
the benefit of the Group’s shareholders and stakeholders.

Board Committees

Each Board Committee has documented terms of reference agreed by the Board. These are regularly reviewed and are available on the Group's corporate 
governance website.

Audit and Risk Committee

The Committee is responsible for:

•  Overseeing the Group’s financial reporting

•  Overseeing the Group’s internal control 
framework and risk management process

•  Overseeing the relationship with the 

external auditors and monitoring their 
independence

Remuneration and Nomination Committee

The Remuneration and Nomination Committee 
is responsible for:

•  Reviewing the structure, size, and 

composition of the Board

•  Succession planning for Directors and 

other senior executives

Environmental, Social and Governance 
Committee

This Committee was established 
in 2022.

The Environmental, Social and Governance 
Committee is responsible for:

•  Overseeing the Group’s sustainability 

•  Promoting diversity, equity and inclusivity

framework, focus and strategy

•  Setting, reviewing, and recommending 
the policy on the remuneration of the 
Executive Directors

•  Overseeing the senior management 

team and general workforce 
remuneration approach

•  Monitoring the implementation of the 

remuneration policy

•  Overseeing the alignment of the reward, 

incentives and culture

•  Monitoring the Group’s sustainability impact 

and performance

•  Providing guidance for the developing 

environmental challenges, which includes 
environmental risk and the impact this will 
have on the Group

•  Overseeing the Group’s ESG reporting, 
including external audit and assurance 
requirements

Executive committee

The executive team is responsible for the day-to-day running of the Group’s business, improving its performance and ensuring future long-term 
growth and development.

Senior management

The Group has a wealth of experienced senior managers across the globe, all of whom have high levels of industry experience.

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Board meetings
Six Board meetings were scheduled in 2022, four to review quarterly updates, and two one-
day meetings to agree the interim and year-end financial accounts. During 2022, the Board 
met more frequently than was planned, for a total of ten meetings, specifically to review the 
performance issues arising in the year and the deterioration in some of the Group's key trading 
markets noted in October 2022.

Scheduled meetings

Lord Ian MacLaurin

Robin Totterman

Christopher Kay

Christopher Hancock

Richard Peck*

Angela Farrugia

Board 

8/10

10/10

10/10

10/10

9/10

10/10

Remuneration and 
Nomination Committee

Audit and Risk 
Committee

ESG 
Committee 

1/2

–

–

2/2

2/2

–

2/2

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–

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2/2

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–

–

–

–

1/1

1/1

* Attendance at the committee meetings was prior to becoming CEO.

Board composition

The Board believes it has the right 
skill sets, knowledge and up-to-date 
experience to perform its duties responsibly. 
This allows the Board to deliver on the 
Group’s strategy of long-term growth of the 
Group for the benefit of all stakeholders.

The Board fully supports the 
Financial Conduct Council’s aim of 
encouraging diversity.  

A full breakdown of gender representation 
for Directors is shown on page 30.

Shaun Smith and Hugo Adams joined the 
board on 1 December 2022. There were 
no board meetings between their date 
of joining and 31 December 2022 and 
therefore, they have not been included in 
the above table.

Directors are expected to attend all meetings 
of the Board and the Committees on which 
they sit. In the event of a Board member 
not being able to attend their respective 
Committee or Board meeting, their 
comments are passed to the Chairman.

Board Committees

The Board has delegated some specific 
responsibilities to the Audit and Risk 
Committee, Remuneration and Nomination 
Committee and ESG Committee.  

The respective reports are shown on pages 50 to 57.

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Board and Board Committee  
effectiveness review
In 2022 the Board carried out an internal 
review of its effectiveness and its 
performance in 2021. This review included:

•  Response to new events and 
unscheduled developments

•  Review of financial information and 

performance of the business

•  Acquisitions

•  Conduct rigorous discussion and debate

•  Setting strategy

•  Composition of the Board and 

future development

•  Training and development

•  Operational effectiveness

The outcome of this review was a need to 
strengthen the financial and operational 
skills of the board. To respond to this 
outcome, the Board recruited two new non-
executive Directors; Shaun Smith and Hugo 
Adams. Please refer to page 48 for their 
respective biographies. 

Board members’ independence
The Board considers and ensures that 
each of the Non-Executive Directors are 
independent of management. Richard Peck 
who became CEO on the 1 December 2022 
remained independent in his role as a  
Non-Executive Director up to this date.  
The Board is led by the Chairman who 
ensures fair and constructive debate  
where appropriate.

The founder and Executive Chairman has 
a substantial shareholding in the Group, 
but this does not detract from the Board’s 
ability to exercise independent judgement 
and enquiry.

All Non-Executive Directors are considered 
to be independent in both their character 
and judgement and confirm that they are 
free of relationships or other circumstances 
that could impact on their independence.

The Board delegates specific matters 
to three sub-committees with the 
ESG Committee being the most 
recent committee.

The Audit and Risk Committee is 
responsible for overseeing the Group’s 
financial reporting, risk management, and 
internal controls, and liaises closely with the 
Group’s external auditors. Full details of this 
Committee’s work is set out on pages 50 to 
52 of this report.

The Remuneration and Nomination 
Committee is responsible for establishing 
procedures for setting executive 
remuneration policy and executive pay. 
The Committee met during the year and 
full details of its work during the year is 
given on pages 53 to 56 of this report. The 
Committee is also responsible for leading 
Board appointments.

The ESG Committee is responsible for 
overseeing and reporting to the Board on a 
six-monthly basis the environmental, social 
and governance matters across the Group.

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Conflicts of interest

The Board ensures that each member of 
the Board declares any interest in matters 
to be discussed and regularly reminds 
Board members of their duty to disclose any 
potential conflicts of interest.

Directors’ and Officers’ liability insurance

The Group has purchased Directors’ and 
Officers’ insurance during the period 
and holds insurance to the benefit of 
the Directors.

Senior Independent Director

Christopher Hancock is the Senior 
Independent Director and is also Deputy 
Chair-elect, and will act as the Chairman’s 
alternate when required.

Development

The Board engages with the Group's 
external advisors, principally our nomad, 
Peel Hunt and our Group corporate lawyers 
Macfarlanes, to keep up to date with 
changes to relevant legislation. 

Election of Directors

All Directors will offer themselves for 
re-election at the forthcoming Annual 
General Meeting.

Relationship with stakeholders

Continuing engagement with shareholders 
and stakeholders in the Group is of 
prime importance to the Board. This 
communication includes both the Annual 
Report and Accounts and interim accounts, 
and RNS releases when appropriate. 

The Group communicates through its 
website www.INSPECS.com and investor 
information is available on the website.

The Non-Executive Directors are available 
to discuss matters that stakeholders may 
wish to raise and the Executive team holds 
meetings with investors on a timely basis. 

The Group has regular reviews from material 
customers on its performance and these are 
closely monitored, and the Group maintains 
regular communication with a wide range 
of stakeholders.

Annual General Meeting

The Annual General Meeting of the Group 
will take place on the 15th of June 2023. 
The Notice of Annual General Meeting and 
the Ordinary and Special Resolutions to be 
put before the meeting are contained in 
the Notice of the Annual General Meeting 
accompanying this Annual Report. The 
AGM is an opportunity for shareholders 
to ask questions relating to the Group. It 
will be held at the Group's office in Bath 
and will also be available on Zoom with 
details of how to join given in the Notice 
of Meeting.

Corporate Governance Code

The Board recognises the corporate 
responsibility in the way that INSPECS 
operates around the globe. The Board has 
adopted the Quoted Companies’ Alliance 
Corporate Governance Code for small and 
mid-sized quoted companies, known as 
the QCA Code.

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The Board is accountable to a wide range of stakeholders and to ensuring its primary goal of 
long-term sustained growth whilst acting in a sustainable manner. Examples of our continued 
work on sustainability are covered in pages 24 to 31 of this report.

The Board has ultimate responsibility for internal control and how we manage this process is 
shown on page 51. 

Our gender diversity is shown on page 30 of this report. Our compliance with the QCA 
Corporate Governance Code principles is reported on below:

The QCA Corporate Governance Code

Governance Principles

Compliant Explanation

Further Reading

The Board is responsible for Group strategy 
and its implementation. This strategy is 
debated and tracked by the Board who 
monitors its progress.

Meetings are held with investors and 
analysts after the release of half-yearly 
interim and final accounts. The AGM 
provides a forum for all shareholders 
to meet and hear from the Directors. 
Shareholder comments and suggestions are 
welcomed by the Board.

See pages 5 to 10 
to learn more about 
our strategy and 
business model.

See pages 35 to 
37 to see how we 
communicate. 
Further information 
is available on 
our website www.
INSPECS.com.

The Board has identified the key 
stakeholders in the business and discusses 
the impact of the long-term growth strategy 
and how our business model may affect 
these stakeholders.

See pages 35 to 
37 to see how we 
communicate and deal 
with our stakeholders.

The Audit and Risk Committee regularly 
reviews risks to the Group, both internal 
and external. Health and Safety is of 
paramount importance and is a standing 
Board meeting agenda item.

See pages 37 to 40 
for further detailed 
information on 
risk management.

Deliver growth

1

2

3

4

Establish a strategy and 
business model which 
promotes long-term 
value for shareholders.

Seek to understand 
and meet shareholders’ 
needs and expectations.

Take into account wider 
stakeholders and social 
responsibilities and 
their implications for 
long-term success.

Embedded effective 
risk management, 
considering both 
opportunities and 
threats throughout 
the organisation.

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Governance Principles

Compliant Explanation

Further Reading

Maintain a dynamic management framework

5 Maintain the Board 

as a well-functioning, 
balanced team led by 
the Chairman.

6

7

8

Ensure that between 
them the Directors 
have the necessary 
up-to-date experience, 
skills and capabilities.

Evaluate Board 
performance 
based on clear and 
relevant objectives, 
seeking continuous 
improvement.

Promote a corporate 
culture that is based 
on ethical values 
and behaviours.

9 Maintain a governance 
structure and processes 
that are fit for purpose 
and support good 
decision-making by 
the Board.

Build trust

10 Communicate how the 
company is governed 
and is performing by 
maintaining dialogue 
with shareholders 
and other relevant 
stakeholders.

The Board consists of four Non-Executive 
Directors with relevant experience, an 
Executive Chairman, and the CEO and CFO. 

The Board has a wealth of experience on 
strategy, operations and financial matters. 
The Executive Chairman engages in open 
debate and new strategies are challenged. 

See Board 
Director information 
on page 48 for 
further  guidance.

The Board believes that it has the required 
skills and correct balance of capabilities to 
manage the Group. Members of the Board 
keep their skill levels up in a variety of ways 
throughout the year.

During 2022, the Board undertook an 
evaluation of its 2021 performance. To 
ensure it had the required necessary 
collective skills. This review will continue to 
take place on an annual basis.

The Board promotes and encourages, 
across the Group, the core values of the 
Group. The aim is to deliver continual 
improvement in both the economic 
performance of the Group and in its ability 
to meet its social responsibility to the 
wider community.

The Board’s governance model is widely 
known as the unitary system. The Board is 
aided by three subcommittees to undertake 
specific work. The Board has regular 
information flows and has regular meetings 
to ensure it has the ability to review, debate 
and make well-informed decisions.

See page 48 for 
further guidance.

The criteria to be used 
to evaluate the Board 
is set out on page 45.

See pages 42 and 
43 of the Corporate 
Governance Report.

See more information 
on the Committee 
Reports on pages 50 
to 57.

INSPECS has open communication with a 
wide range of stakeholders. This includes 
regular updates with investors, yearly and 
half-yearly reports and regulatory news 
service releases on key corporate matters.

See pages 35 to 37 of 
the Strategic Report.

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Board of Directors (executive team)

Committee Membership Key

Audit & Risk Committee

Remuneration & Nomination Committee

Environmental, Social and Governance Committee

C

Chairman

Robin Totterman 
Chairman

Richard Peck
Group Chief Executive Officer

Chris Kay
Group Chief Financial Officer

Christopher Hancock FCA
Independent Non-Executive 
Director

Angela Farrugia
Independent Non-Executive 
Director

Shaun Smith
Independent Non-Executive 
Director

Hugo Adams
Independent Non-Executive 
Director

Tenure

Robin has been a Board 
member since founding 
INSPECS in 1988.

Richard has served as a 
Board member since  
10 January 2020.

Skills, competence and experience

Richard Peck has over 38 
years of optical experience. 
Richard brings a wealth of 
experience from working 
in other leading eyewear 
companies, such as David 
Clulow and Luxottica, where 
he held the position of 
Managing Director Retail 
Northern Europe between 
2010 and 2018. Richard’s 
retail background increases 
the Board’s diversity of skills, 
knowledge and experience.

Robin Totterman is an 
entrepreneur and forerunner 
in the branded eyewear 
industry with over 31 
years of experience in 
eyewear licensing, design, 
manufacture and wholesale. 
Robin’s passion for design 
and fashion brought the first 
branded eyewear to the 
UK optical market (Jean-
Paul Gaultier).

His ability to recognise value 
and seize opportunity saw 
him complete the acquisition 
of Killine in 2017, creating 
a vertically integrated 
Group rivalled by only a 
small number of eyewear 
firms. Prior to INSPECS, 
Robin worked at UBS and 
Banque Paribas.

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Chris has been involved with 
INSPECS since it was founded 
in 1988 and has served 
as a Board member since 
13 November 2013.

Chris Kay is a qualified 
chartered accountant 
and became a partner of 
Thorne Lancaster Parker, 
a UK accountancy and 
taxation firm, in 1992. He 
became Finance Director 
of INSPECS in 2013 and 
works closely with Richard 
Peck and Robin Totterman 
on strategy for the Group. 
Chris’s business development 
and M&A experience was 
pivotal to the execution and 
integration of INSPECS’ 
Killine Group acquisition in 
2017 and further acquisitions 
of Norville and Eschenbach 
in 2020.

C C

C

Christopher has served 
as a Board member since 
8 March 2017.

Angela was appointed as a 
member of the Board on  
12 May 2020.

Shaun was appointed as a 
member of the Board on  
1 December 2022.

Hugo was appointed as a 
member of the Board on  
1 December 2022.

Christopher Hancock FCA 
has 31 years of experience 
in business development, 
restructuring and corporate 
finance. Christopher qualified 
as a chartered accountant 
with Arthur Andersen before 
entering investment banking, 
where he spent 10 years with 
JP Morgan. He established 
his own consultancy practice 
in 2009 and co-founded an 
FCA regulated corporate 
finance and investment 
management firm in 2012. 
Christopher brings a broad 
range of experience in 
business development, M&A 
and corporate finance in 
public markets.

Founder of one of the 
most successful brand 
management companies in 
the world, Angela formed 
TLC (The Licensing Company 
Ltd) in London in 1996. 
Creating a new breed of 
agency, the business grew 
to encompass 24 offices in 
16 countries and amassed 
a roster of leading brand 
representations in various 
sectors, generating over 
$12.4bn in retail sales 
annually for its clients. 
In addition, she has 
22 years of operating 
experience gained within 
a challenging international 
business environment.

Shaun is a qualified treasurer 
and has extensive plc 
experience having previously 
held CFO roles with Norcros 
plc and Aga Rangemaster 
Group plc. In his role at 
Aga Rangemaster Group 
plc, Shaun helped oversee 
the transformation of the 
business into an international 
brand-led manufacturer 
and retail group. Shaun 
has served as a Non-
Executive Director on public 
company boards since 2016, 
including terms as Audit 
and Nomination Committee 
chair. He is currently the 
Non-Executive Chairman of 
Driver Group plc and a Non-
Executive Director of Epwin 
Group plc.

Hugo has more than 25 
years’ experience working 
for some of the biggest and 
best-known global consumer 
brands including The Body 
Shop, and running marketing 
and international expansion 
at Dyson. During nine years 
at Marks and Spencer Group 
PLC he managed businesses 
across Europe and the 
Middle East, as well as being 
Chief of Staff to the CEO 
and subsequently Property 
Director. Hugo served on the 
Executive Board at Superdry 
Plc, responsible for marketing 
and business development, 
and most recently as CEO of 
Start-Rite Shoes. 

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S E N I O R   M A N A G E M E N T

Group’s senior team

The Group’s senior team plays an integral part in ensuring the strategic plans are managed throughout the business and works closely with each subsidiary senior team to oversee finance, risk and all ESG areas. 
The Group’s senior team reports to the Board and the Board Committees on all matters.

Jorg Zobel

Peter Braunhofer

Matthias Anke

Ronald Gezang

Johanna Gezang

Marc Lefebvre

Ha Bui

Michael Zhang

Stefan Bopp

Matthias Deter

Steve Tulba

Clare Lovett

Adam Loewy

Elliott Smith

Angela Eman

Scott Sennett

Ken Bradley

Jennifer Coppel

Jon Bloom

Matthew Loran

Vance Wright

Cheryl Mathavious

Matt Dorling

Nevil Trotter

Sean Donnachie

Sophie Cork

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A U D I T   A N D   R I S K   C O M M I T T E E   R E P O R T

Christopher Hancock FCA
Chair of the Audit and  
Risk Committee

2Meetings during 2022

Meetings during 2022

Attendance

Christopher Hancock (Chair)

Lord MacLaurin

Richard Peck

2

2

2

3Committee members

Christopher Hancock

Lord MacLaurin 
(to 1 December, 2022)

Richard Peck 
(to 1 December, 2022)

Hugo Adams 
(from 1 December, 2022)

Shaun Smith 
(from 1 December, 2022)

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The Audit and Risk Committee 
is responsible for the following 
main areas.
•  Ensuring compliance with rules, 
legislation and best practice for 
reporting on the financial and other 
affairs of the Group

•  Reviewing the internal control and risk 

management systems

•  Advising on the suitability, effectiveness 
and independence of the external 
audit process

•  Reviewing the extent of, and policy 

for, non-audit services provided to the 
Group by the external auditors

•  Engaging with the external auditors 
and ensuring the scope of the audit 
is acceptable

•  Monitoring the disclosures in the 
Annual Report and Accounts 

•  Reviewing changes in 
accounting policies

•  Review of the Annual Report and 

Accounts to ensure its completeness 
and fairness and understandability

•  Review of interim announcements

•  Review of going concern, key 
judgements and significant 
accounting policies

•  Reviewing the carrying values of 

intangible assets

Membership 
The members of the Committee are all 
independent Non-Executive Directors 
in compliance with the QCA Code. The 
Committee is chaired by Christopher 
Hancock and, until 30 November 2022, 
the other members of the Committee were 
Lord MacLaurin and Richard Peck, who up 
until that date, were both Non-Executive 
Directors. On 1 December Richard Peck 
was appointed Chief Executive Officer of 
the Group and Lord MacLaurin retired. They 
were replaced on the Committee by two 
new independent Non-Executive Directors, 
Hugo Adams and Shaun Smith, both of 
whom bring extensive public company 
experience to their roles. See Director 
biographies on page 48 for further details. 

Meetings and attendance 
The Audit and Risk Committee is mandated 
to meet at least three times a year. 

In 2022, the issues arising from the 2021 
audit were sufficiently material that they 
were considered by the Group Board at 
four Board meetings called specifically to 
deal with these matters. The Committee 
met separately on two other occasions to 
consider its other business. 

The Committee has unrestricted access 
to the Group’s external auditors and has 
meetings with external auditors without 
management present. 

The Group CFO attends the meetings of 
the Committee by invitation.

The Group Company Secretary serves as 
secretary of the Committee and ensures 
that the Committee receives information 
and papers in a timely manner.

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Independent External audit
The external auditors EY were reappointed 
on 11 August 2022. 

Fees, effectiveness and independence
The Audit and Risk Committee undertakes 
a review of the effectiveness and 
independence of the Group's auditors. 
Following the acquisition of Eschenbach, 
in the interests of quality and efficiency, it 
was determined that audit work should be 
consolidated with EY. The fee increase for 
the 2022 audit is primarily due to additional 
scope coverage of new ISA 315 and 240 as 
well as inflationary pressure. 

The Committee reviews the level of non-
audit work performed by the Group’s 
auditors to ensure that there is not a risk to 
their independence. 

The fee for the audit to 31 December 2022 
is $1,734,000 (2021: $1,404,000). 

The non-audit fees paid to EY were nil 
(2021: Nil). 

EY has served as the Group’s auditors since 
2020. The Committee’s terms of reference 
call for consideration of a tender of the 
audit service every three years. In light of 
the additional work required for the 2021 
audit which resulted in a delay to the issue 
of the 2021 accounts, it was determined 
best not to tender the audit this year. 

Change of Audit Partner due to 
rotation requirements 
The Group’s Audit Engagement Partner at 
EY was obliged to retire by rotation having 
served five years in role. The Committee, 
having met with the new partner prior 
to appointment, satisfied itself that the 
new partner had the requisite skills and 
experience to take over the audit. The 
Committee also consider that the appointed 
auditor's capabilities and global reach are 
appropriate in comparison to the scale of 
the Group. 

Internal audit
The Committee reviewed whether there 
was a need for the Group to have an 
internal audit function and recommended 
to the Board that one be established. The 
inception of an internal audit function 
was agreed by the Board in principle and 
was expected to be put in effect in 2022 
but, following a series of changes in the 
finance team, this was delayed. The internal 
audit department is now expected to be 
established in 2023. 

Risk governance
The Audit and Risk Committee met twice in 
the year with the Group ESG, Compliance 
and Risk Officer to consider the Group’s risk 
register comprising the risks faced by the 
Group and the adequacy of the controls 
and policies in place to mitigate them. The 
results of this review are set out under Risk 
Management on pages 37 to 40.

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Internal control environment
The Group uses both manual and 
automated systems to control, monitor and 
report risk matters. The principal elements 
of the Group’s internal control are:

•  Cash management monitored by the 

Group treasury function

•  A comprehensive annual budgeting 

process producing detailed profit and 
loss, balance sheets, and cash flows, 
updated on a rolling 12-month basis

•  Comprehensive monthly reporting of 

KPIs, key risk areas, capital expenditure 
and compliance with covenants on 
banking facilities

•  Open and transparent communication 

between senior executive management 
and the Board ensures issues are raised 
on a timely basis

•  Key risks, including reasonableness of 

market forecasts, covenant compliance 
and Health and Safety issues, are 
standing Board agenda items

Significant financial judgements
During the year the Audit and Risk 
Committee considered the following 
significant issues regarding the financial 
statements and having reviewed 
them were satisfied that they were 
appropriately stated. 

•  The Committee has reviewed the 
going concern forecast for the 
period to 30 June 2024. This review 
focused in particular on the headroom 
on the covenants and considered 
management’s response to potential 
disruption of supply chains, cost 
increases and geopolitical instability

•  Goodwill and intangible assets are 

significant values in the balance sheets 
and the Committee reviewed any 
potential impairment that might be 
required, the cash flows of the CGU 
(cash-generating units) and the discount 
rates applicable to the CGU along with 
sensitivity analysis

•  The Committee reviewed the tax 
provisions recognised relating to 
permanent establishment risks and the 
position taken as at 31 December 2022

•  The Committee reviewed the prior 

period adjustment recorded in relation 
to contingent consideration arising on 
acquisitions. See pages 112 and 113 for 
the prior period adjustment noted.

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•  The Committee has reviewed the 

adjustment in relation to the valuation 
of case inventory in accordance with 
IAS2. It has considered the treatment 
of the adjustment against goodwill in 
relation to cases acquired as part of the 
Eschenbach acquisition

•  The Committee reviewed the impact of 
the technical covenant breach as at the 
year end date, and the impact on the 
classification of loans to current liabilities

Recommendations arising out of 
the audit 
Following the issues arising in the 2021 
audit, the Committee recommended a 
strengthening of the finance team both at 
Group and subsidiary level. An additional 
position was created in the finance team 
and Matthew Loran was appointed as 
Head of Group Management Reporting in 
November 2022. The Audit Committee also 
recommended strengthening the financial 
reporting process around inventory across 
the Group, this has been actioned by the 
Senior Management team during 2022.

Whistleblowing, Fraud and 
Bribery Acts

The Group has in place a whistleblowing 
policy which is given to all employees on 
joining and updated yearly. All findings are 
reviewed by the Group ESG, Compliance 
and Risk Officer and reported to the Board. 
The policy sets out a formal process by 
which employees may, in confidence, raise 
concerns in respect of the Group’s activities. 
These include any financial improprieties, 
in reporting or in other matters. The Group 
is committed in all respects to a zero-
tolerance attitude with regards to bribery.

During the year the Group completed an 
anti-bribery and corruption questionnaire. 
It was distributed to the Board, senior 
teams, relevant customer and supplier 
facing positions. The results of this 
questionnaire will be reviewed and 
training will be directed to specific 
learning objectives within the Group, 
along with a general training update. 

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R E M U N E R AT I O N   A N D   N O M I N AT I O N 
C O M M I T T E E   R E P O R T

Christopher Hancock FCA
Chair of the Remuneration 
and Nomination Committee

2Meetings during 2022

Meetings during 2022

Attendance

Christopher Hancock (Chair)

Lord MacLaurin

Richard Peck

2

1

2

3Committee members

Christopher Hancock

Lord MacLaurin 
(to 1 December, 2022)

Richard Peck 
(to 1 December, 2022)

Hugo Adams 
(from 1 December, 2022)

Shaun Smith 
(from 1 December, 2022)

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The Remuneration and Nomination 
Committee is responsible for making 
recommendations to the Board on all 
elements of the remuneration, terms of 
service or employment, reward structure 
and fringe benefits for Executive Directors, 
Non-Executive Directors and senior 
management with the aim of attracting, 
retaining and motivating individuals of 
the highest quality. The Committee is 
responsible for ensuring the appropriate 
Board balance and size, and that the Board 
members have the required mix of skills, 
experience and other core competencies. 

Membership 
The members of the Committee are all 
independent Non-Executive Directors 
in compliance with the QCA Code. The 
Committee is chaired by Christopher 
Hancock and until 1 December, 2022 the 
other members of the Committee were Lord 
MacLaurin and Richard Peck, who at that 
time, were both independent Non-Executive 
Directors. On 1 December Richard Peck 
was appointed Chief Executive Officer of 
the Group and Lord MacLaurin retired. They 
were replaced on the Committee by two 
new independent Non-Executive Directors, 
Hugo Adams and Shaun Smith, both of 
whom bring extensive public company 
experience to their roles. See Director 
biographies on page 48 for further details. 

Meetings and attendance 

The Committee is mandated to meet 
at least twice per year. Non-committee 
members may be invited to attend 
meetings from time to time to provide 
additional expertise and assistance.

The Committee is in particular supported 
by the Group ESG, Compliance and Risk 
Officer, Angela Eman. 

The Company Secretary serves as secretary 
of the Committee and ensures that the 
Committee receives information and papers 
in a timely manner.

Remuneration

Remuneration policy

The Committee’s aim is to set a 
remuneration policy to attract and 
motivate high calibre Directors and senior 
management within the Group and to focus 
them on delivery of the Group’s strategic 
and business objectives.

In 2022, the remuneration of Directors and 
senior executives of the Group comprised 
the following elements: 

•  Contracted base salary

•  Performance-based annual bonus 

•  Long-term share incentives 

•  Pension and other contracted benefits

During the year, the Group commissioned 
a leading accountancy firm to perform a 
review of Director and senior executive 
remuneration and to benchmark current 
levels against the market. This survey 
demonstrated that the pay of Board Directors 
was below that of comparable companies 
while the structure of both short-term and 
long-term incentives was inadequate to 
properly align the objectives of executives 
with the Group’s strategic objectives. 

The Committee has therefore 
recommended that a review of executive 
pay, including the structure of short- and 
long-term incentives, be undertaken in 
2023. This review will look to embed in the 
proposed structure the principles of clarity, 
simplicity, risk, predictability, proportionality 
and alignment to culture. 

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Executive Director service contracts

The Chairman, Robin Totterman, and 
CFO, Chris Kay, signed service contracts 
on admission of the Group to AIM on 
27 February 2020. Richard Peck entered 
into a new contract on becoming CEO on 
1 December 2022. Richard Peck’s salary 
as CEO is £265,000 per annum which is in 
line with the parameters provided in the 
benchmarking survey referenced above, 
having consideration for the size and 
complexity of the Group. Robin Totterman 
also entered into a new contract on 
becoming Chairman.

Directors’ contracts have no fixed duration 
and are terminable with six months’ notice.
Where possible, the Committee Chairs and 
members of the Committees should be 

rotated on a regular basis, and all Directors 
are subject to re-election at each AGM.

of share capital of the Group in any 10-
year period. 

Short-term incentive – 2022 annual bonus

Due to the disappointing outcome of the 
Group’s key performance indicator of adjusted 
underlying EBITDA which reduced from 
$27.6m to $19.2m, no bonuses will be paid to 
the Executive Directors in relation to 2022. 

Long-term incentive plan (LTIP)

The Prospectus issued on admission of 
the Group to AIM on 27 February 2020 
included the details of a Long-Term 
Incentive Plan to issue options on an annual 
basis at the mid-market price to Executive 
Directors and key senior employees up to a 
maximum aggregate of 10% of the issued 

Options have been issued each year since 
admission in accordance to this plan. During 
the year further options were granted under 
the LTIP to both the Executive Directors 
and senior employees. The total amount of 
options granted to them and the respective 
issue prices are set out below.

These options have a three-year vesting 
period from the date of grant. The total LTIP 
options outstanding as at 31 December 
2022 were 5,435,181 and this represents 
5.3% of the Group's issued share capital 
as at 31 December 2022 amounting to 
101,671,525 shares of 0.01p each.

Changes in 2023 

Following feedback from shareholders 
and informed by a review of remuneration 
commissioned by the Group from a leading 
accountancy firm, the remuneration 
package of each of the Executive Directors 
in 2023 will be redesigned to include a 
performance-related short-term incentive 
(bonus) and performance-related long-
term incentives to be provided by way of 
share options. 

Non-Executive Directors 

Non-Executive Directors are paid a base fee 
for serving as a Director with an additional 
fee for serving on each Committee. NEDs 
receive no bonus or LTIP.

Name

Robin Totterman

Christopher Kay

Senior employees

Option
granted

Date

150,000 22/12/2020

50,000 23/12/2021

549,460 27/02/2020

150,000 22/12/2020

183,153 26/02/2021

50,000 23/12/2021

183,153 28/02/2022

2,483,650 31/12/2020

1,177,882 31/12/2021

457,883 28/02/2022 

Price
£

2.10

3.70

1.95

2.10

3.25

3.70

3.75

2.07*

3.61*

3.75

Directors’ interest in shares

The interests of the Directors as at 31 December 2022, including their spouses, dependents and 
close family members, in the Ordinary Shares of the Group were:

Robin Totterman

Christopher Kay

Christopher Hancock

Richard Peck

Angela Farrugia

Shaun Smith (appointed 01/12/2022)

Hugo Adams (appointed 01/12/2022)

2022

2021

18,625,005

2,178,730

19,861,213

2,200,000

18,940

9,523

31,904

–

16,500

16,440

9,523

11,904

–

–

Note: Options originally granted to Lord MacLaurin lapsed on his retirement. Options granted to Christopher 
Hancock and Angela Farrugia to reflect their work on the Eschenbach acquisition on 16 December 2020 were 
cancelled during the year in order to align the NEDs remuneration with best practice. No further share options have 
been granted to Non-Executive Directors. 

*   Weighted Average

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Directors’ employment and pension contributions to 31 December 2022

Lord MacLaurin

Robin Totterman

Chris Kay

Christopher Hancock

Richard Peck

Angela Farrugia

Shaun Smith

Hugo Adams

USD

Salary/Fees Taxable benefits

Total 
remuneration

49,891

316,200

281,617

59,375

124,944

61,539

5,154

5,669

–

49,891

1,370

317,570

19,260

300,877

–

–

–

–

–

–

–

–

–

–

Transactions with Directors

The only transactions between the Directors 
and the Group were as follows:

Kelso Place LLP

Rent is payable by INSPECS Limited to Kelso 
Place LLP on Kelso Place, the headquarters of 
the Group. This rent is reviewed to ensure it is 
on a normal commercial basis and amounted 
to $163,898 in the year to 31 December 2022 
(2021: $182,275). The building is owned by 
Kelso Place LLP, of which Robin Totterman is 
the controlling partner. 

Thorne Lancaster Parker

Chris Kay, a Director of the company is also a 
partner in Thorne Lancaster Parker. During the 
year the partnership charged 

INSPECS Limited $10,000 (2021: $53,000) in 
respect of professional services provided. On 
31 December 2022, INSPECS Limited owed 
Thorne Lancaster Parker $4,000 (2021: $nil) 
in respect of the above, with this balance 
included within trade payables. During the 
year the partnership charged Norville (20/20) 
Limited $9,000 (2021: $14,000) in respect 
of professional services provided, with 
$2,000 being owed at the end of the year 
(2021: $4,000 ).

Consultancy Costs

In addition to a Non-Executive Director 
salary, A Farrugia, a Non-Executive Director 
of the Group, was paid $17,000 (2021: 
$nil) during the year in respect of brand 
consultancy services.

Directors’ employment and pension contributions to 31 December 2021

Share price movement

The price movement of the shares in the Group from the lowest to highest in the year is set 
out below:

Highest market price in the year

Lowest market price in the year

£4.08

£0.38

USD

Salary/Fees Taxable benefits

Total 
remuneration

56,494

328,095

291,640

61,630

61,630

46,222

–

1,524

28,129

–

–

–

56,494

329,619

319,769

61,630

61,630

46,222

Lord MacLaurin

Robin Totterman

Chris Kay

Christopher Hancock

Richard Peck

Angela Farrugia

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Other work of the Committee in the year 

Appointment of new NEDs and CEO

Following the decision that Robin Totterman 
would become Chairman and Richard Peck 
would become Chief Executive Officer on 
the retirement of Lord MacLaurin, effective 
1 December 2022, the Committee helped 
to set the parameters for the recruitment 
and appointment of two replacement Non-
Executive Directors, both of whom were 
expected to have experience of working in 
larger, international listed companies and who, 
between them, should have recent experience 
of sitting on both Audit and Risk and 
Remuneration and Nomination committees. 

As Richard himself was previously a member 
of the Remuneration and Nomination 
Committee the selection of the new CEO and 
their remuneration was determined by the 
executives at the Board level, rather than by 
the Remuneration and Nomination committee. 
Following his appointment as CEO, Richard 
resigned from the Remuneration and 
Nomination Committee.

NED remuneration 

In order to ensure that the remuneration 
being offered would be sufficient to attract 
new Non-Executive Director candidates of the 
right calibre, the Committee commissioned a 
leading accountancy firm to benchmark current 
Non-Executive Director remuneration against 
the market. As a result of this review, the 
Committee recommended that adjustments 
were made to the pay of Non-Executive 
Directors in December 2022. 

Following the review, NEDs will receive 
£40,000 per annum as a base fee and £5,000 
for each Committee on which they serve. 

Board effectiveness review 

The Committee commissioned a self-review 
of Board effectiveness during the year 
which found that of 192 areas examined, 
120 were good or outstanding, 70 required 
some improvement and in 11, significant 
improvement was required. These areas 
have begun to be addressed as a priority 
and included

•  Engagement with and reporting 

on ESG 

•  Recruitment of NEDs with plc 

experience 

•  Review of functions of Board 

Committees

• 

Independent review of Board 
remuneration 

•  Greater involvement of Board in setting 

goals and decision-making

• 

Improved communication with 
Board members

Diversity, equity and inclusion 

The Committee specifically looked to hire new 
Non-Executive Directors who would bring 
greater diversity to the Board. Unfortunately, 
it was unable to secure any of the candidates 
who would have increased the diversity of 
the Board. The Board remains committed to 
this objective. 

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E N V I R O N M E N TA L ,   S O C I A L   A N D 
G O V E R N A N C E   C O M M I T T E E   R E P O R T

Angela Farrugia
Chair of Environmental, 
Social and Governance 
Committee

1Meetings during 2022

3Committee members

Meetings during 2022

Attendance

Richard Peck

Angela Farrugia

1

1

Angela Farrugia 
(from 1 November 2022)

Richard Peck 
(to 1 December 2022)

Hugo Adams 
(from 1 December 2022)

Christopher Hancock 
(from 1 December 2022)

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The Environmental, Social and 
Governance Committee is responsible 
for the following areas:
•  To support the Board in fulfilling its 

• 

obligations to the Group and comply 
with all statutory, legal and regulatory 
requirements and standards in relation 
to all ESG matters.
Independently review actions to 
ensure the Group’s consideration with 
environmental, social and governance 
matters and report to the Board and 
shareholders, as appropriate.

•  Define and further develop ESG goals 
and objectives and key metrics are 
monitored and fairly reported. 

•  Monitor the Group's ESG performance 

and execution, ensuring that it 
addresses matters of material impact.

•  Provide oversight and approval of 
key policies and projects required 
to implement the ESG strategy 
and roadmap.

•  Review current and emerging ESG 

trends, relevant international standards 
and legislative requirements. 
•  Review the effectiveness and 
performance of ESG projects 
and initiatives. 

•  Offer recommendations to the Board on 
any of the matters listed above that the 
Committee considers appropriate.

Membership 
The members of the Committee are all 
independent Non-Executive Directors 
in compliance with the QCA Code. The 
Committee is chaired by Angela Farrugia 
and until 30 November 2022 the other 
member of the Committee was Richard 
Peck, who at the time was an independent 
Non-Executive Director. On 1 December 
2022, Richard Peck was appointed Chief 
Executive Officer of the Group. He was 
replaced on the Committee by two 
independent Non-Executive Directors, 
Hugo Adams and Christopher Hancock, 
their biographies are on page 48. 

Meetings and attendance 
The Committee will meet at least twice 
per year. Non-committee members may 
be invited to attend meetings from time to 
time to provide additional expertise and 
assistance. 

The Committee is in particular supported 
by the Group ESG, Compliance and Risk 
Officer, Angela Eman and the Head of 
Innovations, Nick Youle.

The Committee ensures that all minutes 
are taken and that the Committee receives 
information and papers in a timely manner. 

The ESG Committee's first meeting was 
held in November 2022. The meeting 
focused on the Group's overall approach to 
ESG and our ESG roadmap to include: 

•  Review of community partnerships and 
charity support throughout the Group.

•  Parameters for Group sustainability 

reporting. 

•  Social initiatives, including student 

placements, focus groups and global 
opportunities to expand initiatives to 
continue to inspire and learn at all levels 
throughout the Group.

•  Overview of sustainable product and 
packaging concepts and updates on 
ongoing innovation projects. 
•  Progress of governance activities 

undertaken during 2022 including, 
but not limited to, Anti-Bribery and 
Corruption (ABC) risk assessment 
questionnaires and the development 
of our Group Code of Conduct and 
Risk Framework. 

The Committee's 2023 focus will continue to 
evaluate our ESG Roadmap. The Committee 
recognises the importance of Group 
collaboration for data recording, knowledge 
sharing and will continue to promote a 
sustainable outlook across the Group. 

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D I R E C T O R S ’   R E P O R T

Chris Kay  
CFO, Director

The Directors present their 
report together with the audited 
financial statements for the year 
ended 31 December 2022. The 
Corporate Governance Statement 
on pages 42 and 43 also forms 
part of this Directors’ Report.

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Review of business

The Chairman’s Statement on pages 
3 and 4, and the Strategic Report on 
pages 3 to 40 provides a review of the 
business, the Group’s trading for the 
year ended 31 December 2022, key 
performance indicators and an indication 
of future developments.

Principal activity

The principal activity of the Group in 
the year was that of design, production, 
sale, marketing and distribution of high 
fashion eyewear, lenses and OEM products 
worldwide.

Result and dividend

The Group has reported its Consolidated 
Financial Statements in accordance 
with International Financial Report 
Standards (IFRS).

The Group results for the year are set 
out in the Consolidated Statement of 
Comprehensive Income on page 73. 
The Company financial statements have 
been prepared under FRS 101 for the 
year ended 31 December 2022.

The Group’s revenue of $248.6m  
(FY21: $246.5m), gross margin of 
49.2% (FY21: 47%) and loss after tax of 
$7.8m (FY21: loss $5.4m) represent the 
effects of a turn down in our European 
business following uncertainty in relation 
to consumer confidence, principally 
caused by the political situation in 
Ukraine. Our results were also depressed 
due to adverse exchange movements in  
the second half of 2022, in particular  
the decrease in the Euro against the USD. 

Period ended

Revenue ($m)

Gross margin %

Loss after tax ($m)

Reported IFRS

31 December 
2022

31 December 
2021

248.6

49.2

(7.8)

246.5

47.0

(5.4)

The Board is not recommending a dividend (FY21: 1.25p). 

THE GROUP’S  
REVENUE OF

$248.6m

LOSS AFTER  
TAX OF

$7.8m

(FY21: $246.5m).

(FY21: loss $5.4m).

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D I R E C T O R S ’   R E P O R T  CONTINUED

Directors

The Directors of the Group during the year were:

Executive

Non-Executive

Robin Totterman (Chairman, CEO to 1 Dec 2022) Lord Ian MacLaurin (Retired 1 Dec 2022)

Richard Peck (CEO, NED to 1 Dec 2022)

Christopher Hancock

Christopher Kay (CFO)

Angela Farrugia

Shaun Smith (Appointed 1 Dec 2022)

Hugo Adams (Appointed 1 Dec 2022)

The names of the Directors, along with their brief biographical details, are given on page 48.

Political donations
The Group made no political donations in 
the financial period. 

Disclosure of information to auditor
As far as the Directors are aware, there 
is no relevant audit information (that is, 
information needed by the Group’s auditors 
in connection with preparing their report) of 
which the Group’s auditors are unaware, and 
each Director has taken all reasonable steps 
that he or she ought to have taken as a 
Director in order to make himself or herself 
aware of any relevant audit information and 
to establish that the Group’s auditors are 
aware of that information.

Financial risks
The financial risk management objectives of 
the Group, including credit risk, interest rate 
risk and foreign exchange risk, are provided 
in note 33 to the Consolidated Financial 
Statements on pages 110 to 112.

Share capital structure
At 31 December 2022, the Group's issued 
share capital was £1,016,715 divided into 
101,671,525 Ordinary Shares of 0.01p 
each. The holders of Ordinary Shares are 
entitled to one vote per share at the general 
meetings of the Group.

Directors’ interests

Substantial shareholdings

The Directors’ interests in the share capital of the Group at 31 December 2022 and 2021 is 
shown below:

At 31 December 2022, the Group had been notified of the following substantial 
shareholdings comprising of 3% or more of the issued Ordinary Share capital:

Robin Totterman

Christopher Kay

Lord Ian MacLaurin (retired 01/12/2022)

Christopher Hancock

Angela Farrugia

Richard Peck

Shaun Smith (appointed 01/12/2022)

Hugo Adams (appointed 01/12/2022)

2022

2021

18,625,005

19,861,213

2,178,730

2,200,000

71,428

18,940

31,904

9,523

–

16,500

78,346

16,440

11,904

9,523

–

–

Robin Totterman

Canaccord Genuity Group Inc

Amati Global Partners

Liontrust Asset Management

Hargreaves Lansdown

Royal London Asset Management GIS Ltd

Invesco Asset Management Limited

Stonehage Fleming

% of issued 
share capital

18.3%

17.6%

5.6%

5.6%

4.7%

3.9%

3.7%

3.1%

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D I R E C T O R S ’   R E P O R T  CONTINUED

Share option schemes
Details of employee share scheme, are 
set out in note 32 to the Consolidated 
Financial Statements.

Purchase of own shares
There was no purchase of our own shares in 
the period.

Going concern
As a result of the political situation in 
Ukraine the Group saw some disruption in 
2022. The disruption was mainly caused by 
global inflationary pressures, the continuing 
impact of COVID in Asia, cost of living 
rises, exchange rate turbulence with a 
strengthening USD and loss of consumer 
confidence. The Group also suffered from 
a decrease in external revenue in our Lens 
business, Norville. As discussed in the 
CEO’s review, Norville’s relocation from its 
old site to a new state-of-the-art facility 
caused significant disruption which caused 
operating losses in the lenses segment 
to increase significantly from $2.7m in 
2021 to $5.0m in 2022. Despite a positive 
first half to 2022, the Group suffered a 
downturn in business in the second half of 
the year, resulting in a trading update RNS 
announcement in October 2022. The Group 
traded above expectations in December 
2022 and as a result the outturn is ahead of 
the October 2022 reforecast.

The Directors have considered the Group’s 
financial forecasts, borrowing levels, 
leverage, and capital expenditure to the 
end of June 2024 (‘the going concern 
period’) as part of their comprehensive 
review. As of 31 December 2022, it was 
determined the Group was in technical 
breach of its cashflow cover loan covenant, 

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which has resulted in the re-classification 
of the loan balance ($45.7m) to a current 
liability in line with IAS 1. Subsequently, 
HSBC has waived the cashflow cover and 
leverage covenants on 31 December 2022.

The Board considered a base case, a 
downside scenario, and a reverse stress test 
to assess the effect of potential disruption 
to the supply chain, reducing consumer 
confidence due to rising interest rates and 
high global inflation, cost increases and 
pressure on rising employee costs due to 
the cost-of-living increases facing many 
individuals. The scenarios are as follows:

Base Case

•  The base case is the Board approved 
budget which has been updated with 
the Group’s trading results for Q1 
2023 and our estimate of trading to 
30 April. The budget was prepared 
assuming a continuation of the current 
political situation in Ukraine together 
with inflationary pressures across the 
World. The Group had seen a downturn 
in consumer confidence, especially in 
Europe due to the above factors. 

•  The revenue reduction in Europe 
towards the end of 2022 was a 
temporary slowdown and the Group 
has seen a strong rebound in our early 
2023 trading in Germany and the rest 
of Europe. 

•  The budget does not assume any 

acquisition expenditure.

•  Our US and other markets remain 
resilient and are trading in line 
with expectations.

•  The Group expects to be able 

to maintain its budgeted margin 
throughout 2023.

•  The base case includes Capital 

Reverse stress test

Expenditure through 2023 and 2024 for 
the new third plant in Vietnam and initial 
construction costs of the first European 
factory in Portugal.

• 

In this base case scenario, no covenant 
breaches or liquidity challenges 
are expected. 

Downside scenario
•  The Group has known forward orders 
for circa two months through to the 
middle of June 2023, therefore our 
downside scenario updates the base 
case with a 5.6% reduction in revenue 
from June 2023. The Directors believe 
that a 5.6% reduction from the base 
case is appropriately conservative based 
on the current trading position, the 
improved business through Norville, 
expected falling global inflation and 
increasing consumer confidence. A 5% 
reduction in Employee expenses takes 
affect from September 2023, reflecting 
a reduction of the expected senior 
management bonuses together with 
a reduction in marketing, advertising, 
entertaining, office expenses and other 
discretionary expenditure that would not 
affect operational performance in the 
medium term.

• 

In this downside scenario, no covenant 
breaches or liquidity challenges 
are expected.

The Group has considered the reasonably 
plausible downside scenario. The Group 
mitigates the risk of a long-term drop in 
revenue by having a diverse business that 
trades globally so that it is not reliant on 
any one region.

•  The reverse stress test updated our 

base case with a 24.2% drop in forecast 
revenue, whilst maintaining gross 
margin. The drop of 24.2% represents 
a significant reduction against actual 
trading in 2022 and is a reduction in 
revenue not previously experienced by 
the Group. This results in a breach in 
interest ratio covenant in March 2024 
that is recovered in June 2024. No other 
covenants were forecast to be breached 
in this period. The reverse stress test 
assumes some controllable costs saving 
by a reduction in employee expenses, 
reduction in headcount, a reduction 
in discretionary administration costs 
and removal of discretionary CAPEX 
spending, including a delay of the 
new manufacturing facility in Vietnam 
and construction costs for a factory in 
Portugal, and some repayment of the 
Rolling Credit Facility to reduce interest 
charges through the year.

The Group has considered the reverse stress 
test, which models a breach in the interest 
ratio covenant in March 2024. In this case 
the Directors have available further levers 
within its control to save costs and generate 
income. The Group also has the ability to 
discuss amending or waiving covenants 
with the bank should an unprecedented 
drop in revenue occur. Current trading is 
ahead of budget and there has been no 
erosion of margin. As a result, the directors 
consider that the reverse stress test is a 
remote possibility. 

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D I R E C T O R S ’   R E P O R T  CONTINUED

The Group’s borrowings with HSBC, 
amounting to $58.3m, contains three 
covenants; Leverage, Cashflow Cover and 
Interest Cover ratios. Compliance on these 
covenants is based on 12-month rolling 
periods for each Relevant Period. The 
facilities are due for renewal in October 
2024 and discussions for renewal have 
already taken place. Formal work on the 
renewal is expected to take place in Q3 
2023 with a view to extending the terms 
for a further 3 years from October 2024, 
it is not expected that any bullet payment 
will become due in October 2024 and 
the Directors are confident of a successful 
renewal to the facilities. 

Prior to a technical breach of one of the 
covenants in December 2022 the Group 
was in discussion to amend the facilities 
agreement with HSBC. Following the 
breach in cashflow cover in December 2022 
HSBC subsequently waived the cashflow 
cover and leverage covenants for the 
relevant period ending 31 December 2022. 
The covenant tests for 2023 have been 
amended by HSBC to increase the leverage 
cover for the March and June relevant 
periods; waive cashflow cover until the 
March 2024 relevant period; and decrease 
interest cover for the March and June 
relevant periods. There were no covenant 
breaches in any prior relevant period 
in 2022.

On this basis the Board has reasonable 
expectations that the Group and Company 
has adequate resources to continue 
as a Going Concern to 30 June 2024. 
Accordingly, the directors adopt the 
going concern basis in preparing the 
financial statements.

Post balance sheet events
The Board considers that no other material 
post balance sheet events occurred 
between the end of the period and the date 
of publication of this report.

Future developments
The Board intends to continue to pursue 
the business strategy as outlined in the 
Strategic Report on page 10.

Stakeholder involvement policies
The Directors believe that the involvement 
of employees, customers and suppliers is 
an important part of the business culture 
and contributes to the successes achieved 
to date (see our ESG Report on pages 24 
to 31).

Equal opportunities
The Group is committed to eliminating 
discrimination and encouraging diversity. 
Its aim is that its people will be truly 
representative of all sections of society and 
that each person feels respected and is 
able to perform to the best of their ability. 
The Group aims for its people to reflect the 
business’s diverse customer base.

The Group will not make assumptions about 
a person’s ability to carry out their work, 
for example based on their ethnic origin, 
gender, sexual orientation, marital status, 
religion or other philosophical beliefs, 
age or disability. Likewise, it will not make 
general assumptions about capabilities, 
characteristics and interests of particular 
groups that may influence the treatment of 
individuals, the assessment of their abilities 
and their access to opportunities for 
training, development and promotion.

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Special resolutions are also proposed 
to authorise the Directors, to a limited 
extent consistent with pre-emption Group 
guidelines, to allot new shares, to disapply 
statutory pre-emptions rights and to make 
market purchases of the Group's shares. 
The Notice of Annual General Meeting sets 
out the ordinary and special resolutions to 
be put to the meeting.

Approval
This Directors’ Report was approved on 
behalf of the Board on 03 May 2023.

Chris Kay
Chief Financial Officer

03 May 2023

Ethical business practices
The Group has a zero tolerance to bribery 
and corruption and is committed to ensure 
that it has appropriate procedures in place 
to counter this risk. A formal policy is in place 
and continual training is undertaken. The anti-
bribery and whistleblowing policy is reviewed 
annually by the Audit and Risk Committee.

SECR
Our Streamlined Energy and Carbon 
Reporting (SECR) framework can be found 
on pages 26 and 27. 

Auditor reappointment
The auditor, EY LLP, has indicated its 
willingness to be reappointed and, in 
accordance with section 489 of the 
Companies Act 2006, a resolution for 
reappointment will be proposed at the AGM.

Annual General Meeting
The Annual General Meeting will be held 
on 15 June 2023. The ordinary business 
comprises receipt of the Directors’ Report 
and audited financial statements for the year 
ended 31 December 2022, the re-election 
of Directors, the reappointment of EY as 
auditor and authorisation of the Directors to 
determine the auditor’s remuneration. 

O'Neill

O'Neill Team Rider – Corey Lopez

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S TAT E M E N T   O F   D I R E C T O R S ’   R E S P O N S I B I L I T I E S

The Directors are responsible for 
preparing the Annual Report and the 
financial statements in accordance 
with applicable law and regulation.

Company law requires the Directors 
to prepare financial statements for 
each financial year. Under that law, the 
Directors have prepared the Group 
financial statements in accordance with UK 
adopted Accounting Standards, and the 
Parent Company financial statements in 
accordance with United Kingdom Generally 
Accepted Accounting Practice (United 
Kingdom Accounting Standards, comprising 
FRS 101 ‘Reduced Disclosure Framework’), 
and applicable law. Under company law, 
Directors must not approve the financial 
statements unless they are satisfied that 
they give a true and fair view of the state of 
affairs of the Group and Parent Company, 
and of the profit or loss of the Group and 
the Parent Company for that period.

In preparing these financial statements, the 
Directors are required to:

•  Select suitable accounting policies and 

then apply them consistently

•  State whether applicable UK adopted 
Accounting Standards have been 
followed for the Group financial 
statements and United Kingdom 
Accounting Standards, comprising FRS 
101, have been followed for the Parent 
Company Financial Statements, subject 
to any material departures disclosed and 
explained in the financial statements

•  Make judgements and accounting 
estimates that are reasonable 
and prudent

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•  Prepare the financial statements on 
the going concern basis unless it is 
inappropriate to presume that the 
Group and the Parent Company will 
continue in business

The Directors are also responsible for 
safeguarding the assets of the Group and 
the Parent Company, and hence for taking 
reasonable steps for the prevention and 
detection of fraud and other irregularities.

The Directors are responsible for the 
maintenance of accounting records that are 
sufficient to show and explain the Group 
and the Parent Company’s transactions and 
disclose, with reasonable accuracy at any 
time, the financial position of the Group and 
the Parent Company, and enable them to 
ensure that the financial statements comply 
with the Companies Act 2006.

The Directors are responsible for the 
maintenance and integrity of the Group's 
website. Legislation in the United 
Kingdom governing the preparation and 
dissemination of financial statements may 
differ from legislation in other jurisdictions.

Directors’ confirmation

The Directors consider that the Annual 
Report and Accounts, taken as a whole 
are fair, balanced and understandable. 
They provide the information necessary 
for shareholders to assess the Group 
and Parent Company’s position and 
performance, business model and strategy.

On behalf of the Board

Richard Peck
Chief Executive Officer

03 May 2023

GX BY Lamb

Humphrey’s

Ted Baker

O'Neill Team Rider – Corey Lopez

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Financial Statements

64 

 Independent Auditor’s Report to the Members of  
INSPECS Group plc 

73  Consolidated Income Statement

73  Consolidated Statement of Other Comprehensive Income 

74  Consolidated Statement of Financial Position

75 

 Consolidated Statement of Changes in Equity

75 

 Consolidated Statement of Cash Flows

76 

 Notes to the Consolidated Financial Statements 

114   Company Balance Sheet

115   Company Statement of Changes in Equity 

116   Notes to the Company Financial Statements 

126   Appendix 1 – Comparative information in GBP

129   Company Information and Advisers 

Mini

Valerie

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Barbour

Marc O’Polo

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I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T
to the members of INSPECS Group plc

Opinion
In our opinion:
• 

INSPECS Group PLC’s Group financial statements and Parent Company financial statements 
(the ‘financial statements’) give a true and fair view of the state of the Group’s and of the 
Parent Company’s affairs as at 31 December 2022 and of the Group’s loss for the year 
then ended;

• 

• 

• 

the Group financial statements have been properly prepared in accordance with UK adopted 
international accounting standards;

the Parent Company financial statements have been properly prepared in accordance with 
United Kingdom Generally Accepted Accounting Practice; and

the financial statements have been prepared in accordance with the requirements of the 
Companies Act 2006.

We have audited the financial statements of INSPECS Group PLC (the ‘Parent Company’) and its 
subsidiaries (the ‘Group’) for the year ended 31 December 2022 which comprise:

Group

Parent Company

Consolidated income statement for the year 
ended 31 December 2022

Company balance sheet as at 
31 December 2022 

Consolidated statement of comprehensive 
income for the year then ended

Statement of changes in equity for the year 
then ended

Consolidated statement of financial position 
as at 31 December 2022

Related notes 1 to 14 to the financial statements 
including a summary of significant accounting 
policies Statement of cash flows for the year 
then ended

Consolidated statement of changes in equity 
for the year then ended

Consolidated statement of cash flows for the 
year then ended

Related notes 1 to 36 to the financial 
statements, including a summary of 
significant accounting policies

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The financial reporting framework that has been applied in the preparation of the Group financial 
statements is applicable law and UK adopted international accounting standards. The financial 
reporting framework that has been applied in the preparation of the Parent Company financial 
statements is applicable law and United Kingdom Accounting Standards, including FRS 101 
‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).

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 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 
as applied to listed entities, 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 
Going concern has been determined to be a key audit matter. 

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

Our evaluation of the directors’ assessment of the Group and Parent Company’s ability to continue 
to adopt the going concern basis of accounting included:

•  Understanding the process undertaken by management to perform the going concern 

assessment covering the going concern period to 30 June 2024; including details of available 
facilities, forecast covenant calculations, the results of management’s downside sensitivity and 
reverse stress testing analysis and their evaluation of the ongoing impact of COVID-19 and 
other macro-economic pressures including, but not limited to, inflationary increases related to 
the cost of living, the risk of reduced demands for products due to recession and the Group’s 
access to available sources of liquidity;

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•  Confirming the availability of debt facilities and review of underlying terms, including 
covenants to 30 June 2024, and confirming the repayments due within this period are 
accurately included;

•  Considering events occurring immediately outside of the going concern period, including 
the maturity of the debt facilities in October 2024, and whether these could lead to the 
identification of a material uncertainty related to going concern;

•  Reading the covenant waiver confirmation letter received from the Bank in March 23 which 

•  Testing the clerical accuracy of the model used to prepare the Group’s going concern 

confirmed that the covenant testing period at 31 December 2022 had been waived; 

assessment to 30 June 2024, including the forecast covenant compliance; and

•  Holding a discussion with the Bank to confirm the contents of their correspondence with 
the Group and consider any contra indicators to the assumptions and conclusions within 
management’s going concern assessment;

•  As the covenant waiver confirmation was not received until after the Balance Sheet date, 
we ensured the borrowing facilities with the Bank were appropriately classified within 
current liabilities; 

•  Assessing the reliability of the cashflow forecast by analysing management’s historical 

forecasting accuracy. We understood key inputs underpinning the Group’s forecasts which 
includes sales receipts and cash payment schedule, and challenged these using supporting 
evidence including debt agreements, existing facilities, and FY23 period performance to date;

•  Evaluating management’s key assumptions underpinning the Group’s forecasts (such as 

revenue growth, gross margins and cost reductions as well as the impact of climate change), 
by comparing to externally produced market analyses, including information from competitors; 

•  Challenging, based on our own independent sensitivity testing and specialist input, whether 

the downside case prepared by management could lead to a covenant breach. Our 
assessment considered the impact and likelihood of:
 – Current macro-economic conditions on ability to meet revenue forecasts

•  Assessing the appropriateness of the going concern disclosure on pages 76 and 77. 

Our key observations
•  At 31 December 2022 the Group has committed facilities of $18.7m term loan and a 

Revolving Credit Facility of $37m to October 2024. The Group has utilised $36.4m of the 
Revolving Credit Facility at 31 December 2022. The Group also had a cash balance of $26.8m 
at 31 December 2022. 

•  Management consider the reverse stress test scenario whereby a decline in performance is 

severe enough to cause a liquidity issue and covenant breach to be remote.

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 
and Parent Company’s ability to continue as a going concern for the period to 30 June 2024.

Our responsibilities and the responsibilities of the directors with respect to going concern are 
described in the relevant sections of this report. However, because not all future events or 
conditions can be predicted, this statement is not a guarantee as to the Group’s ability to continue 
as a going concern.

 – Loss of major customers

 – Loss of significant brand licences

 – Increases in costs that are unable to be passed on to customers

Overview of our audit approach

Audit scope

•  We performed an audit of the complete financial information of 5 

•  Challenging the controllable mitigating actions such as implementing reduced working weeks, 
pay reductions and reduced capital expenditure that management could take in the event of a 
decline in trading; 

•  Performing a ‘reverse stress test’ scenario that would lead to a covenant breach and 

challenging management’s assessment as to whether the scenario is remote by considering 
current year trading performance, external market data and controllable mitigating actions; 

Key audit 
matters

components and audit procedures on specific balances for a further 
1 component.

•  The components where we performed full or specific audit procedures 
accounted for 94% of loss before tax, 86% of Revenue and 91% of 
Total assets.

•  Inappropriate revenue recognition

•  Valuation of goodwill

•  Inventory valuation

•  Going concern

Materiality

•  Overall Group materiality of $1,242,000 which represents 0.5% of revenue.

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An overview of the scope of the Parent Company and Group audits 

The table below illustrates the coverage obtained from the work performed by our audit teams.

Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance 
materiality determine our audit scope for each company within the Group. Taken together, this 
enables us to form an opinion on the consolidated financial statements. We take into account size, 
risk profile, the organisation of the Group and effectiveness of Group-wide controls, the potential 
impact of climate change and changes in the business environment when assessing the level of 
work to be performed at each company.

In assessing the risk of material misstatement to the Group financial statements, and to ensure 
we had adequate quantitative coverage of significant accounts in the financial statements, of the 
30 reporting components of the Group, we selected 6 components covering entities within the 
UK, Hong Kong (including sub-components based in China and Vietnam), Germany and the USA, 
which represent the principal business units within the Group.

Of the 6 components selected, we performed an audit of the complete financial information 
of 5 components (‘full scope components’) which were selected based on their size or risk 
characteristics. For the remaining component (‘specific scope component’), we performed audit 
procedures on specific accounts within that component that we considered had the potential for 
the greatest impact on the significant accounts in the financial statements either because of the 
size of these accounts or their risk profile.

In addition, we conducted specified procedures over a number of account balances relating to 
4 reporting units, representing 27% of the Group’s loss before tax, 10% of the Group’s revenue 
and 5% of the Group’s total assets. For all these components we performed procedures related to 
revenue and cash and then performed other procedures determined upon size and risk. 

Of the remaining 20 components that together represent 14% of the Group’s revenue none 
are individually greater than 3% of the Revenue. For these components, we performed other 
procedures including: analytical reviews, testing of consolidation journals and intercompany 
eliminations and foreign currency translation recalculations to respond to any potential risks of 
material misstatement to the Group financial statements.

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Full scope

Specific scope

Specified 
procedures

Full, specific, 
and specified 
procedures 
coverage

Remaining 
components

Total reporting 
components

2022

2021

% of 
Group 
loss 
before 
tax (on 
absolute 
basis)1

% of 
Group 
Revenue

% of 
Group 
Assets

Number

Reporting components

Number

5

1

4

66%

72%

84%

2%

5%

2%

27%

10%

5%

5

3

2

% of 
Group 
loss 
before 
tax (on 
absolute 
basis)1

66%

17%

% of 
Group 
Revenue

74%

13%

% of 
Group 
Assets

85%

5%

1%

0%

6%

10

94%

86%

91%

10

84%

90%

96%

20

6%

14%

9%

23

16%

10%

4%

30

100% 100% 100%

33

100% 100% 100%

1.  Coverage of loss before tax measured on an absolute basis for each component (components with a profit would be 

added to both the numerator and denominator).

The audit scope of the specific scope components included in the table above may not have 
included testing all significant accounts of the component but will have contributed to the 
coverage of significant accounts tested for the Group.

Changes from the prior year 
The approach to scoping is similar to the prior year audit. Our scoping changes from the 
prior year are due to change in either risk assigned to the component or contribution by the 
component. In particular, we challenged the procedures that we undertook on specific scope 
components and moved these to specified procedures where appropriate. This meant that we 
were able to direct our procedures to focus on the risks relevant to these components.

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Involvement with component teams 
In establishing our overall approach to the Group audit, we determined the type of work that 
needed to be undertaken at each of the components by us, as the primary audit engagement 
team, or by component auditors from other EY global network firms operating under our 
instruction. Of the 5 full scope components, audit procedures were performed on 2 of these 
directly by the primary audit team. For the specific scope component, where the work was 
performed by component auditors, we determined the appropriate level of involvement to enable 
us to determine that sufficient audit evidence had been obtained as a basis for our opinion on 
the Group as a whole. The primary team undertook the audit procedures on all of the specified 
procedures components. 

The Group audit team continued to follow a programme of planned visits that has been designed 
to ensure that the Senior Statutory Auditor visits full scope overseas entities every second year 
on a planned rotation policy where this is possible. During the current year’s audit cycle, visits 
were undertaken by the Senior Statutory Auditor to meet with component teams from the 
following locations: USA (Tura) and Hong Kong (Killine.) Other senior primary audit team members 
visited Germany (Eschenbach Optik). These visits involved discussing the audit approach with 
the component team and any issues arising from their work, meeting with local management, 
attending closing meetings, and reviewing relevant audit working papers on risk areas. The 
primary team, including the Senior Statutory Auditor, interacted regularly with the component 
teams where appropriate during various stages of the audit, reviewed relevant working papers 
and were responsible for the scope and direction of the audit process. This, together with the 
additional procedures performed at Group level, gave us appropriate evidence for our opinion 
on the Group financial statements.

Climate change 
Stakeholders are increasingly interested in how climate change will impact INSPECS Group plc. 
The Group has determined that the most significant future impacts from climate change on their 
operations will be from supply chain disruption and possible cost increases to improve product 
sustainability in response to changing customer preferences. These are explained on page 39 
in the risk management section of the strategic report. They have also explained their climate 
commitments on pages 27 to 29. All of these disclosures form part of the ‘Other information’, 
rather than the audited financial statements. Our procedures on these unaudited disclosures 
therefore consisted solely of considering whether they are materially consistent with the financial 
statements, our knowledge obtained in the course of the audit or otherwise appear to be 
materially misstated, in line with our responsibilities on ‘Other information’.

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In planning and performing our audit we assessed the potential impacts of climate change on the 
Group’s business and any consequential material impact on its financial statements. 

The Group has explained in note 13 their articulation of how climate change has been reflected 
in the financial statements. Significant judgements and estimates relating to climate change are 
included in note 3 and these relate to the impact of climate change on cashflow assessments 
used as part of the goodwill impairment assessment. These disclosures also explain where 
governmental and societal responses to climate change risks are still developing, and where 
the degree of certainty of these changes means that the Group continues to monitor the future 
economic impact on their business model as part of the goodwill impairment assessment. As set 
out on page 39 and note 13, the potential future impacts are currently determined to be low risk 
in the financial statements for the current year.

Our audit effort in considering the impact of climate change on the financial statements was 
focused on evaluating management’s assessment of the impact of climate risk, physical and 
transition, their climate commitments, the effects of material climate risks disclosed on page 39 
and whether these have been appropriately reflected in judgements and estimates following 
the requirements of UK adopted international accounting standards. As part of this evaluation, 
we performed our own risk assessment, to determine the risks of material misstatement in the 
financial statements from climate change which needed to be considered in our audit.

We also challenged the Directors’ considerations of climate change risks in their assessment of 
going concern and associated disclosures. 

Based on our work we have not identified the impact of climate change on the financial 
statements to be a key audit matter or to impact a key audit matter.

Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance 
in our audit of the financial statements of the current period and include the most significant 
assessed risks of material misstatement (whether or not due to fraud) that we identified. These 
matters included those which had the greatest effect on: the overall audit strategy, the allocation 
of resources in the audit and directing the efforts of the engagement team. These matters were 
addressed in the context of our audit of the financial statements as a whole, and in our opinion 
thereon, and we do not provide a separate opinion on these matters.

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Risk

Our response to the risk

Risk of manual override through 
inappropriate manual journals 
to revenue or inappropriate 
calculation of right of return 
provision (2022 $248.6m, 
2021 $246.5m)

In order to address this risk we

Conducted targeted transaction testing to respond 
to the risk of fraud in particular focused on manual 
journal entries including top side adjustments 
posted to revenue using lower testing thresholds.

Refer to Accounting policies 
(page 78); and Note 5 of 
the Consolidated Financial 
Statements (page 86)

Used a data driven approach to obtain appropriate 
assurance over the full revenue data set through 
correlation analysis over sales and cash receipts to 
test the existence and occurrence of revenue being 
recognised in the correct period. 

Revenue performance is a 
focus for stakeholders who 
expect a year on year growth in 
revenues. Most of the Group’s 
sales arrangements typically 
require little judgement to be 
exercised, with revenue being 
recognised on the delivery of 
goods. However, there is a risk 
that management may override 
controls to intentionally misstate 
revenue transactions by recording 
inappropriate manual topside 
journals to revenue.

There are key judgements 
and estimates undertaken by 
management in calculating 
the right of return or rebate 
provisions. As such there is a 
heightened risk that management 
could manipulate these 
judgemental areas to understate 
the year end provisions and, in 
doing so, misstate revenue.

The level of risk associated to this 
key audit matter is unchanged 
from the prior year.

Used a detailed analytical review to compare year 
on year revenue balances to our expectations, 
management’s forecasts and, where possible, 
publicly available information.

Enquired of management as to the existence of 
rebate or return arrangements with key customers.

Checked the arithmetical accuracy of rebate 
and return calculations by performing our 
own recalculation.

Identified new agreements that have been agreed 
within the current financial period as well as new 
agreements entered into post year end to challenge 
accounting treatment applied.

To ensure completeness, we compared current year 
agreements with those existing in prior year as well 
as reviewing any return transactions post year end.

A sample of rebate and returns provisions was 
selected with inputs to these calculations validated 
through challenge of the assumptions and 
estimations made which included preparing our own 
point estimate. 

Agreed calculations to customer contracts 
or agreements where available or payments 
subsequent to year-end.

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Key observations 
communicated to the Audit 
Committee

Our audit procedures did not 
identify evidence of material 
misstatements related to 
revenue recognition and 
we found no evidence of 
management bias. 

The procedures we 
performed did not identify 
any material unsupported 
manual adjustments to 
revenue or any unexplained 
anomalies from our 
revenue analytics.

We concluded that the 
right of return and rebates 
provisions are appropriately 
stated at year-end. 

Risk

Our response to the risk

Key observations 
communicated to the Audit 
Committee

We performed full and specific scope audit 
procedures over this risk area in 6 locations, which 
covered 72% of the risk amount. We also performed 
specified procedures in 3 locations, which covered 
10% of the risk amount. 

Procedures to respond to this risk were 
performed by both the primary audit team and 
component teams.

In order to address this risk we:

Understood the methodology applied by 
management in identifying CGUs and assessed 
this against the requirements of IAS 36 impairment 
of assets.

Validated that the cash flow forecasts used in 
the valuation were consistent with information 
approved by the Board and reviewed the historical 
accuracy of management’s forecasts.

Evaluated the implied growth rates beyond FY22 
by considering evidence available to support 
these assumptions, their consistency with findings 
from other areas of our audit and by performing 
sensitivity analyses.

Involved EY valuation specialists to independently 
construct our own expectation of the discount rates 
for a market participant from first principles.

Challenged the long-term growth rates applied 
within the models including comparison to 
economic and industry forecasts.

Impairment of goodwill (2022 
$67.2m, 2021 $75.9m)

Refer to the Audit and Risk 
Committee Report (page 51); 
Accounting policies (page 77); 
and Note 13 of the Consolidated 
Financial Statements (pages 93 
and 94)

There is a risk that, as a result 
of challenging macro-economic 
conditions, Cash Generating Units 
(‘CGUs’) may not achieve the 
cash flow to support the carrying 
value of goodwill leading to an 
impairment charge. 

There is a significant amount 
of goodwill relating to legacy 
acquisitions of $67m included in 
the balance sheet. Management 
are required to carry out an 
impairment review of goodwill 
under IFRS which will involve 
judgement and estimates 
regarding the future results of the 
business, likely growth rates and 
discount rates used. 

Our year end audit 
procedures did not identify 
evidence of material 
misstatement regarding the 
carrying value of goodwill in 
the Group. 

Management has disclosed 
the sensitivities related to 
reasonable possible change 
in key assumptions in note 
13 in accordance with the 
requirements of IAS 36.

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Risk

Our response to the risk

A relatively small change in these 
key assumptions could give 
rise to a material change in the 
estimated recoverable amount 
of goodwill.

Performed sensitivity analyses at a CGU level by 
stress testing key assumptions in the model to 
consider the degree to which these assumptions 
would need to change before an impairment charge 
is triggered.

The level of risk associated to this 
key audit matter is unchanged 
from the prior year.

Analysed available information to identify any 
contrary evidence, including consideration of 
competitor performance.

Assessed the disclosures in the financial statements 
against the requirements of IAS 36, in particular 
in respect of the requirements to disclose further 
sensitivities for CGUs where a reasonably possible 
change in key assumptions would cause impairment.

The primary audit team performed all audit 
procedures over this risk area which covered 100% 
of the value of goodwill.

In order to respond to this risk we:

Obtained aged inventory listings and assessed 
whether older inventory has been appropriately 
provided for.

Obtained management’s inventory provision 
calculations and understood the methodology 
applied in calculating the provision and tested 
inputs into the calculation and clerical accuracy.

Challenged management’s approach on inventory 
obsolescence and compared key assumptions 
against historical and post year-end sales data, 
industry forecasts, customer orders and expected 
consumer demand.

After considering adjustments 
made to the financial 
statements as a result of our 
audit procedures, we did not 
identify evidence of further 
misstatements related to 
inventory valuation as a result 
of inappropriate inventory 
provisioning policies.

Our targeted procedures at 
the two components where 
issues related to inventory 
existence had been found in 
the prior year did not identify 
any audit differences in the 
current year.

Inventory valuation (2022 
$58.3m, 2021 $55.7m)

Refer to the Audit and Risk 
Committee Report (page 52); 
Accounting policies (page 80); 
and Note 17 of the Consolidated 
Financial Statements (page 97)

The valuation of inventory 
across the Group is dependent 
on establishing appropriate 
valuation processes. The 
assessment of how much excess 
and obsolete inventory exists at 
year end requires judgement to 
be applied in determining the 
inventory valuation and level of 
provisioning required. If these 
judgements are not appropriate 
then there is a risk that inventory 
is incorrectly valued.

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Key observations 
communicated to the Audit 
Committee

Risk

Our response to the risk

Key observations 
communicated to the Audit 
Committee

Existence of inventory at 
two components has also 
been identified as an area of 
heightened risk due to control 
failures in the prior year resulting 
in errors in inventory balances at 
both of these locations.

This is a new key audit matter in 
the current year.

Performed physical inventory stocktakes at in-scope 
locations at or near to the year-end date. Special 
considerations were made for 2 components with 
lower testing thresholds applied due to prior year 
issues identified.

Using a lower testing threshold, we tested 
reconciling items on the year-end inventory sub-
ledger reconciliations at the two components where 
control issues were identified in the prior year. 

We performed full and specific scope audit 
procedures over this risk area in 6 locations, which 
covered 90% of the risk amount. We also performed 
specified procedures in 3 locations, which covered 
8% of the risk amount. 

Procedures to respond to this risk were performed 
by both the primary and component audit teams.

As a result of the control failures in the prior year related to inventory and the effort required 
to audit the inventory provisions, we have identified a new key audit matter related to 
inventory valuation.

In the prior year, our auditor’s report included key audit matters in relation to acquisition 
accounting and uncertain tax positions. In the current year, no acquisitions took place and the 
release of the transfer pricing provision in the prior year meant that the value and associated 
judgement related to uncertain tax positions was not considered to be a key audit matter in the 
current year.

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I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T  CONTINUED
to the members of INSPECS Group plc

Our application of materiality 
We apply the concept of materiality in planning and performing the audit, in evaluating the effect 
of identified misstatements on the audit and in forming our audit opinion. 

Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could 
reasonably be expected to influence the economic decisions of the users of the financial 
statements. Materiality provides a basis for determining the nature and extent of our 
audit procedures.

We determined materiality for the Group to be $1,242 thousand (2021: $824 thousand), which is 
0.5% of revenue (2021: 3% of adjusted EBITDA.) We believe that revenue is the metric which is 
used most prevalently by Group management in their internal and external reporting. Therefore, 
given this focus, we consider this is the most appropriate basis to use for calculating materiality. 
This is a change from the prior year basis of using an adjusted EBIDTA measure as the basis for 
calculating materiality. We consider revenue to be more appropriate given the prominence of this 
measure in reporting during a period of ongoing integration of previously acquired businesses 
into the Group and volatility in earnings due to macro-economic factors. Additionally, the use of 
an adjusted measure meant there was judgement in determining which items should be adjusted 
and this judgement has now been removed. 

We determined materiality for the Parent Company to be $709 thousand (2021: $963 thousand), 
which is 0.5% (2021: 0.5%) of total assets. 

During the course of our audit, we reassessed our planning materiality and noted no need to 
change to the basis that materiality was initially based on. We updated our planning materiality 
to reflect actual results being different to the forecast used to calculate planning materiality and 
performed our testing at this level.

Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount 
to reduce to an appropriately low level the probability that the aggregate of uncorrected and 
undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Group’s overall control 
environment, our judgement was that performance materiality was 50% (2021: 50%) of our 
planning materiality, namely $621 thousand (2021: $411 thousand). We have set performance 
materiality at this percentage due to the high level of corrected and uncorrected misstatements 
identified in the prior financial period. 

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Audit work at component locations for the purpose of obtaining audit coverage over significant 
financial statement accounts is undertaken based on a percentage of total performance 
materiality. The performance materiality set for each component is based on the relative scale and 
risk of the component to the Group as a whole and our assessment of the risk of misstatement 
at that component. In the current year, the range of performance materiality allocated to 
components was $61 thousand to $359 thousand (2021: $44 thousand to $300 thousand).

Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit 
differences in excess of $62 thousand (2021: $41 thousand), which is set at 5% of planning 
materiality, as well as differences below that threshold that, in our view, warranted reporting on 
qualitative grounds. 

We evaluate any uncorrected misstatements against both the quantitative measures of materiality 
discussed above and in light of other relevant qualitative considerations in forming our opinion.

Other information 
The other information comprises the information included in the annual report set out on pages 
1 to 62, other than the financial statements and our auditor’s report thereon. The directors are 
responsible for the other information within the annual report. 

Our opinion on the financial statements does not cover the other information and, except to 
the extent otherwise explicitly stated in this 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 the other information, we are required to report that fact.

We have nothing to report in this regard.

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I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T  CONTINUED
to the members of INSPECS Group plc

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• 

the information given in the strategic report and the directors’ report for the financial year for 
which the financial statements are prepared is consistent with the financial statements; and 

• 

 the strategic report and directors’ report have been prepared in accordance with applicable 
legal requirements.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent company and its 
environment obtained in the course of the audit, we have not identified material misstatements in 
the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies 
Act 2006 requires us to report to you if, in our opinion:
•  adequate accounting records have not been kept by the Parent company, or returns adequate 

for our audit have not been received from branches not visited by us; or

• 

the Parent company financial statements are not in agreement with the accounting records 
and returns; or

•  certain disclosures of directors’ remuneration specified by law are not made; or

•  we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 62, the 
directors 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 directors 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 directors are responsible for assessing the Group and 
Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related 
to going concern and using the going concern basis of accounting unless the directors either 
intend to liquidate the Group or the Parent company or to cease operations, or have no realistic 
alternative but to do so.

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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.

Explanation as to what extent the audit was considered capable of detecting irregularities, 
including fraud 
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We 
design procedures in line with our responsibilities, outlined above, to detect irregularities, 
including fraud. The risk of not detecting a material misstatement due to fraud is higher than the 
risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for 
example, forgery or intentional misrepresentations, or through collusion. The extent to which our 
procedures are capable of detecting irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with both those 
charged with governance of the company and management. 

•  We obtained an understanding of the legal and regulatory frameworks that are applicable 

to the Group and determined that the most significant are those that relate to the reporting 
framework (UK adopted international accounting standards, United Kingdom Generally 
Accepted Accounting Practice, the Companies Act 2006 and the UK Corporate Governance 
Code) and the relevant tax laws and regulations in the jurisdictions in which the Group 
operates. We understood how INSPECS Group plc is complying with those frameworks 
by making enquiries of management, the Directors, and those responsible for legal and 
compliance procedures. We corroborated our inquiries through our review of board minutes, 
papers provided to the Audit Committee and attendance at meetings of the Audit Committee 
as well as consideration of the results of our audit procedures across the Group.

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

Helen McLeod-Jones (Senior statutory auditor) 
for and on behalf of Ernst & Young LLP, Statutory Auditor
Bristol

03 May 2023

I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T  CONTINUED
to the members of INSPECS Group plc

•  We assessed the susceptibility of the Group’s financial statements to material misstatement, 
including how fraud might occur by meeting with management from various parts of the 
business to understand where it considered there was susceptibility to fraud. We also 
considered performance targets and their influence on efforts made by management to 
manage earnings or influence the perceptions of investors. We considered the programmes 
and controls that the Group has established to address risks identified, or that otherwise 
prevent, deter and detect fraud; and how senior management monitors those programs and 
controls. Where the risk was considered to be higher, we performed audit procedures to 
address each identified fraud risk. These procedures included testing manual journals and 
were designed to provide reasonable assurance that the financial statements were free from 
fraud or error.

•  Based on this understanding we designed our audit procedures to identify non-compliance 
with such laws and regulations. Our procedures involved enquiries of Group management, 
and those charged with governance, and legal counsel, as well as journal entry testing, 
with a focus on manual consolidation journals and journals indicating significant or unusual 
transactions based on our understanding of the business. Through our testing we challenged 
the assumptions and judgements made by management in respect of significant one-off 
transactions in the financial year and significant accounting estimates as referred to in the key 
audit matters section above. At a component level, our full and specific scope component 
audit team’s procedures included enquiries of component management; journal entry testing; 
and focused testing, including in respect of the key audit matter of revenue recognition. We 
also leveraged our data analytics platform in performing our work on the order to cash and 
purchase to pay processes to assist in identifying higher risk transactions for testing.

•  Where we identified potential non-compliance with laws and regulations, we developed an 
appropriate audit response and communicated directly with components impacted. Our 
procedures involved: understanding the process and controls to identify non-compliance, 
inquiring of key stakeholders, understanding the fact patterns in each case, reading the output 
from management’s own investigation and using specialists including our forensics team to 
support us in concluding on the matters identified as applicable. 

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

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C O N S O L I D AT E D   I N C O M E   S TAT E M E N T
for the year ended 31 December 2022

C O N S O L I D AT E D   S TAT E M E N T   O F   
O T H E R   C O M P R E H E N S I V E   I N C O M E
for the year ended 31 December 2022

Notes

2022 
$’000

2021 
$’000

5

248,577

246,471

7, 10

(126,291)

(130,699)

122,286

115,772

(7,783)

(7,795)

Loss for the year

Other comprehensive (loss)/income

2022 
$’000

(7,816)

2021
Restated 
$’000

(5,435)

Exchange differences on translation of foreign operations

(7,459)

2,891

(7,459)

(15,275)

(15,275)

2,891

(2,544)

(2,544)

7, 10

(115,970)

(106,436)

Other comprehensive (loss)/income for the year, net 
of income tax

Total comprehensive loss for the year

Attributable to: Equity holders of the Parent

The notes on pages 76 to 113 form part of these Financial Statements.

(1,467)

(1,814)

(2,528)

(3,829)

134

23

(9,481)

1,665

(7,816)

1,541

(2,588)

(5,418)

(2,775)

118

(10)

(9,132)

3,697

(5,435)

(7,816)

(5,435)

$(0.08)

$(0.05)

$(0.08)

$(0.05)

8

33

9

9

16

11

12

12

Revenue

Cost of sales

Gross profit

Distribution costs

Administrative expenses

Operating (loss)/profit

Non-underlying costs

Exchange adjustment on borrowings

Finance costs

Finance income

Share of profit/(loss) of associate

Loss before income tax

Income tax credit

Loss for the year

Attributable to:  
Equity holders of the Parent

Earnings per share 

Basic loss for the year attributable to the equity 
holders of the Parent

Diluted loss for the year attributable to the equity 
holders of the Parent

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C O N S O L I D AT E D   S TAT E M E N T   O F   F I N A N C I A L   P O S I T I O N
as at 31 December 2022

ASSETS

Non-current assets
Goodwill

Intangible assets

Property, plant and equipment

Right-of-use assets

Investment in associates

Deferred tax assets

Current assets
Inventories

Trade and other receivables

Tax receivables

Cash and cash equivalents

Assets held for sale

Total assets

EQUITY

Shareholders’ equity
Called up share capital

Share premium

Foreign currency translation reserve

Share option reserve

Merger reserve

Retained earnings

Total equity

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Notes

2022 
$’000 

2021 
Restated 
$’000

Notes

2022 
$’000

2021
Restated 
$’000

13

14

15

25

16

29

17

18

19

20

21

22

22

22

22

22

67,234

43,756

21,078

23,810

135

8,476

164,489

58,257

37,676

4,453

26,799

127,185

1,006

292,680

1,389

122,291

(4,657)

3,548

7,296

223

75,945

54,454

24,569

22,269

48

12,540

189,825

55,664

42,229

3,468

29,759

131,120

–

320,945

1,389

122,291

2,802

2,001

7,296

9,429

130,090

145,208

LIABILITIES

Non-current liabilities

Financial liabilities – borrowings

Interest-bearing loans and borrowings

Deferred consideration

Deferred tax liabilities

Current liabilities

Trade and other payables

Right of return liabilities

Financial liabilities – borrowings

Interest-bearing loans and borrowings

Invoice discounting

Deferred consideration

Tax payable

Total liabilities

Total equity and liabilities

24

28

29

 23

 5

 24

 24

28

 30

20,018

1,634

11,553

33,205

47,363

12,838

62,600

1,803

3,046

1,735

129,385

162,590

292,680

69,194

3,107

20,517

92,818

53,317

11,100

13,289

2,433

–

2,780

82,919

175,737

320,945

The notes on pages 76 to 113 form part of these Financial Statements. Registered Company 
number: 11963910.
The Financial Statements were approved by the Board of Directors on 03 May 2023 and were 
signed on its behalf by: 

R Peck 
Director 

C Kay
Director

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C O N S O L I D AT E D   S TAT E M E N T   O F   
C H A N G E S   I N   E Q U I T Y
for the year ended 31 December 2022

C O N S O L I D AT E D   S TAT E M E N T   O F 
C A S H   F L O W S
for the year ended 31 December 2022

Called 
up share 
capital 
$’000

Share 
premium 
$’000

Foreign 
currency 
translation 
reserve 
$’000

Share 
option 
reserve 
$’000

Notes

Retained 
earnings 
$’000

Merger 
reserve 
$’000

Total 
equity 
$’000

1,384 121,940

(89)

867 14,429

7,296 145,827

Cash flows from operating activities

Interest paid

Tax paid

Net cash from operating activities

Cash flows from investing activities

(5,435)

Purchase of intangible fixed assets

–

–

–

5

–

–

–

–

351

–

–

2,891

2,891

–

–

–

(5,435)

–

(5,435)

–

–

(350)

435

1,484

–

–

–

–

–

–

2,891

(2,544)

441

1,484

1,389 122,291

2,802

2,001

9,429

7,296 145,208

–

–

–

–

–

–

22

22

22

22

–

–

–

–

–

–

–

–

(7,816)

(7,459)

–

–

–

–

(7,816)

(7,459)

(7,459)

–

(7,816)

– (15,275)

–

–

–

1,729

–

(182)

182

–

(1,572)

–

–

–

1,729

–

(1,572)

Purchase of property, plant and equipment

Acquisition of subsidiaries, net of cash acquired

Purchase of shareholding in associate

Interest received

Net cash used in investing activities

Cash flow from financing activities

Proceeds from the exercise of share options

New bank loans in the year

Bank loan principal repayments in year

Transaction costs on debt refinancing

Movement in invoice discounting facility

Dividends paid to equity holders of the Parent

Principal payments on leases

Net cash (used in)/from financing activities

(Decrease)/increase in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Effect of foreign exchange rate changes

Cash and cash equivalents at end the of year

Notes

27

14

15

16

9

22

26

26

26

22

26

19

2022 
$’000

12,358

(3,652)

(3,629)

5,077

(1,042)

(3,193)

–

(88)

134

2021 
$’000

24,895

(1,968)

(2,910)

20,017

(1,508)

(6,137)

(8,134)

–

118

(4,189)

(15,661)

–

12,783

(10,381)

(99)

(384)

(1,572)

(4,745)

(4,398)

(3,510)

29,759

550

26,799

355

26,751

(22,873)

(782)

2,477

–

(4,224)

1,704

6,060

23,776

(77)

29,759

Balance at 
1 January 2021

Changes in equity

Loss for the year

Other comprehensive 
income (restated)

22

Total comprehensive 
loss (restated)

Exercise of share options 21, 22

Share-based payments

22

Balance at 
31 December 2021 
(Restated)

Changes in equity

Loss for the year

Other comprehensive 
loss

Total comprehensive 
loss

Share-based payments

Share options cancelled

Cash dividends

Balance at 
31 December 2022

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1,389 122,291 (4,657) 3,548

223

7,296 130,090

The notes on pages 76 to 113 form part of these Financial Statements.

The notes on pages 76 to 113 form part of these Financial Statements.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
for the year ended 31 December 2022

1. General information
INSPECS Group plc is a public company limited by shares and is incorporated in England and 
Wales (company number 11963910). The address of the Company’s principal place of business is 
7-10 Kelso Place, Upper Bristol Road, Bath BA1 3AU. 

The Board considered a base case, a downside scenario, and a reverse stress test to assess the 
effect of potential disruption to the supply chain, reducing consumer confidence due to rising 
interest rates and high global inflation, cost increases and pressure on rising employee costs due 
to the cost-of-living increases facing many individuals. The scenarios are as follows:

The principal activity of the Group in the year was that of design, production, sale, marketing and 
distribution of high fashion eyewear, lenses and OEM products worldwide. The principal activity 
of the Company was that of a parent company providing services that support the Group. From 
the start of the period the Company has incurred costs to support the Group which have been re-
charged to subsidiary entities where appropriate.

2. Accounting policies

Base Case
•  The base case is the Board approved budget which has been updated with the Group’s 

trading results for Q1 2023 and our estimate of trading to 30 April. The budget was prepared 
assuming a continuation of the current political situation in Ukraine together with inflationary 
pressures across the World. The Group had seen a downturn in consumer confidence, 
especially in Europe due to the above factors.

•  The revenue reduction in Europe towards the end of 2022 was a temporary slowdown and the 
Group has seen a strong rebound in our early 2023 trading in Germany and the rest of Europe. 

Basis of preparation
The Consolidated Financial Statements have been prepared in accordance with UK adopted 
international accounting standards, and those parts of the Companies Act 2006 applicable to 
companies reporting under UK adopted International Financial Reporting Standards (‘IFRS’).

•  The budget does not assume any acquisition expenditure.

•  Our US and other markets remain resilient and are trading in line with expectations.

•  The Group expects to be able to maintain its budgeted margin throughout 2023.

The Consolidated Financial Statements have been prepared on a historical cost basis, except where 
fair value measurement is required under IFRS as described below in the accounting policies.

The presentational currency for the Consolidated and Parent Company Financial Statements is the 
United States Dollar (USD) rounded to the nearest thousand. The functional currency of both the 
Group and Parent Company is Pound Sterling (GBP), however a presentational currency of USD 
is used to be consistent with many other entities within the industry. The Consolidated Financial 
Statements provide comparative information in respect of the year ended 31 December 2021. For 
periods commencing from 1 January 2023, the reporting currency of the Consolidated and Parent 
Company Financial Statements will change to GBP. Comparative information is therefore included 
within Appendix 1 in GBP.

Going concern 
The financial statements have been prepared on the going concern basis as the Directors 
have assessed that there is a reasonable expectation that the Group will be able to continue 
in operation and meet its commitments as they fall due over the going concern period to 
30 June 2024.

•  The base case includes Capital Expenditure through 2023 and 2024 for the new third plant in 

Vietnam and initial construction costs of the first European factory in Portugal.

• 

In this base case scenario, no covenant breaches or liquidity challenges are expected. 

Downside scenario
•  The Group has known forward orders for circa two months through to the middle of June 
2023, therefore our downside scenario updates the base case with a 5.6% reduction in 
revenue from June 2023. The Directors believe that a 5.6% reduction from the base case 
is appropriately conservative based on the current trading position, the improved business 
through Norville, expected falling global inflation and increasing consumer confidence. A 5% 
reduction in Employee expenses takes affect from September 2023, reflecting a reduction 
of the expected senior management bonuses together with a reduction in marketing, 
advertising, entertaining, office expenses and other discretionary expenditure that would not 
affect operational performance in the medium term.

• 

In this downside scenario, no covenant breaches or liquidity challenges are expected.

The Group has considered the reasonably plausible downside scenario. The Group mitigates the 
risk of a long-term drop in revenue by having a diverse business that trades globally so that it is 
not reliant on any one region.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

2. Accounting policies continued
Reverse stress test
•  The reverse stress test updated our base case with a 24.2% drop in forecast revenue, whilst 

maintaining gross margin. The drop of 24.2% represents a significant reduction against actual 
trading in 2022 and is a reduction in revenue not previously experienced by the Group. This 
results in a breach in interest ratio covenant in March 2024 that is recovered in June 2024. No 
other covenants were forecast to be breached in this period. The reverse stress test assumes 
some controllable costs saving by a reduction in employee expenses, reduction in headcount, 
a reduction in discretionary administration costs and removal of discretionary CAPEX 
spending, including a delay of the new manufacturing facility in Vietnam and construction 
costs for a factory in Portugal, and some repayment of the Rolling Credit Facility to reduce 
interest charges through the year. 

The Group has considered the reverse stress test, which models a breach in the interest ratio 
covenant in March 2024. In this case the Directors have available further levers within its control to 
save costs and generate income. The Group also has the ability to discuss amending or waiving 
covenants with the bank should an unprecedented drop in revenue occur. Current trading is ahead 
of budget and there has been no erosion of margin. As a result, the directors consider that the 
reverse stress test is a remote possibility. 

The Group’s borrowings with HSBC, amounting to $58.3m, contains three covenants; Leverage, 
Cashflow Cover and Interest Cover ratios. Compliance on these covenants is based on 12-month 
rolling periods for each Relevant Period. The facilities are due for renewal in October 2024 and 
discussions for renewal have already taken place. Formal work on the renewal is expected to take 
place in Q3 2023 with a view to extending the terms for a further 3 years from October 2024, it 
is not expected that any bullet payment will become due in October 2024 and the Directors are 
confident of a successful renewal to the facilities.

Prior to a technical breach of one of the covenants in December 2022 the Group was in 
discussion to amend the facilities agreement with HSBC. Following the breach in cashflow cover 
in December 2022 HSBC subsequently waived the cashflow cover and leverage covenants for 
the relevant period ending 31 December 2022. The covenant tests for 2023 have been amended 
by HSBC to increase the leverage cover for the March and June relevant periods; waive cashflow 
cover until the March 2024 relevant period; and decrease interest cover for the March and June 
relevant periods. There were no covenant breaches in any prior relevant period in 2022.

On this basis, and as outlined in the Director’s report, the Board has reasonable expectations 
that the Group and Company has adequate resources to continue as a Going Concern to 
30 June 2024. 

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Basis of consolidation
The consolidated financial information incorporates the Financial Statements of the Group and 
all of its subsidiary undertakings. A subsidiary is defined as an entity over which the Group has 
control. Control exists when the Company has power over the investee, the company is exposed, 
or has rights to variable returns from its involvement with the subsidiary and the company has the 
ability to use its power of the investee to affect the amount of investor’s returns. The Financial 
Statements of all Group companies are adjusted, where necessary, to ensure the use of consistent 
accounting policies. Acquisitions are accounted for under the acquisition method from the date 
control passes to the Group. On acquisition, the assets and liabilities of a subsidiary are measured at 
their fair values. Any excess of the cost of acquisition over the fair values of the identifiable net assets 
acquired is recorded as goodwill.

Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition 
is measured as the aggregate of the consideration transferred, which is measured at acquisition 
date fair value, and the amount of any non-controlling interests in the acquiree. Acquisition-
related costs are expensed as incurred and classified as non-underlying costs.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for 
appropriate classification and designation in accordance with the contractual terms, economic 
circumstances and pertinent conditions as at the acquisition date.

Goodwill is initially measured at cost (being the excess of the aggregate of the consideration 
transferred over the net identifiable assets acquired and liabilities assumed). If the fair value of the 
net assets acquired is in excess of the aggregate consideration transferred, the Group reassesses 
whether it has correctly identified all of the assets acquired and all of the liabilities assumed 
and reviews the procedures used to measure the amounts to be recognised at the acquisition 
date. If the reassessment still results in an excess of the fair value of net assets acquired over the 
aggregate consideration transferred, then the gain is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. 
Goodwill is tested annually for impairment. For the purpose of impairment testing, goodwill 
acquired in a business combination is, from the acquisition date, allocated to each of the Group’s 
cash-generating units that are expected to benefit from the combination, irrespective of whether 
other assets or liabilities of the acquiree are assigned to those units.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

2. Accounting policies continued
Investment in associates
An associate is an entity over which the Group has significant influence. Significant influence is the 
power to participate in the financial and operating policy decisions of the investee but is not in 
control or joint control over those policies.

The considerations made in determining significant influence or joint controls are similar to 
those necessary to determine control over subsidiaries. The Group’s investment in its associate is 
accounted for using the equity method.

Under the equity method, the investment in an associate is initially recognised at cost. The 
carrying amount of the investment is adjusted to recognise changes in the Group’s share of net 
assets of the associate since the acquisition date. 

Revenue recognition
Revenue from the sales of goods is recognised at the point in time when control of the asset is 
transferred to the customer, in line with agreed incoterms. Revenue is recognised at the fair value 
of the consideration received or receivable for sale of goods to external customers in the ordinary 
nature of the business. The fair value of the consideration takes into account trade discounts, 
settlement discounts, volume rebates and the right of return. Revenue in relation to royalty 
income is recognised over the period to which the royalty term relates. Revenue in relation to 
design income is recognised as the work is performed.

Rights of return
Under IFRS 15 a sale with right of return is recognised if the customer receives any combination of 
the following:
•  A full or partial refund of any consideration paid

•  A credit that can be applied against amounts owed, or that will be owed, to the entity; and

The income statement reflects the Group’s share of the results of operations of the associate. Any 
change in OCI of those investees is presented as part of the Group’s OCI.

•  Another product in exchange.

Current and non-current classifications
The Group presents assets and liabilities in the statement of financial position based on current/
non-current classification.

An asset is considered current when it is:
•  Expected to be realised or intended to be sold or consumed within the usual parameters of 

trading activity and as a minimum within 12 months after the reporting period, or

•  Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for 

at least 12 months after the reporting period.

The Group classifies all other assets as non-current.

A liability is current when:
• 

It is expected to be settled in the normal parameters of trading activity and as a minimum is 
due to be settled within 12 months after the reporting period, or

•  There is no unconditional right to defer the settlement of the liability for at least 12 months 

after the reporting period.

The Group classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

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The Group recognised a liability where it has historically accepted a right to return with the 
combination of a credit being applied against amounts owed or where another product is offered 
in exchange. The Group estimates the impact of potential returns from customers based on 
historical data on returns. A refund liability is recognised for the goods that are expected to 
be returned (i.e. the amount not included in the transaction price). A right of return asset (and 
corresponding adjustment to cost of sales) is also recognised for the right to recover the goods 
from the customer, to the extent that these goods are not considered impaired.

Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The cost of 
intangible assets acquired in a business combination is their fair value at the date of acquisition. 
Following initial recognition, intangible assets are carried at cost less any accumulated 
amortisation and accumulated impairment losses. Internally generated intangibles are not 
capitalised and the related expenditure is reflected in profit or loss in the period in which the 
expenditure is incurred.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

2. Accounting policies continued
Intangible assets with finite lives are amortised over their useful economic life and are assessed 
for impairment whenever there is an indication that the intangible asset may be impaired. The 
amortisation period and the amortisation method for an intangible asset with a finite useful life 
are reviewed at least at the end of each reporting period. Changes in the expected useful life 
or the expected pattern of consumption of future economic benefits embodied in the asset are 
considered to modify the amortisation period or method, as appropriate, and are treated as 
changes in accounting estimates. The amortisation expense on intangible assets with finite lives is 
recognised in the profit or loss in the expense category that is consistent with the function of the 
intangible assets.

An intangible asset is derecognised upon disposal (i.e. at the date the recipient obtains control) or 
when no future economic benefits are expected from its use or disposal. Any gain or loss arising 
upon derecognition of the asset (calculated as the difference between the net disposal proceeds 
and the carrying amount of the asset) is included in the profit or loss.

Amortisation is calculated on a straight-line basis over the estimated useful lives of the assets 
as follows:

Patents and licences 
Computer software 
Trademarks 
Customer relationships 
Customer order book 

Over the period of the patent or license
3 years
5–10 years
8–20 years
6 months

Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any 
impairment losses. The cost of an item of property, plant and equipment comprises its purchase 
price and any directly attributable costs of bringing the asset to its working condition and location 
for its intended use.

Expenditure incurred after items of property, plant and equipment have been put into operation, 
such as repairs and maintenance, is charged to profit or loss in the period in which it is incurred. 
In situations when it is probable that future economic benefits associated with the item will flow 
to the Group and the cost can be measured reliably then the expenditure for a major inspection 
is capitalised in the carrying amount of the asset as a replacement. Where significant parts of 
property, plant and equipment are required to be replaced at intervals, the Group recognises such 
parts as individual assets with specific useful lives and depreciates them accordingly.

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Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets 
as follows:
Freehold property  
Leasehold improvements 
Fixtures and fittings 
Computer equipment 
Plant and machinery 

33 years
over the lease term
5 years
3–5 years
3–7 years

Construction in progress is not depreciated.

The carrying values of property, plant and equipment are reviewed for impairment when events or 
changes in circumstances indicate the carrying value may not be recoverable.

Where parts of an item of property, plant and equipment have different useful lives, the cost 
of that item is allocated on a reasonable basis among the parts and each part is depreciated 
separately. Residual values, useful lives and the depreciation method are reviewed, and adjusted if 
appropriate, at least at each financial year end.

An item of property, plant and equipment including any significant part initially recognised is 
derecognised upon disposal or when no future economic benefits are expected from its use or 
disposal. Any gain or loss on disposal or retirement recognised in profit or loss in the year the 
asset is derecognised is the difference between the net sales proceeds and the carrying amount of 
the relevant asset.

Leases
The Group applied a single recognition and measurement approach for all leases for which it is 
the lessee, except for short-term leases and leases of low-value assets. The Group recognises 
right-of-use assets representing the right to use the underlying assets and lease liabilities to make 
lease payments.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

2. Accounting policies continued
Right-of-use asset
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date 
the underlying asset is available for use). Right-of-use assets are measured at cost, less any 
accumulated depreciation and impairment losses. The cost of right-of-use assets includes the 
amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at 
or before the commencement date less any lease incentives received. Right-of-use assets are 
depreciated on a straight-line basis over the shorter of the lease term and the estimated useful 
lives of the assets, as follows:

Leasehold property 
Plant and machinery 
Motor vehicles 

2–5 years
3 years
3 years

Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the 
present value of lease payments to be made over the lease term. The lease payments include 
fixed payments (including in substance fixed payments) less any lease incentives receivable. They 
also include any amounts expected to be paid under residual value guarantees. 

In calculating the present value of lease payments, the Group uses its incremental borrowing 
rate at the lease commencement date because the interest rate implicit in the lease is not readily 
determinable. After the commencement date, the amount of lease liabilities is increased to reflect 
the accretion of interest and reduced for the lease payments made. In addition, the carrying 
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, 
a change in the lease payments or a change in the assessment of an option to purchase the 
underlying asset.

The Group’s lease liabilities are included in interest-bearing loans and borrowings.

The Group applies the short-term lease recognition exemption to its short-term leases of 
machinery and equipment (i.e. those leases that have a lease term of 12 months or less from the 
commencement date and do not contain a purchase option). It also applies the lease of low-value 
assets recognition exemption to leases of office equipment that are considered to be low value. 
Lease payments on short-term leases and leases of low-value assets are recognised as expenses 
on a straight-line basis over the lease term.

Inventories
Inventories are stated at the lower of cost and estimated selling price less costs to sell after 
making due allowance for obsolete and slow-moving items. Inventories are recognised as an 
expense in the period in which the related revenue is generated.

Cost is determined on an average cost basis. Cost includes the purchase price and other directly 
attributable costs to bring the inventory to its present location and condition.

At the end of each period, inventories are assessed for impairment. If an item of inventory is 
impaired, the identified inventory is reduced to its selling price less costs to complete and sell and 
an impairment charge is recognised in the income statement.

Royalties
Royalties payable reflect balances owed to brand owners for the right to use the brand name. The 
royalty is payable based on a pre-agreed percentage of sales volumes, with some arrangements 
also having minimum royalty payments for specific periods. Royalties payable are recognised on 
delivery of the products covered by such arrangements, with an additional accrual made where it 
is considered that the sales level required to meet the minimum payment will not be met.

Financial instruments – initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial 
liability or equity instrument of another entity.

Financial assets
Initial recognition and measurement
Financial assets are classified at initial recognition and subsequently measured at amortised cost. 

Subsequent measurement
For purposes of subsequent measurement, the financial assets of the Group are classified as 
financial assets at amortised cost (debt instruments).

Financial assets at amortised cost (debt instruments) 
Financial assets at amortised cost are subsequently measured using the effective interest (‘EIR’) 
method and are subject to impairment. Gains and losses are recognised in profit or loss when the 
asset is derecognised, modified or impaired.

The Group’s financial assets at amortised cost include trade receivables, other receivables and 
loans to Group undertakings.

The Group does not have any financial assets at fair value through OCI or financial assets at fair 
value through profit or loss.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

2. Accounting policies continued
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar 
financial assets) is primarily derecognised (i.e. removed from the Group’s consolidated statement 
of financial position) when the rights to receive cash flows from the asset have expired.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a 
pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards 
of ownership.

When it has neither transferred nor retained substantially all of the risks and rewards of the asset, 
nor transferred control of the asset, the Group continues to recognise the transferred asset to the 
extent of its continuing involvement. In that case, the Group also recognises an associated liability. 
The transferred asset and the associated liability are measured on a basis that reflects the rights 
and obligations that the Group has retained.

Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through 
profit or loss, loans and borrowings or payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings 
and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, loans and borrowings including 
bank overdrafts.

Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in two categories:
•  Financial liabilities at fair value through profit or loss; and

•  Financial liabilities at amortised cost (loans and borrowings)

As at 31 December 2022 and 31 December 2021, the Group has not designated any financial 
liability as at fair value through profit or loss.

Financial liabilities at amortised cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured at 
amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the 
liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and 
fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs 
in the income statement. This category generally applies to interest-bearing loans and borrowings.

Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or 
cancelled or expires. When an existing financial liability is replaced by another from the same 
lender on substantially different terms, or the terms of an existing liability are substantially 
modified, such an exchange or modification is treated as the derecognition of the original 
liability and the recognition of a new liability. The difference in the respective carrying amounts is 
recognised in the income statement.

Refinancing
Where a loan arrangement is replaced with a subsequent facility which is materially different in 
relation to repayment structure or interest rate, any capitalised loan arrangement fees in respect 
of the previous loan are expensed, with transaction costs relating to the new loan capitalised and 
held against the value of the related liability.

Impairment of financial assets 
The Group recognises an allowance for expected credit losses (‘ECLs’) for all debt instruments 
not held at fair value through profit or loss. ECLs are based on the difference between the 
contractual cash flows due in accordance with the contract and all the cash flows that the Group 
expects to receive.

For trade receivables and contract assets, the Group applies a simplified approach in calculating 
ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss 
allowance based on lifetime ECLs at each reporting date. 

The Group considers a financial asset in default when internal or external information indicates 
that the Group is unlikely to receive the outstanding contractual amounts in full before taking into 
account any credit enhancements held by the Group. A financial asset is written off when there is 
no reasonable expectation of recovering the contractual cash flows.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

2. Accounting policies continued
Cash and cash equivalents
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise 
cash on hand and demand deposits, and short-term highly liquid investments that are readily 
convertible into known amounts of cash, that are subject to an insignificant risk of changes in value, 
and have a short maturity of generally within three months when acquired, less bank overdrafts 
which are repayable on demand and form an integral part of the Group’s cash management.

For the purpose of the consolidated statement of financial position, cash and cash equivalents 
comprise cash on hand and at banks, including term deposits, and assets similar in nature to cash, 
which are not restricted as to use.

Classification of shares as debt or equity instruments
Financial instruments issued by the Group are classified as equity only to the extent that they do 
not meet the definition of a financial liability. An equity instrument is a contract that evidences 
a residual interest in assets or an entity after deducting all its liabilities. Accordingly, a financial 
instrument is treated as equity if:
•  There is no contractual obligation to deliver cash or other financial assets or to exchange 

financial assets or liabilities on terms that may be unfavourable; and

•  The instrument is a non-derivative that contains no contractual obligation to deliver a 
variable number of shares or is a derivative that will be settled only by the Company 
exchanging a fixed amount of cash or other assets for a fixed number of the Company’s own 
equity instruments

Costs associated with the issue or sale of equity instruments are allocated against equity to the extent 
that the issue is a new issue, or expensed to the profit and loss for existing equity instruments.

Share-based payments
Employees (including senior executives) of the Group receive remuneration in the form of share-
based payments, whereby employees render services as consideration for equity instruments 
(equity-settled transactions). 

The cost of equity-settled transactions is determined by the fair value at the date when the grant 
is made using an appropriate valuation model, further details of which are given in the detailed 
notes to the accounts. That cost is recognised in employee benefits expense together with a 
corresponding increase in share option reserve, over the period in which the service and, where 
applicable, the performance conditions are fulfilled (the vesting period).

The cumulative expense recognised for equity-settled transactions at each reporting date until 
the vesting date reflects the extent to which the vesting period has expired and the Group’s best 
estimate of the number of equity instruments that will ultimately vest. The expense or credit in the 
income statement for a period represents the movement in cumulative expense recognised as at 
the beginning and end of that period.

Service performance conditions are not taken into account when determining the grant date fair 
value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s 
best estimate of the number of equity instruments that will ultimately vest. Any other conditions 
attached to an award, but without an associated service requirement, are considered to be non-
vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to 
an immediate expensing of an award unless there are also service and/or performance conditions.

No expense is recognised for awards that do not ultimately vest because service conditions 
have not been met. Where awards include a non-vesting condition, the transactions are treated 
as vested irrespective of whether the non-vesting condition is satisfied, provided that all other 
performance and/or service conditions are satisfied. If the terms of an equity-settled award are 
modified, the minimum expense recognised is the grant date fair value of the unmodified award 
provided the original vesting terms of the award are met. An additional expense, measured as at 
the date of modification, is recognised for any modification that increases the total fair value of 
the share-based payment transaction or is otherwise beneficial to the employee. Where an award 
is cancelled by the entity or by the counterparty, any remaining element of the fair value of the 
award is expensed immediately through profit or loss. The dilutive effect of outstanding options 
is reflected as additional share dilution in the computation of diluted earnings per share, to the 
extent that they are dilutive.

Dividend
Final dividend distribution to the Group’s shareholders is recognised as a liability in the 
Group’s financial statements in the period in which the dividends are approved by the 
Group’s shareholders.

Deferred and contingent consideration in relation to acquisitions
Deferred consideration to the previous owners arising on acquisitions are treated as part of 
the consideration for the acquisition, with the liability recognised on the statement of financial 
position at the date of the acquisition. Where the consideration is contingent on continuing 
employment within the Group, the charge is recognised through the Income Statement over the 
period to which it relates.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

2. Accounting policies continued
Taxation
Income tax comprises current and deferred tax. Income tax relating to items recognised outside 
profit or loss is recognised outside profit or loss, either in other comprehensive income or directly 
in equity. Current tax assets and liabilities are measured at the amount expected to be recovered 
from or paid to the taxation authorities, based on the tax rates (and tax laws) that have been 
enacted or substantively enacted by the end of the reporting period, taking into consideration 
interpretations and practices prevailing in the countries in which the Group operates. Tax liabilities 
are recognised when it is considered probable that there will be a future outflow of funds to a 
taxing authority. Uncertainties regarding availability of tax losses, in respect of enquiries raised 
and additional tax measurements issued, may be measured using the expected value method 
or single best estimate approach, depending on the nature of the uncertainty. Tax provisions 
are based on management’s interpretation of country-specific tax law and the likelihood of 
settlement. Management uses professional firms and previous experience when assessing 
tax risks.

Deferred tax is provided, using the liability method, on all temporary differences at the end of 
the reporting period between the tax bases of assets and liabilities and their carrying amounts 
for financial reporting purposes. Deferred tax liabilities are recognised for all taxable temporary 
differences, except:
•  When the deferred tax liability arises from the initial recognition of goodwill or an asset or 

liability in a transaction that is not a business combination and, at the time of the transaction, 
affects neither the accounting profit nor taxable profit or loss; and

• 

In respect of taxable temporary differences associated with investments in subsidiaries, when 
the timing of the reversal of the temporary differences can be controlled and it is probable 
that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of 
unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent 
that it is probable that taxable profit will be available against which the deductible temporary 
differences, the carryover of unused tax credits and unused tax losses can be utilised, except:
•  When the deferred tax asset relating to the deductible temporary differences arises from the 
initial recognition of an asset or liability in a transaction that is not a business combination 
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or 
loss; and

• 

In respect of deductible temporary differences associated with investments in subsidiaries, 
deferred tax assets are only recognised to the extent that it is probable that the temporary 
differences will reverse in the foreseeable future and taxable profit will be available against 
which the temporary differences can be utilised.

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The carrying amount of deferred tax assets is reviewed at the end of each reporting period and 
reduced to the extent that it is no longer probable that sufficient taxable profit will be available 
to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets 
are reassessed at the end of each reporting period and are recognised to the extent that it has 
become probable that sufficient taxable profit will be available to allow all or part of the deferred 
tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the 
period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that 
have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset if and only if a legally enforceable right 
exists to set off current tax assets against current tax liabilities and the deferred taxes relate to 
income taxes levied by the same taxation authority on either the same taxable entity and the 
same taxation authority or different taxable entities which intend either to settle current tax 
liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, 
in each future period in which significant amounts of deferred tax liabilities or assets are expected 
to be settled or recovered.

Foreign currencies
These Financial Statements are presented in USD, which is the Group’s presentational currency. 
Each entity in the Group determines its own functional currency and items included in the 
Financial Statements of each entity are measured using that functional currency. Foreign currency 
transactions recorded by the entities in the Group are initially recorded using their respective 
functional currency rates prevailing at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional 
currency rates of exchange ruling at the end of the reporting period. Differences arising on 
settlement or translation of monetary items are recognised in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are 
translated using the exchange rates at the dates of the initial transactions. Non-monetary items 
measured at fair value in a foreign currency are translated using the exchange rates at the date 
when the fair value was measured.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

2. Accounting policies continued
The gain or loss arising on translation of a non-monetary item measured at fair value is treated 
in line with the recognition of the gain or loss on change in fair value of the item (i.e. translation 
difference on the item whose fair value gain or loss is recognised in other comprehensive income 
or profit or loss is also recognised in other comprehensive income or profit or loss, respectively).
The functional currency of INSPECS Group plc is GBP. The functional currencies of certain 
overseas subsidiaries are currencies other than the GBP. At the end of the reporting period, the 
assets and liabilities of these entities are translated into GBP at the exchange rates prevailing 
at the end of the reporting period and their income statements are translated into GBP at the 
average exchange rates for the year.

The resulting exchange differences are recognised in other comprehensive income and 
accumulated in the foreign currency translation reserve. On disposal of a foreign operation, 
the component of other comprehensive income relating to that particular foreign operation is 
recognised in profit or loss. On translation to USD for presentation, the assets and liabilities of 
the consolidated entity are translated into USD at the exchange rates prevailing at the end of 
the reporting period, equity balances are translated at historic exchange rates and the income 
statement is translated into USD at the average exchange rates for the year.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments 
to the carrying amounts of assets and liabilities arising on acquisition are treated as assets and 
liabilities of the foreign operation and translated at the closing rate at the period end.

For the purpose of the consolidated statement of cash flows, the cash flows of overseas 
subsidiaries are translated at the average exchange rates for the year.

Pensions and other post-employment benefits
The Group operates defined contribution pension schemes, where the amounts charged to 
the statement of comprehensive income are the contributions payable in the year. Differences 
between contributions payable in the year and the contributions actually paid are shown as either 
accruals or prepayments.

Provisions
A provision is required when a present obligation (legal or constructive) has arisen as a result of 
a past event and it is probably that a future outflow of resources will be required to settle the 
obligation, provided that a reliable estimate can be made of the amount of the obligation. When 
the effect of discounting is material, the amount recognised for a provision is the present value at 
the end of the reporting period.

Non-underlying costs
Non-underlying costs are those that in the Directors’ view should be separately disclosed due to 
their nature to enable a full understanding of the Group’s financial performance. These include 
income and expenditure that is considered outside of the usual course of business and therefore 
is separately identified to allow the users of the Financial Statements comparability versus 
prior periods. The main categories of costs disclosed as non-underlying are acquisition costs, 
restructuring costs and other professional service costs relating to the accounting integration 
of acquisitions.

Prior year adjustments
Material prior period errors are corrected retrospectively in the first set of Financial Statements 
authorised for issue after their discovery by restating the comparative amounts for the prior 
periods presented. A reconciliation between the corrected figures and those reported for key 
statements is provided in note 35. During the year, a prior year error has been identified in 
relation to the treatment of contingent consideration.

New and amended standards and interpretations
The following standards have been published and are mandatory for accounting periods 
beginning after 1 January 2022:
•  Amendments to IFRS 3: Business Combinations – Reference to the Conceptual Framework – 

effective 1 January 2022

•  Amendments to IAS 16: Property, Plant and Equipment – effective 1 January 2022

•  Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets – effective 

1 January 2022

•  Annual Improvements to IFRS Standards 2018-2020 Cycle – 1 January 2022

None of the above standards have given rise to a significant change in the reported results or 
financial position of the Group or Company.

The following standards have been published and are mandatory for accounting periods 
beginning after 1 January 2023. 
•  New Standard IFRS 17: Insurance Contracts

•  Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as 

Current or Non-current

•  Amendments to IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors

•  Amendments to IAS 12: Income Taxes

None of the new standards not yet in issue are expected, once adopted, to give rise to a 
significant change in the reported results or financial position of the Group or Company.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

3. Critical accounting judgements and key sources of estimation uncertainty
The preparation of the Group’s Financial Statements requires management to make judgements, 
estimates and assumptions that affect the reported amounts of revenues, expenses, assets 
and liabilities, and their accompanying disclosures, and the disclosure of contingent liabilities. 
Uncertainty about these assumptions and estimates could result in outcomes that could require a 
material adjustment to the carrying amounts of the assets or liabilities affected in the future.

Uncertain tax positions
Tax authorities could challenge and investigate the Group’s transfer pricing or tax domicile 
arrangements. As a growing, international business, there is an inherent risk that local tax 
authorities around the world could challenge either historical transfer pricing arrangements 
between other entities within the Group and subsidiaries or branches in those local jurisdictions, 
or the tax domicile of subsidiaries or branches that operate in those local jurisdictions.

Estimates involve the determination of the quantum of accounting balances to be recognised. 
Judgements typically involve decisions such as whether to recognise an asset or liability. 

The key assumptions concerning the future and other key sources of estimation uncertainty at the 
end of the reporting period, that have a significant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next financial year, are described below:

As a result, the Group has identified that it is exposed to uncertain tax positions, which it has 
measured using an expected value methodology. Such methodologies require estimates to 
be made by management including the relative likelihood of each of the possible outcomes 
occurring, the periods over which the tax authorities may raise a challenge to the Group’s transfer 
pricing or tax domicile arrangements; and the quantum of interest and penalties payable in 
additions to the underlying tax liability. The provision held in relation to uncertain tax liabilities as 
at 31 December 2022 is $706,000 (2021: $623,000). Further details are given in note 30.

Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires 
an estimation of the value in use of the cash-generating units to which the goodwill is allocated. 
Estimating the value in use requires the Group to make an estimate of the expected future cash 
flows from the cash-generating units and also to choose a suitable discount rate in order to 
calculate the present value of those cash flows. The Group has considered the impact of climate 
risk on these cash flow assessments as detailed in note 13, however this is considered to be a 
prudent view, with mitigations such as price structuring detailed on page 39. The carrying amount 
of goodwill at 31 December 2022 was $67,234,000 (2021 restated: $75,945,000). No provision 
for impairment of goodwill was made as at the end of the reporting period. See note 13 for 
further details.

Right of return liability
Management applies assumptions in determining the right of return liability and the associated 
right of return asset. These assumptions are based on analysis of historical data trends, but require 
estimation of appropriate time periods and expected return rates. The right of return liability at 
the period end is $12,838,000 (2021: $11,100,000) with an offsetting right of return asset (held 
within inventory) of $1,931,000 (2021: $1,581,000). If the provision were to increase by 5%, this 
would lead to an additional charge to the profit and loss of $545,000, with it being considered 
that a movement in the right of return liability will have an offsetting impact on the right of 
return asset.

Judgements made by management which are considered to have a material impact on the 
Financial Statements are as follows:

Recognition of intangible assets
In recognising the intangible assets arising on acquisition of subsidiary entities, the intangible 
assets must first be identified. This requires management judgement as to the value drivers of the 
acquired business and its interaction with the marketplace and stakeholders. In calculating the 
fair value of the identified assets, management must use judgement to identify an appropriate 
calculation technique and use estimates in deriving appropriate forecasts and discount rates as 
required. Management has used external experts to mitigate the risk of these judgements and 
estimates on the intangible assets identified and valued.

Deferred tax
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that 
taxable profit will be available against which the losses can be utilised. Significant management 
judgement is required to determine the amount of deferred tax assets that can be recognised, 
based upon the likely timing and the level of future taxable profits, together with future tax 
planning strategies. See note 29 for further details.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

4. Non statutory measures
When reviewing profitability, the Directors use adjusted profit metrics in order to give meaningful 
year on year comparison. These adjusted profit metrics are:
•  EBITDA

•  Adjusted Underlying EBITDA

•  Adjusted Profit Before Tax

•  Underlying operating expenses

•  Revenue on a constant exchange rate basis

Whilst we recognise that the measures used are alternative (non-Generally Accepted Accounting 
Principles) performance measures which are not defined within IFRS, these measures are important 
and should be considered alongside the IFRS measures. A reconciliation to these non-GAAP 
performance measures is shown below:

Less: Amortisation of loan arrangement fees

Less: Amortisation and impairment on intangible assets

Less: Share-based payment expense

Less: Earnout on acquisition

Less: Purchase Price Allocation (‘PPA’) release on inventory through 
cost of sales

Less: Underlying EBITDA (loss) for acquisitions in the period

Less: Non-underlying costs

Less: Exchange adjustment on borrowings

Less: Share of profit/(loss) of associate

Loss before income tax

(973)

(8,526)

(1,729)

(1,909)

(164)

–

(1,814)

(2,528)

23

(9,481)

(389)

(11,020)

(1,484)

–

(5,991)

(90)

(2,588)

(5,418)

(10)

(9,132)

Adjusted Profit Before Tax is used to calculate Adjusted PBT basic and diluted EPS as per note 
12. In the prior period, Underlying EBITDA was used to determine Adjusted Underlying EBITDA 
EPS, however it is considered that Adjusted PBT EPS provides a more appropriate metric of 
performance to the users of the Annual Report.

Underlying operating expenses, as referenced on page 17, is calculated as the difference between 
gross profit and Adjusted Underlying EBITDA. 

2022 
$’000

(1,467)

8,526

8,342

15,401

1,729

1,909

2021 
$’000

1,541

11,020

7,430

19,991

1,484

–

19,039

21,475

In addition, the Directors consider the revenue of the Group on a constant exchange rate 
basis, which is calculated using the average exchange rates in effect for the corresponding 
comparative period. 

164

–

19,203

(8,342)

(2,722)

8,139

5,991

90

27,556

(7,430)

(2,268)

17,858

Operating (loss)/profit

Add back: Amortisation and impairment on intangible assets

Add back: Depreciation

EBITDA

Add back: Share-based payment expense

Add back: Earnout on acquisition

Underlying EBITDA

Add back: Purchase Price Allocation (‘PPA’) release on inventory 
through cost of sales

Add back: Underlying EBITDA (loss) for acquisitions in the period

Adjusted Underlying EBITDA

Less: Depreciation

Less: Interest (excluding amortisation of loan arrangement fees)

Adjusted Profit Before Tax

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

4. Non statutory measures continued
Due to the technical breach of a bank covenant discussed in note 24, the adjusted net current 
assets position has been calculated to allow comparison year on year as follows:

For the years ended 31 December 2022 and 31 December 2021 the Group had no individual 
customer which accounted for more than 10% of the Group’s revenue.

b) Right of return assets and liabilities

Current assets

Current liabilities

Loan in technical breach

Adjusted current liabilities

Adjusted net current assets

2022 
$m

127.2

(129.4)

(45.7)

(83.7)

43.5

2021 
$m

131.1

(82.9)

–

(82.9)

48.2

Right of return asset

Right of return liability

2022 
$’000

1,931

2021  
$’000

1,581

(12,838)

(11,100)

The right of return asset is presented as a component of inventory (note 17) and the right of return 
liability is presented separately on the face of the balance sheet.

5. Revenue
The revenue of the Group is attributable to the one principal activity of the Group.

6. Segment information
The Group operates in three operating segments, which upon application of the aggregation 
criteria set out in IFRS 8 Operating Segments results in three reporting segments:
•  Frames and Optics product distribution

a) Geographical analysis
The Group’s revenue by destination is split in the following geographic areas:

•  Wholesale – being OEM and manufacturing distribution

•  Lenses – being manufacturing and distribution of lenses

United Kingdom

Europe (excluding UK)

North America

South America

Asia

Africa

Australia

2022 
$’000

26,271

115,241

86,189

1,391

7,983

546

10,956

2021 
$’000

30,248

121,930

82,114

517

3,281

3,034

5,347

248,577

246,471

The criteria applied to identify the operating segments are consistent with the way the Group is 
managed. In particular, the disclosures are consistent with the information regularly reviewed by 
the CEO and the CFO in their role as Chief Operating Decision Makers, to make decisions about 
resources to be allocated to the segments and to assess their performance.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

6. Segment information continued
The reportable segments subject to disclosure are consistent with the organisational model 
adopted by the Group during the financial year ended 31 December 2022 and are as follows:

Frames  
and Optics 
$’000

Wholesale 
$’000

Lenses 
$’000

Total before 
adjustments 
& eliminations 
$’000

Adjustments & 
eliminations 
$’000

Total 
$’000

Total assets

Total liabilities

Deferred tax asset

Current tax liability

214,661

29,572

4,344

248,577

– 248,577

Deferred tax liability

6,408

5,047

218

11,673

(11,673)

–

Borrowings

221,069

34,619

4,562

260,250

(11,673) 248,577

Group net assets

(113,851)

(18,911)

(3,500)

(136,262)

9,971 (126,291)

Other disclosures

Frames  
and Optics 
$’000

Wholesale 
$’000

Lenses 
$’000

Total before 
adjustments 
& eliminations 
$’000

Adjustments & 
eliminations 
$’000

Total 
$’000

396,297

84,919

12,665

493,881

(209,677) 284,204

(217,238)

(15,149)

(15,589)

(247,976)

183,095

(64,881)

8,476

(1,735)

(11,553)

(84,421)

130,090

107,218

15,708

1,062

123,988

(1,702) 122,286

Capital additions

2,765

547

923

4,235

–

4,235

(91,564)

(6,228)

(5,245)

(103,037)

(3,848) (106,885)

(6,530)

(992)

(808)

(8,330)

(12)

(8,342)

(7,411)

(1,091)

(24)

(8,526)

–

(8,526)

Revenue

External

Internal

Cost of sales

Gross profit

Expenses

Depreciation

Amortisation

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Operating profit/(loss)

1,713

7,397

(5,015)

4,095

(5,562)

(1,467)

Exchange adjustment  
on borrowings

Non-underlying costs 

Finance costs

Finance income

Share of profit of 
associate

Taxation

Loss for the year

(2,528)

(1,814)

(3,829)

134

23

1,665

(7,816)

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

6. Segment information continued
The reportable segments subject to disclosure are consistent with the organisational model 
adopted by the Group during the financial year ended 31 December 2021 and are as follows:

Frames and 
Optics 
$’000

Wholesale 
$’000

Lenses 
$’000

Total before 
adjustments 
& eliminations 
$’000

Adjustments 
& eliminations 
$’000

Total 
$’000

Frames and 
Optics 
$’000

Wholesale 
$’000

Lenses 
$’000

Total before 
adjustments 
& eliminations 
$’000

Adjustments 
& eliminations 
$’000

Total 
$’000

Total assets

426,449

75,568

13,986

516,003

(207,598) 308,405

Total liabilities

(321,905)

(7,444)

(10,813)

(340,162)

270,205

(69,957)

Revenue

External

Internal

Cost of sales

Gross profit

Expenses

Depreciation

Deferred tax asset

Current tax liability

211,527

27,437

7,507

246,471

–

246,471

Deferred tax liability

3,438

4,664

90

8,192

(8,192)

–

Borrowings

214,965

32,101

7,597

254,663

(8,192)

246,471

(115,964)

(16,922)

(4,977)

(137,863)

7,164

(130,699)

Group net assets

Other disclosures

12,540

(2,780)

(20,517)

(82,483)

145,208

99,001

15,179

2,620

116,800

(1,028)

115,772

Capital additions

2,471

1,300

3,874

7,645

–

7,645

(84,672)

(6,857)

(4,797)

(96,326)

545

(95,781)

(5,669)

(1,209)

(552)

(7,430)

(7,430)

Total assets are the Group’s gross assets excluding deferred tax asset. Total liabilities are the 
Group’s gross liabilities excluding loans and borrowings, current and deferred tax liabilities.

–

–

(11,020)

Amortisation and 
impairment

(6,386)

(4,632)

(2)

(11,020)

Operating (loss)/profit

2,274

2,481

(2,731)

2,024

(483)

1,541

Exchange adjustment on 
borrowings

Non-underlying costs 

Finance costs

Finance income

Share of loss of associate

Taxation

Loss for the year

(5,418)

(2,588)

(2,775)

118

(10)

3,697

(5,435)

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Non-underlying costs, as well as net finance costs and taxation are not allocated to individual 
segments as they relate to Group-wide activities as opposed to individual reporting segments. 

Deferred tax and borrowings are not allocated to individual segments as they are managed on a 
Group basis.

Adjusted items relate to elimination of all intra-group items including any profit adjustments on 
intra-group sales that are eliminated on consolidation, along with the profit and loss items of the 
Parent Company.

Adjusted items in relation to segmental assets and liabilities relate to the elimination of all intra-
group balances and investments in subsidiaries, and assets and liabilities of the Parent Company.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

6. Segment information continued
Non-current operating assets

United Kingdom

Europe

North America

Asia

Directors’ remuneration during the year was as follows:

2022 
$’000

9,820

110,339

4,863

30,856

155,878

2021 
$’000

9,795

Directors’ salaries

Directors’ pension contributions

Share options

129,441

4,589

36,580

180,405

Non-current assets for this purpose consist of property, plant and equipment, right-of-use assets, 
goodwill and intangible assets.

Information regarding the highest paid Director is as follows:

Total remuneration

The number of Directors to whom employer pension contributions were made by the Group 
during year is three (2021: two). This was in the form of a defined contribution pension scheme. 

Remuneration of key management personnel has been disclosed in note 31. For more information 
on Director pay, please refer to the Remuneration and Nomination Committee Report on pages 
53 to 56.

7. Employees and Directors

Wages and salaries

Social security costs

Pension costs

Share-based payment expense

2022 
$’000

56,436

9,624

713

1,729

68,502

The average number of employees during the year by operating segment was as follows:

Frames and Optics

Wholesale

Lenses

2022

669

961

102

2021 
$’000

57,714

10,002

566

1,484

69,766

2021

621

964

87

1,732

1,672

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2022 
$’000

909

16

–

925

2022 
$’000

318

2021 
$’000

811

35

373

1,219

2021 
$’000

523 

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

8. Non-underlying costs
Non-underlying costs are those that in the Directors’ view should be separately disclosed by virtue of 
their size, nature or incidence to enable a full understanding of the Group’s financial performance in 
the year and business trends over time. Non-underlying costs incurred during the year are as follows:

10. Loss before income tax
The loss before income tax is stated after charging:

Acquisition costs

Other professional service costs

Restructuring costs

2022 
$’000

1,101

201

512

1,814

2021 
$’000

1,352

1,236

–

2,588

Acquisition costs of $1,101,000 were incurred during the period relating to prospective acquisition 
targets. The Board decided to pause the acquisition process in the second half of 2022 due to 
market conditions. Other professional service costs of $201,000 relate to accounting transition 
and valuation following the acquisition of BoDe Design GmbH and EGO Eyewear Limited in 
December 2021. Restructuring costs of $512,000 were incurred in the period in relation to the 
closure of International Eyewear Limited and INSPECS Asia Limited. The closure of these entities 
is as a result of recent acquisitions and is therefore considered one-off in nature.

Cost of inventories recognised as expense

Short-term leases

Depreciation – owned assets (note 15)

Depreciation – right-of-use assets (note 25)

Amortisation – intangibles (note 14)

Impairment – intangibles (note 14)

Trading foreign exchange loss/(gain)

Fees payable to the Company’s auditor for audit services:

Audit of the Company and Group accounts

Audit of the subsidiaries

2022 
$’000

2021 
$’000

92,049

95,628

486

3,841

4,501

8,526

–

2,150

2022 
$’000

592

1,142

486

3,423

4,007

7,567

3,453

(1,171)

2021 
$’000

574

830

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9. Finance costs and finance income

Finance costs

Bank loan interest

Invoice discounting interest and charges

Loan transaction costs

Lease interest

Total finance costs

Finance income

Interest receivable

2022 
$’000

2021 
$’000

No fees have been charged by the Company’s auditor for non-audit services in the current or 
prior periods.

2,206

1,785

94

974

555

57

477

456

3,829

2,775

134

118

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

11. Income tax
Analysis of tax expense:

Current tax:

Current tax on profits for the year

Overseas current tax expense

Foreign tax suffered

Adjustment in respect of prior years

Total current tax

Deferred tax: (see note 29)

Deferred tax income relating to the origination and reversal of 
timing differences

Effect of changes in tax rates

Adjustment in respect of prior years

Total deferred tax

Total tax credit reported in the consolidated income statement

2022 
$’000

2021 
$’000

2,036

322

4

(948)

1,414

(2,964)

(108)

(7)

(3,079)

(1,665)

1,618

469

–

(128)

1,959

(4,430)

(1,122)

(104)

(5,656)

(3,697)

Factors affecting the tax credit
The tax credit assessed for the year is lower than the standard rate of corporation tax in the UK. 
The difference is explained below: 

Loss before income tax

Loss multiplied by standard rate of corporation tax in the UK of 19% 
(2021: 19%)

Effects of:

Non-deductible expenses – amortisation of intangible assets

Non-deductible expenses – other expenses

Increase/(decrease) in provision for uncertain tax liabilities

Capital allowances super deduction

Share-based payment

Different tax rate for overseas subsidiaries

Transfer pricing adjustments

Tax rate changes

Effects of Group relief

Amounts not recognised for deferred tax

Adjustments in respect of prior year

Tax credit

2022 
$’000

(9,481)

2021 
$’000

(9,132)

(1,801)

(1,735)

185

907

152

(2)

459

(3,065)

81

(108)

–

2,482

(955)

(1,665)

853

517

(2,224)

–

(136)

(1,311)

1,017

(1,122)

156

520

(232)

(3,697)

Movements in other comprehensive income relating to foreign exchange on consolidation are 
not taxable. 

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Year ended 31 December 2021

Basic EPS

Diluted EPS

Adjusted PBT basic EPS

Adjusted PBT diluted EPS

Basic 
weighted
average 
number
of Ordinary
Shares (‘000)

101,310

106,336

101,310

106,336

Total
(loss)/earnings 
($‘000)

(Loss)/ 
earnings per 
share ($)

(5,435)

(5,435)

17,858

17,858

(0.05)

(0.05)

0.18

0.17

Refer to note 21 for details in relation to the shares in issue and their rights.

N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

12. Earnings per share (‘EPS’)
Basic EPS is calculated by dividing the profit or loss for the year attributable to ordinary equity 
holders of the Parent by the weighted average number of Ordinary Shares outstanding during 
the year.

Diluted EPS is calculated by dividing the profit or loss attributable to ordinary equity holders 
of the Parent by the weighted average number of Ordinary Shares outstanding during the year 
plus the weighted average number of Ordinary Shares that would be issued on conversion of 
all the dilutive potential Ordinary Shares into Ordinary Shares, to the extent that the inclusion 
of such shares is not anti-dilutive. A loss has been made in the year to 31 December 2022 and 
the comparative period. In accordance with IAS 33, potential Ordinary Shares shall be treated 
as dilutive when, and only when, their conversion to Ordinary Shares would decrease earnings 
per share, or increase loss per share from continuing operations. As a loss is made, including the 
dilution of potential Ordinary Shares reduces the loss per share and therefore the outstanding 
options should not be treated as dilutive when calculating EPS.

Adjusted PBT earnings per share figures are calculated by dividing adjusted PBT for the year by 
the weighted average number of Ordinary Shares outstanding during the year. Adjusted PBT 
diluted earnings per share figures are calculated by dividing Adjusted PBT for the year by the 
weighted average number of Ordinary Shares plus the weighted average number of Ordinary 
Shares that would be issued on the conversion of all dilutive potential Ordinary Shares into 
Ordinary Shares. A reconciliation to Adjusted PBT can be found in note 4.

The following table reflects the income and share data used in the basic and diluted 
EPS calculations:

13. Goodwill

COST
At 1 January 2022

Adjustment in respect of cases valuation

Exchange adjustment

At 31 December 2022

NET BOOK VALUE
At 31 December 2022

Year ended 31 December 2022

Basic loss per share

Diluted loss per share

Adjusted PBT basic EPS

Adjusted PBT diluted EPS

Basic 
weighted
average 
number
of Ordinary
Shares (‘000)

Total
(loss)/earnings 
($‘000)

(Loss)/
earnings per 
share ($)

COST
At 1 January 2021 (restated)

101,672

(7,816)

107,554

(7,816)

101,672

107,554

8,139

8,139

(0.08)

(0.08)

0.08

0.08

Additions

Exchange adjustment

At 31 December 2021 (restated)

NET BOOK VALUE

At 31 December 2021 (restated)

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$’000

75,945

(776)

(7,935)

67,234

67,234

$’000

72,708

3,990

(753)

75,945

75,945

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

13. Goodwill continued
During the period, management have re-assessed the valuation of case inventory in line with 
IAS 2. It is determined that cases should be held at the lower of cost or net realisable value, 
whereas previously case inventory has been held at nil value in Eschenbach. Whilst the impact 
of this adjustment in prior periods is not considered material to require restatement of prior year 
comparatives, an adjustment has been made to the carrying value of goodwill in relation to case 
inventory held by Eschenbach at the time of its acquisition in December 2020.

Impairment testing of goodwill 
Goodwill acquired through business combinations has been allocated to the cash-generating 
unit of Twenty20 Limited ($11,512,000 as at 31 December 2022), Eschenbach Group GmbH 
($51,878,000 as at 31 December 2022), INSPECS Limited ($210,000 as at 31 December 2022), 
BoDe Design GmbH ($976,000 as at 31 December 2022), EGO Eyewear Limited ($2,639,000 
as at 31 December 2022) and INSPECS USA LC ($20,000 as at 31 December 2022) for 
impairment testing.

The recoverable amount of each cash-generating unit has been determined based on individual 
value in use calculations using cash flow projections covering a five-year period approved by 
senior management. The forecasts for 2023 have been prepared based on Board approved 
budgets for 2023. Financial years 2024 to 2027 were forecasted assuming a 5% increase in 
turnover based on synergies within the expanding Group of companies. Management has 
assumed a decrease in gross profit margin of 0.5% as a prudent estimation of the impact of 
climate change and our response to it and an increase in administration expenses of 5% per 
annum. From 2028 onwards we have assumed a 2% terminal growth rate. These assumptions have 
been used across all CGUs, with management considering that each CGU has similar potential 
for growth in the market in which it operates. In addition, no major changes have occurred in the 
existing political, legal and economic conditions in those locations in which each cash-generating 
unit operates. 

The impact of climate change has been considered as part of our goodwill impairment review. 
If climate change has a negative impact on the operating costs of the Group there could be 
a potential impact on the discounted cash flow growth rates used in the models. Sensitivity 
analysis performed and set out below for each CGU demonstrates that the discount rates can 
increase considerably before an impairment is triggered. Therefore, at present, management has 
concluded that the impact of climate change would not be expected to trigger an impairment.

The discount rates used are before tax and reflect specific risks where required relating to the 
cash-generating unit. Discount rates used for each value in use calculation, along with relevant 
sensitivity analysis is detailed by CGU as follows:

Twenty20 Limited
The discount rate applied to the cash flow projections was 10.8%. In 2021 a company specific risk 
premium of 2.5% was included, however with Killine continuing to perform in line with budget 
expectations, it is not considered a company specific risk premium is required for 2022. Based on 
management’s assessment there is no impairment adjustment required on goodwill.

To recognise an impairment provision, the discount rate would have to exceed 13.4%. To 
recognise an impairment provision the cash flow into perpetuity would need to be discounted by 
13.7% with the applicable discount rate for the five-year period to 2027 remaining at 10.8%.

If the terminal growth rate was decreased to 1%, the discount rate applied to the cash flow 
projections would need to exceed 12.7% before an impairment would be recognised.

Eschenbach Holdings GmbH
The discount rate applied to the cash flow projections was 9.4%. Based on management’s 
assessment there is no impairment adjustment required on goodwill.

To recognise an impairment provision the cash flow into perpetuity would need to be discounted 
by 12.5% with the applicable discount rate for the five-year period to 2027 remaining at 9.4%. To 
recognise an impairment on discount rate alone, the rate would need to increase to 12.2%.

If the terminal growth rate was decreased to 1%, the discount rate applied to the cash flow 
projections would need to exceed 11.5% before an impairment would be recognised.

BoDe Design GmbH
The discount rate applied to the cash flow projections was 11.2%. Based on management’s 
assessment there is no impairment adjustment required on goodwill.

To recognise an impairment on discount rate alone, the total discount rate would have to 
exceed 29.8%.

EGO Eyewear Limited
The discount rate applied to the cash flow projections was 8.3%. Based on management’s 
assessment there is no impairment adjustment required on goodwill.

To recognise an impairment provision the cash flow into perpetuity would need to be discounted 
by 16.5% with the applicable discount rate for the five-year period to 2027 remaining at 8.3%. 
To recognise an impairment on discount rate alone, the total discount rate would have to 
exceed 15.1%.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

14. Intangible assets

COST

At 1 January 2022

Additions

Disposals

Exchange differences

At 31 December 2022

AMORTISATION

At 1 January 2022

Patents and 
licences 
$’000

Customer 
relationships 
$’000

Trademarks 
$’000

Customer 
order book 
$’000

Computer 
software 
$’000

Totals 
$’000

COST

Patents and 
licences 
$’000

Customer 
relationships 
$’000

Trademarks 
$’000

Customer 
order book 
$’000

Computer 
software 
$’000

Totals 
$’000

At 1 January 2021

322

41,274

18,788

368

48,801

18,457

776

3,373

71,775

Acquisition of a subsidiary

92

–

8

–

–

–

–

–

950

1,042

Additions

(786)

–

(786)

Disposals

(3,370)

(1,069)

10

(135)

(4,556)

Exchange differences

1

45

–

–

9,212

–

–

406

704

–

(1,685)

(1,441)

68

794

–

(65)

(21)

2,650

63,102

7

10,420

759

1,508

–

(65)

(43)

(3,190)

4,188

67,475

At 31 December 2021

368

48,801

18,457

776

3,373

71,775

468

45,431

17,388

258

11,954

3,761

–

–

AMORTISATION

1,348

17,321

At 1 January 2021

Amortisation for the year

94

3,707

3,589

776

360

8,526

Amortisation for the year

–

7

–

–

(786)

–

(786)

Impairment

(1,156)

(168)

10

(35)

(1,342)

Disposals

1,673

23,719

Exchange differences

359

14,505

7,182

109

30,926

10,206

–

–

At 31 December 2021

258

11,954

3,761

–

1,348

17,321

2,515

43,756

NET BOOK VALUE

At 31 December 2021

110

36,847

14,696

776

2,025

54,454

180

77

–

–

1

5,849

310

2,883

3,626

3,453

–

–

–

(231)

(175)

5

80

–

(65)

(20)

453

901

–

–

(6)

6,797

7,567

3,453

(65)

(431)

Disposals

Exchange differences

At 31 December 2022

NET BOOK VALUE

At 31 December 2022

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

14. Intangible assets continued
The individual intangible assets, excluding goodwill, which exceed 10% of the net book value of 
intangible assets, excluding goodwill, are:

15. Property, plant and equipment
Some of the Group’s property, plant and equipment are subject to a charge to secure against the 
Group’s bank loans.

Intangible asset

$’000

Eschenbach customer 
relationship with 
independents

EGO customer relationship 
with a single customer

13,111

6,009

2022

2021

Remaining  
amortisation 
period (years)

8

7

$’000

15,646

6,868

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Remaining  
amortisation 
period (years)

COST

Freehold 
property 
$’000

Leasehold 
improvement 
$’000

Plant & 
machinery 
$’000

Fixtures 
& fittings  

$’000

Computer 
equipment 
$’000

Construction
 in progress 
$’000

Total 
$’000

At 1 January 2022

12,285

864

11,418

3,719

9

8

Additions

Disposals

Assets held for sale  
(note 20)

Transfers

575

–

(1,089)

1,343

–

521

1,382

978

332

3,618 32,882

383

3,193

(24)

(73)

(248)

(77)

–

(422)

–

–

–

1,535

–

–

–

–

(1,089)

136

(3,014)

–

Exchange differences

(827)

(62)

(615)

123

(86)

(357)

(1,824)

At 31 December 2022 12,287

778

12,786

4,976

1,283

630 32,740

1,067

319

5,432

909

62

1,559

1,400

(24)

(32)

(171)

(66)

DEPRECIATION

At 1 January 2022

Charge for the year

Disposals

Assets held for sale  
(note 20)

Exchange differences

615

–

(83)

(33)

–

–

–

(21)

(227)

220

At 31 December 2022

1,566

336

6,732

2,358

NET BOOK VALUE

586

205

–

(55)

670

–

–

–

–

–

8,313

3,841

(293)

(83)

(116)

– 11,662

At 31 December 2022 10,721

442

6,054

2,618

613

630 21,078

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

15. Property, plant and equipment continued

16. Investment in associates

Freehold 
property 
$’000

Leasehold 
improvement 
$’000

Plant & 
machinery 
$’000

Fixtures 
& fittings  

$’000

Computer 
equipment 
$’000

Construction 
in progress 
$’000

Total  
$’000

Share of net assets of associate

COST

COST

At 1 January 2021

10,590

862

10,829

3,269

1,102

1,282 27,934

At 1 January 2022

Acquisition of a subsidiary

Additions

Disposals

Transfers

Exchange differences

–

550

–

1,416

(271)

–

21

–

–

4

957

(289)

–

20

647

–

–

(19)

(83)

(217)

1

153

(275)

–

(3)

–

25

Additions

3,809

6,137

Share of profit

–

(564)

Exchange difference

(1,416)

–

At 31 December 2022

(57)

(650)

NET BOOK VALUE

At 31 December 2021

12,285

864

11,418

3,719

978

3,618 32,882

At 31 December 2022

DEPRECIATION

At 1 January 2021

Charge for the year

Eliminated on disposals

Exchange differences

569

511

–

(13)

200

3,847

118

1,856

219

719

–

–

1

(289)

18

(29)

At 31 December 2021

1,067

319

5,432

909

NET BOOK VALUE

639

219

(275)

3

586

–

–

–

–

–

5,474

3,423

(564)

(20)

8,313

Revenue

Expenses

Profit before tax

Income tax

Share of profit of associate for the year ended 31 December 2022

At 31 December 2021

11,218

545

5,986

2,810

392

3,618 24,569

As at 31 December 2022 the Group had capital commitments of $249,000 in respect of property, 
plant and equipment (2021: $nil). 

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Interest  
in associate 
$’000

48

88

23

(24)

135

135

$’000

100

(77)

23

–

23

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

16. Investment in associates continued
The Group’s associated undertakings are:
•  Ruain Zuoyou Glasses Co Ltd, a company registered in China. 25% of the share capital of 

18. Trade and other receivables

Ruain Zuoyou is owned by the Group, with Zhongshan Torkai Optical Co Limited being the 
direct owner of these shares.

Current:

•  BeeQuick Logistics Lda, a company registered in Portugal. 40% of the share capital of 

Trade receivables

BeeQuick is owned by the Group, with On Sight Services Lda being the direct owner of 
these shares. These shares were acquired during the year, being the addition identified above.

Prepayments

Other receivables

2022 
$’000

2021 
$’000

27,424

29,362

2,742

7,510

3,396

9,471

37,676

42,229

17. Inventories

Raw materials

Work in progress

Finished goods

2022 
$’000

4,360

2,006

51,891

58,257

2021 
$’000

4,068

3,812

47,784

55,664

Part of the Group uses an invoice factoring facility to prefinance certain trade receivables and 
assist with trade receivables collection. Other receivables include $5,361,787 (2021: $7,097,000) 
relating to retentions held by the factorer at the period end until rebate arrangements relating to 
the preceding period are finalised, at which point they are paid to the Group. An ageing analysis 
of the trade receivables as at the end of the reporting period, based on the invoice date and net 
of loss allowance, is as follows:

The above includes amounts in respect of right of return assets and the amount for each year is 
as below:

Invoiced in last month

Finished goods – Right of return asset

2022 
$’000

1,931

2021 
$’000

1,581

1–2 months

2–3 months

Over 3 months

Inventories are stated after provisions for impairment of $8,548,000 (2021: $9,646,000).

2022 
$’000

2021 
$’000

18,465

18,404

4,745

2,358

1,856

6,616

2,113

2,229

27,424

29,362

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

18. Trade and other receivables continued
Set out below is the movement in the allowance for expected credit losses of trade receivables.

19. Cash and cash equivalents

At 1 January

Movement in the year

Exchange adjustment

At 31 December

2022 
$’000

555

251

(31)

775

2021 
$’000

556

36

(37)

555

The Group’s trading terms with its customers are mainly on credit. The credit period is generally 
30 to 90 days. Each customer has a maximum credit limit. The Group seeks to maintain strict 
control over its outstanding receivables and has a credit control department to minimise credit 
risk. Overdue balances are reviewed regularly by senior management. The Group’s large retail 
chain customers order on purchase orders which are paid within 30 to 60 days and the remaining 
customer base is well diversified, and hence there is considered to be no significant credit risk. 
Acquisitions during the comparative year have further diversified the reliance on major customers 
and therefore have further mitigated credit risk. Trade receivables are non-interest-bearing and are 
stated net of loss allowance.

Impairment under IFRS 9 
An impairment analysis is performed at each reporting date to measure expected credit losses. 
The provision rates are based on days past due for groupings of customer segments with similar 
loss patterns (i.e. by customer type and rating). The calculation reflects the probability-weighted 
outcome, the time value of money and reasonable and supportable information that is available 
at the reporting date about past events, current conditions and forecasts of future economic 
conditions. Generally, trade receivables are written off if past due for more than one year and are 
not subject to enforcement activity.

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Cash at bank and in hand

2022 
$’000

26,799

26,799

2021 
$’000

29,759

29,759

At the end of the reporting period, the cash and cash equivalents of the Group denominated in 
Renminbi (‘RMB’) amounted to $3,163,000 (2021: $2,738,000). The RMB is not freely convertible 
into other currencies, however, under Mainland China’s Foreign Exchange Control Regulations 
and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group 
is permitted to exchange RMB for other currencies through a bank authorised to conduct foreign 
exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term time 
deposits are made for varying periods of between one day and three months depending on the 
immediate cash requirements of the Group and earn interest at the respective short-term time 
deposit rates. The bank balances and time deposits are deposited with creditworthy banks with no 
recent history of default.

For the purposes of the statement of cash flows, cash and cash equivalents comprise the following 
at 31 December:

Cash at bank and in hand

2022 
$’000

26,799

26,799

2021 
$’000

29,759

29,759

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

20. Assets held for sale
The carrying amount of assets classified as held for sale at 31 December 2022 is $1,006,000 
(2021: $nil). Assets held for sale relate to the Magdala Road property previously used as the 
manufacturing facility by Norville. The sales process began on 1 September 2022 and a sale is 
expected within 12 months. This asset is part of the lenses reporting segment (note 6).

21. Called up share capital
Authorised and issued share capital:

Number

Class Nominal value

101,671,525 (2021: 101,671,525)

Ordinary

 £0.01

2022 
$’000

1,389

1,389

2021 
$’000

1,389

1,389

Each Ordinary Share carries the right to participate in distributions, as respects dividends and as 
respects capital on winding up.

22. Reserves

Share premium
This reserve records the amount above the nominal value of the sums received for shares issued, 
less transaction costs.

At 1 January

Exercise of share options

At 31 December

2022 
$’000

2021 
$’000

122,291

121,940

–

351

122,291

122,291

Foreign currency translation reserve
This reserve records the foreign currency translation adjustment on consolidation.

At 1 January

Other comprehensive income

At 31 December

2022 
$’000

2,802

(7,459)

(4,657)

2021
Restated 
$’000

(89)

2,891

2,802

Share option reserve
The share option reserve is used to recognise the value of equity-settled share-based payments 
provided to employees, including key management personnel, as part of their remuneration.

At 1 January

Share-based payment charge

Exercise of share options

Share options cancelled

Deferred tax on share options (note 29)

At 31 December

2022 
$’000

2,001

1,729

–

(182)

–

2021 
$’000

867

1,484

(437)

–

87

3,548

2,001

The share-based payment charge for the year is recognised against the reserve as per IFRS 2 
Share-Based Payments. 150,000 share options have been cancelled during the period. Upon 
cancellation of share options, the remaining element of fair value of the option is expensed 
immediately through the income statement. The related share option reserve is then recycled 
into retained earnings, resulting in the movement of $182,000 from the share option reserve to 
retained earnings.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

22. Reserves continued
Retained earnings

At 1 January

Loss for the year

Exercise of share options

Share options cancelled

Cash dividends

At 31 December

23. Trade and other payables

2022 
$’000

9,429

(7,816)

–

182

(1,572)

223

2021  
$’000

14,429

(5,435)

435

–

–

9,429

Current:

Trade payables

Amounts owed to related parties

Other payables

Social security and other taxes

Royalties

Accruals 

During the period, the final dividend in relation to 2021 was paid, amounting to 1.25 pence 
per share.

Merger reserve
This reserve arose on the share for share exchange between INSPECS Holdings Limited and 
INSPECS Group plc on 10 January 2020.

2022 
$’000

7,296

7,296

2021 
$’000

7,296

7,296

At 1 January

At 31 December

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The trade payables are non-interest-bearing and are normally settled on credit terms of 30–90 
days. Amounts owed to related parties are unsecured, interest free, have no fixed date of 
repayment and are repayable on demand.

2022 
$’000

2021  
$’000

26,784

32,801

239

562

5,119

4,927

9,732

196

934

5,776

4,435

9,175

47,363

53,317

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

24. Financial liabilities – borrowings

Current:

Invoice discounting

Bank loans

Lease liabilities

Non-current: 

Bank loans

Lease liabilities

On 27 October 2021, the Group entered a new multi-currency term loan with HSBC for 
$18,700,000. Repayments under this loan are $900,000 per quarter plus interest. Interest is 
payable at the applicable Margin Rate plus LIBOR calculated daily on a 360-day year basis. The 
Margin Rate is 1.90%, 2.15% or 2.40% dependent upon the Group’s leverage ratio. The loan 
matures in October 2024.

The Group also holds a multi-currency revolving credit facility, from which an additional 
$4,000,000 was drawn down in September 2022, increasing this loan to $36,385,000 as at 31 
December 2022. Interest is payable at LIBOR/EURIBOR/SONIA (depending on the currency in 
which funds are drawn down) plus 2.4% calculated daily on a 360-day year basis. The credit facility 
matures in October 2024.

Loans amounting to $8,700,000 were refinanced during the year, bringing these balances to the 
same lender as the rest of the Group. This new loan holds an interest rate of LIBOR plus 2.25%. 

Remaining loans in the Group are at a fixed interest rate of 2.0% and are repayable in between 
one and five years. The Group’s bank loans and overdrafts are secured against the business assets 
of the Group. The Group’s lease liabilities are secured against the assets concerned.

2022 
$’000

2021 
$’000

1,803

58,204

4,396

62,600

2,433

9,979

3,310

13,289

2022 
$’000

2021 
$’000

225

19,793

20,018

50,113

19,081

69,194

At the balance sheet date, the available invoice discounting facility was $1,827,000 (2021: 
$1,621,000). The invoice discounting facility bears interest at 2.25% over base rate (2021: 
2.00%). The invoice discounting facility is secured by way of fixed and floating charges over the 
trade receivables of INSPECS Limited. The facility has no fixed end date, with a notice period of 
three months.

As at 31st December 2022, it was determined the Group was in technical breach of its cashflow 
cover loan covenant, which has resulted in the re-classification of the loan balance ($45.7m) to a 
current liability in line with IAS 1. Subsequently, HSBC has waived the cashflow cover and leverage 
covenants at 31 December 2022.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

25. Right-of-use assets and leases
The Group has lease contracts for various items of plant, machinery, vehicles and other equipment 
used in its operations. Leases of plant and machinery, motor vehicles and leasehold properties 
generally have lease terms between two and five years. The Group’s obligations under its leases 
are secured by the lessor’s title to the leased assets. The Group’s right-of-use assets are as follows:

Leasehold 
properties 
$’000

 Plant & 
machinery 
$’000

Motor 
vehicles 
$’000

COST

At 1 January 2021

Acquisition of a subsidiary

Total 
$’000

Additions

End of lease

24,147

5,310

(1,614)

(1,669)

26,174

3,843

2,944

(1,621)

(251)

4,915

669

339

(321)

(31)

656

277

258

(306)

(8)

221

2,334

2,050

27,150

7,699

(681)

(2,616)

(89)

(1,789)

3,614

30,444

761

1,299

4,881

4,501

(576)

(2,503)

14

(245)

1,498

6,634

21,259

435

2,116

23,810

Exchange differences

At 31 December 2021

DEPRECIATION

At 1 January 2021

Charge for the year

Eliminated on end of lease

Exchange differences

At 31 December 2021

NET BOOK VALUE

At 31 December 2021

COST

At 1 January 2022

Additions

Disposals

Exchange differences

At 31 December 2022

DEPRECIATION

At 1 January 2022

Charge for the year

Eliminated on end of lease

Exchange differences

At 31 December 2022

NET BOOK VALUE

At 31 December 2022

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Leasehold 
properties 
$’000

 Plant & 
machinery 
$’000

Motor 
vehicles 
$’000

Total 
$’000

19,556

273

5,973

(315)

(1,340)

24,147

1,331

2,920

(315)

(93)

3,843

718

–

16

(24)

(41)

669

31

279

(24)

(9)

277

1,517

21,791

138

834

(69)

(86)

411

6,823

(408)

(1,467)

2,334

27,150

50

808

(69)

(28)

761

1,412

4,007

(408)

(130)

4,881

20,304

392

1,573

22,269

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

25. Right-of-use assets and leases continued
Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans 
and borrowings) and the movements during the period:

2022 
$’000

2021 
$’000

22,391

20,274

–

7,699

541

411

6,822

456

(4,745)

(4,224)

(74)

–

(1,623)

(1,348)

24,189

4,396

19,793

22,391

3,310

19,081

At 1 January

Acquisition of a subsidiary

Additions

Interest charge

Payments

Reduction in lease terms

Exchange adjustment

As at 31 December

Current

Non-current

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

26. Changes in liabilities from financing activities

1 January 
2022 
$’000

New loans 
$’000

Repayments 
$’000

Reclassification 
between current and 
non-current 
$’000

Transaction  
costs on debt 
refinancing 
$’000

New leases 
$’000

Foreign exchange  
on consolidation 
$’000

31 December 
 2022 
$’000

Due in one year

Bank loans

Lease liabilities

Invoice discounting facility

Due after one year

Bank loans

Lease liabilities

(9,979)

(8,783)

(3,310)

(2,433)

–

–

6,801

4,745

384

(50,113)

(4,000)

3,580

(19,081)

–

–

Total liabilities from financing activities

(84,916)

(12,783)

15,510

Balances at the end of each reporting period are summarised in note 24, with balances above 
being shown under interest-bearing loans and borrowings on the balance sheet.

(50,341)

(5,995)

–

50,341

5,995

–

(974)

–

–

–

–

(974)

–

–

–

–

(7,703)

(7,703)

5,072

(58,204)

164

246

(33)

996

6,445

(4,396)

(1,803)

(225)

(19,793)

(84,421)

1 January 2021 
$’000

New loans 
$’000

Repayments 
$’000

Reclassification between 
current and non-current 
$’000

Transaction costs on 
debt refinancing 
$’000

New leases 
$’000

Acquired on acquisition 
of subsidiary 
$’000

Foreign exchange  
on consolidation 
$’000

31 December 2021 
$’000

Due in one year

Bank loans

Lease liabilities

(3,855)

(6,028)

4,092

(2,975)

–

4,224

Invoice discounting facility

–

(2,477)

–

Due after one year

Bank loans

Lease liabilities

(53,092)

(20,723)

18,781

(17,299)

–

–

Total liabilities from financing activities

(77,221)

(29,228)

27,097

(3,946)

(4,691)

–

3,946

4,691

–

Balances at the end of each reporting period are summarised in note 24, with balances above 
being shown under interest-bearing loans and borrowings on the balance sheet.

(478)

–

–

–

–

(478)

–

–

–

–

(6,822)

(6,822)

(176)

–

–

–

(411)

(587)

412

132

44

975

760

2,323

(9,979)

(3,310)

(2,433)

(50,113)

(19,081)

(84,916)

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

27. Analysis of cash flows given in the statement of cash flows
A reconciliation of profit for the year to cash generated from operations is shown below:

Loss before income tax

Adjustments for:

Depreciation

Amortisation and impairment of intangible assets

Share of (profit)/loss of associate

Share-based payment

Earnout on acquisitions

Exchange adjustment on borrowings

Cases valuation adjustment against goodwill

Notes

15, 25

14

16

32

28

33

13

Loss on disposal of non-current assets

14, 15

Exchange adjustment on trading

Finance costs

Finance income

Changes in working capital

(Increase)/decrease in inventories

Decrease in trade and other receivables

Increase in trade and other payables

9

9

17

18

23

2022 
$’000

(9,481)

8,342

8,526

(23)

1,729

1,909

2,528

776

129

–

3,829

(134)

(8,418)

117

2,529

2021 
$’000

(9,132)

7,430

11,020

10

1,484

–

5,418

–

–

(1,171)

2,775

(118)

149

1,923

5,107

Cash flows from operating activities

12,358

24,895

28. Deferred consideration
Deferred considerations payable relate to the acquisitions of BoDe Design GmbH and EGO 
Eyewear Limited. In relation to BoDe Design GmbH, the full balance of $685,000 is based on 
the performance of the entity during 2022. In relation to EGO Eyewear Limited, $2,451,000 is 
deferred consideration payable in equal instalments in 2023, 2024 and 2025. The remaining 
balance is based on the performance of the entity during 2022. 2021 deferred consideration has 
been restated, as detailed in note 35. The split of the deferred consideration between each entity 
is as follows:

BoDe Design GmbH

EGO Eyewear Limited

Total non-current deferred consideration

BoDe Design GmbH

EGO Eyewear Limited

Total current deferred consideration

2022 
$’000

–

1,634

1,634

2022 
$’000

685

2,361

3,046

2021
Restated 
$’000

371

2,736

3,107

2021
Restated
$’000

–

–

–

The previous owners of BoDe design and EGO eyewear are entitled to earnout payments based 
on the performance of each entity to 31 December 2025. A charge has been recognised in the 
Income Statement of $1,909,000 (2021: $nil) in relation to the earnout payable as a result of 
performance for the year to 31 December 2022.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

29. Deferred tax

The deferred tax balances consist of the tax effect of timing differences in respect of:

On 1 January 2022

Credit/(charge) for the year:

Temporary timing differences

Deferred tax (charge)/credit to profit and loss

Exchange adjustment

On 31 December 2022

Deferred 
tax asset 
$’000

Deferred 
tax liability 
$’000

Total 
$’000

12,540

(20,517)

(7,977)

Unused trade losses

(2,813)

(2,813)

(1,251)

6,971

6,971

1,993

4,158

4,158

742

8,476

(11,553)

(3,077)

Right of return liability

Lease liability

Other short-term differences

Total deferred tax asset

Deferred 
tax asset 
$’000

Deferred 
tax liability 
$’000

Total 
$’000

Right of use asset

On 1 January 2021

12,771

(24,678)

(11,907)

Right of return asset

Acquired on acquisition of subsidiary

–

(2,423)

(2,423)

Intangible assets

Credit/(charge) for the year:

Derecognition of losses brought forward

Losses in the year

Temporary timing differences

Deferred tax credit to profit and loss

Deferred tax credit to share option reserve

Exchange adjustment

On 31 December 2021

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Inventory

(422)

Property, plant and equipment

Other short-term differences

Total deferred tax liability

(422)

1,012

(186)

404

87

–

–

5,124

5,124

–

(722)

1,460

1,012

4,938

5,528

87

738

12,540

(20,517)

(7,977)

In addition to the deferred tax assets and liabilities recognised, the Group has tax losses that 
arose in subsidiary entities of $3,336,000 (2021: $1,692,000) that are available indefinitely for 
offsetting against future taxable profits of the entities in which the losses arose. A deferred tax 
asset has not been recognised in respect of these losses as these losses may not be used to offset 
against taxable profits elsewhere in the Group and there is no evidence of these losses being 
utilised by the subsidiary in the future.

2022 
$’000

4,680

1,978

137

1,681

8,476

2022 
$’000

(18)

–

2021 
$’000

4,144

1,178

5,106

2,112

12,540

2021 
$’000

(5,056)

(362)

(9,641)

(11,937)

–

(1,414)

(480)

(1,324)

(1,586)

(252)

(11,553)

(20,517)

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

30. Tax payable

Corporation tax payable

Uncertain tax liabilities

2022 
$’000

1,029

706

1,735

2021 
$’000

2,157

623

2,780

The Group has previously identified it is potentially exposed to uncertain tax positions in relation 
to tax authorities challenging that the Group has created a taxable presence and asset taxing 
rights over profits they consider to be allocable in the given territory. The Group considers that it 
is possible that these uncertain tax positions may result in a future outflow of funds to one or more 
local tax authorities and has recognised current tax liabilities for these uncertainties.

As referenced last year, during 2022 we expected a further review of uncertain tax provisions 
to be completed in relation to this perceived risk. This review has been delayed until 2023 now 
that regular travel has been renewed after COVID restrictions. Management have taken a view 
to continue to recognise a liability as at 31 December 2022 following the same approach to the 
liability calculated at 31 December 2021.

Due to the range of potential outcomes that the Directors have identified, these liabilities have 
been measured using an expected value methodology. Key assumptions underpinning the 
expected value calculations are (i) relative probabilities of such tax liabilities crystallising in one or 
more of the jurisdictions in which the Group operates, (ii) the tax periods over which tax authorities 
would seek to challenge the Group’s tax domicile arrangements; and (iii) the quantum of interest 
and penalties that would be applicable in the event that the Group was found to be liable for tax 
amounts by one or more tax authorities. If the probability of tax liabilities crystallising is increased 
by 5%, the provision against uncertain tax liabilities increases to $842,000. If the probability of tax 
liabilities crystallising is decreased by 5%, the provision against uncertain tax liabilities decreases 
to $571,000.

It is reasonably possible, on the basis of the Directors’ existing knowledge, that different 
outcomes to the assumptions set out above, within the next financial year, could require a material 
adjustment to the carrying amount of the uncertain tax liabilities.

31. Related party disclosures
The Group has taken advantage of the exemption not to disclose related party transactions with 
wholly owned subsidiaries within the Group. Below are transactions and balances with related 
parties that are not owned.

a) Kelso Place LLP
Mr R Totterman is a designated member and controlling owner of Kelso Place LLP. During the year 
Kelso Place LLP leased the Bath head office building to INSPECS Limited. As at 31 December 
2022, a right-of-use asset with net book value of $130,000 (2021: $319,000) and lease liability of 
$132,000 (2021: $320,000) related to this lease, with depreciation of $159,000 (2021: $174,000) 
and interest of $6,000 (2021: $10,000) charged to the income statement. At the year end, the 
Group owed Kelso Place LLP $233,000 (2021: $205,000) in respect of the above.

b) Thorne Lancaster Parker
Mr C Kay, a Director of the Company is also a Partner in Thorne Lancaster Parker. During the year 
the partnership charged INSPECS Limited $10,000 (2021: $53,000) in respect of professional 
services provided. At 31 December 2022, INSPECS Limited owed Thorne Lancaster Parker $4,000 
(2021: $nil) in respect of the above. During the year the partnership charged Norville (20/20) 
Limited $9,000 (2021: $14,000) in respect of professional services provided, with $2,000 being 
owed at the end of the year (2021: $4,000). This balance is included within trade payables.

c) Key management personnel
The key management personnel of INSPECS Group plc at 31 December 2022 are R Totterman, 
R Peck, C Kay, M Lefebvre and J Zobel. In respect of these individuals, the total short-term 
employee benefits payable in the period were $2,068,000 (2021: $1,706,000) and post-
employment benefits were $16,000 (2021: $35,000). In addition, share-based payments totalled 
$918,000 (2021: $733,000) in relation to these individuals.

d) Minima SAS
During the year M Lefebvre, who is identified as a part of the key management personnel 
of INSPECS Group plc, acquired a controlling share ownership of Minima SAS. During 2022, 
INSPECS Group plc charged $269,000 in respect of goods provided, with a balance of $125,000 
being owed to the Group at 31 December 2022.

d) Consultancy costs
In addition to a Non-Executive Director salary, A Farrugia, a Non-Executive Director of the Group, 
was paid $17,000 (2021: $nil) during the year in respect of brand consultancy services.

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Movements during the year
The following tables illustrates the number and weighted average exercise price (‘WAEP’) of and 
movements in share options during the year:

N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

32. Share-based payments
Certain employees of the Group have been granted options over shares in INSPECS Group plc. 
The options are granted with a fixed exercise price and are exercisable between three and ten 
years after the date of grant.
The Company recognises a share-based payment expense based on the fair value of the awards 
granted, and an equivalent credit directly in equity to the share option reserve. On exercise of the 
shares by the employees, the Company is charged the intrinsic value of the shares by INSPECS 
Group plc and this amount is treated as a reduction of the capital contribution recognised directly 
in equity. Share options outstanding at the end of the year have the following expiry date and 
exercise prices:

Grant date

Expiry date

11 October 2019

1 July 2022

27 February 2020

27 February 2025

22 December 2020

22 December 2025

26 February 2021

26 February 2026

21 June 2021

21 June 2026

31 August 2021

31 August 2026

23 December 2021

23 December 2026

28 February 2022

28 February 2027

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The option weighted average exercise price is $3.36 per share. Options were valued at the date 
of grant.

The expense recognised for employee services received during the year is shown in the 
following table:

Expense arising from equity-settled share-based payment transactions

Taxes charged to the Group in respect of options exercised

2022 
$’000

1,729

–

Total expenses arising from share-based payment transactions

1,729

2021 
$’000

1,484

–

1,484

At 1 January

Granted during the year

Exercised during the year

Cancelled during the year

Exercise price 
per option $

Number of 
share options

1.27

412,102

As at 31 December

2.52

1,923,110

2.87

1,410,000

4.53

4.87

5.09

4.95

5.02

641,036

90,000

275,000

454,999

641,036

WAEP

At 1 January

Granted during the year

Exercised during the year

Cancelled during the year

As at 31 December

Number  
2022

Number 
2021

5,356,247

4,327,307

641,036

1,561,035

–

(532,095)

(150,000)

–

5,847,283

5,356,247

2022  

$

3.14

0.29

–

(0.07)

3.36

2021 
$

2.41

4.67

(3.94)

–

3.14

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for the year ended 31 December 2022

32. Share-based payments continued
The following table lists the inputs to the models used for the valuation of the options issued 
during the year.

The fair values of the financial assets and liabilities are included at the amounts at which the 
instruments could be exchanged in current transactions between willing parties, other than in 
forced or liquidation sale transactions. At the end of the reporting period, the carrying amounts of 
the financial assets and financial liabilities of the Group approximated to their fair values.

Number of options in issue as at 31 December 2022

Dividend yield (%)

Expected volatility

Risk-free interest rate

Exercise price

Ordinary Share price at grant date

Expected life of share options/SARs (years)

Options granted  
28 February 2022

641,036

0%

27.4%

1.08%

$5.02

$4.92

5 years

Model used

 Black Scholes option analysis

The determination of the risk-free interest rate has been based on the UK Sovereign Curve for 
each grant made during 2022.

33. Financial risk management
The financial assets of the Group comprise trade receivables, deposits and other receivables, 
and cash and cash equivalents which are categorised as financial assets at amortised cost. The 
carrying amounts of these financial assets are the amounts shown on the consolidated statement 
of financial position or in the corresponding notes to the Financial Statements.

The financial liabilities of the Group comprise trade payables, bank loans, other loans, financial 
liabilities included in other payables and accruals, and lease liabilities which are categorised as 
financial liabilities at amortised cost. The carrying amounts of these financial liabilities are the 
amounts shown on the consolidated statement of financial position or in the corresponding notes 
to Financial Statements.

2022

2021

The Group’s principal financial instruments comprise cash and cash equivalents, bank loans and 
other loans. The main purpose of these financial instruments is to raise finance for the Group’s 
operations. The Group has various other financial assets and liabilities such as trade receivables 
and trade payables, which arise directly from its operations.

The main risks arising from the Group’s financial instruments are foreign currency risk, credit risk 
and liquidity risk which arise in the normal course of its business. The Board of Directors reviews 
and agrees policies to analyse and formulate measures to manage each of these risks which are 
summarised below.

Interest rate risk 
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will 
fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes 
in market interest rates relates primarily to the Group’s debt obligations with floating interest rates.

Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonable possible change in interest rates 
on that proportion of loans and borrowings affected. With all other variables held constant, the 
Group’s loss before tax is affected through the impact on floating rate borrowings as follows, 
based on the outstanding loans from the bank as at 31 December 2022:

Loan  
balance  
$’000

Increase/
decrease in 
basis points

Effect on loss 
before tax 
$’000

58,429

60,092

50 BP

50 BP

292

300

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

33. Financial risk management continued
Foreign currency risk 
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate 
because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in 
foreign exchange rates relates to both the Group’s operating activities (when revenue or expense 
is denominated in a foreign currency) and the Group’s borrowing (both internal and external) when 
held in a different currency to the functional currency of the Company in which they are held.

The Group manages its foreign currency risk by selling and buying in the same currencies where 
possible but does not enter into any material hedging transactions or derivatives. The ability of 
the Group to organise its sales and purchases in similar currencies allows a natural hedge in some 
circumstances against currency fluctuations.

Exchange adjustments on borrowings has resulted in a charge to the profit and loss account 
of $2,528,000 (2021: $5,418,000). This arises from loans with banks denominated in foreign 
currencies ($722,000) and intercompany loans ($1,806,000).

The following table demonstrates the sensitivity at the end of the reporting period to a reasonable 
possible change in the United States Dollar (USD), Euro (EUR) and Macau Pataca (MOP) exchange 
rates, with all other variables held constant, of the Group’s profit before tax (due to changes in the 
fair value of monetary assets and liabilities). These currencies have been selected for sensitivity 
analysis as they represent the local currencies covering the majority of the trading locations of the 
Group, and are compared against the Pound Sterling (GBP) as this is the functional currency of the 
Group. There is no impact on the Group’s equity except on the retained profits.

2022

If the GBP weakens against the USD

If the GBP strengthens against the USD

If the GBP weakens against the EUR

If the GBP strengthens against the EUR

If the GBP weakens against the MOP

If the GBP strengthens against the MOP

Increase/(decrease)  
in exchange rate 
%

Increase/(decrease)  
in loss before tax 
$

 5

 (5)

 5

 (5)

 5

 (5)

(16,282)

16,282

(50,267)

50,267

(338,825)

338,825

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Credit risk
The Group trades only with parties who have been assessed via a credit check. Receivables 
balances are monitored on an ongoing basis and the Group’s history of credit losses of trade 
receivables is not significant. The credit risk of the Group’s other financial assets arises from 
default of the counterparty, with a maximum exposure equal to the carrying amounts of these 
financial assets.

The Group maintains regular control over its trade receivables and normal terms are between 30 
and 60 days across the Group. The percentage of debtors outside of these terms is shown in the 
analysis below.

Trade receivables

Current

Past due 1-30 days 

Past due 31-60 days

Past due 61+ days

Total

Percentage over terms

2022 
$’000

2021 
$’000

Increase/ 
(decrease)  

$’000

20,507

21,822

(1,315)

3,796

442

2,679

27,424

25%

4,225

1,186

2,129

(429)

(744)

550

29,362

(1,938)

26%

Raw material costs and inflation
The Group subcontracts with third-party suppliers on fixed terms and thus any immediate 
commodity risk is mitigated in the short term on these transactions. On the Group’s own 
manufactured products, raw materials in 2022 accounted for 15% of cost of sales (2021: 9%). 
This risk is mitigated by the use of different suppliers and the diversification of production 
locations across the Group. The risk of inflation has led to cost increases for goods and services, 
including shipping costs. The eyewear market continues to grow and over the long term, the 
Group can mitigate the loss of margin through an increase in its selling price.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

33. Financial risk management continued
Cash deposits
The Group invests its excess cash in either weekly or monthly deposits with either HSBC or OCBC. 
The Group considers these deposits to carry a very low risk and they typically return an interest 
rate of around 0.5%.

Liquidity risk
For the management of the liquidity risk, the Group monitors and maintains a sufficient level 
of cash and bank balances deemed adequate by management, along with utilising an invoice 
discounting facility, to finance the Group’s operations and mitigate the effects of fluctuation in 
cash flows. Management reviews and monitors its working capital requirements regularly. The 
Group reviews on a monthly basis the cash generation and the requirement for capital repayments 
on the bank loan in its detailed working capital model to ensure sufficient liquidity for operating 
purposes across the Group. The table below summarises the gross undiscounted cash flows of the 
Group’s financial liabilities:

Less than  
1 year  
$’000

1 to 2  
years  
$’000

2 to 5  
years 
$’000

Over  
5 years 
$’000

Total 
$’000

Bank overdrafts (including invoice 
discounting facility)

1,803

–

Interest-bearing loans and borrowings 
(excluding items below)

58,204

307

–

–

–

–

1,803

58,511

Lease liabilities

4,396

7,441

7,092

5,617

24,546

Other financial liabilities – right of return

12,838

Trade and other payables

47,363

–

–

–

–

–

–

12,838

47,363

Capital risk management
The Group’s capital management objectives are:
• 

to ensure the Group’s ability to continue as a going concern so that it can continue to provide 
returns for shareholders and benefits for other stakeholders; and

• 

to provide an adequate return to shareholders by pricing products and services commensurate 
with the level of risk.

To meet these objectives, the Group reviews the budgets and forecasts on a regular basis to 
ensure there is sufficient capital to meet the needs of the Group.

The capital structure of the Group consists of shareholders’ equity as set out in the consolidated 
statement of changes in equity. All working capital requirements are financed from existing cash 
resources and borrowing. The loan covenant ratios achieved by the Group, and required by the 
bank, as at the end of each year were as follows:

Leverage

Interest cover

Cash flow cover

2022

2021

Actual

Required

Actual

Required

Waived

Waived

1.9

Below 2.0

5.0

Above 4.0

12.3

Above 4.0

Waived

Waived

1.6

Above 1.2

34. Guarantees
The Company’s UK subsidiary Algha Group Limited (registered number 03240950) has taken 
advantage of the audit exemption under section 479A of the Companies Act 2006 for the year 
ended 31 December 2022. Consequently, the Company has provided the statutory guarantee in 
relation to the subsidiary’s liabilities. The third-party liabilities of the subsidiary as of 31 December 
2022 amounted to $nil (2020: $1,000).

35. Prior year adjustment – contingent consideration
Under IFRS 3: Business Combinations, contingent consideration payable dependent on continuing 
employment of the previous owners should be accounted for as remuneration for continuing 
services over the period to which it relates. Within the 2021 Annual Report, these earnout payments 
were included within the total consideration for both the BoDe Design GmbH and EGO Eyewear 
Limited acquisitions. A prior year adjustment is therefore required to reduce the deferred 
consideration liability by $5,398,000, reduce goodwill by $5,414,000 and reduce the foreign currency 
translation reserve by $16,000. There is no impact on the prior year Income Statement as no 
earnout payments related to 2021, with the acquisitions both made in December 2021.

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N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

35. Prior year adjustment – contingent consideration continued
The reconciliation of the restated Statement of Financial Position as at 31 December 2021 is 
shown below:

31 December 
2021 
$’000

Prior year 
adjustment 
$’000

Restated 
31 December 
2021 
$’000

ASSETS

Non-current assets

Goodwill

Intangible assets

Property, plant and equipment

Right-of-use asset

Investment in associates

Deferred tax 

Current assets

Inventories

Trade and other receivables

Tax receivable

Cash and cash equivalents

Total assets

EQUITY

Called up share capital

Share premium

Foreign currency translation reserve

Share option reserve

Merger reserve

Retained earnings

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81,359

54,454

24,569

22,269

48

12,540

195,239

55,664

42,229

3,468

29,759

131,120

326,359

1,389

122,291

2,818

2,001

7,296

9,429

Total equity

113

145,224

(16)

145,208

LIABILITIES

Non-current liabilities

Financial liabilities – borrowings

Contingent and deferred consideration

Deferred tax

Current liabilities

Trade and other payables

Right of return liabilities

(5,414)

–

–

–

–

–

75,945

54,454

24,569

22,269

48

12,540

(5,414)

189,825

Financial liabilities – borrowings

Interest-bearing loans and borrowings

Invoice discounting

Tax payable

55,664

42,229

3,468

29,759

131,120

Total liabilities

–

–

–

–

–

(5,414)

320,945

Total equity and liabilities

31 December 
2021 
$’000

Prior year 
adjustment 
$’000

Restated 
31 December 
2021 
$’000

69,194

8,505

20,517

98,216

53,317

11,100

13,289

2,433

2,780

82,919

–

69,194

(5,398)

3,107

–

20,517

(5,398)

92,818

–

–

–

–

–

–

53,317

11,100

13,289

2,433

2,780

82,919

181,135

(5,398)

175,737

326,359

(5,414)

320,945

36. Post balance sheet events
Since the balance sheet date, but before these Financial Statements were approved, there were 
no events that the Directors consider material to the users of these Financial Statements.

–

–

(16)

–

–

–

1,389

122,291

2,802

2,001

7,296

9,429

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C O M PA N Y   B A L A N C E   S H E E T
as at 31 December 2022

ASSETS

Fixed assets

Investments

Right of use assets

Current assets

Trade and other debtors – falling due after more than 
one year

Trade and other debtors – falling due within one year

Cash and cash equivalents

Total assets

EQUITY

Shareholders’ equity

Called up share capital

Share premium

Foreign currency translation reserve

Share option reserve

Merger reserve

Retained earnings

Total equity

LIABILITIES

Non-current liabilities

Interest-bearing loans and borrowings

Current liabilities

Trade and other creditors

Interest-bearing loans and borrowings

Total liabilities

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Total equity and liabilities

114

Notes

2022  
$’000

2021 
$’000

The notes on pages 116 to 125 form part of these Financial Statements. Registered Company 
number: 11963910.

As permitted by section 408(3) of the Companies Act 2006, a separate Income Statement dealing 
with the results of the Parent Company has not been presented. The Parent Company loss for the 
period ended 31 December 2022 was $1,326,000 (2021: $1,043,000 loss).

The Financial Statements were approved by the Board of Directors on 03 May 2023 and were 
signed on its behalf by:

R Peck 
Director 

C Kay
Director

 3

4

5

6

7

8

9

 9

9

9

9 

69,828

124

76,762

–

99,962

1,487

44

115,331

–

–

171,445

192,093

1,389

122,291

(22,390)

3,548

7,296

58,695

170,829

1,389

122,291

(2,295)

2,001

7,296

61,411

192,093

4, 10

11

4, 10

89

491

36

616

–

–

–

–

171,445

192,093

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C O M PA N Y   S TAT E M E N T   O F   C H A N G E S   I N   E Q U I T Y
for the year ended 31 December 2022

Called 
up share 
capital 
$’000

Share 
premium 
$’000

Foreign 
currency 
translation 
reserve 
$’000

Share 
option 
reserve 
$’000

Notes

Retained 
earnings 
$’000

Merger 
reserve 
$’000

Total  
equity 
$’000

Balance at 
1 January 2021

Changes in equity

Loss for the year

Other comprehensive loss

9

Total comprehensive 
loss

Share-based payments

Exercise of share options

9

9

Balance at 
31 December 2021

Changes in equity

Loss for the year

Other comprehensive loss

9

Total comprehensive 
loss

Share-based payments

Share options cancelled

Cash dividends

Balance at 
31 December 2022

9

9

9

1,384 121,940

(157)

867 62,019

7,296 193,349

–

–

–

–

5

–

–

–

–

351

–

(2,138)

(2,138)

–

–

–

(1,043)

–

(1,043)

–

–

1,484

–

(350)

435

–

–

–

–

–

(1,043)

(2,138)

(3,181)

1,484

441

1,389 122,291

(2,295)

2,001

61,411

7,296 192,093

–

–

–

–

–

–

–

–

– (20,095)

–

–

(1,326)

–

(1,326)

–

– (20,095)

– (20,095)

–

(1,326)

– (21,421)

–

–

–

–

–

–

1,729

–

(182)

182

–

(1,572)

–

–

–

1,729

–

(1,572)

1,389 122,291 (22,390) 3,548 58,695

7,296 170,829

The notes on pages 116 to 125 form part of these Financial Statements.

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N O T E S   T O   T H E   C O M PA N Y   F I N A N C I A L   S TAT E M E N T S
for the year ended 31 December 2022

1. General information
INSPECS Group plc is a public company limited by shares and is incorporated in England and 
Wales. The address of the Company’s principal place of business is 7–10 Kelso Place, Upper 
Bristol Road, Bath BA1 3AU.

The principal activity of the Company was that of a parent company providing services that 
support the Group. From the start of the period the Company has incurred costs to support the 
Group which have been re-charged to subsidiary entities where appropriate.

2. Accounting policies
These Financial Statements were prepared in accordance with Financial Reporting Standard 101 
Reduced Disclosure Framework (‘FRS 101’), the Companies Act 2006 as applicable to companies 
using FRS 101, and applicable accounting standards. The Financial Statements have been 
prepared on the historical cost basis, and as a going concern. Historical cost is generally based 
on the fair value of the consideration given in exchange for the assets. 

As permitted by section 408(3) of the Companies Act 2006, no separate profit and loss account 
has been presented for the Company. As permitted by FRS 101, the Company has taken 
advantage of the disclosure exemptions available in the preparation of the Financial Statements 
in relation to the presentation of a statement of cash flows.

Investments
Investments held as non-current assets comprise the Company’s investment in subsidiaries and are 
shown at fair value on the date of acquisition, less any provision for impairment. In the case of the 
share for share exchange which occurred in the prior period, the number and aggregate value of 
the shares issued was specified in the share for share exchange agreement.

An annual review of investments is performed for indicators of impairment. If indicators of 
impairment are identified investments are tested for impairment to ensure that the carrying value 
of the investments is supported by their recoverable amount.

Current and non-current classifications
The Company presents assets and liabilities in the balance sheet based on fixed or 
current classification.

An asset is considered current when it is:
•  Expected to be realised or intended to be sold or consumed within the usual parameters of 

trading activity, or

•  Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for 

at least 12 months after the reporting period.

The Company classifies all other assets as non-current.

A liability is current when:
• 

It is expected to be settled in the normal parameters of trading activity and as a minimum is 
due to be settled within 12 months after the reporting period, or

•  There is no unconditional right to defer the settlement of the liability for at least 12 months 

after the reporting period.

The Company classifies all other liabilities as non-current.

Leases
The Company applied a single recognition and measurement approach for all leases for which it is 
the lessee, except for short-term leases and leases of low-value assets. The Company recognises 
right-of-use assets representing the right to use the underlying assets and lease liabilities to make 
lease payments.

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N O T E S   T O   T H E   C O M PA N Y   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

2. Accounting policies continued
Right-of-use asset
The Company recognises right-of-use assets at the commencement date of the lease (i.e. the 
date the underlying asset is available for use). Right-of-use assets are measured at cost, less any 
accumulated depreciation and impairment losses. The cost of right-of-use assets includes the 
amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at 
or before the commencement date less any lease incentives received. Right-of-use assets are 
depreciated on a straight-line basis over the shorter of the lease term and the estimated useful 
lives of the assets, as follows:

Plant and machinery 
Motor vehicles 

3 years
3 years

Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at 
the present value of lease payments to be made over the lease term. The lease payments include 
fixed payments (including in substance fixed payments) less any lease incentives receivable. They 
also include any amounts expected to be paid under residual value guarantees. 

In calculating the present value of lease payments, the Company uses its incremental borrowing 
rate at the lease commencement date because the interest rate implicit in the lease is not readily 
determinable. After the commencement date, the amount of lease liabilities is increased to reflect 
the accretion of interest and reduced for the lease payments made. In addition, the carrying 
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, 
a change in the lease payments or a change in the assessment of an option to purchase the 
underlying asset.

The Company’s lease liabilities are included in interest-bearing loans and borrowings.

The Company applies the short-term lease recognition exemption to its short-term leases of 
machinery and equipment (i.e. those leases that have a lease term of 12 months or less from the 
commencement date and do not contain a purchase option). It also applies the lease of low-value 
assets recognition exemption to leases of office equipment that are considered to be low value. 
Lease payments on short-term leases and leases of low-value assets are recognised as expenses 
on a straight-line basis over the lease term.

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Financial instruments – initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial 
liability or equity instrument of another entity.

Financial assets
Initial recognition and subsequent measurement
Financial assets are classified, at initial recognition and subsequently measured at amortised cost, 
and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is 
derecognised, modified or impaired.

The Company’s financial assets at amortised cost include loans to Group undertakings.

The Company does not have any financial assets at fair value through OCI or financial assets at fair 
value through profit or loss.

Derecognition
A financial asset is primarily derecognised when the rights to receive cash flows from the asset 
have expired.

Impairment of financial assets 
The Company recognises an allowance for expected credit losses (‘ECLs’) for all debt instruments 
not held at fair value through profit or loss. ECLs are based on the difference between the 
contractual cash flows due in accordance with the contract and all the cash flows that the 
Company expects to receive.

The Company considers a financial asset in default when internal or external information indicates 
that the Company is unlikely to receive the outstanding contractual amounts in full before taking 
into account any credit enhancements held by the Company. A financial asset is written off when 
there is no reasonable expectation of recovering the contractual cash flows.

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for the year ended 31 December 2022

2. Accounting policies continued
Cash and cash equivalents
For the purpose of the consolidated statement of cash flows, cash and cash equivalents 
comprise cash on hand and demand deposits, and short-term highly liquid investments that 
are readily convertible into known amounts of cash, that are subject to an insignificant risk of 
changes in value, and have a short maturity of generally within three months when acquired, 
less bank overdrafts which are repayable on demand and form an integral part of the Company’s 
cash management.

Taxation
Income tax comprises current and deferred tax. Income tax relating to items recognised outside 
profit or loss is recognised outside profit or loss, either in other comprehensive income or directly 
in equity.

Current tax assets and liabilities are measured at the amount expected to be recovered from or 
paid to the taxation authorities, based on the tax rates (and tax laws) that have been enacted or 
substantively enacted by the end of the reporting period, taking into consideration interpretations 
and practices prevailing in the countries in which the Company operates.

For the purpose of the consolidated statement of financial position, cash and cash equivalents 
comprise cash on hand and at banks, including term deposits, and assets similar in nature to cash, 
which are not restricted as to use.

Tax liabilities are recognised when it is considered probable that there will be a future outflow of 
funds to a taxing authority.

Share-based payments
Employees (including senior executives) of the Company receive remuneration in the form 
of share-based payments, whereby employees render services as consideration for equity 
instruments (equity-settled transactions).

The cost of equity-settled transactions is determined by the fair value at the date when the grant 
is made using an appropriate valuation model, further details of which are given in the detailed 
notes to the consolidated accounts. That cost is recognised in employee benefits expense in 
the company within which the relevant employee is employed, together with a corresponding 
increase in share option reserve, over the period in which the service and, where applicable, the 
performance conditions are fulfilled (the vesting period).

Foreign currencies
These Financial Statements are presented in USD, which is the Company’s presentational currency. 
The functional currency of the Company is GBP. Monetary assets and liabilities denominated in 
foreign currencies are translated at the functional currency rates of exchange ruling at the end 
of the reporting period. Differences arising on settlement or translation of monetary items are 
recognised in profit or loss. Non-monetary items that are measured in terms of historical cost in 
a foreign currency are translated using the exchange rates at the dates of the initial transactions. 
Non-monetary items measured at fair value in a foreign currency are translated using the 
exchange rates at the date when the fair value was measured. The resulting exchange differences 
are recognised in other comprehensive income and accumulated in the foreign currency 
translation reserve.

The cumulative expense recognised for equity-settled transactions at each reporting date until the 
vesting date reflects the extent to which the vesting period has expired and the Company’s best 
estimate of the number of equity instruments that will ultimately vest. The expense or credit in the 
income statement for a period represents the movement in cumulative expense recognised as at 
the beginning and end of that period.

Pensions and other post-employment benefits
The Company operates defined contribution pension schemes, where the amounts charged to 
the statement of comprehensive income are the contributions payable in the year. Differences 
between contributions payable in the year and the contributions actually paid are shown as either 
accruals or prepayments.

Details of the Group’s share option scheme are provided in note 31 of the Consolidated 
Financial Statements.

Dividend
Final dividend distribution to the Group’s shareholders is recognised as a liability in the 
Group’s financial statements in the period in which the dividends are approved by the 
Group’s shareholders.

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for the year ended 31 December 2022

2. Accounting policies continued
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the Company’s Financial Statements requires management to make 
judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, 
assets and liabilities, and their accompanying disclosures, and the disclosure of contingent 
liabilities. Uncertainty about these assumptions and estimates could result in outcomes that 
could require a material adjustment to the carrying amounts of the assets or liabilities affected in 
the future.

Estimates involve the determination of the quantum of accounting balances to be recognised. 
Judgements typically involve decisions such as whether to recognise an asset or liability.

The key assumptions concerning the future and other key sources of estimation uncertainty at the 
end of the reporting period, that have a significant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next financial year, are described below:

Expected credit loss
In accordance with IFRS 9, the expected credit loss model is used to determine an expectation 
of an economic loss of an asset. Application of this model to the loans to Group undertakings 
within the Company requires estimation by management. An expected credit loss calculation has 
been performed by management, which has deemed that the required provision is considered 
immaterial and no provision has been recognised against the Group undertakings shown in notes 
5 and 6 due to the recovery risk being deemed immaterial.

3. Investments

COST AND NET BOOK VALUE

At 1 January 2022

Additions for share-based payments in subsidiaries

Foreign exchange

At 31 December 2022

Shares in  
subsidiaries 
$’000

76,762

1,729

(8,663)

69,828

Investments held are shown below. Investments held directly by the Company are marked *. The 
remaining investments are held indirectly by the Company.

Subsidiaries

Registered office

Nature of  
business

Class of 

shares % holding

INSPECS Holdings 
Limited*

7–10 Kelso Place, Bath, Somerset, 
BA1 3AU, UK

Holding 
company

Ordinary

100.00

INSPECS Limited8

7–10 Kelso Place, Bath, Somerset, 
BA1 3AU, UK

Eyewear 
trading

Eyewear 
trading

Ordinary

100.00

Ordinary

100.00

Judgements made by management which are considered to have a material impact on the 
Financial Statements are as follows:

INSPECS USA LC8

18401 US Highway 19N, 
Clearwater, Florida 33764, USA

Carrying value of investments
An annual review of investments is performed to identify any indicators of impairment which, 
if found, would result in an impairment review being performed. Judgement is required by 
management in performing this review, including in the identification and interpretation of 
any indicators.

Algha Group Limited8

7–10 Kelso Place, Bath, Somerset, 
BA1 3AU, UK

Eyewear 
manufacturing

Ordinary

100.00

INSPECS Scandinavia 
AB8

184 40 Akersberga, Stockholm, 
Sweden

Eyewear 
trading

Ordinary

100.00

Maronglow Limited1

UK Optical Limited8

7–10 Kelso Place, Bath, Somerset, 
BA1 3AU, UK

7–10 Kelso Place, Bath, Somerset, 
BA1 3AU, UK

Dormant Ordinary

100.00

Dormant Ordinary

100.00

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for the year ended 31 December 2022

3. Investments continued

Subsidiaries

Registered office

American Optical UK 
Limited8

7–10 Kelso Place, Bath, Somerset, 
BA1 3AU, UK

Twenty20 Limited2

Elian Fiduciary Services (Cayman) 
Limited, 89 Nexus Way, Camana 
Bay, Grand Cayman KY1-9007, 
Cayman Islands 

Bandoma Limited3

Suite 6, Watergardens 4, Gibraltar

Ice Foster Limited3

Killine Group Limited4

Nemours Chambers, Road Town, 
Tortola, British Virgin Islands

Elian Fiduciary Services (Cayman) 
Limited, 89 Nexus Way, Camana 
Bay, Grand Cayman KY1-9007, 
Cayman Islands

Nature of  
business

Class of 

shares % holding

Dormant Ordinary

100.00

Holding 
company

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Holding 
company

Holding 
company

Holding 
company

Killine Optical Limited3 Alameda Dr. Carlos D’Assumpcao, 

nos 335–341, Edificio Centro 
Hotline, 21 andar A, em Macau

Eyewear 
trading

Ordinary

100.00

Neo Optical Company 
Limited5

Neo Town Industrial Zone, 
Yen Dung District, Bac Giang 
Province, Vietnam

Eyewear 
manufacturing

Ordinary

100.00

Subsidiaries

Registered office

Zhongshan Torkai 
Optical Co Limited6

Shagou Industrial Park,  
Banfu County, Zhongshan,  
Guangdong, China 

Nature of  
business

Class of 

shares % holding

Eyewear 
manufacturing

Ordinary

100.00

Neway (Macao 
Commercial  
Offshore) Limited9

Kudos S.R.L.1

Primoptic Limited7

Alameda Dr. Carlos D’Assumpcao, 
nos 335–341 Edificio Hot line, 21 
andar D, em Macau

Eyewear 
trading

Ordinary

100.00

Via Noai 5, Domeggi Di Cadore, 
CAP 32040, Italy

Eyewear 
manufacture

Ordinary

100.00

Alameda Dr. Carlos D’Assumpcao, 
nos 335–341, Edificio Centro, 21 
andar A, em Macau

Nemours Chambers Limited, 
Road Town, Tortola, British Virgin 
Islands

Eyewear 
trading

Holding 
company

Ordinary

100.00

Ordinary

100.00

INSPECS Asia Limited8 10F Sing Ho Finance Building, 

166–168 Gloucester Road, Hong 
Kong 

Quality control 
services

Ordinary

100.00

Duval Company  
Group Limited3

Nemours Chambers, Road Town, 
Tortola, British Virgin Islands

Holding 
company

Ordinary

100.00

Norville (20/20) 
Limited2

7–10 Kelso Place, Bath, Somerset, 
BA1 3AU, UK

Lens 
manufacturer

Ordinary

100.00

Ordinary

100.00

Yardine Limited3

On Sight Services-
Sociedade Unipessoa, 
Lda3

Rua Soares de Passos, 10A/10B, 
Portugal

Eyewear 
design

Ordinary

100.00

Hardy Amies Limited2

7–10 Kelso Place, Bath, Somerset, 
BA1 3AU, UK

Dormant Ordinary

100.00

BoDe Design GmbH2

Hofweg 20, 97737 Gemunder am 
Main, Germany

Eyeware 
trading

Ordinary

100.00

O.W. Ventures Limited3 Unit 305–7, 3/F, Laford Centre, 
838 Lai Chi Kok Road, Cheung 
Sha Wan, Kowloon, Hong Kong

Corporate 
management

Ordinary

100.00

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for the year ended 31 December 2022

3. Investments continued

Subsidiaries

Registered office

EGO Eyewear Limited2 7–10 Kelso Place, Bath, Somerset, 

BA1 3AU, UK

EGOptiska AB15

Johannesgränd 1, Stockholm, 
Sweden

EGOptiska  
International AB15

Johannesgränd 1, Stockholm, 
Sweden

EGO Eyewear (HK) 
Limited15

EGO Eyewear AB15

Greights AB17

Yau Tsim Mong, Hong Kong

Johannesgränd 1, Stockholm, 
Sweden

Johannesgränd 1, Stockholm, 
Sweden

Eschenbach Holding 
GmbH2

Fürther Straße 252, 90429, 
Nuremberg, Germany

Eschenbach 
Beteiligungs GmbH10 

Fürther Straße 252, 90429, 
Nuremberg, Germany

Eschenbach Optik 
GmbH14

Althardstraße 70, Regensdorf, 
Switzerland

Eschenbach  
Optik B.V.14

Osloweg 134, Groningen, 
Netherlands

Eschenbach Optik  
spol s. r.o.14

K Fialce 35, Prague, Czech 
Republic

Eschenbach Optik  
sp. z o.o.14

ul. Biedronki 60, Warsaw, Poland

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Nature of  
business

Class of 

shares % holding

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

50.00

Ordinary

100.00

Ordinary

100.00

Subsidiaries

Registered office

Eschenbach Optik 
GmbH14

Brunnenfeldstraße 14, Linz, 
Austria

Eschenbach Optik 
s.a.r.l14

64 rue Claude Chappe, Plaisir, 
France

Eschenbach Optik 
s.r.l.14

Via C.Colombo 10, Torino, Italy

Eschenbach Optik  
of America, Inc.14

22 Shelter Rock Lange, Danbury, 
USA

Eschenbach Optik  
of Japan Co.Ltd.14

2-15-4 Kanda-Tsukasamachi, 
Chiyoda-ku, Tokyo, Japan 

Eschenbach Optik S.L.14 Consell de Cent 106-108, 

Barcelona, Spain

Eschenbach Optik 
GmbH11

Fürther Straße 252, 90429, 
Nuremberg, Germany

Eschenbach Optik 
(Shenzhen)14

Block A, Tian An Cyber Times 
Che Gong Miao, Futian District, 
Shenzhen, China

Ordinary

100.00

Eschenbach 
International GmbH11

Fürther Straße 252, 90429, 
Nuremberg, Germany

Ordinary

100.00

Eschenbach UK 
Holdings Ltd12

27 Blackberry Lane, Halesowen¸ 
B63 4NX, UK

Ordinary

100.00

International  
Eyewear Ltd13

27 Blackberry Lane, Halesowen¸ 
B63 4NX, UK

Ordinary

100.00

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Holding 
company

Holding 
company

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Nature of  
business

Class of 

shares % holding

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Holding 
company

Holding 
company

Eyeware 
trading

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

Ordinary

100.00

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for the year ended 31 December 2022

3. Investments continued

Subsidiaries

Registered office

TURA, Inc.12

123 Girton Drive, Muncy, USA

Eschenbach  
Optik A/S11

Boskærvej 18, Vejle, Denmark

Ruain Zuoyou Glasses 
Co Ltd16

Building 35, Shidai industrial 
zone, Mayu, Ruian, Zhejiang, P. R. 
China

Nature of  
business

Class of 

shares % holding

Eyeware 
trading

Eyeware 
trading

Eyeware 
trading

Ordinary

100.00

Ordinary

100.00

Ordinary

25.00

COST

At 1 January 2022

BeeQuick Logistics 
Lda18

24 Praca Sa Da Bandeira, 
Santarem, Portugal

Logistics 
company Ordinary

40.00

Additions

At 31 December 2022

DEPRECIATION

At 1 January 2022

Charge for the year

At 31 December 2022

NET BOOK VALUE

At 31 December 2022

1  The shares are held by Algha Group Limited
2   The shares are held by INSPECS Limited
3   The shares are held by Killine Group Limited
4  The shares are held by Twenty20 Limited
5  The shares are held by Killine Optical Limited
6  The shares are held by Bandoma Limited
7  The shares are held by Duval Company Group Limited 
8  The shares are held by INSPECS Holdings Limited 
9  The shares are held by Yardine Limited 
10 The shares are held by Eschenbach Holding GmbH 
11 The shares are held by Eschenbach Beteiligungs GmbH 
12 The shares are held by Eschenbach International GmbH 
13 The shares are held by Eschenbach UK Holdings Ltd 
14 The shares are held by Eschenbach Optik GmbH 
15 The shares are held by EGO Eyewear Limited 
16 The shares are held by Zhongshan Torkai Optical Co Limited 
17 The shares are held by EGO Eyewear AB
18 The shares are held by On Sight Services-Sociedade Unipessoa Lda

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4. Right-of-use assets and leases
The Company has lease contracts for various items of plant, machinery, vehicles and other 
equipment used in its operations. Leases of plant, machinery and motor vehicles generally have 
lease terms between three and five years. The Company’s obligations under its leases are secured 
by the lessor’s title to the leased assets. The Company’s right-of-use assets are as follows:

 Plant & 
machinery 
$’000

Motor 
vehicles 
$’000

Total 
$’000

–

85

85

–

8

8

–

50

50

–

3

3

–

135

135

–

11

11

77

47

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for the year ended 31 December 2022

4. Right-of-use assets and leases continued
Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans 
and borrowings) and the movements during the period:

6. Trade and other debtors – falling due within one year

2021 
$’000

Current:

Prepayments

Amounts owed by Group undertakings

2022 
$’000

2021 
$’000

108

1,379

1,487

–

–

–

Amounts owed by Group undertakings are unsecured, with no interest charged, and have no set 
repayment date. These amounts are expected to be received within 12 months of the reporting 
period and have therefore been classified as falling due within one year. 

7. Cash and cash equivalents

Cash at bank and in hand

2022 
$’000

44

44

2021 
$’000

–

–

At 1 January

Additions

Interest charge

Payments

Exchange adjustment

As at 31 December

Current

Non-current

2022 
$’000

–

135

2

(12)

–

125

36

89

–

–

–

–

–

–

–

–

5. Trade and other debtors – falling due after more than one year

Current:

Amounts owed by Group undertakings

2022 
$’000

2021 
$’000

99,962

99,962

115,331

115,331

Amounts owed by Group undertakings are unsecured, with no interest charged, and have no 
set repayment date. These amounts are not expected to be received within 12 months of the 
reporting period and have therefore been classified as falling due after more than one year. As the 
substance of the loan arrangement has not changed since 1 January 2022, the comparative figure 
has been re-presented as due after more than one year.

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N O T E S   T O   T H E   C O M PA N Y   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

8. Called up share capital

Authorised and issued share capital:

Share option reserve
The share option reserve is used to recognise the value of equity-settled share-based payments 
provided to employees, including key management personnel, as part of their remuneration.

Number

Class

Nominal  
value

101,671,525 (2021: 101,671,525)

Ordinary

£0.01

2022 
$’000

1,389

2021 
$’000

1,389

Each Ordinary Share carries the right to participate in distributions, as respects dividends and as 
respects capital on winding up. 

9. Reserves

Share premium
This reserve records the amount above the nominal value of the sums received for shares issued, 
less transaction costs.

At 1 January

Share-based payment charge

Share options cancelled

Exercise of share options

Deferred tax on share options

At 31 December

2022 
$’000

2,001

1,729

(182)

–

–

2021 
$’000

867

1,484

–

(437)

87

3,548

2,001

At 1 January

Exercise of share options

At 31 December

2022  
$’000

2021 
$’000

122,291

121,940

–

351

The share-based payment charge for the year is recognised against the reserve as per IFRS 2: 
Share-Based Payments. 150,000 share options have been cancelled during the period. Upon 
cancellation of share options, the remaining element of fair value of the option is expensed 
immediately through the income statement. The related share option reserve is then recycled 
into retained earnings, resulting in the movement of $182,000 from the share option reserve to 
retained earnings.

122,291

122,291

Retained earnings

Foreign currency translation reserve
With regards to the foreign currency translation reserve in the Company, this is in relation to 
translating the Parent Company’s accounts into the presentation currency of USD.

At 1 January

Other comprehensive loss

At 31 December

2022 
$’000

(2,295)

(20,095)

(22,390)

2021 
$’000

(157)

(2,138)

(2,295)

At 1 January

Loss for the year

Exercise of share options

Share options cancelled

Cash dividends

At 31 December

2022 
$’000

61,411

(1,326)

–

182

(1,572)

58,695

2021 
$’000

62,019

(1,043)

435

–

–

61,411

During the period, the final dividend in relation to 2021 was paid, amounting to 1.25 pence 
per share.

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N O T E S   T O   T H E   C O M PA N Y   F I N A N C I A L   S TAT E M E N T S  CONTINUED
for the year ended 31 December 2022

9. Reserves continued
Merger reserve
This reserve arose on the share for share exchange between INSPECS Holdings Limited and 
INSPECS Group plc on 10 January 2020.

The trade payables are non-interest-bearing and are normally settled on credit terms of 
30-90 days. 

12. Employees

At 1 January

At 31 December

2022 
$’000

7,296

7,296

2021 
$’000

7,296

7,296

Wages and salaries

Social security costs

Pension costs

10. Interest-bearing loans and borrowings

Share-based payment expense

2022 
$’000

903

667

82

598

2,250

2021 
$’000

–

–

–

–

–

2022

7

2021

–

2022 
$’000

2021 
$’000

36

36

–

–

2022 
$’000

2021 
$’000

89

89

–

–

Total average number of employees during the year was as follows:

13. Guarantees
The Company’s UK subsidiary Algha Group Limited (registered number 03240950) has taken 
advantage of the audit exemption under section 479A of the Companies Act 2006 for the year 
ended 31 December 2021. Consequently, the Company has provided the statutory guarantee in 
relation to the subsidiary’s liabilities. The third-party liabilities of the subsidiary as of 31 December 
2021 amounted to $nil (2021: $1,000).

2022 
$’000

2021  
$’000

14. Post balance sheet events
Since the balance sheet date, but before these Financial Statements were approved, there were 
no events that the Directors consider material to the users of these Financial Statements.

262

7

72

150

491

–

–

–

–

–

Current:

Lease liabilities

Non-current: 

Lease liabilities

11. Trade and other creditors

Current:

Trade creditors

Other creditors

Social security and other taxes

Accruals 

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A P P E N D I X   1
Comparative information in GBP

Consolidated Income Statement in GBP

for the year ended 31 December 2022

Consolidated Statement of Financial Position in GBP

As at 31 December 2022

2022 
£’000

200,957

(102,097)

2021 
£’000

179,165

(95,010)

ASSETS

Non-current assets

98,860

(6,292)

(93,754)

(1,186)

(1,466)

(2,044)

(3,095)

108

19

(7,664)

1,345

(6,319)

84,155

Goodwill

(5,667)

Intangible assets

(77,371)

Property, plant and equipment

1,117

Right-of-use assets

(1,881)

Investment in associates

(3,938)

Deferred tax assets

(2,017)

86

(7)

Current assets

Inventories

(6,640)

Trade and other receivables

2,689

Tax receivables

(3,951)

Cash and cash equivalents

Assets held for sale

Total assets

Revenue

Cost of sales

Gross profit

Distribution costs

Administrative expenses

Operating (loss)/profit

Non-underlying costs

Exchange adjustment on borrowings

Finance costs

Finance income

Share of profit of associate

Loss before income tax

Income tax (credit)/charge

Loss for the year

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2022 
£’000 

2021 
£’000

55,578

36,170

17,424

19,683

112

7,007

56,206

40,298

18,182

16,482

36

9,281

135,974

140,485

48,158

31,144

3,681

22,153

105,136

832

41,199

31,242

2,566

22,024

97,031

–

241,942

237,516

Contents Generation – PageContents Generation – Sub PageContents Generation – Section 
 
 
 
 
 
 
 
 
 
 
A P P E N D I X   1  CONTINUED
Comparative information in GBP

Consolidated Statement of Financial Position in GBP continued
As at 31 December 2022

EQUITY

Shareholders’ equity

Called up share capital

Share premium

Foreign currency translation reserve

Share option reserve

Merger reserve

Retained earnings

Total equity

2022 
£’000 

2021 
£’000

Non-current liabilities

LIABILITIES

Financial liabilities – borrowings

Interest-bearing loans and borrowings

1,017

89,508

9,434

2,703

5,340

(461)

1,017

89,508

3,206

1,454

5,340

6,931

Deferred consideration

Deferred tax liabilities

Current liabilities

Trade and other payables

Right of return liabilities

107,541

107,456

Financial liabilities – borrowings

Interest-bearing loans and borrowings

Invoice discounting

Deferred consideration

Tax payable

Total liabilities

Total equity and liabilities

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2022 
£’000

2021
£’000

16,548

1,350

9,548

27,446

39,153

10,613

51,746

1,490

2,518

1,435

106,955

134,401

241,942

51,210

2,300

15,184

68,694

39,459

8,215

9,835

1,800

–

2,057

61,366

130,060

237,516

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2021 
£’000

179,165

Underlying EBITDA

84,155

Add back: Purchase Price Allocation (‘PPA’) release on inventory 
through cost of sales

Add back: Underlying EBITDA (loss) for acquisitions in the period

Adjusted Underlying EBITDA

Less: Depreciation

Less: Interest (excluding amortisation of loan arrangement fees)

Adjusted Profit Before Tax (PBT)

A P P E N D I X   1  CONTINUED
Comparative information in GBP

Reconciliation of Adjusted Underlying EBITDA and Adjusted PBT in GBP

for the year ended 31 December 2022

Revenue

Gross profit

2022 
£’000

200,957

98,860

Operating and distribution expenses, net of other operating income

(100,046)

(83,038)

Operating (loss)/profit

Add back: Amortisation and impairment on intangible assets

Add back: Depreciation

EBITDA

Add back: Share-based payment expense

Add back: Earnout on acquisition

(1,186)

6,893

6,744

12,451

1,398

1,544

1,117

8,011

5,401

14,529

1,079

–

Underlying EBITDA

15,393

15,608

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2022 
£’000

2021 
£’000

15,393

15,608

132

–

15,525

(6,744)

(1,979)

6,802

4,355

66

20,029

(5,401)

(1,649)

12,979

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Annual Report 2022 
inspecs.com/investors/results-and-reports

C O M PA N Y   I N F O R M AT I O N   A N D   A D V I S E R S

Registrars
Equiniti, 
Aspect House, 
Spencer Road, 
Lancing BN99 6DA

For Investor Relations  
enquiries please contact:
investor.relations@inspecs.com

For enquiries please  
contact FTI Consulting:
Alex Beagley, Harriet Jackson, 
Alice Newlyn on 0203 727 1000 or 
inspecs@fticonsulting.com

Registered Office
INSPECS Group plc, 
7–10 Kelso Place 
Upper Bristol Road, 
Bath BA1 3AU

Nominated Adviser and  
Broker to the Company
Peel Hunt LLP, 
120 London Wall, 
London EC2Y 5ET

Legal Advisers  
to the Company
Macfarlanes LLP, 
20 Cursitor Street, 
London EC4 1LT

Auditors
Ernst & Young LLP, 
The Paragon Counterslip, 
Bristol BS1 6BX

Printed by a CarbonNeutral® Company certified to ISO 14001 environmental 
management system. 

This product is made using recycled materials limiting the impact on our 
precious forest resources, helping reduce the need to harvest more trees. 

100% of the inks used are HP Indigo ElectroInk which complies with RoHS 
legislation and meets the chemical requirements of the Nordic Ecolabel (Nordic 
Swan) for printing companies, 95% of press chemicals are recycled for further 
use and, on average 99% of any waste associated with this production will be 
recycled and the remaining 1% used to generate energy. 

The paper is Carbon Balanced with World Land Trust, an international 
conservation charity, who offset carbon emissions through the purchase and 
preservation of high conservation value land. Through protecting standing 
forests, under threat of clearance, carbon is locked-in, that would otherwise 
be released.

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Registered Office
INSPECS Group plc, 
7–10 Kelso Place 
Upper Bristol Road, 
Bath BA1 3A

www.INSPECS.com