Annual Report and Accounts 2021
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Post-Covid recovery enables
record performance
Judges Scientific plc is an AIM-quoted group focused on acquiring and developing
companies within the scientific instrument sector. Corporate expansion is being pursued,
both through Organic growth within its subsidiary companies and through the acquisition
of top-quality businesses with established reputations in worldwide markets.
Investment case
• Robust business model; pursued
with discipline
• Large pool of targets, every
acquisition is earnings enhancing;
nineteen acquisitions since May 2005
• Strong long-term growth
drivers in higher education
and process optimisation
• Well diversified by geography
and by scientific application
• Management focused on shareholder
value – profitability, cash generation,
debt reduction, dividend growth
and return on capital
• Dividend growth of 10+% for
past 15 years, CAGR 23%
Cover image: The GDS Electro-mechanical Dynamic Cyclic Simple Shear
Confined (EMDCSS-CON) is the premier device for simple shear testing. It is
capable of carrying out dynamic cyclic tests ranging from small strain (0.005%
shear strain amplitude) to large strain (10% shear strain amplitude), as well as
a large range of extremely accurate quasi-static testing. This is the ultimate
choice for a no-compromise simple shear machine with the greatest range of
testing capabilities.
This page: The Oxford Cryosystems Cobra, delivers the same stable and effective
cooling as the Cryostream 800 but without the need for liquid nitrogen.
Strategic report
Highlights
FINANCIAL HIGHLIGHTS
• Revenues up 14% to a record £91.3 million
(2020: £79.9 million), including 10%
Organic* growth;
•
Adjusted** operating profit up 31% to
£18.8 million (2020: £14.4 million);
– Statutory operating profit of £15.6 million
(2020: £10.2 million);
•
Adjusted** basic earnings per share up
34% to 238.1p (2020: 177.2p);
– Statutory basic earnings per share
of 201.0p (2020: 131.1p);
•
•
Final dividend of 47.0p, totalling 66.0p
for the year, an increase of 20%; covered
3.6 times by adjusted earnings;
Organic* order intake up 25% compared
with 2020; and 9% up compared with
record 2019***;
•
•
•
•
•
Organic* order book at 22.6 weeks
(31 December 2020: 14.7 weeks); total
order book 23.0 weeks;
Cash generated from operations of
£19.6 million (2020: £14.6 million);
Adjusted** net cash of £1.4 million as at
31 December 2021 (31 December 2020:
adjusted net debt £5.7 million);
– Statutory net cash of £1.4 million at
31 December 2021 (31 December 2020:
statutory net debt £5.7 million);
Cash balances of £18.4 million as at
31 December 2021 (31 December 2020:
£15.5 million);
New £60 million five-year bank
facility to provide greater acquisition
financing capability.
STRATEGIC HIGHLIGHTS
•
Holding in Bordeaux Acquisition increased
from 75.5% to 88%.
*
Organic describes the performance of the Group including businesses acquired prior to 1 January 2020.
** Adjusted earnings figures exclude adjusting items relating to amortisation of acquired intangible assets, acquisition-related costs, share based payments
and hedging of risks materialising after the end of the year. Adjusted net cash/debt includes acquisition-related liabilities and excludes IFRS 16 liabilities.
*** For this measure only, Organic excludes the performance of Moorfield which was acquired in 2019.
91,289
Revenue (£000)
+14%
21
20
19
18
17
91,289
79,865
82,499
77,868
71,360
18,777
Adjusted operating profit (£000)
238.1
Adjusted undiluted basic
earnings per share (pence)
+31%
21
20
19
18
17
18,777
14,357
17,384
14,731
10,879
+34%
21
20
19
18
17
238.1
177.2
222.5
183.4
131.9
STRATEGIC REPORT
FINANCIAL STATEMENTS
1 Highlights
2 At a glance
8 Chairman’s Statement
9 Chief Executive’s Report
11 Business model and strategy
13 Section 172 statement
14 Sustainability Report
22 Principal risks and uncertainties
24 Finance Director’s Report
GOVERNANCE REPORT
28 Board of Directors
30 Corporate Governance Statement
33 Audit Committee Report
35 Remuneration Report
38 Directors’ Report
40 Independent auditor’s report
49 Consolidated statement of
comprehensive income
50 Consolidated balance sheet
51 Consolidated statement of changes
in equity
52 Consolidated cashflow statement
53 Notes to the consolidated financial
statements
79 Parent company balance sheet
80 Parent company statement of changes
in equity
81 Notes to the parent company financial
statements
88 Ten year financial history
IBC Company information
For more information visit:
www.judges.uk.com
Judges Scientific plc
Annual report and accounts 2021
1
Strategic reportGovernance reportFinancial statements Strategic report
At a glance
Specialist portfolio
Judges Scientific plc is an AIM-quoted group focused on acquiring and developing
companies within the scientific instrument sector. The Group consists of nineteen
businesses and maintains a policy of selectively acquiring businesses that generate
sustainable profits and cash.
Key statistics
GROUP REVENUE
BY GEOGRAPHY
UK
Rest of Europe
North America
China/Hong Kong
Rest of the World
1616+
GROUP REVENUE
77+
FTT
Sircal
PFO
GDS
Armfield
Diastron
Quorum
Moorfield
UHV
Deben
Oxford Cryo
Scientifica
CoolLED
EWB
THT
Korvus
TIMELINE OF OUR ACQUISITIONS
Fire Testing Technology
Quorum Technologies
Scientifica Armfield
Moorfield
PE.fiberoptics
UHV Design
Aitchee
Engineering
Sircal Instruments
Deben KE
Developments
GDS
Instruments
CoolLED
FIRE
Dia-Stron
EWB Solutions
Oxford
Cryosystems
Korvus
THT
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Annual report and accounts 2021
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OUR BUSINESSES
Dia-Stron is the global leader in fibre testing
instrumentation.
Our measurement systems provide scientific insights to our
customers, being academia or industry, in the cosmetics and
composite materials sectors. Our instruments determine fibre
properties – mechanical deformations, dimensions, or at the
interface – for natural, hair, and technical fibre applications.
Dia-Stron automated testing systems serve as essential tools
in assessing irregular fibre distributions.
Our purpose-built laboratory supports our customers through
contract testing services and enables us to generate data to
stay at the forefront of fibre research, connecting with
scientific communities around the world.
Sircal designs, manufactures and distributes rare gas
purifiers typically for use in metal analysis utilising
the Arc/Spark spectrometry technique.
This technique provides qualitative and quantitative analysis of
a metallic sample for determination of its purity. The products are
sold worldwide to OEM customers (spectrometer manufacturers
that use such purifiers in conjunction with their own instruments)
or directly to end users such as metal manufacturers and
dealers, and test houses.
Scientifica is a globally trusted designer, manufacturer,
and installer of market leading life science research
equipment.
We develop pioneering equipment to enhance discoveries
in electrophysiology, multiphoton imaging and optogenetics
research within neuroscience, cardiology, and other areas.
These discoveries lead to advancements the understanding
and treatment of diseases. All our equipment is manufactured
in the United Kingdom and exported to more than 40 countries
worldwide. Our diverse team of experts brings experience from
across the globe and from all levels of academic and
professional backgrounds.
Scientifica’s HoloStim-3D seamlessly integrates with the
HyperScope, the award-winning multiphoton imaging
system, to enable all-optical interrogation of neural
networks with previously unachievable performance.
This allows researchers to better understand the roles of
neurons and brain circuits, and how they contribute to
different behaviours.
Judges Scientific plc
Annual report and accounts 2021
3
Dia-Stron’s new fibra.one.stress accessory for the
best-selling fibra.one instrument to measure dimensional
and tensile properties of single fibres.
PE.fiberoptics is a leading manufacturer of test
equipment that measures optical and physical
properties of optical fibres and cables.
Optical fibres are the main medium for long-distance
transmission of telecommunication data and form the
backbone of the world’s internet and telecommunications
networks. Our products support the leading fibre and cable
manufacturing companies around the world during production
and in their quality assurance and R&D laboratories.
At a glance continued
OUR BUSINESSES continued
East Sussex-based Quorum Technologies manufactures
market-leading scientific instruments primarily used for
electron microscopy (EM) sample preparation.
Electron microscopy is a key research tool in almost every area
of scientific endeavour, from the fight against coronavirus and
other diseases such as cancer, through to food safety and the
development of advanced microelectronics and new materials.
Key products:
• Q Series of vacuum coating systems; and
• PP3010T cryo preparation systems for SEM and FIB/SEM.
EWB Solutions specialises in the design and
manufacture of edge-welded metal bellows where a
high integrity hermetic seal is required in the presence
of an applied movement.
Supplied globally, EWB bellows are produced in a wide range
of materials, meeting a variety of life and environmental
constraints for applications within a diverse range of
industries such as semiconductor processing, particle
physics experimentation, material/surface analysis,
oncology therapy and petrochemical processing.
Quorum adapted its
GloQube glow
discharge system to
make an OEM
component for use in
a fully automated
Cryo-EM vitrification
instrument.
GDS designs, develops and manufactures equipment
and software used for the computer-controlled testing
of soils and rocks.
This technology is used to evaluate the mechanical properties
that are key in geotechnical and earthquake engineering design.
Services include:
• advanced systems for commercial soil and rock testing
laboratories; and
• bespoke systems for university research in the engineering
properties of soil and rock.
The GDS Hydraulic Loading
Frames are load frames with a
hydraulic dynamic actuator
mounted on the cross beam for
axial stress/strain cyclic
dynamic loading. This particular
frame has our optional
temperature controlled heating
and cooling system.
4
Judges Scientific plc
Annual report and accounts 2021
UHV Design, founded in 1993, specialises in the design,
manufacture and supply of high precision motion,
manipulation, heating and cooling (cryogenic) of
samples for use in the high and ultra-high vacuum
environments for materials research.
Globally, our products are essential in major big physics
experiments including:
• high energy particle accelerators such as CERN and SLAC;
and synchrotron light sources including PSI (Swiss),
Argonne (USA) and the UK’s own facility, Diamond.
They are also used routinely in laboratory-scale R&D
instrumentation focused on new state-of-the-art
materials in: semiconductors, photovoltaics, catalysis
and bio-compatible materials.
High performance beamline diagnostic device (Wire Scanner)
for use in particle accelerators.
Strategic report OUR BUSINESSES continued
FTT is internationally recognised
as the world’s leading supplier of
fire testing instrumentation and
has supplied the majority of
leading fire research groups
and testing laboratories
around the world.
Our directors and senior researchers
participate in UK, ISO, CEN and
ASTM standardisation committees to
ensure that our instruments are always
compliant. These include committees
dealing with construction products,
electro-technical products, furnishing
products and transport applications for
instruments such as the Cone
Calorimeter, NBS Smoke Density
Chamber, EN 50399 and SBI.
Oxford Cryosystems specialises in the design and manufacture of world-class
cryogenic devices.
Our first product launched in 1985 was the Cryostream cooler, which revolutionised the
process of low temperature data collection in X-rat diffraction. Today the company has
a broad range of products aimed at low temperature data collection in X-ray diffraction
as well as a range of single-stage and two-stage GM cryocoolers and associated helium
compressors. These are used in a range of applications from our own cryostats to use
in radioastronomy and HTS magnets.
Oxford Cryosystems flagship system, the Cryostream 800, offers stable and effective
cooling for both single crystal and powder X-ray diffraction experiments.
Following a successful launch
of the iCone plus in 2013 and iCone
mini and classic in 2016, FTT has now
released the iCone 2+, marking the
beginning of the next generation of
the i-series. The iCone 2+ features the
latest technology in control and
automation, making it the most
advanced, reliable and user-friendly
cone calorimeter in the world.
Aitchee Engineering is a well-established precision engineering company that can offer high end
sheet metalwork, laser cutting and CNC machining. We use state-of-the-art software to take
customers’ drawings and turn them into manufactured goods in steel, aluminium, stainless steel,
yellow metals or plastics. We can supply large batch-work, call off orders and R&D including
prototypes; we can also offer manufacturing process assistance and value engineering.
Judges Scientific plc
Annual report and accounts 2021
5
Strategic reportGovernance reportFinancial statements At a glance continued
OUR BUSINESSES continued
Armfield Limited is a global
supplier of equipment for
engineering education and
research and development
systems for the food industry.
Typically, Armfield’s engineering
education and research products are
sold into the tertiary education sector.
Customers are institutes teaching
disciplines in civil, chemical,
mechanical and food engineering
including vocational schools,
technical institutes, specialised
engineering universities and training
establishments or government bodies
such as the Ministry of Defence,
Ministry of Education or Petroleum
authorities.
Armfield’s industrial food research
products are for the development of
beverages, dairy, ingredients, edible oils,
flavours, fragrances, liquid foods and
nutraceuticals and are sold into the
food and pharmaceutical sectors.
Customers include start-up companies,
established businesses, multinationals
and R&D centres of excellence.
Deben provides innovative tensile testing solutions for in situ applications.
Systems are used with SEM, X-ray CT, Optical Microscopes, AFM, XRD and
Synchrotrons. Force measurement from 1mN to 20kN and torsion to 100Nm
is available. Deben also manufactures SEM detectors and a range of SEM
accessories including heating and cooling stages and beam blanking systems
for E-Beam lithography.
Product groups:
•
in situ tensile and compression
testing systems;
• accessories for Scanning
Electron Microscopes; and
• detectors for Scanning
Electron Microscopes.
Deben’s MT1000 Tensile Stage.
Manufactured by Deben for Thermo
Fisher Scientific, allowing tension,
compression and bending of samples
at high magnification inside the
Phenom XL tabletop SEM.
CoolLED designs and manufactures cutting-edge illumination systems for
microscopy and other applications, pioneering the use of LEDs as controllable
and environmentally friendly replacements for mercury-based lamps.
Our expertise spans optical engineering and the life sciences, driving the development
of our vast product range which includes the:
• ground-breaking pE-800 Series for live cell imaging;
• award-winning triple-wavelength
pE-300 Series for everyday
fluorescence microscopy;
• 16-wavelength pE-4000
Universal Illumination System
for high-end research; and
• pE-340fura for calcium imagings.
We continue to push the boundaries
with our OEM service and an exciting
development plan.
The pE-800 Series includes two
sophisticated yet easy-to-use LED
Illumination Systems, featuring eight
individually controllable channels,
industry-leading < 7 µs TTL switching
and a host of advanced control options.
The new FT102XA carbonator enables
food research developers to experiment
and test their beverage formulas at a
variety of carbonation levels and then
fill and seal into cans, glass and PET
bottles and kegs. The Armfield Team
will be presenting this unit at the
Institute of Food Technologists (IFT)
exhibition in Chicago this July, and we
are excited to get this product out into
the market.
6
Judges Scientific plc
Annual report and accounts 2021
Strategic report THT is a world leader in the design, manufacture and supply of specialised
calorimeters for use in the chemical and battery industries. With a full range
of adiabatic, reaction, and isothermal calorimeters, application areas include
process development, optimisation and safety of chemical reactions, and
determining performance and safety characteristics of Lithium-Ion batteries.
THT’s products allow measurement of heats
of reaction, derivation of kinetic parameters,
assessment of maximum safe temperatures,
and pressure generation. THT’s flagship
product, the Accelerating Rate Calorimeter
(ARC), is the world’s benchmark adiabatic
calorimeter and provides full adiabatic
runaway information for
both temperature and
pressure events.
THT’s world benchmark
battery calorimeter
testing system.
Moorfield are a team of scientists
and engineers specialising in the
design, manufacture, supply, and
support of vacuum deposition
(PVD and CVD), etching and
annealing systems. All tools are
highly modular with a range
of options to suit uses and
budgets. Customisations are
routine. The company also offers
components, consumables, and
coating services.
Moorfield systems are applied for research, product development and
batch production. Applications include semiconductors, photovoltaics,
superconductors, sensors, optics, graphene and 2D materials. Academic
and industrial markets are served, worldwide.
Korvus Technology manufactures
the HEX Series of benchtop thin
film deposition systems. The
fully interchangeable HEX
system allows the User to
construct and re-assemble their
system in a modular fashion
without requiring expert
knowledge, specialist tools and/
or expensive design resource.
Korvus offers a wide range of thin
film deposition instruments to
integrate/upgrade to within the
HEX, including E-Beam
Evaporators, RF and DC Sputtering
Sources, Low Temperature Organic
Evaporators and Thermal
Evaporators. The HEX is used
within Universities and
Laboratories worldwide for
applications including research into
new materials for battery
technology, OLED, nanomaterials,
contact metallisation, coating of
electrical contacts and EM sample
preparation. Equally the HEX
system’s ease of use makes it the
ideal tool for thin film teaching and
training programmes.
Korvus’ HEX benchtop thin
film deposition system.
Judges Scientific plc
Annual report and accounts 2021
7
Strategic reportGovernance reportFinancial statements Chairman’s Statement
For the year ended 31 December 2021
Post-acquisition the Group provides a
favourable environment for these businesses
to continue to prosper. Much effort is
invested into helping their autonomous
management improve their operating
metrics as organic growth and optimisation
is an ever-growing component of
shareholder returns.
As a result of the dependable growth of
our Group, it has been possible to promptly
reduce debt, thereby generating the financial
resources necessary to reinvest in further
acquisitions and reward shareholders with a
progressively increasing dividend, subject
always to our prudent approach to gearing.
The underlying market for scientific
instrumentation remains robust and the
sector’s long-term growth drivers provide
comfort that the Group will continue to
deliver durable returns for our shareholders
despite the potential for some short-term
variability in performance. These long-term
market drivers are rooted in the global
expansion of higher education and the
need for measurement tools to support the
relentless worldwide search for optimisation
and discovery across industry and science.
Our team
The Group’s ability to deliver this record
performance would not have been possible
without our colleagues, all of whom have
yet again worked very hard in a challenging
environment in order to further develop
our businesses and take full advantage of
a gradual return toward normality. Whilst
we remained impacted by the pandemic,
our 500-strong team continued to exercise
caution and discipline to protect their
colleagues and keep each other safe. I am
sure our shareholders join the Board in
thanking them for their continued dedication.
Alex Hambro
Chairman
22 March 2022
T he Group demonstrated its resilience
and adaptability in 2020 at the onset
of the Covid-19 pandemic.
Throughout 2021 we still had to navigate
numerous challenges as the uncertainty
caused by the pandemic continued to
impact the world, with travel restrictions
and new variants having to be managed.
Despite this, the Group experienced
progressive improvement enabling it to
recover and to deliver, once again, record
revenue, profit and cash generation
supported by a record order intake.
Notwithstanding the utterly deplorable
events unfolding in Ukraine, we enter 2022
with cautious optimism as our business
model has proven its resilience and the
strength of our order book gives confidence
for further recovery.
Generating attractive returns for our
shareholders remains the core objective of
the Group and as such the Board is pleased
to be recommending a final dividend of
47p, making a total of 66p in respect of
2021, a 20% increase on the prior year
(2020: 55p). Since the payment of the
first dividend in respect of 2006, regular
dividends have grown at a compound
annual rate of 22.9% and total dividend
distributions have aggregated to nearly six
times the 2005 re-admission price of 100p.
Strategy
The Group’s strategy remains unchanged,
based as it is on creating shareholder
returns through highly selective and
carefully structured acquisitions,
underpinned by the diversified, solid and
growing earnings and cashflows arising
from our existing businesses.
The Group’s acquisition model is to acquire
small/medium-sized scientific instrument
manufacturers, paying a disciplined multiple
of earnings and to finance any acquisition,
ideally, through existing cash resources
and/or bank borrowings. We are highly
selective in seeking to acquire businesses
with a focus on sustainable profits and
cashflows, in order to obtain immediate
and enduring earnings enhancement for
our shareholders. It is paramount that
acquisitions are completed only when the
Directors are satisfied that the target
business has sound underlying strength
with robust and defensible margins.
SUMMARY
• Throughout 2021 we still had to
navigate numerous challenges as the
uncertainty caused by the pandemic
continued to impact the world.
Despite this, the Group experienced
progressive improvement enabling
it to stage a solid recovery and to
deliver, once again, record revenue,
profit and cash generation supported
by a record order intake.
• The resilience of the Group’s
business model and a good
performance from recent
acquisitions alongside the hard work
by all our colleagues have supported
the recovery.
Generating attractive
returns for our
shareholders remains the
core objective of the
Group and as such the
Board is pleased to be
recommending a final
dividend of 47p, making a
total of 66p in respect of
2021, a 20% increase on
the prior year (2020:
55p).”
8
Judges Scientific plc
Annual report and accounts 2021
Strategic report Chief Executive’s Report
For the year ended 31 December 2021
the pandemic, surfaced as an increasing but
still manageable headwind. Despite these
challenges our Group showed its resilience,
delivering a strong recovery and a record
performance.
With the constant changes in the UK Covid
situation, the year was particularly suited to
devolved local tactical improvements that
the Group’s structure and culture promotes
so effectively. With each business seeing a
different market situation, a varied degree
of staff availability and Covid resilience, and
with differing building layouts influencing
options, each of our businesses responded
differently. Given market conditions, some
found that R&D could be accelerated, while
others had to pause; some were able to
upgrade their online presence and impact
(including remote installations) while some
markets resisted this. The fact that six of our
businesses recorded not just full recoveries
but all-time record profits suggests that
many emerged from the pandemic
fundamentally stronger than they entered
it. The businesses have also become better
at constantly sharing their challenges and
successes, so that best practice can be
continually developed across the Group, a
fundamental part of our strategy as we look
to drive organic growth. 2022 began with the
widely reported component shortages and
delivery restrictions, so whilst life is not
completely back to normal, we will continue
with our dedication to raise the operational
bar across the Group: seeking to improve the
less advanced production processes, upgrade
the less integrated IT systems, and focus
R&D efforts to deliver fewer but more
targeted innovations more quickly.
Order intake
Order intake is the main driver of our
business. With the easing of restrictions,
intake improved throughout the year:
Organic* intake was up 25% year-on-year in
the first half and accelerated to maintain its
advance at 25% for the year as a whole, in
spite of tougher comparatives in the second
half (H1 2020 intake suffered the worst
effect of Covid). Organic** order intake
progressed 8.5% against 2019, our
previous record.
The best performance was recorded in North
America (up 39%, following a 26% decline
in 2020) followed by the Rest of the World
(up 31% following a 25% decline), the UK
(up 27% after growing 8% in 2020) and the
Rest of Europe (up 22% after growing 3% in
2020). China/Hong Kong, which had receded
22% in 2020, stabilised and was broadly flat.
The largest year-on-year absolute progress
was achieved in the USA, followed by the UK,
the Czech Republic, Japan, France, Germany
and Australia. The Netherlands and Belgium
showed the largest absolute declines after
strong progress in 2020. Order intake still
varied considerably from business to business
and between scientific disciplines; all
businesses except one grew from 2020 and
among those servicing large corporate
customers enforcing capex freezes, one
staged a strong revival and one only
improved late in the year.
As a result of the accelerating order intake,
the Organic order book progressed from
16.1 weeks of budgeted sales on 30 June to
22.6 weeks at the year end (31 December
2020: 14.7 weeks). The Group’s total order
book ended the year at 23.0 weeks.
Revenues
Although Covid continued to challenge our
operations, disruptions were less prevalent
than in 2020 and alleviated as the year
progressed; the use of the furlough scheme
shrank strongly and many of our colleagues
were able to return to their offices,
although a degree of flexibility will endure.
Installations remained disrupted by travel
restrictions and logistic difficulties slowed
down the recognition of some revenue.
Global supply chain issues became more
challenging; they were successfully
managed albeit with some impact in terms
of management effort, purchase prices,
excess inventory and product redesign.
Group revenues for the financial year ended
31 December 2021 progressed from £79.9
million to £91.3 million, including Organic*
growth of 10% and the full year contribution
from the two acquisitions completed
in 2020.
The Group continues to be a strong exporter
and is well diversified across the globe, with
22% of the Group’s revenues earned in North
America, 32% in the Rest of Europe and 12%
in China/Hong Kong. Organic revenues grew
strongly in all regions except China/Hong
Kong (down 28% after growing 18% in
2020). North America recovered 11% (down
32% in 2020), the Rest of the World grew
3% (down 18% in 2020), and the Rest of
Europe 16% (down 3% in 2020); the UK,
which had receded 6% in 2020, grew 43%.
The most notable absolute swings were the
UK (up £4 million), Germany (up £2 million),
the USA (up £2 million) and the Czech
Republic (up £1 million) whilst China/Hong
Kong was down £3 million (up £2 million
in 2020).
Profits
The most important driver of Judges’
operating margins is volume. The strong
SUMMARY
• With the constant changes in the
UK Covid situation, the year was
particularly suited to devolved
local tactical improvements that
the Group’s structure and culture
promotes so effectively, and each of
our businesses responded differently.
The fact that six of our businesses
recorded not just full recoveries but
all-time record profits suggests that
many emerged from the pandemic
fundamentally stronger than they
entered it.
• The Group was also not immune to
the widely reported supply chain
issues seen across the globe which
surfaced as an increasing but still
manageable headwind. Despite
these challenges our Group showed
its resilience, delivering a strong
recovery and a record performance.
• The long-term fundamentals
supporting demand for scientific
instruments remain positive. Market
demand is being driven primarily
by the strong worldwide growth in
higher education and the enduring
pursuit of optimisation across
science and industry, and of course
optimisation requires measurement.
W hilst we started the 2021 financial
year with renewed optimism
looking forward to a more
familiar environment as a consequence of
the mass vaccination programmes, we still
had to navigate external challenges
throughout the year under review. The
continued restrictions on travel were the
biggest hurdle to overcome as our ability to
visit customers and attend scientific
conferences and trade conventions was
hindered, as most were held virtually; and to
a lesser extent, a number of our corporate
customers retained freezes on capital
expenditure. The Group was also not immune
to the widely reported supply chain issues
seen across the globe. These supply chain
issues, which had been benign at the start of
*
“Organic” in this report describes the performance of the Group excluding THT and Korvus as they
were acquired since 1 January 2020.
Judges Scientific plc
Annual report and accounts 2021
9
** For this measure only, Organic excludes the performance of Moorfield which was acquired in 2019.
Strategic reportGovernance reportFinancial statements Chief Executive’s Report continued
For the year ended 31 December 2020
recovery in Organic revenue, with some help
from savings on travel and exhibitions still
continuing, drove our EBITA margin before
central costs to 25% (2020: 21.2%, 2019:
24%). Adjusted profit before tax and
adjusting items progressed to a record
£18.1 million (2020: £13.7 million, 2019:
£17.0 million). All measures of profitability
were flattered compared to previous years
as, for the first time, £0.8 million of R&D
expenditure was capitalised in compliance
with IAS 38, with no meaningful
amortisation to offset it. Organic operating
contribution increased 28%. All the Group
businesses increased their contribution
except two, one of which had achieved its
record in 2020; six companies achieved
new record contribution in 2021. The
operating subsidiaries combined produced
a Return on Total Invested Capital of 28.3%
(2020: 23.5%, 2019: 31.4%).
The Group continued to invest in the
improvement of its existing products and
the development of new products.
Investment in research and development
amounted to £6.2 million in 2021 (2020:
£6.2 million), equivalent to 6.8% of Group
revenue (2020: 7.7%).
The increase in pre-tax profits was replicated
in earnings per share: Adjusted earnings per
share progressed by 34% from 177.2p to 238.1p
beating the 2019 record of 222.5p; adjusted
fully diluted earnings per share similarly
progressed to 234.9p (2020: 173.9p).
Corporate activity
The Group purchased a further 12.5%
of interest in Bordeaux Acquisition
(the holding company for Deben UK and
Oxford Cryosystems) for £1.8 million,
bringing our ownership to 88%.
As a buy and build focused group, the
acquisition of new businesses is a fundamental
feature of Group strategy. Executing this
effectively is key to ensure that long-term
value is generated for shareholders. We
retain a strict acquisition discipline and are
highly selective in relation to both the
acquisition cost and long-term quality of
any potential addition to our Group.
The industry in which we operate contains a
multitude of small global niches, as illustrated
by the diverse nature of the new entrants
to our Group. The UK is recognised in this
arena as a centre of excellence for product
innovation and manufacturing with
world-leading businesses. Our Group has
built a strong reputation over the past
decade as an ethical, experienced and
well-financed buyer and a supportive home
for businesses in our sector whose owners
wish to sell. We are trusted to act decisively
10
Judges Scientific plc
Annual report and accounts 2021
and to complete deals under the initial
terms agreed. For the businesses we
acquire, the Group offers advice and support
wherever necessary, stimulates intra-group
co-operation, participates in succession
planning and implements robust financial
controls. We trust subsidiary management
teams with the day-to-day running of their
businesses. This has been a successful
operating model for the Group, as
management teams are given responsibility
for their own destinies, as well as an
environment in which they can thrive.
The uncertainty caused by Covid didn’t
encourage owners to offer their businesses
for sale and the Group didn’t complete any
acquisition during the year.
Cashflow
In spite of the build-up of precautionary
stock, of logistical issues delaying revenue
recognition and of receivables relating to
outstanding installations, cash conversion
was satisfactory at 104% (2020: 102%),
with cash generated from operations of
£19.6 million (2020: £14.6 million). As a
result, year-end cash balances increased
to £18.4 million from £15.5 million as at
31 December 2020. Adjusted net cash
(excluding IFRS 16 lease liabilities but
including sums still due in respect of
acquisitions) at the year end amounted to
£1.4 million (2020: £5.7 million net debt).
Dividends
Your Board is recommending a final dividend
of 47p per share subject to approval at the
forthcoming Annual General Meeting on
24 May 2022, which will make a total
distribution of 66p per share in respect
of 2021 (2020: 55p per share). The total
dividend per share is 3.6 times covered by
adjusted earnings per share (2020: 3.2 times).
Our policy of increasing the dividend by a
minimum of 10% per year remains
sustainable as long as we have ample cover.
The proposed final dividend, if approved by
shareholders, will be payable on 8 July 2022
to shareholders on the register on 10 June
2022 and the shares will go ex-dividend on
9 June 2022.
The Company’s shareholders are reminded
that a Dividend Reinvestment Plan (“DRIP”)
is in place to enable shareholders to
automatically reinvest their dividends into
additional Judges shares should they so wish.
Trading environment
The long-term fundamentals supporting
demand for scientific instruments remain
positive. Market demand is being driven
primarily by the strong worldwide growth in
higher education and the enduring pursuit of
optimisation across science and industry, and
of course optimisation requires measurement.
In parallel to these positive long-term trends,
the markets across which Judges and its
peers operate are characterised by a degree
of shorter-term variability, influenced mostly
by government spending, research funding,
currency fluctuations and the business
climate in major trading blocs, particularly
the USA and China.
In the medium-term horizon the competing
goals, in the various jurisdictions where the
Group operates, of stimulating recovery and
of reducing ballooning government deficits
will increase uncertainty in worldwide
research funding. It appears that re-emerging
inflation may not be as temporary as
proclaimed and higher interest rates could
accentuate government deficits and bring
back austerity, whilst higher interest rates
may alter the competitive balance in M&A
activity to the detriment of more highly
geared participants.
As a large percentage of the Group’s revenue
is overseas, exchange rates have a significant
influence on the Group’s business: Judges’
manufacturing costs are largely denominated
in Sterling and most of its revenue originates
from countries where the standard of value
is the US Dollar (one-half of total revenue)
or the Euro (one-third of total revenue).
The currency movements since the run-up
to the Brexit referendum vote have had a
positive influence on our margins and our
competitiveness; the recent resolution of the
Brexit uncertainty might have improved the
outlook for Sterling but exchange rates have
continued to remain favourable to our Group.
Outlook
The long-term drivers for our business are
as strong as ever and we remain confident
in the Group’s resilience and adaptability.
The expectation of a year less dominated
by Covid has been overshadowed with
Europe being shaken by the Russian
leadership’s invasion of Ukraine. Whilst
our direct exposure to Russia and Ukraine
is limited (0.4% of Group revenue over the
past three years), the war is further
exacerbating supply chain difficulties and
may in future create competing claims for
public funds across the world.
Nevertheless, the Group is starting the year
with a record order book, order intake slightly
ahead of the first 11 weeks of 2021 and a
robust financial position, leaving it well
equipped to pursue its unchanged strategy.
David Cicurel
Chief Executive
22 March 2022
Strategic report Business model
Buy and build model
Favourable market
LONG-TERM ORGANIC
GROWTH DRIVERS
+
LOW CAPITAL USE
+
LARGE DEAL POOL
Long-term Organic growth trends
in science: global higher education
and process optimisation
Low working capital and
capex requirements
Large pool of potential
acquisitions in global niches
Track record of successful acquisitions
• Fragmented market with over 2,000
privately held businesses in the UK
• The UK is a recognised worldwide centre
of excellence for scientific instrument
development and manufacture
• Large pool of potential acquisitions; Judges
is highly selective
• Judges has a strong reputation for
being a good acquirer
OUR ACQUISITION
STRATEGY POINTS
• Trusted to honour the terms agreed
• Trusted to act quickly with
secured funding
• Treats vendors and staff with respect
• No micromanagement post acquisition
Shareholder value
DIVERSE
PORTFOLIO
SUSTAINABLE
RETURNS
GROWING
DIVIDENDS
Judges Scientific plc
Annual report and accounts 2021
11
Strategic reportGovernance reportFinancial statements Strategy
A focused strategy
Develop the Group through a “buy and build” programme of carefully structured
acquisitions, supported by long-term Organic individual business development.
1
LEVERAGE EXPERTISE AND CAPITAL
We use our knowledge of the scientific instrument
sector to identify and progress suitable acquisition
targets. Through longstanding relationships,
we leverage our access to capital enabling us to
act decisively and in a timely fashion.
2
ACCUMULATE SUSTAINABLE,
ESTABLISHED BUSINESS
The companies we acquire have established
reputations in worldwide niche markets. Target
companies need to meet exacting performance
criteria that support sustainable sales, profits and
cash generation. We pay three to six times EBIT
according to size and borrow up to 2.5 times EBITDA
at 2–4% depending on the Group’s level of gearing.
3
CREATE AN ENVIRONMENT WHERE
BUSINESSES CAN THRIVE
4
We buy successful businesses with long-term futures.
Our approach is to create additional opportunities
through guidance, business support, expertise and
capital, under an umbrella of robust
financial controls.
REPAY DEBT AND REINVEST PROFITS
IN FURTHER ACQUISITIONS
Core value is created through the repayment
of debt used to acquire target companies and
Organic sales growth.
As with all acquisitions THT, acquired in May 2020,
has an established reputation in a worldwide niche
market, and meets exacting performance criteria that
support sustainable sales, profits and cash generation.
12
Judges Scientific plc
Annual report and accounts 2021
Strategic report Section 172 statement
For the year ended 31 December 2021
Engaging with our stakeholders
As required by section 172 of the Companies Act, a director of a company
must act in the way he or she considers, in good faith, would likely
promote the success of the company for the benefit of the shareholders.
In doing so, the director must have regard, amongst other matters, to the following issues:
• Likely consequences of any decisions in the long term;
• Impact of the company’s operations on the community
• Interests of the company’s employees;
• Need to foster the company’s business relationships with
suppliers/customers and others;
and environment;
• The company’s reputation for high standards of business
conduct; and
• Need to act fairly between members of the company.
The Group’s ongoing engagement with stakeholders and consideration of their respective
interests in its decision-making process is as described below.
Our culture
Judges has always espoused a long-term
perspective, from its first interaction
with a prospective acquisition and
thereafter on an ongoing basis. This is
part of what makes the Group unique.
Despite the continued challenges arising
from the pandemic, no change was
made to the strategic outlook and key
decisions continued to be made only for
the long-term benefit of the Group.
Further detail is explained in the
Sustainability Report on pages 14 to 21.
Shareholders
The primary mechanism for engaging
with shareholders is through the
Company’s AGM and also through the
annual cycle of investor meetings held
alongside the publication of the Group’s
financial results for the half year and full
year. Further information is disclosed in
the Corporate Governance statement on
pages 30 to 32.
HOW WE ENGAGE
Customers and suppliers
Our companies operate in global niche
markets and hence reputation is key to
our ongoing success. Maintaining the
strong reputation with our customer
base for providing instruments and
service of the highest quality is therefore
of paramount importance. Likewise, we
have long-standing close relationships
with our locally situated suppliers, as
evidenced via the payment terms on
page 38 in the Directors’ Report.
Employees
A key to the Group’s success has been
its engaged workforce. As well-regarded
local employers within each of our
businesses’ respective communities,
the Group’s Directors, alongside our
subsidiary management teams, work hard
to provide a positive work environment
with opportunities for all our staff to
grow and achieve their potential.
Our management teams have remained
focused through the pandemic on
maintaining staff wellbeing and have
created Covid-secure environments for
all our staff. As disclosed in the
Sustainability Report on pages 14 to 21,
we are also proud that around 40% of
our staff are shareholders.
Community and environment
Our businesses are proud of their
positive contribution to the wider, and
more local, community both as low
carbon-intensive businesses and as a
well-respected local employer. More
information can be found in the
Sustainability Report on pages 14 to 21.
Judges Scientific plc
Annual report and accounts 2021
13
Strategic reportGovernance reportFinancial statements Sustainability Report
For the year ended 31 December 2021
Our unique culture
Corporate Social Responsibility is integral
to our ongoing business success. It
reminds us of the need to minimise our
impact on the environment, encourages
us to pay attention to the needs of
our customers, employees, and other
stakeholders, and to build engagement
with local communities.
Judges Scientific is focused on acquiring and developing global
niche companies within the scientific instrument sector. It
selectively acquires businesses that generate sustainable profits
and cash. We produce scientific instruments that enable our
customers to push the boundaries of science and also make a world
a little safer. At the same time, Judges Scientific recognises that its
operations have environmental and social impacts. Whilst these are
relatively small, given that we operate a portfolio of low carbon-
intensity manufacturing businesses, it is still imperative that we
minimise our negative impact on the environment.
Given the structure of our Group, which consists of 17 small and
medium-sized businesses, each of whom employ less than 70 staff,
we also have to prioritise our time and resources into those areas
that provide the most positive outcome or greatest reduction in
negative impact.
This report is split into four main areas, Culture, Products, People
and Environment because these are the core areas applicable to
our business.
Providing a good working environment for our employees
and maintaining an efficient use of resources have always been
key features of the success of Judges Scientific businesses.
Transparency is important and this report goes beyond what
we are required to disclose as we want to ensure stakeholders
are well informed about our actions and continued progress
across the key ESG areas.
We know that the focus on sustainability also opens up opportunities
for us, for example in the application of our products and services
in industries that will provide environmental or social impact, in the
way we do business, and in how we interact with our employees,
our suppliers, our communities and the wider society.
Over the coming years we expect to continually evolve this strategy,
further reduce emissions, continue to provide a fulfilling place
of work, and provide our customers with even better products.
Sustainability is becoming more and more important and our
businesses will contribute.
We are committed to better communicate with our stakeholders
as, over time, we gradually increase the volume of disclosure in this
area. Whilst this is currently voluntary, we take due note of existing
recommendations such as the UN’s Sustainable Development
Goals (SDGs) of which objectives 8 (Decent Work and Economic
Growth) and 5/10 (Gender Equality/Reduced Inequalities) are
most closely linked to our business. We will also update our
reporting to reflect the requirements of the IASB’s future
standard on non-financial reporting in this area.
CULTURE
Judges Scientific’s unique culture drives
decision-making within the organisation.
Purpose
“Our purpose is to build a portfolio of businesses with longevity,
within the scientific instrument sector, by selectively acquiring
businesses that generate sustainable profits and cash.”
The Group’s strategy is based on creating shareholder returns
through highly selective and carefully structured acquisitions,
underpinned by the diversified, solid and growing earnings and
cashflows arising from our existing businesses.
Judges Scientific’s unique culture starts from when we first interact
with the vendors of acquisition prospects. We believe that each
company that joins our Group will remain for the long term, and
therefore we must begin that relationship properly from our first
contact with them. We acquire successful businesses and we expect
them to remain successful, so it is very important that we treat the
vendors with respect, and never seek to change the terms of a deal
once heads of terms are agreed. We also treat their staff in the
same manner as we treat our own, showing respect, openness,
honesty and integrity in all our actions.
Whilst we do not manufacture products that directly create an
impact on society or the planet, our products are used for research,
for example in finding solutions to pressing global problems.
We take our role in the world seriously and recognise that how
we do business is as important as what we do. Internally, we work
to minimise the environmental footprint of our operations, while
investing in our employees to keep them safe and help them
develop their career. Externally, we focus on delivering on our
purpose to support our customers in addressing some of the
world’s most difficult challenges, improving scientific
understanding and enabling a greener economy.
Shared values
“Our employees share our long-term values, and we encourage
all our employees to act like entrepreneurs and treat the
Company as if they are its owner.”
14
Judges Scientific plc
Annual report and accounts 2021
Strategic report “ Our belief is that principles of honesty and fairness should apply to our relationships
with all stakeholders, internal and external, across the entirety of our value chain.”
PRODUCTS
Our products enable our customers to
make the world healthier, cleaner and
safer. We do this by helping our customers
accelerate life sciences research, solve
complex analytical challenges and
increase laboratory productivity.
Purpose
“High quality products help our customers develop and enhance
their own offerings, innovations or research.”
Judges Scientific’s portfolio businesses are diverse and provide
varied products and services that contribute to making a positive
societal and planetary impact, although not always directly on
their end user.
A good example is at one of our subsidiaries, CoolLED, which
manufactures LED illumination systems for fluorescence microscopy.
Their technology, which uses a small LED as the light source for
microscopy, is helping to eliminate mercury lamps, which were
historically the light source of choice for light microscopes but
are toxic. CoolLED’s newer, safer non-toxic technology is also far
superior to the mercury lamp, enabling researchers to generate
a higher and more reliable volume of results together with
reducing wastage of precious sample matter in their experiments.
These products are also more energy efficient than mercury lamps
which helps reduce the energy usage of the researchers and
their laboratories.
Approximately 40% of our team are Judges Scientific shareholders
(216 staff at 31 December 2021), having acquired shares through
the Judges Scientific Share Incentive Plan, an HMRC approved
scheme, which enables our staff to acquire Judges Scientific shares
from pre-tax earnings; Judges Scientific matches our staff’s
investment up to a certain level which ensures that all staff can
benefit from Judges Scientific maximum matching contribution,
not just the highest paid.
We value employee tenure and longevity and always encourage
long-term decision making above the short term as we expect
that our businesses build for the future, not just for the present.
Consequently we have many long-standing experienced staff
happy to work with our businesses throughout their career.
Our businesses have all built a good reputation as a key employer
in their local community, dealing fairly with their own staff,
customers and suppliers. We expect them to continue to do this,
understanding that as a public company we must continue to
uphold high standards of behaviour.
Ethical behaviour
“Our belief is that principles of honesty and fairness should
apply to our relationships with all stakeholders, internal and
external, across the entirety of our value chain.”
Judges Scientific has a zero-tolerance policy on bribery and
corruption in relation to all business transactions in which the
Group is involved. This policy includes the offering or receiving of
inappropriate gifts or making payments to influence the outcome
of business transactions. We also require customers and suppliers
who contract with the Group on our standard business terms to
comply with anti-corruption and anti-bribery laws, and during 2021
we rolled out an updated Code of Conduct to ensure everyone in
the Group, and all our suppliers and customers, are aware of and
adhere to the code (https://www.Judges Scientific.uk.com/
financial-performance/corporate-social-responsibility.html).
Judges Scientific also supports the provisions set out in the Modern
Slavery Act and endorses the core requirements of the Universal
Declaration of Human Rights and the ILO Declaration on
Fundamental Principles and Rights at Work. We do not tolerate
practices which contravene these international standards.
Additional information is included within the Judges Scientific
Modern Slavery statement on our website at https://www.Judges
Scientific.uk.com/PDF/Modern-Slavery-Act-statement-Judges
Scientific-2021.pdf.
Judges Scientific plc
Annual report and accounts 2021
15
Strategic reportGovernance reportFinancial statements Sustainability Report continued
For the year ended 31 December 2021
“ Our recruitment philosophy is that it doesn’t matter what your age
is, if you can do the job and want to do the job, you are welcomed.”
Diversity, Equity and Inclusion
“Our employees share our values and we encourage all our
employees to act like entrepreneurs and treat the Company as
if they are its owner.”
Judges Scientific supports equal opportunity for all our employees
and those that wish to join our Group. Our aim is to build a
meritocratic work environment where everyone can make the most
Employee length of service (years)
1818+
<1 year
1-2 years
18%
10%
2-5 years
29%
5-10 years
21%
10+ years
22%
of their skills and talents throughout their career, without
discrimination or harassment. In the event of a member of staff
becoming disabled, every effort is made to ensure that they can
continue their employment with the Group with suitable support.
It is the Group’s policy that disabled people should have access to
the same career path, training and promotion opportunities as all
other employees. It is a Group policy to not discriminate against
staff or candidates on the basis of age, disability, gender reassignment,
marital or civil partner status, pregnancy or maternity, race, colour,
nationality, ethnic or national origin, religion or belief, or sex or
sexual orientation.
Our Group believes in providing a secure workplace with
meaningful roles for all our staff which is evidenced through
employee tenure and staff turnover rates. People who feel safe
at work and enjoy their job, stay with their employer longer, it’s
as simple as that. Our average length of service is 6.5 years, with
5% of our team having worked for our businesses for more than
20 years. Staff turnover has always been fairly low and in 2021 was
15% of our workforce, close to the UK average. We calculate this
figure as the number of leavers in the year (excluding any
retirements) divided by the average annual number of staff.
Product quality
“High standards of quality of products and services and ensuring
global regulatory compliance.”
Judges Scientific businesses design and manufacture highly engineered
equipment with long-life applications, providing longer lifespan of
products and parts.
Quality for our customers means they can rely on our products and
services to consistently meet their specifications and requirements,
and some of our businesses have customers with products greater
than ten years old still working as well as the day they were purchased.
Quality for regulatory authorities means that we operate at the
highest ethical standards and meet or exceed all applicable
regulatory requirements, and a number of our businesses are
ISO 9001 certified.
Quality for our colleagues means we take personal ownership
to aim to ensure our work meets customer requirements and
is error-free from design through use.
Quality for our Company means we encourage a continuous
improvement culture.
PEOPLE
We believe that our people are
fundamental to the success of the
business. We invest in our people to help
them develop the capabilities that they
need to succeed in the long term.
Purpose
Our vision is that all employees are proud to work for businesses
that are the best at what they do and understand the positive
difference that their products make in the world. Simply put,
well-motivated employees are more productive.
Our aim is to retain, attract and enable the best people, creating
an inclusive environment for all, noting at the same time that
recruitment for small companies is often more challenging than
for blue-chip businesses.
16
Judges Scientific plc
Annual report and accounts 2021
Strategic report22
22
+
21
21
+
29
29
+
+
10
10
+
J
“ Our employees share our values and we encourage all our employees to
act like entrepreneurs and treat the Company as if they are its owner.”
Board diversity
Male
Female
2021
1212+
J 1212+
2020
Senior management diversity
Male
Female
2021
2222+
J 1717+
2020
All employee diversity
Male
Female
2021
2525+
J 2424+
2020
The average age of our staff is 44.4 years old. As a niche engineering
business that produces cleverly designed products that require
skilled design, manufacture and assembly, we are happy to employ
anyone with a good skillset together with a positive attitude.
Often when recruiting, we find more experienced people applying,
who sometimes have felt less welcome in other businesses and
we are delighted to bring them into our team. We have 201 staff
over the age of 50 and our oldest staff member is 80 years old.
Our recruitment philosophy is that it doesn’t matter what your age
is, if you can do the job and want to do the job, you are welcomed.
At the same time, we regularly recruit apprentices and younger
staff into our group, who bring in fresh knowhow on emerging
technologies and the changing needs of our end customers.
This protects our subsidiaries’ long-term viability, with 16%
of the Group being under the age of 30.
It is clear that there is an over-representation of males in our
workforce. As an engineering group we are in an industry that has
historically been male-dominated, so consequently for many years
we have been challenged with recruiting from a largely male pool
for a number of our roles. That having been said, 25% of our Group
are female (2020: 24%). Over the past few years we have
appointed Lushani Kodituwakku as a Non-Executive Director of the
Board and we are also developing our own internal talent and now
have three female Directors on subsidiary boards (including one
Managing Director).
Across the last decade, significant efforts have been made by
governments around the world, including the UK, to encourage
the study of STEM by females, but there is only a low flow of these
graduates to smaller companies as so many of our blue-chip peers
are their first choice. Additionally, we already have challenges in
finding good shortlists of potential recruits for open roles, and so
whilst we are keen to improve the diversity across all levels of our
business, it is not easy for us to change this situation quickly.
At the same time, an important aspect of how we are trying to
close the diversity gap and build greater inclusion is through flexible
working, in a trusting environment, which we have been offering
for a number of years to many of our staff. For example, we have
a number of our finance team who are able to work the hours
they wish in order to balance their personal and work lives.
More recently, and reflective of the changes to working practices
due to Covid restrictions, we have wherever possible offered hybrid
working, and we have accommodated the needs of many of our
staff to work remotely.
Judges Scientific plc
Annual report and accounts 2021
17
Strategic reportGovernance reportFinancial statements78
+
83
+
J
75
+
76
+
J
88
+
88
+
J
Sustainability Report continued
For the year ended 31 December 2021
Gender Pay Gap Reporting
The Gender Pay Gap Regulations state that employers with more
than 250 employees in Great Britain are required to report their
Gender Pay Gap. Judges Scientific, with its group of smaller trading
businesses, each below this level, is not required to report under
this criteria, but has taken the decision to do so in order to provide
stakeholders with greater transparency.
Having collected, and analysed our Group pay data, the overall
result shows a 12% average gender pay gap between males and
females across all employees excluding senior management.
This has decreased slightly from 2020, although the median gap
The pay gap is summarised in the following tables/graphs:
2021
Pay gap
Bonus pay gap
2020
Pay gap
Bonus pay gap
Pay gap progress:
Excluding Senior management
Including Senior management
20%
10%
0
2021
2020
40%
20%
0
Mean
Median
2021
2020
has marginally increased. If one also includes senior management
(both Judges Scientific and subsidiary level Directors), the mean pay
gap becomes larger due to the majority male demographic of this
group, but this reduced from 30% in 2020 to 29% in 2021, and the
median gap reduced to 20% from 23%. In relation to bonuses,
there is a larger gap due to bonuses paid to senior management
and also from commissions payable to salespeople, who are
predominantly male. In 2021 99.3% of women received a bonus
with 98.8% of men (2020: 65.6% of women and 58.0% of men).
Excluding Senior management
Including Senior management
Mean
12%
-1%
Mean
13%
27%
Median
15%
0%
Median
13%
-15%
Mean
29%
37%
Mean
30%
52%
Median
20%
29%
Median
23%
-29%
to do this, particularly in more senior roles, where is it is easier to
compare like for like e.g. Non-Executive Directors, sales or operations
director or finance managers of our subsidiary companies, we have
not noted any significant variance in pay. That having been said,
this does not exclude us from looking at opportunities to bridge
the gap.
The table below provides quartile hourly pay data, ordered from
highest to lowest, into four equal groups. This provides a picture of
where male and female employees are in the pay hierarchy.
As our businesses are fairly small, we do not have a consistent staff
structure across them all. It was therefore not straightforward to
collate groups of staff in similar roles across all role in order to
benchmark pay between males and females to establish whether
there were any significant differences. Where we have been able
Upper
Upper middle
Lower middle
Lower
2021
Female
37%
26%
20%
17%
2021
Male
63%
74%
80%
83%
2020
Female
36%
24%
21%
15%
2020
Male
64%
76%
79%
85%
We know that a highly capable, diverse workforce will be important to Judges Scientific’s long-term success. Having a diverse team enables
the Company to better understand our different customers and markets, particularly as we sell to blue-chips universities and commercial
businesses whose own demographics are changing quickly, together with having broader perspective to ensure we maximise our ability to
make the right decisions and thereby deliver solutions to our customers that exceed their expectations. To achieve this, we must continue to
make our workplace an environment that everyone looks forward to working in and to continue to offer career development so that all
women and men realise they can develop their careers and be rewarded fairly at Judges Scientific.
18
Judges Scientific plc
Annual report and accounts 2021
Strategic report Health and Safety
Health and safety is of paramount importance to the Judges
Scientific Group and a key priority for our subsidiary management
teams. Our employees must be and feel safe at work and we
therefore aim to provide a safe and comfortable working
environment for them. The Group encourages all of its subsidiary
companies to seek continuous improvement and promote a strong
health and safety culture.
The Group routinely monitors health and safety adherence across
our trading subsidiaries. As we operate a decentralised autonomous
operating structure, performance is monitored at a Group level
with the board of each trading subsidiary directly responsible for
compliance with local health and safety regulations. We have also
instituted a Group-wide annual independent health and safety
review which assesses compliance and provides local management
with feedback to continually improve health and safety.
During 2021, we had ten minor incidents and no significant
injuries across all our businesses (2020: seven minor incidents and
no significant injuries). All incidents are followed up with changes
to procedures and/or training of our employees as appropriate
to prevent recurrence.
Total number of accidents
Accident frequency
per million hours
12
10
8
6
4
2
0
2021
2020
2019
12
10
8
6
4
2
0
2021
2020
2019
Employee Engagement and Training
“Only by fully engaging with our workforce, embedding our
values across all that we do and developing progressive people
management practices, will we achieve a culture that aims to
allow employees to maximise their potential.”
As seen over the past few years, the commitment and dedication of
our people enables us to fulfil our Group’s potential and successfully
deliver on our business strategy. We strive to continuously improve
Judges Scientific as a great place to work and to achieve personal
goals. Having a sustained focus on engagement will help us
retain our talent, which is crucial to our future success. Improving
engagement also helps us to build on our core values, resulting
in committed, hardworking and loyal employees.
To date 95% of our subsidiary leadership teams have attended our
Judges Scientific leadership development programme. During 2021
we also implemented a new management development course that
36 of our most promising managers attended, to aid with
their progression towards becoming the next generation of senior
leadership. We will continue with both these types of course over
the coming years, as this will ensure we continue to have the
highest quality of junior and senior management across our
businesses. We further encourage all our businesses to invest
in other skills training for staff to enable everyone to become
more proficient in their roles.
An added benefit in being part of a diversified group of companies
is staff mobility. Where we have good employees, but where
there may be structural barriers to their career advancement in a
particular business or a change in their circumstances which stops
them from performing their current role, we have the capacity for
staff to join a sister company rather than continuing their career
outside the Group and this has worked well for a number of our
team during the past few years.
Judges Scientific plc
Annual report and accounts 2021
19
Strategic reportGovernance reportFinancial statements Sustainability Report continued
For the year ended 31 December 2021
“ We work to minimise the environmental impact of our operations
wherever possible. Our instruments are largely used for research, to
help progress scientific advancement.”
ENVIRONMENT
Judges Scientific recognises that
concerns about the environment,
including climate change, must be
addressed by all its businesses.
Purpose
We work to minimise the environmental impact of our operations
wherever possible. As a manufacturer of niche scientific
instruments, we do not have carbon-intensive manufacturing
facilities, instead the vast majority of our businesses are assembling
instruments. Our niche instruments are largely used for research, to
help progress scientific advancement.
Through our culture of sustainable ownership, it’s often our colleagues
who identify areas for improvement to combat climate change. Best
practices in individual businesses are shared across the Group, and
implemented where feasible. This year, as part of our budgeting
process, we also gave specific encouragement to all our businesses to
invest in environmentally friendly initiatives wherever possible.
Energy use
“Efficient use of energy makes commercial sense.”
Due to our low capital-intensive manufacturing processes, we
use comparatively little fossil fuels. We are a business founded
on technological innovation, and this mindset has subconsciously
translated into our businesses adopting energy efficient technologies
wherever sensibly achievable. The vast majority of our facilities
have used energy efficient LED lighting for a number of years,
and we have almost completed the conversion of the remainder.
We have energy management technologies in many of our facilities;
simple things like having motion-sensor lighting in low-footfall
areas and making sure lights are turned off at the end of the day to
ensure we keep a low-waste mindset.
kWh used
2,500,000
2,000,000
1,500,000
1,000,000
500,000
Carbon emissions
and fuel mix
400
300
200
100
)
2
O
C
t
(
s
n
o
i
s
s
i
m
e
n
o
b
r
a
C
2021
2020
■ Electricity ■ Gas
2021
2020
■ Electricity ■ Gas
Electricity Energy source
FY21
FY20
0%
20%
40%
60%
80%
100%
Energy use and GHG (Scope 1) emissions
Global energy usage (KWh)
2,442,838
2,195,777
2021
2020
Emissions
Scope 1 (direct emissions) tCO2e
Normalised values
Scope 1 (direct emissions)
tCO2e/£m revenue
371.1
334.3
4.06
4.18
20
Judges Scientific plc
Annual report and accounts 2021
Strategic report
Our businesses continue to seek ways of reducing energy; whilst
the energy consumed this year increased 11% from 2020’s Covid
affected year, we have managed to reduce our energy usage per
£ of revenue by 3%. We are looking at best practices across the
Group, and seeking to implement other innovations that could
improve this performance. Over 60% of the electricity we use
comes from renewable sources and we will ensure this increases
as business by business we switch to renewable energy sources.
The UK’s share of the Group’s global energy usage was 98% for
gas and 99% for electricity (2020: 98% and 99% respectively).
As mentioned in the Products section, much design effort also goes
into reducing the energy requirements of our products such that
our customers benefit from lower energy consumption per use.
Environmental accreditations
“We believe that it is important that our facilities are operating
to the highest environmental standards.”
We are looking at new ways through certification to improve our
environmental performance. Some of our facilities have achieved
ISO 14001 certification, proving their facilities are in compliance
with environmental laws and regulation in the UK and EU and one
further subsidiary has a My Green Lab ACT Label Certification
for sustainability.
Other environmental concerns
“Climate change should not only include energy and
carbon emissions.”
We understand that concerns about the climate should not be
confined to the remit of energy use and carbon, and are aware that
water, waste and recyclability are other areas that must be addressed.
We are at the start of the journey, but we are exploring ways to
calculate our waste and water use, and for example, many of our
subsidiaries already use eco-packaging wherever possible. As a
Group, we are examining further ways to package our products
more sustainably, particularly given the inevitable volume of
packaging that we use in transporting our instruments to our
customers around the world.
As noted at the start of this report, we have voluntarily provided
this information in order to aid our stakeholders’ understanding
of our business and whilst our Group is a collection of small
businesses with limited resources, we will continue to focus on the
greatest opportunities to continue to improve our impact on society.
Brad Ormsby
Director
22 March 2022
Benefits of certification so far have included cost savings, energy
use improvement and allowing us to align ourselves with the
ethical values of our customers. We will seek to achieve ISO 14001
certification in other facilities as appropriate.
Judges Scientific plc
Annual report and accounts 2021
21
Strategic reportGovernance reportFinancial statements Principal risks and uncertainties
Managing our risks
Why is it important?
What are we doing to mitigate the risk?
ACQUISITIONS
The most significant risk for the Group is that an acquired
company does not meet its expected profitability. As an
important element of the Group’s business strategy is
development through acquisition, the Group’s growth is also
exposed to the risk of insufficient availability of target
companies of requisite quality or available within the disciplined
price range to which the Group adheres. The emergence of
competing acquirers and the aggressive search for returns
by private equity funds may increase competition for
acquisition targets.
The Group manages these risks by maintaining relationships with
organisations that market appropriate targets and by performing detailed
research into potential acquisitions; post-acquisition, the Group provides
advice and support to entity management teams as appropriate, in order
to facilitate their ongoing performance.
Why is it important?
ECONOMIC CONDITIONS
The Group’s customers are internationally located and are often state owned or their liquidity is closely linked to government spending. The
stress in the world economy and in public finances as a result of Covid-19, will affect the Group’s prospects. In the short to medium term,
individual countries are likely to oscillate between austerity and economic stimulation and this will affect research funding worldwide. The
resurgence of inflation, maybe not as fleeting as predicted, and unavoidably higher interest rates are likely to disrupt the stability of the
Group’s environment.
Why is it important?
POLITICAL TENSION
The war in Ukraine may exacerbate the supply chain difficulties already triggered by Covid. If the conflict extended to NATO countries, this
would strongly impact businesses throughout the world. The tensions between the West and China may well degenerate into an open
conflict; China is an important destination for our products. More generally, political tensions may have a detrimental effect on our ability
to trade worldwide and divert government funding priorities away from research.
Why is it important?
COVID-19
The development of vaccines and the emergence of a more benign variant are progressively mitigating the economic impact of the Covid-19
pandemic; its effect on order intake, deliveries, installations and supply chain ought to continue alleviating over time. Progress may however
not be linear and setbacks are possible.
Why is it important?
What are we doing to mitigate the risk?
KEY PERSONNEL
The Group’s future success is dependent on its senior
management and key personnel and, given the small
niche serving nature of the Group’s businesses, it is always a
challenge to maintain back-up support in respect of key roles
or to replace key staff should they leave our organisation.
Finding quality executives in our sector is a challenge and it
can take a long time to replace and/or to prove the suitability
of any new executive.
The Group encourages succession planning wherever possible and seeks to
provide a positive work environment with opportunities for career growth
coupled with appropriate remuneration and, where appropriate, longer-
term rewards.
22
Judges Scientific plc
Annual report and accounts 2021
Strategic report Why is it important?
What are we doing to mitigate the risk?
CURRENCY AND FOREIGN EXCHANGE
The Group exports the large majority of its products, hence it is
exposed to fluctuations in exchange rates which may impact on
its competitiveness. Rates are affected by macro-economic
factors such as Brexit and the levels of government borrowings
due to Covid-19; should Sterling appreciate this may reduce the
Group’s competitiveness.
The Group seeks, so far as is practicable, to mitigate currency effects for
the financial year via hedging foreign exchange rates. Additional detail is
set out in note 27.
Why is it important?
What are we doing to mitigate the risk?
R&D AND PRODUCTS
The Group continues to invest in the development of new
products to meet the needs of our end customers. There is a
risk that our businesses may be unable to develop suitably
commercial and technically reliable new products with which
to maintain and drive revenue performance. There is also a risk
that new developments in science will make certain of the
Group’s products obsolete.
The Group maintains a focus on ensuring there are ongoing R&D
roadmaps for our businesses and that we continue to invest in
well-trained and qualified R&D and operations teams to deliver
quality, well-engineered products for our customers.
COMPETITION
Why is it important?
What are we doing to mitigate the risk?
The Group faces competition across all its businesses and there
can be no certainty that each business will achieve the market
penetration it seeks. There is also no guarantee that there will
be no new competition or new entrant to the market with
better products.
The Group seeks to mitigate this through detailed market analysis when
considering acquisitions and seeks to acquire companies in small global
niches. Additionally, the Group continues to listen carefully to its
customers’ aspirations for product development and, where possible,
satisfy those product development requests.
Why is it important?
What are we doing to mitigate the risk?
CYBER SECURITY
The Group faces the risk of cyber-attacks which could
compromise the confidentiality, integrity and availability of IT
systems and data. This could impact our ability to respond and
deliver to our customers and ultimately affect our reputation
and financial performance, including potentially significant
financial loss as a result of the effects of ransomware or
breach of GDPR.
The Group is partnering with cyber security experts to monitor our
resilience to cyber-attacks and also provide early warnings of risks
or attempted intrusions.
On behalf of the Board
David Cicurel
Director
22 March 2022
Company registration number: 04597315
Judges Scientific plc
Annual report and accounts 2021
23
Strategic reportGovernance reportFinancial statements Finance Director’s Report
For the year ended 31 December 2021
T he Group’s strategy is based on
acquiring companies within the
scientific instruments sector and
continued profitable performance at its
existing subsidiary businesses.
Key Performance Indicators
The Group’s financial Key Performance
Indicators (“KPIs”), which are aligned with
the ability to reduce acquisition debt and
fund dividend payments to shareholders,
are basic adjusted earnings per share,
operating margins, Return on Total Invested
Capital and cash conversion. We have a
further non-financial KPI of Organic order
intake which is the bellwether of future
short-term financial performance. All five
KPIs delivered well in 2021 as the Group has
delivered a strongly profitable performance
in returning to normal after the effects of
Covid-19 in 2020.
Revenue
Group revenues increased to £91.3 million,
up 14% on the £79.9 million in 2020.
Organic revenues grew by 10% (2020:
Organic decline of 12%) as much improved
order intake enabled higher throughput.
The balance of the growth was provided by
full year contributions from THT and Korvus,
the businesses acquired in May 2020 and
October 2020, respectively.
Across our two segments, Materials Sciences
total revenues improved by £7.5 million to
£40.7 million (2020: £33.2 million) whilst
Vacuum revenues rose by £3.9 million to
£50.6 million (2020: £46.7 million).
Profits
The improvement in revenue supported
strong growth in profits and profitability.
Adjusted operating profits increased by
£4.4 million to £18.8 million, a 31% uplift
and, due to the operational gearing of the
Group, this also meant that the Group
achieved operating margins of 21%, up
from 18% in 2020.
This shows the Group’s good recovery from
the challenges of the previous year and
despite having to navigate the global
supply chain challenges that the Group,
amongst many others, faced in particular
through the second half of this year.
Compared with the pre Covid-19
performance in 2019, on the face of it the
results are better, with adjusted operating
profit up £1.4 million. However it is important
to appreciate a few items that affect this
comparison. Firstly, we have acquired three
businesses since December 2019; secondly
we have incurred lower travel and marketing
costs as a result of the inability to travel;
and thirdly, this year, for the first time,
we have also capitalised £0.8 million of
internally generated development costs;
all of which flatter any comparison to 2019.
Average Sterling rates strengthened in
2021, as an example by around 7% against
the US Dollar, which was a minor drag on
our performance, but overall rates remained
at a beneficial level for the Group and we
enter 2022 with the environment remaining
fairly aligned with 2021. Adjusted profit
before tax was £18.1 million compared to
£13.7 million in 2020, an increase of 32%.
Statutory operating profit increased to
£15.6 million (2020: £10.2 million), and
statutory profit before tax was £14.9 million
compared to £9.5 million in 2020.
Adjusted basis earnings per share
Adjusted operating profit margin
Return on Total Invested Capital
Cash conversion
Organic order intake
2021
2020
238.1p
21%
28.3%
104%
+25%
177.2%
18%
23.5%
102%
-13%
The Group has four Key
Performance Indicators,
and one non-financial KPI
of Organic order intake,
which are aligned with the
ability to reduce
acquisition debt and fund
dividend payments to
shareholders. All five KPIs
delivered well in 2021 as
the Group has delivered a
strongly profitable
performance in returning
to normal after the effects
of Covid-19 in 2020.”
24
Judges Scientific plc
Annual report and accounts 2021
Strategic report Taxation
The Group’s tax charge arising from
adjusted profit before tax was £2.8 million
(2020: £2.0 million). The effective tax rate
on adjusted profits is 15.2% compared with
14.8% in the prior year and this increase
reflects relatively stable benefits from
research and development tax credits set
against the significant growth in profits
this year.
The effective tax rate is influenced by the
wider regime of low UK and US corporate
tax rates and by claims for UK research
and development tax credits. The Group
benefits from a tax rate lower than the
standard UK corporation rate as we
continue to invest heavily in R&D, although
now that the Group exceeds 500 full-time
equivalent employees, we will in future
move into the large companies R&D
scheme which provides a lower level of
credit against the standard UK corporate
rate, which itself is also due to substantially
rise in the coming years.
Earnings per share
Adjusted basic earnings per share increased
from 177.2p to 238.1p, an increase of 34%,
and adjusted diluted earnings per share was
35% higher at 234.9p (2020: 173.9p).
Statutory basic earnings per share, after
reflecting adjusting items which are
influenced by the amortisation of
intangible assets arising from recent
acquisitions, was 201.0p (2020: 131.1p)
and statutory diluted earnings per share
totalled 198.2p (2020: 128.7p).
Capitalisation of development costs
This year for the first time, in accordance
with IAS 38, we were required to capitalise
£0.8 million of our total R&D expense
relating to development of new or
significantly improved products. The related
amortisation on these amounts capitalised
is £0.0 million. This has had the effect of
artificially improving our result for the year
by approximately 10 pence of earnings per
share. As products are completed, their
development costs will be amortised
through the income statement over the
next three years.
We are likely to have a materially similar
run rate of capitalisation over the coming
years, so whilst there has been a
performance-enhancing effect on the
results this year, this effect will diminish
over the next two to three years.
Adjusting items
The total pre-tax adjusting items of
£3.2 million were recorded in 2021 (2020:
£4.2 million). The main constituents were
amortisation of intangible assets recognised
upon acquisition of £2.6 million (2020:
£3.2 million), lower due to no acquisitions
having completed in 2021 and hence also
£nil of acquisition costs (2020: £0.6 million).
Finance costs
Net finance costs (excluding adjusting items)
totalled £0.7 million (2020: £0.6 million)
arising from the Group’s existing debt.
Given recent increases to Bank of England
interest rates, this will likely mean that
interest costs will remain relatively stable
despite amounts being repaid. Statutory
net finance costs were £0.8 million (2020:
£0.7 million), the £0.1 million difference
between the statutory and adjusted figures
is attributable to the net finance cost
arising from the defined benefit pension
scheme acquired with Armfield in 2015.
Order intake
Organic order intake was pleasingly 25%
ahead of the Covid-19 affected prior year
and was strong throughout 2021. This
allowed our businesses to finish rebuilding
their order books and then deliver higher
performance as we progressed through the
year. Your Board considers order intake and
the resultant year-end order book as an
important bellwether to the Group’s ability
to achieve its expected results, and this
strong intake resulted in a closing Organic
order book at 31 December 2021 of 22.6
weeks of budgeted sales (31 December 2020:
14.7 weeks). Total order book was 23.0 weeks,
including THT and Korvus, giving a healthy
platform to commence 2022.
Return on Capital
The Group closely monitors the return
it derives on the capital invested in its
subsidiaries. The annual rate of Return
on Total Invested Capital (“ROTIC”) at
31 December 2021 reflected a good
recovery throughout 2021 and hence
ROTIC improved to 28.3% (2020: 23.5%).
There is still room to improve this, and it
reflects that not all our businesses are back
operating at their full potential following
the pandemic.
The annual rate of ROTIC is calculated by
comparing attributable earnings excluding
central costs, adjusting items and before
interest, tax and amortisation (“EBITA”)
with the amounts invested in plant and
equipment, net current assets (excluding
cash) and unamortised intangible assets
and goodwill (as recognised at the initial
acquisition date).
ROTIC is influenced by the overall
performance of our businesses and the size
of, and multiple paid for, acquisitions.
We always strive to improve Group ROTIC
whilst accepting the inevitable downward
pressure on overall returns that would arise
from acquiring businesses at multiples
higher than three times.
Judges Scientific plc
Annual report and accounts 2021
25
Strategic reportGovernance reportFinancial statements Finance Director’s Report continued
For the year ended 31 December 2021
Dividends
For the financial year ended 31 December
2021 the Company paid an interim dividend
of 19.0p per share in November 2021.
Following a good performance in 2021, the
Board is recommending a final dividend of
47.0p per share giving a 20% increase in
the total dividend for the year of 66.0p per
share (2020: 55.0p per share). Dividend
cover is approximately 3.6 times earnings
per share.
Your Group’s policy is to pay a progressively
increasing dividend covered by earnings
provided the Group retains sufficient cash
and borrowing resources with which to
pursue its longstanding acquisition strategy.
Headcount
The Group’s full-time equivalent (FTE)
employees for 2021 stood at 519 (2020:
499). This growth reflects the full year
contribution from our 2020 acquisitions
and also a return to recruitment to support
the Group’s long-term growth strategy.
Share capital and share options
The Group’s issued share capital at
31 December 2021 totalled 6,318,415
Ordinary shares (2020: 6,299,163).
The shares issued during 2021 arose from
the exercise of share options by various
members of staff during the year.
Share options issued during the year
under the 2015 scheme totalled 60,986
(2020: 6,151) and the total share options
in issue at the year end under both the
2005 and 2015 schemes amounted to
201,460 (2020: 160,026).
Defined benefit pension scheme
The Group has a defined benefit pension
scheme which was acquired with Armfield
in 2015. This scheme has been closed to
new members from 2001 and closed to
new accrual in 2006. The next triennial full
actuarial valuation will be in 2023 and the
current annual contributions to the scheme
are £0.4 million. The Group accounts for
post-retirement benefits in accordance
with IAS 19 Employment Benefits. The
Consolidated balance sheet reflects the
net deficit on the pension scheme, based
on the market value of the assets of the
scheme and the valuation of liabilities
using year-end AA corporate bond yields.
At 31 December 2021, the pension liability
(net of deferred tax) was £1.0 million
(31 December 2020: £2.7 million). This
reduction to the net liability primarily
resulted from the deficit reduction
payments, good fund asset performance
and an increase to the discount rates.
Armfield takes its responsibility seriously
to ensure the pension is adequately funded
whilst also continuing to review
appropriate deficit control strategies.
Cashflow and net debt
The Group has an enduring track record of
converting profits into cash and this year’s
profitable trading delivered a strong cash
performance with cash generated from
operations of £19.6 million (2020:
£14.6 million), and a high conversion rate
of adjusted operating profit into cash of
104% (2020: 102%). This was achieved
despite having to invest in our inventory
levels following the growing challenges
with global supply chain issues and still
experiencing delays in collections due to
ongoing restrictions which impacted on our
ability to travel to customers to complete
installations and training across the world
and consequently be paid upon completion.
Total capital expenditure on property, plant
and equipment amounted to £2.7 million
(2020: £1.3 million). This figure is higher
than usual due to a £1.3 million property
purchase to enable the relocation of
Oxford Cryosystems from two small units
into a single building, and from utilising
the Government’s special investment
allowance. Year-end cash balances totalled
£18.4 million (2020: £15.5 million).
The Group ended 2021 with net cash
(excluding IFRS 16 liabilities) of £1.4 million
compared with £5.7 million of adjusted net
debt at the end of 2020. Gearing, calculated
as the proportion of net cash/debt
compared to adjusted operating profit,
at 31 December 2021 was -0.07 times
(2020: 0.40 times). We remain committed
to maintaining a conservative gearing
position whilst at the same time taking the
opportunities of acquiring strong, sound
businesses at disciplined multiples. The
£7.1 million growth in net cash is a result
of the strong 2021 performance offset
partially by the investments in capital
expenditure (£2.7 million), settling
corporate taxes (£2.2 million), the
continuation of our policy of paying
progressively increasing dividends to
shareholders (£3.6 million in 2021) and
a £1.8 million outlay on acquiring
additional shares in Bordeaux.
The Group’s financial position continues to
be a strength and we have suitable banking
facilities to support inorganic growth. On
26 May 2021 the Group entered into new
banking facilities (“Facility”) with Lloyds
Banking Group plc (the “Bank”) for an
aggregate £60.0 million, which replaced its
previous £35.0 million banking arrangements.
The new Facility will provide the Group, in
support of its buy and build strategy, with
greater acquisition capacity, both in terms
of higher frequency and/or larger deals.
26
Judges Scientific plc
Annual report and accounts 2021
Strategic report The ongoing long-term support of Lloyds
Bank is greatly appreciated and continues
to provide the Group with major capacity
to capitalise on opportunities to support
the Group’s buy and build strategy.
Overall 2021 was a positive year for the
Group. Thanks to the outstanding efforts
by all our team, we achieved a strong
performance with excellent cash generation
despite having to battle through many
problems caused by the global supply
chain issues and the enduring uncertainty
surrounding the Covid-19 pandemic and
its many variants. The Group remains in a
strong position, with a healthy balance
sheet, robust opening order book with
which to start 2022 and significant
available borrowing capacity, and is
therefore well positioned to continue its
strategy of achieving growth in earnings
via selective acquisitions of strong niche
businesses in the scientific instruments
sector, alongside the ongoing performance
of its existing businesses.
Brad Ormsby
Group Finance Director
22 March 2022
The Facility consists of a £19.0 million
term loan (“Term Loan”), a committed
£35.0 million revolving credit facility
(“RCF”) plus a £6.0 million uncommitted
accordion facility, which can be drawn at
the discretion of the Bank. The Term Loan
amortises on a straight-line basis over the
Borrowing Term by quarterly instalments.
The RCF is repayable in a bullet at the end
of the Borrowing Term.
The Facility has a five-year term (“Borrowing
Term”) with interest consistent with
previous banking arrangements and
likewise with banking covenants, namely:
• Gearing no greater than 2.5 times
Adjusted EBITDA;
• Interest cover no less than three
times; and
• Adjusted EBITDA cover of greater than
£7.5 million plus 75% of any future
acquired company’s adjusted EBITDA.
The accordion increases by the amount
paid off the Term Loan, keeping the overall
Facility at £60.0 million throughout the
Borrowing Term.
The existing lending facilities via Bordeaux
Acquisition Limited the Group’s 88% owned
subsidiary remain unchanged. Bordeaux
owns the trading companies of Deben UK
Limited and Oxford Cryosystems Limited.
At the year end the Term Loan was
£16.1 million (2020: £4.5 million) and the
RCF was undrawn (2020: £15.0 million),
with £35.0 million available to drawdown
for future acquisitions. At 31 December
2021, repayments on the Bordeaux loan
had reduced the outstanding balance to
£0.9 million (2020: £1.7 million).
Judges Scientific plc
Annual report and accounts 2021
27
Strategic reportGovernance reportFinancial statements Board of Directors
Our Board
Providing a unique combination of international business, investor
and financing experience across public and private markets.
RN
RE
RE
RE
AAN
RI
RRA
RRR
Hon. Alexander
Hambro
Chairman
Alex Hambro has been
active in the small company
investment sector both in
the UK and the USA for
some 30 years, during which
time he acted as a principal
investor, manager and
sponsor of private equity
and venture capital
management teams.
In addition to his
responsibilities at Judges
Scientific plc, Alex is also
Chairman of OTAQ plc,
Falanx Group Ltd and IWP
Holdings Ltd; and a
Non-Executive Director
of Octopus Apollo VCT plc,
Oberon Investments Group plc,
Whitley Asset Management
Ltd and Time Partners Ltd.
Alex is a founder partner of
Welbeck Capital Partners LLP,
a specialist investment
syndicate that creates
secured convertible loan
notes to finance growth
opportunities primarily for
small-cap listed companies.
David Cicurel
Chief Executive
Brad Ormsby
Group Finance Director
Mark Lavelle
Chief Operating Officer
Charles Holroyd
Non-Executive
David Cicurel founded Judges
in 2002 having spent much
of his career as a turnaround
specialist and, subsequently,
as an “active value” investor
operating with his own funds.
He has been responsible for
several corporate recovery
exercises including two
UK public companies,
International Media
Communications plc
(later known as Continental
Foods) and International
Communication and
Data plc.
Brad Ormsby is a Chartered
Accountant who has
significant senior finance
and operational experience
acquired during nine years
at PwC followed by six years
at Eurovestech plc, the
pan-European development
capital fund, and associated
companies.
Prior to joining Judges Scientific
in 2015, Brad was Chief
Financial Officer at Kalibrate
Technologies plc where he
led the company’s IPO.
Brad is also a Non-Executive
Director at Octopus AIM
VCT 2 plc, a Venture Capital
Trust which invests in
AIM-quoted companies.
Charles Holroyd has a BSc
in Electrical and Electronics
Engineering from the
University of Bristol and an
MBA from INSEAD. He is a
Chartered Engineer and a
Fellow of the Institution of
Engineering and Technology.
Charles has held senior
management positions
within a number of publicly
quoted companies. Most
recently Charles worked
at Oxford Instruments plc,
which he joined in 1999 and
where he served on the board
from 2005 until 2013 and
was responsible for group
business development
including M&A activities.
He is the Senior Independent
Director and is Chairman of
the Remuneration Committee.
Mark Lavelle gained sales
and marketing experience
with PerkinElmer, and finance
experience with Bank of
America in London and the
USA, then moved into
Industrial general
management. Before joining
Judges as COO in 2017,
Mark most recently spent
15 years at Halma plc where
he was Managing Director
of two separate businesses
(in Medical Devices and
Ion Beam Coating), ran
Acquisitions for the group,
and led two Divisions
(Industrial Safety and Water
Analysis & UV) comprising a
total of 15 companies in the
UK, Europe, the USA and
Asia-Pacific. He also had
responsibility for Innovation
at Halma, and subsequently
the group’s Indian presence.
He was also a Pension trustee
for 12 years. Mark is a
Chemistry graduate of the
University of Cambridge
and holds an MBA from
INSEAD in France.
28
Judges Scientific plc
Annual report and accounts 2021
Governance report COMMITTEE
MEMBERSHIP
Executive
Non-Executive
Independent
Audit Committee
Remuneration
Committee
AAE
RRN
RRI
RRA
RRR
Glynn Reece
Company Secretary
Glynn Reece is a graduate
of Oxford University and
a qualified solicitor. Since
1987, he has specialised in
providing corporate finance
deal origination and advisory
services, working for (inter
alia) Coopers & Lybrand,
Arthur Andersen and CLB,
a specialist AIM firm.
He is currently a Proprietor
of Carl Reiss Meyer, a
business that acts as an
arranger of pre-flotation
finance for small fast-
growing companies.
AAN
RI
RRR
AAN
RRA
Lushani Kodituwakku
Non-Executive
Ralph Cohen
Non-Executive
AAN
RRA
RRR
Ralph Elman
Non-Executive
Ralph Elman is a former
Finance Director of quoted
companies Paramount plc,
Delyn plc and International
Communication & Data plc
and Finance Director of
businesses within GUS plc
and RR Donnelley.
Ralph was Senior Partner of
accountancy firm Elman Wall
and is a Non-Executive
Director of a number of
private companies. He is
Chairman of the Judges
Audit Committee.
Ralph Cohen was the Finance
Director of Judges Scientific
plc for nearly ten years until
his retirement in April 2015.
He held various senior
executive positions within
the energy and water
divisions of the Paris based
Vivendi group between 1981
and 2001, including eight
years as Finance Director of
a listed subsidiary, followed
by positions as Managing
Director within that group.
He previously spent nine
years at Ernst & Young.
Latterly he was the founding
partner of MC Consultancy
Services, where he was
closely associated with major
projects, including electricity
supply opportunities in
Europe and M&A projects.
Lushani is the founder and
Managing Director of Luminii
Consulting, a consulting firm
specialising in strategy,
Commercial Due Diligence
(“CDD”) and value creation.
Lushani has over 20 years’
experience in advising
corporates, private equity and
banks on their investments
and growth strategy across
UK, Europe, and USA. She
founded Luminii in 2017 after
setting up and heading the
Grant Thornton Strategy and
CDD team in 2008 and
holding various other senior
roles with KPMG, Frost
& Sullivan, PMSI and
Neovian Partners.
Lushani holds a Bachelor of
Science (BSc) in Economics
with first-class honours, and
a Master of Research (MRes)
in Management and
Organisational Behaviour.
She is an Independent
Director and is a member of
the Remuneration Committee.
Board composition
1212+
Board tenure
1
3
Chairman
Executive Directors
Non-Executive Directors
J 1414+
Independent Non-Executive
Directors
2
2
0–3 years
4–7 years
8+ years
1
3
4
Judges Scientific plc
Annual report and accounts 2021
29
Strategic reportGovernance reportFinancial statements38
38
+
25
25
+
25
25
+
36
36
+
50
50
+
0
0
+
J
Corporate Governance Statement
For the year ended 31 December 2021
Introduction
I have pleasure in introducing the Corporate
Governance Statement. In accordance with
the requirements of being an AIM-listed
company we recognise that the application
of sound corporate governance is essential
to the Group’s ongoing success and adopt
the principal provisions of the QCA
Corporate Governance Code for Small and
Mid-Size Quoted Companies published in
April 2018 (“QCA guidelines”). This report
sets out our approach to Judges’ corporate
governance in accordance with AIM rule 26,
also documented in the Investors section
of the Judges website.
Board composition
The Board is responsible to the shareholders
and sets the Group’s strategy for achieving
long-term success. It is also ultimately
responsible for the management,
governance, controls, risk management,
direction and performance of the Group.
The year commenced with the Board
comprising three Executive Directors,
together with the Non-Executive Chairman
and four further Non-Executive Directors,
supported by the Company Secretary.
The Group has two independent
Non-Executive Directors in accordance
with the QCA guidelines. All other
Non-Executive Directors are not considered
independent under the QCA guidelines
by virtue of the duration of their tenure,
as they have served more than nine years
from the date of their first election or were
previously an Executive Director of the
Company. At the same time, the Company
considers that these Non-Executive
Directors in practice act independently
of the Executive management and that
the value of their long association with
the Company alongside their deep
understanding of the Group’s business
model ensures that they are best placed
to appropriately oversee adherence to the
Group’s enduring strategy, which continues
to provide shareholders with long-term
market-beating performance.
The structure of the Board has been
refreshed over the recent past, however
wholesale change for the purpose of
adopting perceived best practice is not
considered beneficial for our shareholders,
although over time, this process of Board
composition refreshment will continue.
It is also key that the Non-Executive
Directors, as a whole, retain a corporate
memory of past events to ensure that
decision making of Executive Directors is
appropriately challenged.
Board operation
The Board is responsible for the Company’s
strategy and for its overall management.
The operation of the Board is documented
in a formal schedule of matters reserved for
its approval, which is reviewed annually.
These include (although not exhaustively)
matters relating to:
• the Group’s strategic aims and objectives;
• the approval of significant acquisitions
and expenditure;
• financial reporting, financial controls and
dividend policy;
• the approval of the Group’s annual budget;
• the structure, capital and financing of
the Group;
• internal control, risk and the Group’s
risk appetite;
• effective communication with
shareholders; and
• any changes to Board membership
or structure.
Board decision making
The Board has a schedule of matters
covering business, financial and operational
matters ensuring that all areas of Board
responsibility are addressed throughout
the year. The Chairman, supported by
the Company Secretary, is responsible for
ensuring the Directors receive accurate and
timely information. The Company Secretary
compiles the Board papers which are
circulated to Directors in advance of
meetings. The Company Secretary prepares
and provides minutes of each meeting and
every Director is aware of the right to
formally minute any concerns.
Board meetings
The Board meets monthly (except in August)
in addition to any ad hoc Board meetings
that may be required during the year.
Non-Executive Directors communicate
directly with Executive Directors between
formal Board meetings as necessary.
In accordance with the
requirements of being AIM
quoted we recognise that the
application of sound corporate
governance is essential in the
Group’s ongoing success.”
30
Judges Scientific plc
Annual report and accounts 2021
Governance report Directors are expected to attend all
meetings of the Board, and the Committees
on which they sit, and to devote sufficient
time to the Company’s affairs to enable
them to fulfil their duties as Directors.
In the event that Directors are unable
to attend a meeting in person they will
endeavour to attend via phone, Microsoft
Teams or similar arrangement. In a normal
year, Board meetings are held at the
Group’s head office or rotated around the
Group’s operating companies so that the
Board are able to meet local management,
however due to the restrictions imposed by
the Covid-19 pandemic, the majority of
Board meetings in 2021 had to be held
remotely using Microsoft Teams although
prior to the arrival of the Omicron variant,
the Board were delighted to have been able
to hold two in-person Board meetings at
our subsidiaries.
When Directors cannot attend, their
comments on papers to be considered
at the meeting will be discussed in
advance with the Chairman so that their
contribution can be included in the wider
Board discussion.
The Directors’ attendance record at Board
and Committee meetings during the year is
disclosed in the table below:
Hon. AR Hambro
DE Cicurel
BL Ormsby
MS Lavelle
CJA Holroyd
LD Kodituwakku
RL Cohen
RJ Elman
Board
11/11
11/11
11/11
11/11
11/11
11/11
11/11
11/11
Audit
Remuneration
—
—
—
—
7/7
—
7/7
7/7
—
—
—
—
3/3
3/3
—
3/3
Board Committees
The Board has delegated specific
responsibilities to the Audit and
Remuneration Committees, details of
which are set out below. As the Board is
small, there is no separate nominations
committee and any consideration of
recommendations for appointments to the
Board is considered by a specific committee
of Directors set up at that time.
Each Committee has written terms of
reference setting out its duties, authority
and reporting responsibilities. Copies of
all the Committee terms of reference
are available on the Company’s website
(www.judges.uk.com) or on request from
the Company Secretary. The terms of
reference of each Committee are kept
under continuous review to ensure they
remain appropriate to the Group. Each
Committee is comprised of three of the
Non-Executive Directors of the Company.
The Company Secretary is the secretary
of each Committee.
Audit Committee
The Audit Committee is chaired by Ralph
Elman and the other members are Ralph
Cohen and Charles Holroyd. The Audit
Committee has primary responsibility for
monitoring the quality of internal controls
and ensuring that the financial performance
of the Group is properly measured and
reported on. It receives and reviews
information and reports from the Group’s
management, internal audit function and
Auditor relating to the annual financial
statements and the accounting and internal
control systems in use throughout the
Group. It also advises the Board on the
appointment of the Auditor, reviews their
fees and discusses the nature, scope and
results of the audit with the Auditor. The
Audit Committee meets at least twice a
year and has unrestricted access to the
Group’s Auditor. The Executive Directors
and the Chairman attend the Committee
meetings by invitation as required.
The Audit Committee Report on page 33
and 34 contains more detailed information
on the Committee’s role.
Remuneration Committee
The Remuneration Committee is chaired
by Charles Holroyd, the Senior Independent
Non-Executive Director. The other
members of this Committee are Ralph
Elman and Lushani Kodituwakku. The
Remuneration Committee reviews the
performance of the Executive Directors and
makes recommendations to the Board on
matters relating to their remuneration and
terms of employment. The Remuneration
Committee also makes recommendations
to the Board on proposals for the granting
of share options and other equity incentives
pursuant to any share option scheme or
equity incentive scheme in operation from
time to time. The remuneration and terms
and conditions of appointment of the
Non-Executive Directors of the Company
are set by the Board. The Chief Executive
and Group Finance Director are invited to
attend for some parts of the Committee
meetings where their input is required
although they do not take part in any
discussion on their own benefits and
remuneration. The Remuneration
Committee meets at least once per year.
The Remuneration Report on pages 35 to
37 contains more detailed information on
the Committee’s role and the Directors’
remuneration and fees.
Board effectiveness
Biographies of the Board on pages 28 and
29 set out the skills, knowledge and
experience of the Board. This mix of
capabilities enables them to constructively
challenge strategy and review performance.
All Directors undertake ongoing training
sessions to ensure they retain relevant skills
to execute their roles.
Induction of new Directors
New Directors undergo a programme
tailored to the existing knowledge and
experience of the Director concerned
and ensures they develop the requisite
knowledge about the Group such that they
can contribute fully from an early stage.
Time commitments
All Directors are aware of the time required
to fulfil the role prior to appointment and
have confirmed their ability to meet the
required commitment prior to appointment.
This requirement is also included in their
letters of appointment or service contract.
The Board is satisfied that the Chairman
and each of the Non-Executive Directors is
able to devote sufficient time to the Group.
Development
The Company Secretary ensures that all
Directors are made aware of changes in
relevant legislation and regulations, with
the assistance of the Company’s advisers
where appropriate. Executive Directors are
subject to the Company’s performance
development review process and will obtain
additional professional training as appropriate.
Judges Scientific plc
Annual report and accounts 2021
31
Strategic reportGovernance reportFinancial statements Additionally, the Group operates a
twice-yearly site visit (although due to
Covid-19 these were unable to be operated
in both 2020 and 2021), where a group
of significant shareholders/potential
shareholders are shown around a number
of the Group’s subsidiaries to view their
operations and meet with the local
management. All shareholders are also
encouraged to attend the Annual General
Meeting which is on 24 May 2022 (full
details in the Directors’ Report on page 39).
This is the main opportunity for all
shareholders to meet with all the Executive
and Non-Executive Directors and where the
Group’s activities are considered and
questions answered.
General information about the Group
is also available on the Group’s website
(www.judges.uk.com). This includes a
Group overview, detailed information
about our trading businesses (including
short videos introduced by each subsidiary
managing director), details of all recent
Group announcements and other relevant
investor information.
Whistleblowing
The Group has had in place for several years
a whistleblowing policy which sets out the
formal process by which any employee
of the Group may, in confidence, raise
concerns about possible improprieties
in financial reporting or other matters.
Whistleblowing is a standing item on the
Board’s agenda with updates provided at
each meeting. During 2021 no matters
were raised.
Alex Hambro
Chairman
22 March 2022
Corporate Governance Statement continued
For the year ended 31 December 2021
Board Committees continued
External appointments
In the appropriate circumstances, the Board
may authorise Executive Directors to take
Non-Executive positions in other companies
and organisations, provided the time
commitment does not impact upon the
Director’s ability to perform their role, since
such appointments should widen their
experience. The Chairman will approve any
such appointment.
As part of Brad Ormsby’s appointment
process as Non-Executive Director of
Octopus AIM VCT 2 plc, the Board satisfied
itself that he would be able to perform
the additional role alongside his existing
responsibilities and that the experience
gained would also be beneficial for
Judges Scientific.
Conflicts of interest
The Board regularly reviews any Directors’
conflicts of interest. The Company’s Articles
of Association provide for the Board to
authorise any actual or potential conflicts
of interest.
Independent professional advice
Directors have access to independent
professional advice at the Company’s
expense. In addition, they have access to
the advice and services of the Company
Secretary who is responsible to the Board
for advice on corporate governance matters.
Directors’ and Officers’ liability
insurance
The Company has obtained Directors’ and
Officers’ liability insurance during the year
as permitted by the Company’s articles.
Election of Directors
In accordance with the Company’s Articles
of Association, Ralph Elman, Ralph Cohen
and Charles Holroyd will retire and offer
themselves for re-election at the Annual
General Meeting.
Performance evaluation
The Chairman discusses with each of the
Non-Executive Directors their ongoing
effectiveness. He is also responsible for
the Executive composition of the Board.
The Chief Executive assesses each Executive
Director and provides informal feedback
on their performance on a timely basis.
Internal controls
The Board has ultimate responsibility for
the Group’s system of internal control and
for reviewing its effectiveness. However,
any such system of internal control can
provide only reasonable, but not absolute,
assurance against material misstatement
or loss. The Board considers that the
internal controls in place are appropriate
for the size, complexity and risk profile of
the Group.
The principal components of the Group’s
internal control system include:
• overview of the day-to-day activities of
the Group by the Executive Directors;
• all proposed acquisitions are
comprehensively reviewed by the Board;
• a comprehensive annual budgeting
process which is approved by the Board;
• a decentralised organisational structure
with defined levels of responsibility for
all trading subsidiaries, to encourage
principled entrepreneurial behaviour
whilst minimising risks;
• rotational visits by the Board to the
trading subsidiaries;
• detailed monthly reporting of performance
against budget and forecast;
• central control over key areas such
as cash/banking facilities; capital
expenditure and cyber security; and
• an internal audit function which, on
a rotational basis, reviews each of the
Group’s trading subsidiaries and seeks
to ensure consistent application of the
Group’s policies.
The Group continues to assess and
develop its internal control system to
ensure compliance with best practice
for a Group of its size.
Relations with shareholders
The Group maintains communication
with institutional shareholders through
individual meetings with Executive
Directors, particularly following publication
of the Group’s interim and full year results.
The Group’s results presentations are
recorded on video and are available on the
Judges website for all shareholders to view.
32
Judges Scientific plc
Annual report and accounts 2021
Governance report Audit Committee Report
For the year ended 31 December 2021
• ensure the Annual Report and Accounts
are fair, balanced and understandable
and recommend their approval to
the Board;
• manage the relationship with the Group’s
external Auditor and review their
suitability and independence;
• negotiate and approve the external
Auditor’s fee, the scope of their audit
and terms of engagement;
• advise on the appointment of external
Auditors and to review and monitor the
extent of the non-audit services undertaken
by the Group’s external Auditor;
• review the risk management and internal
control systems;
• review the assessment of going
concern; and
• assess the approach of the internal audit
function and review its reporting to
the Committee.
Role of the external Auditor
The Audit Committee monitors the
relationship with the external Auditor,
Grant Thornton UK LLP, to ensure that
auditor independence and objectivity
are maintained. No non-audit fees were
charged by Grant Thornton UK LLP to
the Group as the Group adopted a policy
to restrict work of the Auditor to audit
or audit-related services only from
31 December 2020. An analysis of fees
charged by Grant Thornton UK LLP is
disclosed in note 8 to the Group’s financial
statements. No material issues impacting
upon the Auditor’s independence
were observed or brought to the
Committee’s attention.
Audit process
The external Auditor prepares an audit
plan for its review of the full year financial
statements. The audit plan sets out the
scope of the audit, specific areas of risk to
target and audit timetable. This plan is
reviewed and agreed in advance by the
Audit Committee. Following its review, the
Auditor presents their findings to the Audit
Committee for discussion. No matters of
significant concern relating to either the
Group’s internal controls or accounting
practices were highlighted by the Auditor
during the year, however, possible areas of
significant risk and other matters of audit
relevance are regularly communicated.
Audit tender process
Grant Thornton UK LLP has been the
auditor to the Company since 2002.
The Statutory Auditors and Third Country
Auditors Regulations 2016, which the
Group has followed as best practice, set
out that no auditor’s tenure be greater
than 20 years, with transitionary provisions
requiring that the Company change auditor
no later than in 2023. The Board agreed,
following recommendation of the
Committee, that it was in the best interests
of the Company to commence an external
audit tender process during the second half
of 2021. The incumbent auditor, due to
their tenure approaching 20 years, was
therefore excluded from this process.
The following process was carried out on
behalf of the Committee:
• significant shareholders were canvassed
for their opinions on the tender process
and suitable audit firms;
• a desktop review of external audit
providers to AIM was carried out. Based
on the review and shareholder feedback,
a number of UK top ten firms were
invited to tender for the external audit;
• a Request for Proposal was issued which
set out the timetable and tender process,
scope of the work and the key
assessment requirements;
• meetings were held between the audit
partner from each firm and myself, as
Audit Committee Chairman;
• meetings were held between each firm
and Judges Scientific, including the Group
Finance Director and Group Financial
Controller; and
• submitted proposals were assessed
by the Audit Committee focusing in
particular on audit quality, strength and
experience of the audit team and their
fee proposal.
Judges Scientific plc
Annual report and accounts 2021
33
On behalf of the Board, I am pleased
to present the Audit Committee
Report for the year ended
31 December 2021.
Composition of the Committee
The Committee consists of myself
(as Chairman), Ralph Cohen and Charles
Holroyd. The Group’s Executive and other
Non-Executive Directors may be invited to
attend Committee meetings. During the
year, the Committee met seven times, to
undertake our responsibilities as set out
below and, in particular, review the audit
and interim findings, approve the audit
plan, oversee an audit tender process,
approve an internal audit approach for
2021 and consider internal audit findings.
The Board is satisfied that I, as Chairman
of the Committee, have recent and relevant
financial experience. I am a Chartered
Accountant; I have served as Finance
Director in a number of quoted companies
and as Non-Executive Director of a number
of other companies. Glynn Reece acts as
Secretary to the Committee. I report the
Committee’s deliberations at the next
Board meeting and the minutes of each
meeting are circulated to all members
of the Board.
Responsibilities
The main duties of the Audit Committee
are set out in its Terms of Reference, which
are available on the Company’s website
(www.judges.uk.com) and are available
on request from the Company Secretary.
The Committee’s main duties are to:
• ensure the integrity of the financial
statements (including annual and interim
accounts and results announcements);
• review significant financial reporting
judgements and the application of
accounting policies thereon;
Strategic reportGovernance reportFinancial statements Audit Committee Report continued
For the year ended 31 December 2021
Risk management and internal controls
As described in the Corporate Governance
Statement on pages 30 to 32, the Group
has established a framework of risk
management and internal control systems
and procedures. The Audit Committee is
responsible for reviewing the risk
management and internal control
framework and ensuring that it operates
effectively. The Committee has initiated a
review procedure to be satisfied that the
appropriate internal controls are in place.
Comfort on the effective operation of the
Group’s internal control systems has been
obtained via feedback from internal and
external audits and through assessment of
annual confirmation certifications from
each of the Group’s trading subsidiaries and
the parent company.
Ralph Elman
Audit Committee Chairman
22 March 2022
Audit tender process continued
Two audit firms were selected to present
to Judges Scientific’s Audit Committee and
following these presentations, the Audit
Committee recommended to the Board
that their preferred new auditor was
BDO UK LLP. The Board approved the
recommendation in November 2021
and the Company is recommending
to shareholders at the 2022 AGM the
appointment of BDO UK LLP as auditor
of the Company for the financial year
commencing 1 January 2022.
The Audit Committee would like to thank
Grant Thornton for their long-standing
contribution to the Group over the life of
Judges Scientific having generally enjoyed
both a good working relationship and
high-quality feedback throughout the past
20 years.
Internal audit
The scope of the internal audit work
performed by the Group’s internal audit
function in 2021 was determined following
feedback from the 2020 audit, and also via
selection of subsidiary undertakings chosen
through a selective process. The scope of
the internal audit work in 2021 focused on
specific reviews at six of the Group’s
subsidiaries (including Thermal Hazard
Technology which was acquired in 2020)
and a group-wide review of standard terms
and conditions. No material issues for the
Group were noted as part of this review.
The Committee agreed a new internal audit
approach during 2020 with an expectation
that every one of the Group’s trading
subsidiaries will receive an internal audit
review at least once every four years, with
each new material subsidiary receiving an
internal audit within twelve months of
joining the Judges Scientific group.
The Committee considers that
management is generally able to derive
assurance as to the adequacy and
effectiveness of internal controls and risk
management procedures but that the
internal audit work performed provides
additional assurance.
34
Judges Scientific plc
Annual report and accounts 2021
Governance report Remuneration Report
For the year ended 31 December 2021
Overall remuneration is reviewed annually,
and the key elements are explained below:
Base salary
This is set to reflect the market value of the
role and the individual’s performance and
contribution to the Group. Base salary is
reviewed annually with any changes
applied from 1 January.
Pension and other benefits
The Group provides a matching
contribution of up to 5% of base salary,
consistent with that offered to employees
within the Group. Additionally, the Group
may provide additional market-competitive
benefits such as private healthcare, car
allowance and life assurance.
Annual bonus
The annual bonus for the Executive
Directors is set at 25% of base salary upon
achieving annual earnings per share targets
set within the annual budget. The Judges
Scientific policy for achieving an annual
bonus has historically included a preclusion
to earning a bonus if earnings per share is
below a historical high watermark. Whilst
the Remuneration Committee had waived
this requirement on an exceptional basis
for 2021 due to the pandemic, the high
watermark policy is fully reinstated
for 2022.
Share options
Share options are issued to incoming
Executive Directors and/or in the course
of their employment in order to drive
sustained long-term performance
supporting the creation of shareholder
value. Share options are issued at market
value and vest over a period of three years.
All share option awards to Executive
Directors now have a performance
condition of at least 6% compound
annual growth of earnings per share over
the three-year vesting period in order for
them to be exercisable, with the Executive
Directors being able to ‘bank’ one-third of
the award each year subject to meeting
this annual requirement.
Non-Executive Director fee policy
Non-Executive Director fees are set such
that the Chairman and Non-Executive
Directors receive a base fee for their
respective roles designed to be comparable
to similar AIM-quoted companies. Further
fees are payable for additional services such
as chairing any of the Board’s Committees.
Fees payable to the Chairman and
Non-Executive Directors are fixed
and determined by the Board and are
reviewed at least every three years.
Non-Executive Directors also have
long-standing agreements in place which,
should they introduce an acquisition to the
Company, would result in the payment of
a 1% introduction fee, a rate that is well
below market rate for acquisition deal
brokers. As at 31 December 2021, no
Non-Executive Director had ever received
remuneration of this nature. For good
governance purposes and to ensure
independence of process, any Non-
Executive Director that introduced
a potential acquisition to the Company
would be required to recuse themselves
from any decision-making activities in
relation to that acquisition.
Key Committee activities in 2021
The Remuneration Committee operates
under the Group’s agreed Terms of
Reference and determines the Group’s
remuneration policy in respect of the terms
of employment of Executive Directors and
their remuneration packages.
During the year the Committee held three
meetings for regular Committee business.
Its main activities were:
• review of the longer-term incentive
arrangements for Executive Directors and
award of share options, inclusive of
appropriate performance conditions;
• benchmarking of and review of Executive
Director remuneration arrangements
for 2022;
• determining the performance target for
the 2022 Executive Director annual
bonus arrangements; and
• review of developments in corporate
governance and best practice.
Service contracts
Executive Directors
The Executive Directors are all employed
on service contracts. These are not of a
fixed duration and are terminable by either
party giving 12 months’ written notice.
Executive Director
Date of service contract
DE Cicurel
BL Ormsby
MS Lavelle
24 December 2002
3 March 2015
15 November 2017
Judges Scientific plc
Annual report and accounts 2021
35
On behalf of the Board, I am pleased
to present the 2021 Directors’
Remuneration Report, which sets
out the remuneration policy and the
Directors’ remuneration for the year. Whilst
there is no statutory requirement for a
report to be produced, the Remuneration
Committee consider that providing a report
is good practice, transparent and beneficial
for shareholders, although not every
disclosure required under the statutory
requirements has been produced.
Composition of the Committee
The Committee consists of myself
(as Committee Chairman), Lushani
Kodituwakku and Ralph Elman. The Chief
Executive and Group Finance Director may
be invited to attend Committee meetings
if required.
Executive Director remuneration policy
Our remuneration arrangements are designed
to align the interests of the Executive
Directors with shareholders over the short
and longer term. The Committee is aware
of recent developments in corporate
governance and good practice in Executive
remuneration and ensures that it is able to
benchmark Executive remuneration against
similar sized AIM-quoted businesses, in
order to attract, motivate and retain high
quality individuals who will, over time,
contribute to the continuing success of
the Group. No external remuneration
consultants have been engaged to support
the Committee’s deliberations, instead the
Committee has utilised publicly available
remuneration benchmarking to assist its
decision-making.
To achieve our goal of alignment between
shareholders and the Executive Directors,
the Group provides competitive pay,
split between fixed and performance-
related elements.
Strategic reportGovernance reportFinancial statements Remuneration Report continued
For the year ended 31 December 2021
Service contracts continued
Non-Executive Directors
The Non-Executive Directors signed letters
of appointment with the Company upon
appointment for the provision of Non-
Executive Directors’ services, terminable by
three months’ written notice given by
either party.
Non-Executive Director
Appointment date
Hon. AR Hambro
RJ Elman
RL Cohen
CJA Holroyd
L Kodituwakku
24 December 2002
25 October 2005
1 May 2015
1 June 2018
23 September 2020
Directors’ remuneration (audited)
The remuneration paid to or receivable by each person who served as a Director during the year was as follows:
Salary/fees
£000
Bonus
£000
Pension
£000
Benefits
£000
2021 total
£000
Salary/fees
£000
Bonus
£000
Pension
£000
Benefits
£000
2020 total
£000
Non-Executive Directors
Hon. AR Hambro
CJA Holroyd
RL Cohen
RJ Elman
LD Kodituwakku
Executive Directors
DE Cicurel
BL Ormsby
MS Lavelle
Total
40
35
30
35
30
200
180
220
770
—
—
—
—
—
50
45
55
150
—
—
—
—
—
—
3
—
3
—
—
—
—
—
5
11
17
33
40
35
30
35
30
255
239
292
956
39
34
29
34
8
195
175
214
728
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3
—
3
—
—
—
—
—
5
8
17
30
39
34
29
34
8
200
186
231
761
Note: The apparent increases in base salary/fees for 2021 are due to voluntary reductions in pay taken by Directors during 2020.
The 2021 annual bonus of 25% of base salary was awarded to the Executive Directors as a result of exceeding the earnings per share target
(2020: no annual bonus was awarded). During 2021 one Director exercised options over the Ordinary shares of the Company realising a gain
on exercise of £107,000 (2020: one Director with a gain of £1,084,000).
scheme and partly as cash in lieu
of contributions.
Share options
As disclosed in the 2021 Remuneration
Report, 20,000 share options were awarded
to each of the Executive Directors on
8 January 2021 to retain and incentivise
them. No additional share options have
been awarded for 2022.
Chairman and Non-Executive fees
The Chairman and Non-Executive Directors’
fees were updated as of 1 January 2020
and fixed for three years as follows:
Chairman base fee
Non-Executive Director base fee
Fee for chairing Audit or
Remuneration Committee
£000
40
30
5
Chief Executive remuneration Level
The new pay ratio regulations for large UK
listed companies came into force in 2019.
Whilst we, as an AIM-quoted group, are
not required to adhere to these regulations,
the Remuneration Committee consider it
valuable to provide additional disclosure to
enable comparison of the Chief Executive’s
total remuneration for 2021.
Chief Executive total
remuneration
Upper quartile UK
employee total
remuneration
Median UK employee
total remuneration
Lower quartile UK
employee total
remuneration
2021
£000
2020
£000
255
200
52
37
29
51
38
29
Implementation of remuneration policy
for 2022
Base salary
During the year, the Committee reviewed
the base salary of the Executive Directors
and considered individual performance,
experience and comparable market rates.
This benchmarking exercise noted that the
Executive Directors’ base salaries were
below their benchmark and given the
Group’s recovery in performance approved
the following base salaries:
DE Cicurel
BL Ormsby
MS Lavelle
2022
£000
230
200
236
2021
£000
200
180
220
Pension and other benefits
Mark Lavelle receives 5% of his base
salary as cash in lieu of contributions into
a pension scheme. Brad Ormsby receives
5% of his base salary partly as matched
pension contributions into a pension
36
Judges Scientific plc
Annual report and accounts 2021
Governance report
Directors’ interests
At 31 December 2021, the Directors had the following beneficial interests in the Company’s Ordinary shares of 5p each and options
to subscribe for shares:
Ordinary shares of the Company
Non-Executive Directors
Hon. AR Hambro
RL Cohen
RJ Elman
LD Kodituwakku
CJA Holroyd
Executive Directors
DE Cicurel*
BL Ormsby
MS Lavelle
31 December 2021
1 January 2021
Shares
Options
Shares
Options
62,000
66,116
62,860
325
2,016
—
—
—
—
—
62,000
64,341
62,778
—
2,016
—
1,775
—
—
—
709,496
3,815
331
30,275
21,000
81,000
759,458
3,754
295
10,275
1,000
61,000
* Includes non-beneficial interest in the 55,000 shares held by Shoftim Charitable Trust (2020: 50,000 shares).
Dividends paid in the year to Directors who hold shares amounted to £549,000 in aggregate (2020: £492,000).
In 2021, the Group continued to award a free “matching share” under the Judges Scientific Share Incentive Plan for every share purchased up
to a maximum value of £600 per employee per tax year for all eligible employees. Shares acquired by Directors, including matching shares,
were 36 shares acquired by David Cicurel (2020: 47 shares), 36 shares by Brad Ormsby (2020: 47 shares) and 36 shares by Mark Lavelle
(2020: 48 shares).
Options over Ordinary shares in the Company
Date of option issue
2005 Option Scheme
25 October 2013 at 1690p
2015 Option Scheme
21 October 2015 at 1402.5p
23 November 2017 at 1935.0p
3 November 2020 at 5200.0p*
8 January 2021 at 6580.0p**
Number of shares
DE Cicurel
MS Lavelle
BL Ormsby
1,775
—
—
7,500
—
1,000
20,000
30,275
—
60,000
1,000
20,000
81,000
—
—
1,000
20,000
21,000
* These share options were issued with a performance condition of 6% compound growth in Adjusted Earnings Per Share.
** These share options were issued with a performance condition achievement of Adjusted Earnings Per Share of 200p in 2021, with 10% compound
growth in Adjusted Earnings Per Share above the 2021 target in 2022 and 2023 respectively.
Charles Holroyd
Remuneration Committee Chairman
22 March 2022
Judges Scientific plc
Annual report and accounts 2021
37
Strategic reportGovernance reportFinancial statements
Directors’ Report
For the year ended 31 December 2021
The Directors present their report and
audited consolidated financial statements
for the year ended 31 December 2021.
Comparative information is provided for
the year ended 31 December 2020.
Results and dividends
The results for the financial year to
31 December 2021 are set out in the
Consolidated Statement of Comprehensive
Income. The Company paid an interim
dividend of 19.0p per Ordinary share on
5 November 2021. At the forthcoming
Annual General Meeting, the Directors
will recommend payment of a final
dividend for the year of 47.0p per Ordinary
share to be paid on Friday 8 July 2022 to
shareholders on the register on Friday
10 June 2022. The shares will go
ex-dividend on Thursday 9 June 2022.
The total dividend proposed for the 2021
financial year will aggregate to 66.0p,
an increase of 20% (2020: 55.0p).
Going concern
The consolidated financial statements have
been prepared on a going concern basis.
The Directors have taken note of guidance
issued by the Financial Reporting Council
on Going Concern Assessments in
determining that this is the appropriate
basis of preparation of the financial
statements. The Group ended 2021 with
adjusted net cash of £1.4 million compared
to adjusted net debt of £5.7 million at
31 December 2020. This increase in net
cash was as a result of consistent cash
generation arising from strong performance
of the Group’s principal operating
companies, enabled by 25.0% growth in
Organic order intake. The improvement in
net cash is after outlays for dividends to our
shareholders (£3.6 million), paying our fair
share of tax (£2.2 million) and ongoing
investment into capital expenditure
(£2.7 million). In addition the Group also
refinanced its borrowing facilities in May
2021 for a further five-year term providing
the Group with greater certainty over
long-term liquidity (see note 21).
The Directors have considered the ongoing
impact of the Covid-19 pandemic, and a
summary of the implications is included in
the Chairman’s Statement. The Group is in
a strong financial position with high cash
balances, low gearing and a solid future
order book enabling it to face the challenge
of the continued uncertain global economic
environment due to Covid-19 and more
recently the events in Ukraine.
38
Judges Scientific plc
Annual report and accounts 2021
The Directors have planned for reasonably
foreseeable worsening scenarios including a
repetition of the same level of reduction in
orders in 2022 as happened in 2020 which
would not cause any significant challenges
to the Group’s continued existence.
The Directors therefore have a reasonable
expectation that the Group has adequate
resources to continue in operational
existence for the foreseeable future.
In making this assessment the Directors
have considered the period until the end
of March 2023 and therefore continue to
adopt the going concern basis in preparing
the Annual Report and Accounts.
Future developments
The Group will continue to execute its
long-standing business model in the same
manner it has done so every year, including
acquiring sustainably profitable businesses,
supporting them to continue to deliver
profitable results and encouraging
investment in their range of products.
Research and development
The Group spent £6.2 million in 2021 (2020:
£6.2 million) on a mixture of development
of new products, amendments to existing
products and other routine activities such as
updating products due to obsolescence of
parts or faults. During the year £0.8 million
of this expenditure was capitalised (2020:
£nil) with amortisation of £0.0 million
(2020: £nil).
Engagement with stakeholders
The Group engages with all its stakeholders
as disclosed in the Section 172 statement
on page 13. The Group’s payment policy
is to agree terms and conditions with
suppliers in advance and to pay agreed
invoices in accordance with the agreed
terms of payment. Creditor days of the
Company at the end of the year
represented 16 days (2020: 11 days).
Significant shareholders
The following are beneficial interests of 3%
or more of the Company’s issued Ordinary
share capital, the only class of voting
capital, of which the Directors have been
notified at 22 March 2022:
No. of
shares
held
% of total
Share
Capital
David Cicurel
Liontrust
Odin Global
Hargreaves
Lansdown
Stephen Upton and
Jacqueline Upton
709,492
422,729
374,476
193,911
187,700
11.2
6.7
5.9
3.1
3.0
Advice and Insurance
This is disclosed in the Corporate
Governance Statement on page 32.
Financial risk management objectives
and policies
The Group utilises financial instruments
(see note 23), comprising borrowings,
cash and cash equivalents and various
other items such as trade receivables
and payables that arise directly from its
operations. The main purpose of these
financial instruments is to raise finance
for the Group’s operations. The main
risks arising from the Group’s financial
instruments relate to interest rates,
liquidity, credit and foreign currency
exposure. The Directors review and agree
policies for managing each of these risks,
which are described and evaluated in more
detail in note 27 and which are summarised
below. Except as stated, the policies have
remained unchanged from previous years.
1. Interest rate risk
The Group finances its operations through
a mixture of bank borrowings, equity and
retained profits. With adjusted net cash of
£1.4 million (31 December 2020: adjusted
net debt of £5.7 million) (see note 21),
exposure to interest rate fluctuations
remains a low risk to the Group; however,
the Group’s loans are subject to interest
rate hedges, as described in note 27.
2. Liquidity risk
The Group seeks to manage liquidity risk by
ensuring that sufficient funds are available
to meet foreseeable needs and to invest
cash assets safely and profitably. Primarily
this is achieved through loans arranged at
Group level. Short-term flexibility is
achieved through the significant cash
balances that the Group currently holds.
Additionally, where the Group has already
repaid funds into the revolving credit
facility, it is able to subsequently redraw
these funds should the need arise.
3. Credit risk
The Group reviews the credit risk relating
to its customers by ensuring, wherever
possible, that it deals with long-established
trading partners, agents and university/
government-backed bodies, where the
risk of default is considered low. Where
considered appropriate, the Group will
protect itself via requiring advance
payment or letters of credit to be provided.
Governance report 4. Currency risk
With exports representing a significant
proportion of its sales, the main risk area
to which the Group is exposed is that of
foreign currencies (principally US Dollars
and Euros). The Group adopts a strategy
to hedge against this risk by entering into
currency options/forward exchange
contracts and/or by maintaining a
proportion of its bank loans in these
currencies as appropriate, although this
strategy does not represent hedging under
IFRS 9. The Directors review the value of
this economic hedging on a regular basis.
There remains, nevertheless, an ongoing
threat to the Group’s competitive position
in international markets from any sustained
period of Sterling strength. Forward and
option contracts are entered into in both
US Dollars and Euros maturing in the
subsequent year, aimed at protecting the
ensuing year’s competitive position and
margins from adverse currency movements.
5. Cashflow risk
The Group manages its cashflow through
a mixture of working capital, bank
borrowings, equity and retained profits.
With adjusted net cash of £1.4 million
(31 December 2020: adjusted net debt of
£5.7 million) (see note 21) and cash and
cash equivalents of £18.4 million, the
Group’s cash position is considered to
be a key strength.
Streamlined energy and carbon reporting
(SECR)
Whilst the Group and the parent company
are not required to report under SECR as
none of its subsidiary undertakings are large
companies, and the parent company is a low
energy user consuming less than 40MWh
per annum, this information has been
voluntarily presented in the Sustainability
Report on pages 14 to 21 in order to provide
stakeholders with useful information on the
energy consumption of the Group.
It is the policy of the Group that training,
career development and promotion
opportunities should be available to
all employees.
Directors
The following Directors have held office
during the year and until the date of
signing this report:
Hon. AR Hambro – Non-Executive Chairman
DE Cicurel
BL Ormsby
MS Lavelle
CJA Holroyd – Non-Executive
LD Kodituwakku – Non-Executive
RL Cohen – Non-Executive
RJ Elman – Non-Executive
Statement of Directors’ responsibilities
The Directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable
law and regulations.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law the Directors
have elected to prepare the Group
consolidated financial statements in
accordance with UK-adopted international
accounting standards (IAS) and those parts
of the Companies Act 2006 that applies to
companies reporting under IAS and the
parent in accordance with United Kingdom
Generally Accepted Accounting Practice
(United Kingdom Accounting Standards
and applicable law including FRS 101
‘Reduced Disclosure Framework’). Under
company law the Directors must not
approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of affairs and of the
profit or loss of the Group and the parent
company for that period.
In preparing each of the Group and parent
company financial statements, the
Directors are required to:
Employee engagement
Please refer to the s172 statement and the
Sustainability Report on pages 13 and 14 to
21 respectively for further information.
• select suitable accounting policies and
then apply them consistently;
• make judgements and accounting
estimates that are reasonable and prudent;
Disabled employees
Applications for employment by disabled
persons are given full and fair consideration
for accordance with their particular
aptitudes and abilities. In the event of
employees becoming disabled, every effort
is given to retrain them in order that their
employment with the Group may continue.
• state whether applicable IFRSs or
UK Accounting Standards have been
followed, subject to any material
departures disclosed and explained in
the financial statements; and
• 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 responsible for keeping
adequate accounting records that are
sufficient to show and explain the parent
company’s transactions and disclose with
reasonable accuracy at any time the
financial position of the parent company
and the Group and enable them to ensure
that the financial statements comply with
the Companies Act 2006. They are also
responsible for safeguarding the assets of
the Group and for taking reasonable steps
for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
Company’s website. Information published
on the website is accessible in many
countries and legislation in the United
Kingdom governing the preparation and
dissemination of financial statements may
differ from legislation in other jurisdictions.
Provision of information to the Auditor
The Directors confirm that:
• so far as each Director is aware, there is
no relevant audit information of which
the Company’s Auditor is unaware; and
• the Directors have taken all the steps
that they ought to have taken as
Directors in order to make themselves
aware of any relevant audit information
and to establish that the Auditor is aware
of that information.
Auditor
Following an audit tender process (as explained
on page 33 of the Audit Committee Report),
we will be appointing a new auditor for the
audit of the 2022 financial statements
following an extensive tender process in
the second half of 2021. The Auditor, BDO
UK LLP, has expressed a willingness to be
appointed. In accordance with section
489(4) of the Companies Act 2006, a
resolution to appoint BDO UK LLP will be
proposed at the Annual General Meeting.
Annual General Meeting
The Annual General Meeting of the Company
will be held on Tuesday 24 May 2022 at 12.00
noon. The venue will be announced closer to the
date of the meeting depending on the latest
Government restrictions in place at that time.
On behalf of the Board
Brad Ormsby
Director
22 March 2022
Company registration number: 04597315
(England and Wales)
Judges Scientific plc
Annual report and accounts 2021
39
Strategic reportGovernance reportFinancial statements
Independent auditor’s report
To the members of Judges Scientific plc
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Judges Scientific plc (the ‘parent company’) and its subsidiaries (the Group’) for the year ended
31 December 2021, which comprise the Consolidated statement of comprehensive income, the Consolidated and parent company balance
sheets, the Consolidated and parent company statements of changes in equity, the Consolidated cashflow statement and notes to the
financial statements, including a summary of significant accounting policies. 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 Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted
Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 December 2021
and of the Group’s profit 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.
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 the 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
We are responsible for concluding on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Group’s and the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the
auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or
conditions may cause the Group or the parent company to cease to continue as a going concern.
Our evaluation of the Directors’ assessment of the Group’s and the parent company’s ability to continue to adopt the going concern basis
of accounting included:
• Obtaining management’s base case cashflow forecasts covering the period to 31 March 2023, assessing how these cashflow forecasts
were compiled and evaluating supporting information, including budgets and order book;
• Assessing the accuracy of management’s historical forecasting by comparing management’s forecasts for 2021 and 2020 to the actual
results for those periods and considering the impact on the base case cashflow forecast;
• Performing an analysis on the base case forecasts, assessing the impact of changes in key assumptions on the cashflow forecasts and
the headroom on debt covenants, including the sensitivity scenarios prepared by management. We considered whether the assumptions
are consistent with our understanding of the business derived from other detailed audit work undertaken;
• Performing a reverse stress test to identify the scenario which would result in a breach in covenants in the assessment period and
assessing the probability of such a scenario and identifying the mitigating factors available to management if necessary;
• Assessing whether there are indicators of events and circumstances which may cast doubt on the Group’s and parent company ability
to continue as a going concern beyond management’s period of assessment; and
• Evaluating the Group’s disclosures on going concern for compliance with the requirements of IAS 1 ‘Presentation of financial statements’ (IAS 1).
In our evaluation of the Directors’ conclusions, we considered the inherent risks associated with the Group’s and the parent company’s
business model including effects arising from macro-economic uncertainties such as Brexit and Covid-19, we assessed and challenged the
reasonableness of estimates made by the Directors and the related disclosures and analysed how those risks might affect the Group’s and
the parent company’s financial resources or ability to continue operations over the going concern period.
40
Judges Scientific plc
Annual report and accounts 2021
Financial statements Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and the parent company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
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.
The responsibilities of the Directors with respect to going concern are described in the ‘Responsibilities of Directors for the financial
statements’ section of this report.
Our approach to the audit
Materiality
Key audit
matters
Scoping
Overview of our audit approach
Overall materiality:
Group: £775,500, which represents circa 5% of the Group’s profit before tax.
Parent company: £728,000 which approximately 1% of the parent company’s total
assets.
Key audit matters were identified as:
• Valuation of Goodwill (same as last year); and
• Valuation of investments in the parent company (same as last year).
Our auditor’s report for the year ended 31 December 2020 included two key audit
matters that have not been reported as key audit matters in our current 31 December 2021
report. These relate to:
Going concern assumption – The going concern assumption was raised as a key audit
matter for the year ended 31 December 2020. At the time of the 2020 reporting there
was an unprecedented level of uncertainty in regards to Covid-19 and Brexit and the
ultimate impact of these events on the Group. Going concern has not been identified as
a significant risk for the current year due to the recovery of the business in the 2021 year
and the decreased uncertainty surrounding the impact of Covid-19 and Brexit which has
informed a lower risk assessment for this matter.
Valuation of intangibles arising on a business combination – the Group had no
significant business combinations during the current period.
The Group engagement team have performed an audit of the parent company and
component teams an audit of the financial information of three components using
component materiality (full scope audit). Component teams performed specified audit
procedures relating to nine components. The Group engagement team performed
analytical procedures at a Group level for the remaining 17 components in the Group
during the year.
Based on the procedures performed on the financial information of the Group, coverage
of more than 75% of all identified significant risks has been achieved.
Description
Audit response
KAM
Disclosures
Key observations
Key audit matters
Key audit matters are those matters that, in our professional
judgement, 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 that 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 forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Judges Scientific plc
Annual report and accounts 2021
41
Strategic reportGovernance reportFinancial statements Independent auditor’s report continued
To the members of Judges Scientific plc
Key audit matters continued
In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.
Key audit matter
Significant risk
Other risk
h
g
H
i
l
a
i
c
n
a
n
fi
l
a
i
t
n
e
t
o
P
t
c
a
p
m
i
t
n
e
m
e
t
a
t
s
w
o
L
Going
concern
Revenue
recognition
Management
override
Valuation of
goodwill
Valuation of
investments
in the parent
company
Retirement
benefit
obligations
Capitalised
development
cost
Low
Extent of management judgement
High
Key Audit Matter – Group
How our scope addressed the matter – Group
Valuation of goodwill
We identified the carrying value of goodwill as one of the
most significant assessed risks of material misstatement
due to error. We have pinpointed the significant risk in
relation to certain cash generating units (“CGUs”).
There is a risk that goodwill recognised on historical
acquisitions may be impaired due to the current trading
performance relating to these acquisitions. The process
for assessing whether impairment of assets exists under
IAS 36 is complex. Management prepare impairment
models to assess the value in use. Calculating value in
use, through forecasting cashflows related to CGUs and
the determination of the CGUs, appropriate discount
rate and other assumptions to be applied can be highly
judgemental and subject to management bias or error.
The selection of certain inputs into the cashflow
forecasts can also significantly impact the results
of the impairment assessment.
In responding to the key audit matter, we performed the following audit procedures:
• Assessed the accounting policy and disclosure to ensure it is in accordance
with the financial reporting framework, including IAS 36;
• Updated our understanding of, and evaluated, the systems and controls
over the year end impairment process and confirmed our understanding
by performing a walkthrough;
• Obtained management’s impairment assessment for each cash generating
unit, which are based on discounted cashflow models;
• Checked the mathematical accuracy of the impairment models;
• Evaluated the key assumptions using industry data and other external
information to assess the reasonableness of management’s assumptions.
This included engaging our internal valuations specialists to review the
discount rate and long-term growth rate;
• Tested the accuracy of management’s historical forecasting through
a comparison of budget to actual data and historical variance trends;
• Evaluated the sensitivity analysis performed by management on key
assumptions made in calculations to determine whether a reasonably
possible change in assumptions would trigger an impairment;
• Performed our own sensitivity analysis to understand the impact of any
reasonably possible changes in assumptions, and evaluated the headroom
available from different outcomes to assess whether goodwill could be
impaired; and
• Evaluating the information included in management’s impairment models
through our knowledge of the business and discussions with management.
Relevant disclosures in the Annual Report and
Accounts 2021
Key observations
Our audit work did not identify any material misstatements in the valuation
of goodwill.
• Group financial statements:
• Note 2, Summary of significant account policies
– Goodwill
• Note 2, Summary of significant accounting policies
– Use of key accounting estimates and judgements
• Note 13, Goodwill
42
Judges Scientific plc
Annual report and accounts 2021
Financial statements
Key audit matters continued
Key Audit Matter – Parent company
How our scope addressed the matter– Parent company
Investments valuation
We identified the valuation of certain investments held
by the parent company as one of the most significant
assessed risks of material misstatement due to error.
There is a risk that investments in subsidiaries on
historical acquisitions may be impaired. In accordance
with International Accounting Standard (IAS) 36
‘Impairment of Assets’, assets should be considered for
indicators of impairment annually, and if indicators exist,
the valuation should be assessed by reference to the
value in use of the relevant cash-generating units.
Management’s assessment of the potential impairment
of the parent company’s investment in subsidiaries
incorporates significant judgements in assumptions,
such as timing and extent of future profits and cashflows
and relevant income-generating units and an estimate
of their values in use whilst applying an appropriate
discount rate and is also subject to management bias.
In responding to the key audit matter, we performed the following audit procedures:
• Updated our understanding of, and evaluated, the systems and controls over
the year end impairment process and confirmed our understanding by
performing a walkthrough.
• Obtained management’s impairment assessment and associated discounted
cashflow forecasts and checked the mathematical accuracy of the model.
• Compared the carrying amount of the identified investment with the net
assets and the expected value of the business based on discounted cashflow
models prepared by management.
• Where impairment indicators existed, we evaluated the key assumptions using
industry data and other external information to assess the reasonableness of
management’s assumptions. This included engaging our internal valuations
specialists to review the discount rate and long-term growth rate.
• Performed sensitivity analysis on key assumptions made in calculations to
determine whether a reasonable possible change in assumptions would
trigger an impairment.
• Checked that management’s models used to assess impairment of investments
were consistent with the results of our audit over subsidiaries’ profits and
forecasts used for the impairment of goodwill and going concern assessment.
Relevant disclosures in the Annual Report and
Accounts 2021
• Parent company financial statements:
Key observations
Our audit work did not identify any material misstatements in the valuation
of investments.
• Note 2, Summary of significant accounting policies
– Investments
• Note 2, Summary of significant accounting policies
– sources of estimation uncertainty
• Note 5, Investments in subsidiaries
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified misstatements on
the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor’s report.
Materiality was determined as follows:
Group
Group
Parent company
Materiality for financial
statements as a whole
We define materiality as the magnitude of misstatement in the financial statements that, individually or
in the aggregate, could reasonably be expected to influence the economic decisions of the users of these
financial statements. We use materiality in determining the nature, timing and extent of our audit work.
Materiality threshold
£775,500, which represents circa 5% of the Group’s
profit before tax.
£728,000, which represents approximately 1%
of the parent company’s total assets.
Judges Scientific plc
Annual report and accounts 2021
43
Strategic reportGovernance reportFinancial statements Independent auditor’s report continued
To the members of Judges Scientific plc
Our application of materiality continued
Group
Group
Parent company
Significant judgements
made by the auditor in
determining the
materiality
In determining materiality, we made the following
significant judgements:
In determining materiality, we made the following
significant judgements:
• The selection of an appropriate benchmark;
• The selection of an appropriate benchmark;
• The selection of an appropriate percentage to apply to
• The selection of an appropriate percentage
that benchmark; and
to apply to that benchmark; and
• The consideration of other qualitative factors.
• The consideration of other qualitative factors.
We have consistently used profit before tax as the most
appropriate benchmark because maximisation of
shareholder returns is a key measure used by
management and the shareholders in assessing
performance of the business.
The chosen percentage applied to the benchmark is
consistent with the previous year and in line with
industry practice. We did not believe a reduction to the
percentage was necessary based on consideration of
other risk factors.
Materiality for the current year is higher than the level
that we determined for the year ended 31 December
2020 to reflect the increase in profit before tax.
Significant revisions of
materiality threshold that
were made as the audit
progressed
We calculated materiality during the planning stage of the
audit based on projected profit before tax and then during
the course of our audit, we re-assessed initial materiality
based on actual profit before tax for the year ended
31 December 2021 which resulted in an increase in
materiality and adjusted our audit procedures accordingly.
We have consistently used total assets as the most
appropriate benchmark because the parent
company is primarily a holding company of
investments and other assets.
The chosen percentage applied to the benchmark
is consistent with the previous year and in line with
industry practice. We did not believe a reduction
to the percentage was necessary based on
consideration of other risk factors.
Materiality for the current year is higher than the
level that we determined for the year ended
31 December 2020 due to the increase in total
assets and due to the fact that materiality was
not capped at 75% of Group materiality.
We calculated materiality during the planning stage
of the audit based on the Company’s total assets
and then during the course of our audit, we
re-assessed initial materiality based on actual assets
as at 31 December 2021 which resulted in an
increase in materiality and adjusted our audit
procedures accordingly.
Performance materiality
used to drive the extent
of our testing
We set performance materiality at an amount less than materiality for the financial statements as a whole to
reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole.
Performance
materiality threshold
£542,500, which is 70% of financial statement
materiality.
£509,600, which is 70% of financial statement
materiality.
Significant judgements
made by auditor in
determining the
performance materiality
In determining performance materiality, we made the
following significant judgements:
In determining performance materiality, we made
the following significant judgements:
• Our experience with auditing the financial statements
of the group; and
• Our experience with auditing the financial
statements of the parent company; and
• The effect in the current year of previously identified
and uncorrected misstatements.
• The effect in the current year of previously
identified and uncorrected misstatements.
Significant revision(s) of
performance materiality
threshold that were made
as the audit progressed
The performance materiality threshold percentage did
not change during the course of the audit but the overall
threshold increased as a result of an increase in
materiality, as referred to above.
The performance materiality threshold percentage
did not change during the course of the audit but
the overall threshold increased as a result of an
increase in materiality, as referred to above.
Specific materiality
We determine specific materiality for one or more particular classes of transactions, account balances or
disclosures for which misstatements of lesser amounts than materiality for the financial statements as a
whole could reasonably be expected to influence the economic decisions of users taken on the basis of the
financial statements.
Specific materiality
threshold
We determined a lower level of specific materiality
for the following areas:
We determined a lower level of specific materiality
for the following areas:
• Directors’ remuneration; and
• Directors’ remuneration; and
• Related party transactions.
• Related party transactions.
44
Judges Scientific plc
Annual report and accounts 2021
5
+95+z
Financial statements Our application of materiality continued
Group
Group
Parent company
Communication of
misstatements to the
Audit Committee
We determine a threshold for reporting unadjusted differences to the Audit Committee.
Threshold for
communication
£38,775 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
£36,400 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.
Overall materiality – Group
Overall materiality – parent company
Profit before tax
£14,860,00
5
FSM
£775,000
5.2%
PM
£543,000
70%
TFPUM
£232,500
30%
+95+z
Total Assets
£71,694,000
30%5
FSM
£728,000
1% of total
assets
PM
£509,600
70%
TFPUM
£218,400
+95+z
FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected misstatements.
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding of the Group’s and the parent company’s business and in particular
matters related to:
Understanding the Group, its components, and their environments, including Group-wide controls
• Judges Scientific plc Group management are responsible for the consolidation, impairment consideration, treasury and the going
concern assessment whilst each trading subsidiary has a decentralised local accounting function which reports to the local subsidiary
management who are responsible for the operations and financial management of the subsidiary companies. We have tailored our audit
response accordingly with audit work undertaken by the Group audit team and component audit teams. In assessing the risk of material
misstatement of the Group financial statements we considered the account balances and transactions undertaken by each entity to
identify the appropriate level of work to be performed by the Group and component audit teams.
Identifying significant components
• In order to address the risks identified at a Group level, the engagement team performed an evaluation of identified components
to assess the significant components and to determine the planned audit response based on a measure of materiality, calculated
by considering the component’s significance as a percentage of the Group’s total assets, revenue and profit before taxation.
• Of the Group’s 30 components, we identified four which, in our view, required an audit of their financial information (full scope audit),
either due to their size or their risk characteristics. As a result of this, the Group team performed an audit of the financial statements
of the parent company and the component teams, under the direction and supervision of the Group team, audited the financial
information of three other components, using component materiality.
• For a further nine components the component audit teams audited specific transactions and account balances under the direction
and supervision of the Group audit team in order for the Group audit team to have sufficient appropriate audit evidence to support
the Group opinion. For all other components the Group team performed analytical procedures to support the Group opinion.
Judges Scientific plc
Annual report and accounts 2021
45
Strategic reportGovernance reportFinancial statements
Independent auditor’s report continued
To the members of Judges Scientific plc
An overview of the scope of our audit continued
Performance of our audit
The Group audit team communicated with all component auditors performing full-scope audits and specific-scope audit procedures
throughout the stages of their work, from planning, through fieldwork and as part of the concluding procedures per the approach in the
table below:
Full-scope audit
Specific-scope audit
Analytical procedures
No. of
components
% coverage
Total assets
% coverage
Revenue
4
9
17
46
43
11
33
43
24
Communications with component auditors
During the planning stages of the Group audit, the Group team sent detailed instructions to the component audit teams that detailed the
scope of the work, component materiality and planned audit approach on significant risk areas. The Group team also had a planning
meeting with the component teams to discuss these instructions and provide direction to the component teams. During the fieldwork
stage the Group team was in communication with the component teams and performed detail reviews of a selection of working papers
that cover the significant risks at a Group level as well as working papers to ensure that the Group team have sufficient appropriate audit
evidence to support the Group opinion.
Changes in approach from previous year
We have refined our approach to the determination of component significance since the prior year, ensuring that sufficient and appropriate
audit evidence is obtained to support our opinion on the Group’s financial statements.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual report
and accounts, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, 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 audit or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
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 the Directors’ report have been prepared in accordance with applicable legal requirements.
Matter on which we are required to report under the Companies Act 2006
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.
Matters on which we are required to report by exception
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.
46
Judges Scientific plc
Annual report and accounts 2021
Financial statements Responsibilities of Directors for the financial statements
As explained more fully in the Directors’ responsibilities statement, 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’s and the 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.
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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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 material misstatements in respect of irregularities, including fraud. Owing to the inherent
limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even
though the audit is properly planned and performed in accordance with ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
• We obtained an understanding of the legal and regulatory frameworks applicable to the parent company, the Group and industry in
which they operate. We determined that the following laws and regulations were most significant: UK-adopted international accounting
standards for the Group and Financial Reporting Standard 101 ‘The Financial Reporting Standard applicable in the UK and Republic of
Ireland’ for the parent company, Companies Act 2006 and tax compliance regulations which is the principal jurisdiction in which the
Group operates.
• We understood how the parent company and the Group is complying with those legal and regulatory frameworks by making inquiries to
Group management. We corroborated our inquiries through our review of Board minutes and papers provided to the Audit Committee.
• We assessed the susceptibility of the parent company’s and Group’s financial statements to material misstatement, including how fraud
might occur. Audit procedures performed by the Group engagement team included:
• identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
• challenging assumptions and judgements made by management in its significant accounting estimates;
• utilising a valuation specialist to assess management’s impairment calculation;
• identifying and testing journal entries, in particular any journal entries posted with unusual account combinations; and
• assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement item.
• These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error.
The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and
detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may
involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with
laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it.
• The assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration
of the engagement team’s:
• Understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training
and participation; and
• Knowledge of the industry in which the client operates.
• Team communications in respect of potential non-compliance with laws and regulations and fraud included the potential for fraud
in revenue and management override of controls.
Judges Scientific plc
Annual report and accounts 2021
47
Strategic reportGovernance reportFinancial statements Independent auditor’s report continued
To the members of Judges Scientific plc
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud continued
• In assessing the potential risks of material misstatement, we obtained an understanding of:
• the parent company’s and the Group’s operations, including the nature of its revenue sources, products and services and of its
objectives and strategies to understand the classes of transactions, account balances, expected financial statement disclosures
and business risks that may result in risks of material misstatement; and
• the parent company’s and the Group’s control environment, including:
• The policies and procedures implemented to comply with financial reporting requirements, including the adequacy of the training
to inform staff of financial reporting changes; and
• The adequacy of procedures for authorisation of transactions and internal review procedures over the parent company and the
Group’s transactions.
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.
Joanne Love
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
22 March 2022
48
Judges Scientific plc
Annual report and accounts 2021
Financial statements Consolidated statement of comprehensive income
For the year ended 31 December 2021
Revenue
Operating costs
Operating profit/(loss)
Interest income
Interest expense
Profit/(loss) before tax
Taxation (charge)/credit
Profit/(loss) for the year
Attributable to:
Owners of the parent
Non-controlling interests
Profit/(loss) for the year
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss
Retirement benefits actuarial gain/(loss)
Deferred tax on retirement benefits
actuarial gain/(loss)
Items that may be reclassified
subsequently to profit or loss
Exchange differences on translation
of foreign subsidiaries
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
Attributable to:
Owners of the parent
Non-controlling interests
Earnings per share – adjusted
Basic
Diluted
Earnings per share – total
Basic
Diluted
Note
3
3,4,5
9
9
10
Adjusted
£000
91,289
(72,512)
18,777
2
(713)
18,066
(2,753)
Adjusting
items
£000
—
(3,158)
(3,158)
—
(48)
(3,206)
797
2021
Total
£000
91,289
(75,670)
15,619
2
(761)
14,860
(1,956)
15,313
(2,409)
12,904
Adjusted
£000
79,865
(65,508)
14,357
14
(654)
13,717
(2,029)
11,688
15,027
286
15,313
(2,345)
(64)
12,682
222
(2,409)
12,904
11,108
580
11,688
Adjusting
items
£000
—
(4,191)
(4,191)
—
(53)
(4,244)
1,204
(3,040)
(2,888)
(152)
(3,040)
2020
Total
£000
79,865
(69,699)
10,166
14
(707)
9,473
(825)
8,648
8,220
428
8,648
1,445
(206)
22
1,261
14,165
13,943
222
2021
Pence
201.0
198.2
2020
Pence
177.2
173.9
(1,378)
286
(82)
(1,174)
7,474
7,046
428
2020
Pence
131.1
128.7
2021
Pence
238.1
234.9
12
12
12
12
The accompanying notes form an integral part of these consolidated financial statements.
Judges Scientific plc
Annual report and accounts 2021
49
Strategic reportGovernance reportFinancial statements Consolidated balance sheet
As at 31 December 2021
ASSETS
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-use leased assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Right-of-use lease liabilities
Current tax liabilities
Non-current liabilities
Borrowings
Right-of-use lease liabilities
Deferred tax liabilities
Retirement benefit obligations
Total liabilities
Net assets
EQUITY
Share capital
Share premium account
Other reserves
Retained earnings
Equity attributable to owners of the parent company
Non-controlling interests
Total equity
The accompanying notes form an integral part of these consolidated financial statements.
The financial statements were approved by the Board on 22 March 2022.
David Cicurel Brad Ormsby
Director
Director
50
Judges Scientific plc
Annual report and accounts 2021
Note
2021
£000
2020
£000
13
14
15
16
17
18
19
20
21
22
21
22
17
29
24
26
30
18,713
5,056
8,254
4,186
3,081
18,713
6,909
6,678
5,125
2,153
39,290
39,578
14,133
17,146
18,408
49,687
88,977
12,585
14,340
15,523
42,448
82,026
(19,373)
(4,657)
(887)
(1,726)
(15,828)
(3,857)
(947)
(1,539)
(26,643)
(22,171)
(12,351)
(3,420)
(1,845)
(1,324)
(17,358)
(4,209)
(1,945)
(3,295)
(18,940)
(26,807)
(45,583)
(48,978)
43,394
33,048
316
16,667
1,999
23,794
42,776
618
315
16,429
1,977
13,469
32,190
858
43,394
33,048
Financial statements Consolidated statement of changes in equity
For the year ended 31 December 2021
At 1 January 2021
Dividends
Change in non-controlling interest
Issue of share capital
Purchase of own shares for Company
reward scheme
Deferred tax on share-based payments
Share-based payments
Transactions with owners
Profit for the year
Retirement benefit actuarial gain
Foreign exchange differences
Total comprehensive income for the year
Share
capital
£000
315
Share
premium
£000
16,429
Other
reserves
£000
1,977
—
—
1
—
—
—
1
—
—
—
—
—
—
238
—
—
—
238
—
—
—
—
—
—
—
—
—
—
—
—
—
22
22
At 31 December 2021
316
16,667
1,999
23,794
42,776
At 1 January 2020
311
15,453
2,059
10,048
Dividends
Change in non-controlling interest
Issue of share capital
Deferred tax on share-based payments
Share-based payments
Transactions with owners
Profit for the year
Retirement benefit actuarial loss
Foreign exchange differences
Total comprehensive income for the year
—
—
4
—
—
4
—
—
—
—
—
—
976
—
—
976
—
—
—
—
—
—
—
—
—
—
—
—
(82)
(82)
(3,231)
(680)
—
(113)
317
(3,707)
8,220
(1,092)
—
7,128
At 31 December 2020
315
16,429
1,977
13,469
The accompanying notes form an integral part of these consolidated financial statements.
27,871
(3,231)
(680)
980
(113)
317
(2,727)
8,220
(1,092)
(82)
7,046
32,190
Total
attributable
to owners of
the parent
£000
32,190
(3,630)
(1,371)
239
(53)
823
635
Retained
earnings
£000
13,469
(3,630)
(1,371)
—
(53)
823
635
Non-controlling
interests
£000
858
—
(462)
—
—
—
—
Total equity
£000
33,048
(3,630)
(1,833)
239
(53)
823
635
(3,596)
(3,357)
(462)
(3,819)
12,682
1,239
—
13,921
12,682
1,239
22
13,943
222
—
—
222
618
821
—
(391)
—
—
—
(391)
428
—
—
428
858
12,904
1,239
22
14,165
43,394
28,692
(3,231)
(1,071)
980
(113)
317
(3,118)
8,648
(1,092)
(82)
7,474
33,048
Judges Scientific plc
Annual report and accounts 2021
51
Strategic reportGovernance reportFinancial statements Consolidated cashflow statement
For the year ended 31 December 2021
Cashflows from operating activities
Profit after tax
Adjustments for:
Financial instruments measured at fair value: hedging contracts
Share-based payments
Depreciation of property, plant and equipment
Depreciation of right-of-use leased assets
Amortisation of acquired intangible assets
Amortisation of internally generated intangible assets
Profit on disposal of property, plant and equipment
Interest income
Interest expense
Interest payable on right-of-use lease liabilities
Retirement benefit obligation net finance cost
Contributions to defined benefit plans
Tax expense recognised in the Consolidated Statement of Comprehensive Income
(Increase)/decrease in inventories
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
Cash generated from operations
Tax paid
Net cash from operating activities
Cashflows from investing activities
Paid on acquisition of subsidiaries
Payment of deferred consideration
Gross cash inherited on acquisition
Acquisition of subsidiaries, net of cash acquired
Purchase of property, plant and equipment
Capitalised development costs
Proceeds on disposal of property, plant and equipment
Interest received
Net cash used in investing activities
Cashflows from financing activities
Proceeds from issue of share capital
Purchase of own shares for Company reward scheme
Finance costs paid
Repayments of borrowings*
Repayment of subordinated loan notes
Repayments of right-of-use lease liabilities
Proceeds from bank loans**
Equity dividends paid
Paid on acquisition of non-controlling interest in subsidiary
Net cash (used in)/from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at the start of the year
Exchange movements
Cash and cash equivalents at the end of the year
2021
£000
2020
£000
12,904
8,648
(190)
635
1,039
1,066
2,638
11
(37)
(2)
516
197
48
(574)
1,956
(1,548)
(2,806)
3,726
19,579
(2,180)
17,399
—
—
—
—
(2,652)
(796)
74
2
72
317
926
935
3,179
—
(4)
(14)
464
190
53
(236)
825
1,099
(1,232)
(598)
14,624
(2,377)
12,247
(8,857)
(3,922)
1,363
(11,416)
(1,268)
—
14
14
(3,372)
(12,656)
239
(53)
(516)
(4,207)
—
(1,164)
—
(3,630)
(1,833)
(11,164)
2,863
15,523
22
18,408
980
—
(468)
(7,857)
(190)
(1,108)
14,816
(3,231)
(1,071)
1,871
1,462
14,123
(62)
15,523
* On 25 May 2021, £19.0 million of outstanding loans were repaid and simultaneously reborrowed as the Group renewed its banking facilities (see note 21).
** On 29 June 2020, £5.0 million was borrowed as a working capital buffer, and was subsequently repaid in December 2020.
The accompanying notes form an integral part of these consolidated financial statements.
52
Judges Scientific plc
Annual report and accounts 2021
Financial statements Notes to the consolidated financial statements
For the year ended 31 December 2021
1. General information
Judges Scientific plc is the ultimate parent company of the Group, whose principal activities comprise the design, manufacture and
sale of scientific instruments.
Judges Scientific plc is incorporated and domiciled in the UK and its registered office is 52c Borough High Street, London SE1 1XN.
2. Summary of significant accounting policies
Basis of preparation
The consolidated financial statements have been prepared under the historical cost convention except for certain financial instruments
which are carried at fair value.
Being quoted on the Alternative Investment Market of the London Stock Exchange, the Company has prepared its consolidated financial
statements in accordance with UK-adopted international accounting standards (IAS) and those parts of the Companies Act 2006 that
applies to companies reporting under IAS. Accordingly, these financial statements have been prepared in accordance with the accounting
policies set out below which are based on the aforementioned IFRS and in effect at 31 December 2021.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed
under “Use of key accounting estimates and judgements.”
Going concern
The consolidated financial statements have been prepared on a going concern basis. The Directors have taken note of guidance issued
by the Financial Reporting Council on Going Concern Assessments in determining that this is the appropriate basis of preparation of the
financial statements. The Group ended 2021 with adjusted net cash of £1.4 million compared to adjusted net debt of £5.7 million at
31 December 2020. This increase in net cash was as a result of consistent cash generation arising from strong performance of the Group’s
principal operating companies, enabled by 25.0% growth in Organic order intake. The improvement in net cash is after outlays for
dividends to our shareholders (£3.6 million), paying our fair share of tax (£2.2 million) and ongoing investment into capital expenditure
(£2.7 million). In addition the Group also refinanced its borrowing facilities in May 2021 for a further five-year term providing the Group
with greater certainty over long-term liquidity (see note 21).
The Directors have considered the ongoing impact of the Covid-19 pandemic, and a summary of the implications is included in the
Chairman’s Statement. The Group is in a strong financial position with high cash balances, low gearing and a solid future order book
enabling it to face the challenge of the continued uncertain global economic environment due to Covid-19 and more recently the events in
Ukraine. The Directors have planned for reasonably foreseeable worsening scenarios including a repetition of the same level of reduction in
orders in 2022 as happened in 2020 which would not cause any significant challenges to the Group’s continued existence.
The Directors therefore have a reasonable expectation that the Group has adequate resources to continue in operational existence for the
foreseeable future. In making this assessment the Directors have considered the period until the end of March 2023 and therefore continue
to adopt the going concern basis in preparing the Annual Report and Accounts.
Changes in accounting policies
Standards, amendments and interpretations to existing standards that are not yet effective
At the date of approval of these consolidated financial statements, certain new standards, amendments to and interpretations of existing
standards have been published but are not yet effective. None of these pronouncements have been adopted early by the Group, and they
have not been disclosed as they are not expected to have a material impact on the Group’s financial statements. Management anticipates
that all relevant pronouncements will be adopted for the first period beginning on or after their effective date.
Consolidation
The consolidated financial statements include those of the parent company and its subsidiaries. Subsidiaries are entities where the Group
is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through
its power over the subsidiary. The Group obtains and exercises control through voting rights. Income, expenditure, unrealised gains and
intra-Group balances arising from transactions within the Group are eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred.
The Group uses the purchase method of accounting for the acquisition of a subsidiary. Acquisition consideration is measured at the fair
value of the consideration given, equity instruments issued and liabilities incurred or assumed at the date of exchange.
Business combination costs directly attributable to the acquisition are immediately written off through the Consolidated Statement
of Comprehensive Income. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date irrespective of the extent of any non-controlling interest. The excess of the
cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of the
acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the Consolidated
Statement of Comprehensive Income.
Judges Scientific plc
Annual report and accounts 2021
53
Strategic reportGovernance reportFinancial statements 2. Summary of significant accounting policies continued
Consolidation continued
The parent company has taken the merger relief that is required by section 612 of the Companies Act 2006 in respect of the fair value
of the consideration received in excess of the nominal value of the equity shares issued in connection with the acquisition of Fire Testing
Technology Limited, UHV Design Limited, Scientifica Limited and Armfield Limited.
Goodwill
Goodwill is the difference between the fair value of the consideration paid and the fair value of the net identifiable assets and liabilities
acquired in a business combination. Following recognition, it is not amortised; however, it is subject to impairment testing on an annual
basis or more frequently if circumstances indicate that the asset may have become impaired and is carried at cost less accumulated
impairment losses. Goodwill is allocated to cash-generating units for the purpose of impairment testing.
Revenue recognition
In accordance with IFRS 15 Revenues from Contracts with Customers, revenue is measured by reference to the fair value of consideration
received or receivable by the Group, excluding value added tax (or similar local sales tax), in exchange for transferring the promised
goods or services to the customer. The consideration is allocated to each separate performance obligation that is identified in a sales
contract, based on stand-alone selling prices. Sales of instruments and spares, and sales of services, such as non-specialised installation
and training, extended warranty, maintenance and service, contract testing, software licences or consultancy, are assessed to be separate
performance obligations.
Revenue is recognised when (or as) the Group satisfies the identified performance obligation. For sales of instruments, spares, installation,
and one-off services, the performance obligation is satisfied at a point in time; for revenue from other services, the performance obligation
is satisfied over time. As the period of time between payment and performance is less than one year, the Group does not adjust revenue for
the effects of financing.
Revenue from sales of instruments and spares is recognised at the point at which the customer obtains control of the asset. This is usually
on despatch of the instrument; however, for sales from overseas subsidiaries, it is when the customer receives the goods. Revenue from
installations and one-off services is recognised at the point at which the installation or service is completed. For large, complex instruments
which require highly specialised installation, revenue from both the instrument and installation is recognised at the point at which
installation is completed.
Revenue from extended warranty, maintenance and testing contracts and software licences is recognised rateably as the performance
obligation to the customer is satisfied.
Receipts from customers for instruments, either part or in full, in advance of their date of shipping are recognised within accruals and
payments-on-account within note 20.
Segment reporting
The Group’s activities are predominantly in or in support of the design and manufacture of scientific instruments. The Group operates
two main operating segments: Materials Sciences and Vacuum. No operating segments have been aggregated.
Operating segments are reported in a manner consistent with internal reporting provided to the Executive Directors, which is responsible
for allocating and assessing performance of operating segments, and which is considered to be the Chief Operating Decision Maker.
Each segment’s range of instruments has its individual requirements in terms of design, manufacture and marketing.
Intangible assets acquired as part of a business combination
In accordance with IFRS 3 Business Combinations, an intangible asset acquired in a business combination is deemed to have a cost to
the Group of its fair value at the acquisition date. The fair value of the intangible asset reflects market expectations about the probability
that the future economic benefits embodied in the asset will flow to the Group.
Amortisation charges are included as adjusting items in operating costs in the Consolidated Statement of Comprehensive Income.
Amortisation is provided at rates calculated to write off the cost of each intangible asset over its expected useful life, as follows:
Acquired customer relationships
Acquired non-competition agreements
3 years
2 years
Acquired distribution agreements
Between 2 and 5 years
Acquired technology
5 years
Acquired sales order backlog
On shipment (this is usually consumed within six months of initial recognition)
Acquired brand and domain names
Between 1 and 5 years
Subsequent to initial recognition, intangible assets are stated at deemed cost less accumulated amortisation.
54
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021
2. Summary of significant accounting policies continued
Research and development
Research and development expenditure is recognised in the Consolidated Statement of Comprehensive Income as an expense until
it can be demonstrated that the conditions for capitalisation under IAS 38 Intangible Assets apply.
The criteria for capitalisation include demonstration that the project is technically and commercially feasible, the Group has sufficient
resources to complete development and the asset will generate probable future economic benefit. Assets capitalised are amortised on
a straight-line basis over three years from the start of the commercial sales life.
Property, plant and equipment
Property, plant and equipment is stated at historical cost, less accumulated depreciation.
Depreciation is provided at annual rates calculated to write off the cost less residual value of each asset over its expected useful life,
within the following ranges:
Property
Plant and machinery
50 years (excluding the estimated cost of land)
7 years
Fixtures, fittings and equipment
Between 3 and 7 years
Motor vehicles
4 years
Building improvements
Over the minimum term of the lease
Material residual value estimates and expected useful lives are updated as required but at least annually.
Where an asset is disposed, the gain or loss arising on the disposal is determined as the difference between the disposal proceeds
and the carrying amount of the asset and is recognised in the Consolidated Statement of Comprehensive Income.
Impairment testing of goodwill, other intangible assets and property, plant and equipment
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows
(cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level.
Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and
represent the lowest level within the Group at which management monitors goodwill.
Cash-generating units to which goodwill has been allocated are tested for impairment at least annually. All other individual assets or
cash-generating units are tested whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use. Value in use is
based on estimated future cashflows from each cash-generating unit, discounted at a suitable rate in order to calculate the present value
of those cashflows. The data used for impairment testing procedures is directly linked to the Group’s latest approved budgets, adjusted as
necessary to exclude any future restructuring to which the Group is not yet committed. Discount rates are determined individually for
each cash-generating unit and reflect their respective risk profiles as assessed by the Directors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit.
Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all
assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. Impairment charges
are included in operating costs in the Consolidated Statement of Comprehensive Income. An impairment charge that has been recognised
is reversed if the cash-generating unit’s recoverable amount exceeds its carrying amount.
Leases
Any contract entered into, which contains an identified asset, whose use the Group has the right to direct throughout the period of the
lease, and the right to obtain substantially all of the economic benefits from, is accounted for as a lease. At the lease commencement date,
the Group recognises a right-of-use leased asset and a lease liability on the balance sheet. The lease liability is measured at the present
value of the total lease payments due, discounted using the interest rate implicit in the lease if readily available, or at the Group’s
incremental borrowing rate. The right-of-use asset is measured at cost, being the lease liability, plus any initial direct costs incurred
by the Group, or lease payments made in advance of the commencement date.
Right-of-use assets are depreciated on a straight-line basis to the end of the lease term. The Group assesses the right-of-use asset for
impairment when such indicators exist.
The lease liability is repaid over the life of the lease, through the lease payments, which includes interest which is accrued monthly at the
same rate used to calculate the liability. Lease liabilities are remeasured to reflect any reassessment or modification of the lease – when the
lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use leased asset, or in the Consolidated Statement
of Comprehensive Income if the asset is already reduced to zero.
Judges Scientific plc
Annual report and accounts 2021
55
Strategic reportGovernance reportFinancial statements
2. Summary of significant accounting policies continued
Inventories
Inventories are recorded at the lower of cost and net realisable value. Costs of ordinarily interchangeable items are assigned using the
first-in, first-out cost formula. Cost includes materials, direct labour and an attributable proportion of manufacturing overheads based
on normal levels of activity.
Taxation
Current tax is the tax currently payable based on taxable profit for the year.
Deferred taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference
between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition
of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or
accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries is not provided if reversal of those temporary
differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses
available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the
underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and
liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or
substantively enacted at the balance sheet date.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Consolidated Statement of Comprehensive
Income, except:
• where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged
or credited directly to equity; or
• where items are recognised in other comprehensive income, in which case the related deferred tax is recognised in other
comprehensive income.
Share-based employee compensation
The Group operates equity-settled share-based compensation plans for remuneration of its Directors and employees.
All employee services received in exchange for the grant of any share-based compensation are measured at their fair values. The fair value
is appraised at the grant date and excludes the impact of any non-market vesting conditions (e.g. profitability or sales growth targets).
Share-based compensation is recognised as an expense in the Consolidated Statement of Comprehensive Income with a corresponding
credit to retained earnings. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on
the best available estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions
about the number of share options that are expected to become exercisable. Estimates are subsequently revised if there is any indication
that the number of share options expected to vest differs from previous estimates.
The proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options
are exercised.
Financial assets
Financial assets consist of loans, receivables and derivatives.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term deposits which are subject to an insignificant risk
of changes in value.
Trade receivables
Trade receivables are recognised and carried at the original invoice amount less a provision for uncollectable amounts. An estimate of
uncollectable amounts is made on initial recognition of each receivable and updated should collection of the amount become no longer
probable. The Group uses historical experience and external information to determine the need for, and quantum of, any such provision.
Uncollectable amounts are written off to the Consolidated Statement of Comprehensive Income when identified.
Financial liabilities
Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the
contractual provisions of the instrument. Financial liabilities are recorded initially at fair value net of direct issue costs if they are not
held at fair value through profit and loss. Derivatives are recorded at fair value through profit or loss. The fair value of derivative financial
instruments is determined by reference to active market transactions or using a valuation technique where no active market exists.
56
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 2. Summary of significant accounting policies continued
Financial liabilities continued
All financial liabilities with the exception of interest rate swaps and foreign currency options are recorded at amortised cost using the
effective interest method, with interest-related charges recognised as an expense in finance cost in the Consolidated Statement of
Comprehensive Income.
These financial liabilities include trade and other payables and borrowings, including bank loans, subordinated loans and right-of-use lease
liabilities. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are charged to the Consolidated
Statement of Comprehensive Income on an accruals basis using the effective interest method and are added to the carrying amount of the
instrument to the extent that they are not settled in the period in which they arise.
Interest rate swaps and foreign currency options are treated as derivative financial instruments and are accounted for at fair value through
profit and loss.
A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged or cancelled or expires.
Employee benefits – Defined contribution plans
The Group operates defined contribution pension schemes for employees and Directors. The assets of the schemes are held by investment
managers separately from those of the Group. The contributions payable to these schemes are recorded in the Consolidated Statement of
Comprehensive Income in the accounting period to which they relate.
Employee benefits – Defined benefit plans
The Group operates a funded defined benefit scheme, where payments are made to trustee administered funds. The asset or liability
recognised in the Consolidated Balance Sheet is calculated as the present value of the defined benefit obligation less the fair value of the
plan assets, as at the balance sheet date.
The defined benefit obligation is calculated at least triennially by independent actuaries using the projected unit credit method and is
determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds, matched to the
currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation.
The plan administration expenses and past service costs or credits are recognised as an operating expense in the Consolidated Statement
of Comprehensive Income. There is no current service cost. The retirement benefits obligation net finance cost is the change during the year
in the net defined benefit liability due to the passage of time and is recognised as an interest expense in the Consolidated Statement of
Comprehensive Income. The interest rate is based on the yield on high quality corporate bonds. Actuarial gains and losses arising from
changes in actuarial assumptions and experience adjustments are recognised in the Consolidated Statement of Comprehensive Income
in the year which they arise.
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities
in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. Exchange differences arising on the settlement
of monetary items or on translating monetary items at rates different from those at which they were initially recorded are recognised in the
Consolidated Statement of Comprehensive Income in the period in which they arise. In respect of overseas subsidiaries on consolidation,
assets and liabilities are translated at the closing rate and income and expenses are translated at the average rate over the reporting period.
Exchange differences are recorded in other comprehensive income.
Other income
Interest income is recognised using the effective interest method which calculates the amortised cost of a financial asset and allocates
the interest income over the relevant period. Dividend income is recognised when the shareholder’s right to receive payment is established.
Dividends
Final dividend distributions payable to equity shareholders are included in trade and other payables when the dividends are approved
in general meeting but not paid prior to the balance sheet date. Interim dividends are recognised in the period in which they are paid.
Equity
Equity comprises the following:
Share capital
Share capital represents the nominal value of equity shares.
Share premium
Share premium represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses
of the share issue.
Capital redemption reserve
Capital redemption reserve represents amounts set aside from retained earnings on conversion of convertible redeemable shares equal
to the reduction then arising in the overall nominal value of share capital of all classes.
Judges Scientific plc
Annual report and accounts 2021
57
Strategic reportGovernance reportFinancial statements 2. Summary of significant accounting policies continued
Equity continued
Merger reserve
Merger reserve represents the fair value of the consideration received in excess of the nominal value of equity shares issued in connection
with acquisitions where the Company has taken the merger relief that is required by section 612 of the Companies Act 2006.
Retained earnings
Retained earnings represents retained profits and losses and equity-settled share-based payment credits.
Non-controlling interests
Non-controlling interests represent retained profits and losses attributable to minority shareholders in subsidiary companies.
Adjusting items
Adjusting items (and their related tax impact) are those which by their size or nature the Directors consider should be disclosed separately
for the purposes of presenting results and earnings per share figures so as to enable users of the financial statements to evaluate more
effectively the underlying operating performance of the Group. Amortisation of intangible assets recognised following an acquisition is
excluded from the underlying performance as these assets are not otherwise allowed to be recognised in the normal course of business.
Acquisition costs are also considered to be a cost outside of normal trading and are therefore presented separately. Movements in the fair
value of future hedging is also excluded from normal trading as the total cost of the hedge is recorded as a trading expense in the period to
which the hedge relates. Share-based payments have consistently been treated as non-trading cost as these are non-cash and equity related.
Normal costs of restructuring are treated as a trading expense, and not as an adjusting item as these are considered to be a normal cost of
doing business.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is likely that an
outflow of resource will be required to settle the obligation and that the amount of the probable outflow can be reasonably estimated.
Where the Group expects all or some of the obligation to be reimbursed, the reimbursement is recognised as a separate asset to the extent
that it is virtually certain to be reimbursed. The expense relating to any provision is presented in the Consolidated Statement of
Comprehensive Income net of any reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation
at the year-end date. If material, provisions are determined by discounting the expected future cashflows using rates that reflect current
market assessments of the time value of money.
Government grants
Government grants are recognised at their fair value in the Consolidated Statement of Comprehensive Income over the same period as
the costs to which the grants relate, and is only recognised once there is a reasonable assurance that the Company has complied with the
conditions of the grant and that the grant will be received.
Use of key accounting estimates and judgements
Many of the amounts included in the consolidated financial statements involve the use of judgement and/or estimation. These judgements
and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to prior experience, but
actual results may differ from the amounts included in the consolidated financial statements. Information about such judgements and
estimation is contained in the accounting policies and/or the notes to the consolidated financial statements and the key areas are
summarised below.
Judgements in applying accounting policies
• Fair value assessment of a business combination: Following an acquisition the Group makes an assessment of all assets and liabilities,
inclusive of making judgements on the identification of specific intangible assets which are recognised separately from goodwill. These
include items such as brand names and customer lists, to which value is first attributed at the time of acquisition. The valuation process
for the intangible assets requires a number of judgements to be made regarding future performance of an acquisition, together with
other asset-specific factors. In order to estimate the fair value of separately identifiable assets in business combinations certain
judgements must be made about future trading performance, royalty rates and customer attrition rates. Where acquisitions are
significant, appropriate advice is sought from professional advisers before making such allocations. The fair values of assets and liabilities
acquired in business combinations are disclosed in note 28 and the carrying values of separately identifiable intangible assets initially
measured at fair value are disclosed in note 14.
• Capitalisation of development costs: Expenditure incurred in the development of major new products is capitalised as internally
generated intangible assets only when it has been judged that strict criteria are met, specifically in relation to the products’ technical
feasibility and commercial viability (the ability to generate probable incremental future economic benefits for the Group). The assessment
of technical feasibility and future commercial viability of development projects requires significant judgement particularly around
whether a product in development will have a sufficient appeal to its niche market and also the level of marketplace competition.
During 2021 the Group capitalised £796,000 of expenditure on new or significantly improved products (2020: £nil), as per note 14.
58
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 2. Summary of significant accounting policies continued
Use of key accounting estimates and judgements continued
Sources of estimation uncertainty
• Retirement benefits: Determining the value of the future defined benefit obligation involves significant estimates in respect of the
assumptions used to calculate present values. These include future mortality, discount rate and inflation. The Group uses previous
experience and independent actuarial advice to select the values for critical estimates. See note 29 for additional information.
• Carrying value of goodwill: In carrying out impairment reviews of goodwill, a number of significant assumptions have to be made
when preparing cashflow projections to determine the value in use of the asset or cash-generating unit (CGU). These include the future
rate of market growth, discount rates, the market demand for the products acquired and the future profitability of acquired businesses
or products. If actual results differ or changes in expectations arise, impairment charges may be required which would adversely impact
the statutory results. Further information can be found in note 13.
3. Segmental analysis
For the year ended 31 December 2021
Revenue
Operating costs
Adjusted operating profit
Adjusting items
Operating profit
Net interest expense
Profit before tax
Income tax charge
Profit for the year
For the year ended 31 December 2020
Revenue
Operating costs
Adjusted operating profit
Adjusting items
Operating profit
Net interest expense
Profit before tax
Income tax charge
Profit for the year
Unallocated items relate to the Group’s head office costs.
Segment assets and liabilities
At 31 December 2021
Assets
Liabilities
Net assets
Capital expenditure
Depreciation of property, plant and equipment
Depreciation of right-of-use leased assets
Amortisation of acquired intangible assets
Materials
Sciences
£000
40,716
(33,251)
Vacuum
£000
50,573
(35,531)
7,465
15,042
Unallocated
items
£000
—
(3,730)
(3,730)
Materials
Sciences
£000
33,210
(28,341)
Vacuum
£000
46,655
(34,564)
4,869
12,091
Unallocated
items
£000
—
(2,603)
(2,603)
Note
4
Note
4
Total
£000
91,289
(72,512)
18,777
(3,158)
15,619
(759)
14,860
(2,061)
12,799
Total
£000
79,865
(65,508)
14,357
(4,191)
10,166
(693)
9,473
(825)
8,648
Materials
Sciences
£000
Vacuum
£000
Unallocated
items
£000
Total
£000
27,087
(13,423)
35,671
(11,873)
26,219
(20,287)
88,977
(45,583)
13,664
23,798
5,932
43,394
384
362
536
1,070
2,253
624
474
1,568
15
53
56
—
2,652
1,039
1,066
2,638
Judges Scientific plc
Annual report and accounts 2021
59
Strategic reportGovernance reportFinancial statements 3. Segmental analysis continued
Segment assets and liabilities continued
At 31 December 2020
Assets
Liabilities
Net assets
Capital expenditure
Depreciation of property, plant and equipment
Depreciation of right-of-use leased assets
Amortisation of acquired intangible assets
Materials
Sciences
£000
23,566
(11,468)
12,098
355
285
465
1,345
Vacuum
£000
31,713
(11,702)
20,011
902
591
413
1,834
Unallocated
items
£000
26,747
(25,808)
Total
£000
82,026
(48,978)
939
33,048
11
50
57
—
1,268
926
935
3,179
Unallocated items are borrowings, intangible assets and goodwill arising on acquisition, deferred tax, defined benefit obligations and parent
company net assets. There are no material non-current assets outside the UK.
Analysis of revenue by geographical areas
Geographic analysis
UK (domicile)
Rest of Europe
North America
China/Hong Kong
Rest of the World
Revenue
Non-current assets
Year to
31 December
2021
£000
Year to
31 December
2020
£000
Year to
31 December
2021
£000
Year to
31 December
2020
£000
14,776
29,488
20,034
11,103
15,888
91,289
10,167
24,784
17,289
13,721
13,904
79,865
38,862
—
217
—
—
39,079
39,288
—
290
—
—
39,578
Segmental revenue is presented on the basis of the destination of the goods where known, otherwise the geographical location of customers
is utilised.
Analysis of revenue by performance obligation
Sale of goods, recognised at a point in time
Sale of services, recognised at a point in time
Sale of services, recognised over time
No customer makes up more than 10% of the Group’s revenues.
2021
£000
87,622
3,259
408
91,289
2020
£000
77,316
2,338
211
79,865
60
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 4. Adjusting items
Amortisation of acquired intangible assets
Financial instruments measured at fair value: hedging contracts
Share-based payments
Employment taxes arising from share-based payments
Acquisition costs
Total adjusting items in operating profit
Retirement benefits obligation net interest cost
Total adjusting items
Taxation
Total adjusting items net of tax
Attributable to:
Owners of the parent
Non-controlling interest
5. Operating costs
Raw materials and consumables
Staff costs
Other external charges
Government grants
Depreciation of property, plant and equipment
Depreciation of right-of-use leased assets
Amortisation of internally generated intangible assets
Other operating costs, excluding adjusting items
Amortisation of acquired intangible assets
Hedging contracts
Share-based payments
Employment taxes arising from share-based payments
Acquisition costs
Total operating costs
2021
£000
2,638
(190)
635
90
(15)
3,158
48
3,206
(797)
2,409
2,345
64
2,409
2021
£000
33,247
26,769
10,540
(160)
1,039
1,066
11
72,512
2,638
(190)
635
90
(15)
75,670
2020
£000
3,179
72
317
64
559
4,191
53
4,244
(1,204)
3,040
2,888
152
3,040
2020
£000
31,013
24,994
8,478
(838)
926
935
—
65,508
3,179
72
317
64
559
69,699
Research and development expenditure totalled £6,221,000 (2020: £6,185,000) of which £796,000 (2020: £nil) was capitalised in the year.
Income from government grants of £160,000 (2020: £838,000) relates to claims made under the UK Government’s Coronavirus Job
Retention Scheme.
6. Remuneration of key senior management
Short-term employee benefits:
Salaries including bonuses and social security costs
Share-based payments
Company car allowance and other benefits
Total short-term employee benefits
Post-employment benefits:
Defined contribution pension plans
Total post-employment benefits
2021
£000
2020
£000
2,847
531
82
3,460
103
103
2,448
212
92
2,752
99
99
3,563
2,851
Judges Scientific plc
Annual report and accounts 2021
61
Strategic reportGovernance reportFinancial statements 6. Remuneration of key senior management continued
Key management personnel comprise Directors of the parent company and the managing directors of the principal operating companies
and totalled 22 (2020: 23).
Remuneration of Directors is disclosed in the Remuneration Report on pages 35 to 37.
7. Employees
Employment costs
Wages and salaries
Social security costs
Pension costs
Capitalised development costs
Share-based payments
Average number of employees
By function:
Manufacturing
Sales and administration
By operating segment:
Materials Sciences
Vacuum
Head office (includes Non-Executive Directors in both years)
8. Operating profit
Operating profit is stated after charging:
Fees payable to the Company’s auditor:
for the audit of the Company’s annual accounts
Fees payable to the Company’s auditor for other services:
for the audit of the Company’s subsidiaries, pursuant to legislation
for audit-related assurance services
for other assurance services
for corporate finance services
for other non-audit services
Depreciation of property, plant and equipment
Depreciation of right-of-use fixed assets
Amortisation of internally generated intangible assets
Amortisation of acquired intangible assets
62
Judges Scientific plc
Annual report and accounts 2021
2021
£000
23,802
2,319
1,179
(531)
26,769
635
27,404
2020
£000
21,898
2,049
1,047
—
24,994
317
25,311
2021
No.
231
309
540
256
273
11
540
2021
£000
2020
No.
216
296
512
225
277
10
512
2020
£000
100
31
287
5
—
—
—
1,039
1,066
11
2,638
198
5
9
40
—
926
935
—
3,179
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 9. Interest income and expense
Interest income – short-term bank deposits
Interest expense – bank loans
Interest expense – payable on right-of-use lease liabilities
Retirement benefits obligation net finance cost
Net interest expense
10. Taxation charge/(credit)
UK corporation tax at 19% (2020: 19%)
Current year
Prior years
Foreign tax suffered
2021
£000
2
(516)
(197)
(48)
(761)
(759)
2020
£000
14
(464)
(190)
(53)
(707)
(693)
2021
£000
2020
£000
3,175
(907)
99
2,367
1,907
(565)
102
1,444
The prior year’s current tax adjustments represent claims for UK Research and Development tax credits which are primarily under the
SME scheme.
2021
£000
2020
£000
Deferred tax – origination and reversal of temporary differences:
Current year
Prior years
Effect of changes in tax rates
Tax on profit for the year – current year
Tax on profit for the year – prior years
Factors affecting the tax charge for the year:
Profit before tax
Profit before tax multiplied by standard rate of UK corporation tax of 19% (2020: 19%)
Share options
Provisions and expenditure not deductible for tax purposes
Changes in tax rates
Overseas tax
Utilisation of previously unrecognised losses
Tax on profit for the year – current year
Tax on profit for the year – prior years
Total net taxation charge
11. Dividends
Final dividend for the previous year
Interim dividend for the current year
Total final and interim dividend
(542)
(26)
157
(411)
2,889
(933)
1,956
14,860
2,823
(219)
128
157
9
(9)
2,889
(933)
1,956
2021
Pence
per share
38.5
19.0
57.5
£000
2,430
1,200
3,630
2020
Pence
per share
35.0
16.5
51.5
(607)
(130)
118
(619)
1,520
(695)
825
9,473
1,800
(468)
102
118
7
(39)
1,520
(695)
825
£000
2,195
1,036
3,231
The Directors will propose a final dividend of 47.0p per share, amounting to £2,970,000, for payment on 8 July 2022. As the final dividend
remains conditional on shareholders’ approval at the Annual General Meeting, provision has not been made for this dividend in these
consolidated financial statements.
Judges Scientific plc
Annual report and accounts 2021
63
Strategic reportGovernance reportFinancial statements 12. Earnings per share
Profit attributable to owners of the parent
Adjusted profit
Adjusting items
Profit for the year
Earnings per share – adjusted
Basic
Diluted
Earnings per share – total
Basic
Diluted
Issued Ordinary shares at the start of the year
Movement in Ordinary shares during the year
Issued Ordinary shares at the end of the year
Weighted average number of shares in issue
Dilutive effect of share options
Weighted average Ordinary shares in issue on a diluted basis
Note
4
2021
£000
2020
£000
15,027
(2,345)
12,682
11,108
(2,888)
8,220
Pence
Pence
238.1
234.9
201.0
198.2
177.2
173.9
131.1
128.7
Note
Number
Number
6,299,163
19,252
6,226,291
72,872
24
6,318,415
6,299,163
6,310,608
87,786
6,269,437
117,551
6,398,394 6,386,988
Adjusted basic earnings per share is calculated on the adjusted profit, which excludes any adjusting items, attributable to the Company’s
shareholders divided by the weighted average number of shares in issue during the year.
Adjusted diluted earnings per share is calculated on the adjusted basic earnings per share, adjusted to allow for the issue of Ordinary
shares on the assumed conversion of all dilutive share options and any other dilutive potential Ordinary shares. The calculation is based on
the treasury method prescribed in IAS 33. This calculates the theoretical number of shares that could be purchased at the average middle
market price in the period out of the proceeds of the notional exercise of outstanding options. The difference between this theoretical
number and the actual number of shares under option is deemed liable to be issued at nil value and represents the dilution.
Total earnings per share are calculated as above whilst substituting total profit for adjusted profit.
13. Goodwill
1 January
Acquisitions (note 28)
31 December
2021
£000
18,713
—
18,713
2020
£000
15,265
3,448
18,713
£10,428,000 of goodwill resides in the Material Sciences segment and £8,285,000 resides in the Vacuum segment. Goodwill is tested
annually for impairment by reference to the value in use of each of the relevant cash-generating units it is allocated to and aggregated for
disclosure purposes into the respective operating segments. The value in use is calculated on the basis of projected cashflows for five years
together with the terminal value at the end of the five years, which is computed by reference to projected year six cashflows and discounted. There was
no requirement for any impairment provision at 31 December 2021 (2020: £nil). The key assumptions in determining the value in use are:
Revenue and margins: These are derived from the detailed 2022 budgets which are built up with reference to markets and product
categories and projected margins reflect historical performance and the expected impact of efforts to improve operational efficiency,
whilst reflecting the need to operate within the constraints of the Covid-19 pandemic and local government guidelines.
Discount rate: Cashflows are discounted using a pre-tax discount rate of 13.8% (2020: 11.5%) per annum, calculated by reference
to year-end data on equity values and interest, dividend and tax rates.
64
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 13. Goodwill continued
Long-term growth rates: 2.1% long-term revenue growth rate takes into account both UK and overseas markets and the 2.1% cost growth
broadly aligns with inflation, and enables gross margins to be maintained.
The long-term growth rate and discount rate are consistent for all cash-generating units on the basis that the businesses operate in similar
markets and are exposed to similar risks.
The Directors have considered the sensitivity of the key assumptions, including the discount rate and long-term growth rates, and have
concluded that any possible changes that may be reasonably contemplated in these key assumptions would not result in the value in use
falling below the carrying value of goodwill, given the amount of headroom available, and the conservative nature of the assumptions.
14. Other intangible assets
Gross carrying amount
1 January 2020
Acquisitions
31 December 2020
Additions
31 December 2021
Amortisation
1 January 2020
Charge for the year
31 December 2020
Charge for the year
31 December 2021
Carrying amount 31 December 2021
Carrying amount 31 December 2020
Carrying amount 31 December 2019
Internally
generated
development
costs
£000
Acquired
distribution
agreements
£000
Acquired
technology
£000
Acquired
sales order
backlog
£000
—
—
—
796
796
—
—
—
11
11
785
—
—
3,784
—
3,784
—
3,784
3,384
208
3,592
100
3,692
92
192
400
10,539
2,100
12,639
—
12,639
8,612
1,057
9,669
964
10,633
2,006
2,970
1,927
4,907
500
5,407
—
5,407
4,788
586
5,374
33
5,407
—
33
119
Acquired
brand and
domain
names
£000
12,774
830
13,604
—
13,604
11,266
772
12,038
648
Acquired
customer
relationships
£000
9,080
2,200
11,280
—
11,280
8,576
556
9,132
893
Total
£000
41,084
5,630
46,714
796
47,510
36,626
3,179
39,805
2,649
12,686
10,025
42,454
918
1,566
1,508
1,255
2,148
504
5,056
6,909
4,458
Judges Scientific plc
Annual report and accounts 2021
65
Strategic reportGovernance reportFinancial statements Plant and
machinery
£000
Fixtures,
fittings and
equipment
£000
Motor
vehicles
£000
Property
and building
improvements
£000
1,910
231
5
(32)
—
2,114
440
—
(120)
—
2,591
563
114
—
(6)
3,262
625
—
(48)
1
2,434
3,840
1,025
252
(22)
—
1,255
296
(120)
—
1,431
1,003
859
885
1,597
439
—
(6)
2,030
503
(35)
1
2,499
1,336
1,232
994
263
84
17
(43)
(6)
315
6
—
(110)
1
212
215
39
(43)
(6)
205
31
(86)
1
151
61
110
48
Total
£000
9,799
1,268
239
(75)
(12)
11,219
2,652
—
(289)
2
5,035
390
103
—
—
5,528
1,581
—
(11)
—
7,098
13,584
855
196
—
—
1,051
209
(11)
—
1,249
5,849
4,477
4,180
3,692
926
(65)
(12)
4,541
1,039
(252)
2
5,330
8,254
6,678
6,107
15. Property, plant and equipment
Cost
1 January 2020
Additions
Acquisitions
Disposals
Exchange differences
31 December 2020
Additions
Acquisitions (note 28)
Disposals
Exchange differences
31 December 2021
Accumulated depreciation
1 January 2020
Charge for the year
Disposals
Exchange differences
31 December 2020
Charge for the year
Disposals
Exchange differences
31 December 2021
Net book value – 31 December 2021
Net book value – 31 December 2020
Net book value – 31 December 2019
66
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 16. Right-of-use leased assets
Cost
1 January 2020
New leases
Acquisitions
Exit from leases
Remeasurement of leases
Exchange differences
31 December 2020
New leases
Exit from leases
Remeasurement of leases
Exchange differences
31 December 2021
Accumulated depreciation
1 January 2020
Charge for the year
Acquisitions
Exit from leases
Exchange differences
31 December 2020
Charge for the year
Exit from leases
Exchange differences
31 December 2021
Net book value – 31 December 2021
Net book value – 31 December 2020
Right-of-use lease liabilities are disclosed in note 22.
Plant and
machinery
£000
Fixtures,
fittings and
equipment
£000
Motor
vehicles
£000
Property
£000
Total
£000
114
—
—
—
—
—
114
4
—
—
—
118
33
33
—
—
—
66
38
—
—
104
14
48
146
18
—
—
—
—
164
57
(25)
—
—
196
29
38
—
—
—
67
36
(21)
—
82
114
97
81
—
—
—
—
—
81
43
—
—
—
4,741
1,313
319
(265)
(3)
(1)
6,104
27
(170)
66
1
5,082
1,331
319
(265)
(3)
(1)
6,463
131
(195)
66
1
124
6,028
6,466
25
29
—
—
—
54
26
—
—
80
44
27
567
835
15
(265)
(1)
1,151
966
(104)
1
2,014
4,004
4,953
654
935
15
(265)
(1)
1,338
1,066
(125)
1
2,280
4,186
5,125
Judges Scientific plc
Annual report and accounts 2021
67
Strategic reportGovernance reportFinancial statements 17. Deferred tax
Assets
1 January
Acquisitions in the year (note 28)
Adjustments in respect of prior years
Movement in other comprehensive income – retirement benefits actuarial (gain)/loss
Credit to the Consolidated Statement of Comprehensive Income in the year
Credit/(charge) to equity in the year
31 December
Deferred tax balances relate to temporary differences as follows:
Provisions allowable for tax in subsequent periods
Tax losses
Share options
Defined benefit obligation
Liabilities
1 January
Acquisitions in the year (note 28)
Adjustments in respect of prior years
Credit to the Consolidated Statement of Comprehensive Income in the year
31 December
Deferred tax balances relate to temporary differences as follows:
Accelerated capital allowances
Intangible assets
2021
£000
2020
£000
2,153
—
33
(206)
278
823
3,081
241
48
2,461
331
3,081
1,945
—
7
(107)
1,845
923
922
1,845
1,873
87
—
286
20
(113)
2,153
174
36
1,317
626
2,153
1,447
1,097
(130)
(469)
1,945
632
1,313
1,945
Finance Act 2021 which was substantively enacted on 24 May 2021 included provisions to increase the corporation tax rate further to 25%
effective from 1 April 2023 and this rate has been applied when calculating the deferred tax at the year end.
18. Inventories
Raw materials
Work in progress
Finished goods
2021
£000
10,212
2,356
1,565
14,133
2020
£000
8,726
2,341
1,518
12,585
In 2021, a total of £33,268,000 of inventories was included in the Consolidated Statement of Comprehensive Income as an expense
(2020: £31,013,000). This includes an amount of £522,000 (2020: £557,000) resulting from write-downs of inventories and an amount
of £nil (2020: £138,000) which is the reversal of previous write-downs. The carrying amount of inventories held at fair value less costs to
sell is £502,000 (2020: £457,000). All Group inventories form part of the assets pledged as security in respect of bank loans.
19. Trade and other receivables – current
Trade receivables
Other receivables
Prepayments
2021
£000
14,207
1,298
1,641
17,146
2020
£000
11,843
1,196
1,301
14,340
The fair value of receivables approximates to their carrying value. All trade and other receivables have been reviewed for expected credit
losses with no material provision being required.
68
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 19. Trade and other receivables – current continued
Trade receivables which were past due at the balance sheet date are analysed as follows:
Not more than three months
More than three months but not more than six months
More than six months but not more than twelve months
Greater than one year
Trade and other receivables are denominated in the following currencies:
Sterling
US Dollars
Euros
20. Trade and other payables – current
Trade payables
Social security and other taxes
Other payables
Accruals and payments-on-account
2021
£000
4,820
1,125
545
421
6,911
2021
£000
10,531
5,154
1,461
17,146
2021
£000
6,438
1,023
805
11,107
2020
£000
3,595
735
219
56
4,605
2020
£000
9,398
3,170
1,772
14,340
2020
£000
5,907
972
1,436
7,513
19,373
15,828
The fair value of trade and other payables approximates to their carrying value. Payments-on-account, which relate to receipts from
customers for instruments in advance of their shipment, amount to £5,068,000 (2020: £3,957,000). All such shipments are expected to
be fulfilled within 12 months and £3,957,000 of the opening payments-on-account balance has been included in revenue in 2021
(£3,541,000 of the opening balances included in revenue in 2020).
21. Borrowings
Current
Bank loans
Subordinated loans
Non-current
Bank loans
The movement in borrowings over the year was as follows:
At 1 January
Proceeds from drawdown of loans*
Repayment of loans*
Repayment of subordinated loans
Interest payable
Interest paid
At 31 December
2021
£000
4,657
—
4,657
12,351
12,351
2021
£000
21,215
—
(4,207)
—
516
(516)
17,008
2020
£000
3,857
—
3,857
17,358
17,358
2020
£000
14,450
14,816
(7,857)
(190)
464
(468)
21,215
* On 25 May 2021, £19.0 million of outstanding loans were repaid and simultaneously reborrowed as the Group renewed its banking facilities (see below).
On 29 June 2020, £5.0 million was borrowed as a working capital buffer, and was subsequently repaid in December 2020.
Judges Scientific plc
Annual report and accounts 2021
69
Strategic reportGovernance reportFinancial statements 21. Borrowings continued
On 25 May 2021, the Group entered into new banking facilities (“Facility”) with Lloyds Banking Group plc (the “Bank”) replacing its existing
banking arrangements. The Facility was for an aggregate £60.0 million consisting of a £19.0 million term loan (“Term Loan”), a committed
£35.0 million revolving credit facility (“RCF”) plus a £6.0 million accordion facility, which can be drawn at the discretion of the Bank. The
Facility replaced the previous facilities for which the Group had a total of £19.0 million outstanding. The Facility has a five-year term
(“Borrowing Term”) with covenants and interest consistent with the previous bank facilities. The Term Loan shall amortise on a straight-line
basis over the Borrowing Term by quarterly instalments. The RCF is repayable in a bullet at the end of the Borrowing Term. The accordion
facility increases by the amount paid off the Term Loan, keeping the overall Facility at £60.0 million throughout the Borrowing Term.
The existing lending facilities via Bordeaux Acquisition Limited (“Bordeaux”), the Group’s 88% owned subsidiary, remain unchanged. Bordeaux
was set up as a vehicle to acquire Deben UK Limited and was used in 2017 to acquire Crystallon, the parent of Oxford Cryosystems Limited.
At the year end, the Group’s two bank loans are summarised as follows:
• The first loan of £16,150,000 (2020: £4,500,000 term loans plus £15,000,000 RCF) is repayable in quarterly instalments over the period
ending 31 March 2026 and bears interest at 1.85% to 3.00% (depending upon gearing) above SONIA-related interest rates.
• The second loan of £858,000 (2020: £1,715,000) is repayable in quarterly instalments over the period ending 31 December 2022
and bears interest at 1.75% to 2.75% (depending upon gearing) above LIBOR-related rates.
The subordinated loans previously advanced by non-controlling shareholders in Bordeaux Acquisition Limited were repaid in full
in December 2020.
Borrowings mature as follows:
31 December 2021
Repayable in less than six months
Repayable in months seven to twelve
Current portion of long-term borrowings
Repayable in years one to five
Total borrowings
Less: interest included above
Less: cash and cash equivalents
Total net cash
31 December 2020
Repayable in less than six months
Repayable in months seven to twelve
Current portion of long-term borrowings
Repayable in years one to five
Total borrowings
Less: interest included above
Less: cash and cash equivalents
Total net debt
22. Right-of-use lease liabilities
The movement in the right-of-use lease liabilities over the year was as follows:
At 1 January
New leases (note 16)
Lease liabilities acquired on acquisition (note 28)
Remeasurement of lease liabilities
Interest payable (note 9)
Exits from leases
Repayments of lease liabilities
At 31 December
70
Judges Scientific plc
Annual report and accounts 2021
Bank loans
£000
2,504
2,481
4,985
12,810
17,795
(787)
(18,408)
(1,400)
Bank loans
£000
2,115
2,100
4,215
17,704
21,919
(704)
(15,523)
5,692
2020
£000
4,446
1,331
302
(5)
190
—
(1,108)
5,156
2021
£000
5,156
131
—
67
197
(80)
(1,164)
4,307
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 22. Right-of-use lease liabilities continued
Right-of-use lease assets are disclosed in note 16.
Lease liabilities mature as follows:
Minimum right-of-use lease liabilities falling due
Within one year – land and property
Within one year – vehicles
Within one year – plant and machinery
Within one year – fixtures, fittings and equipment
Between one and five years – land and property
Between one and five years – vehicles
Between one and five years – plant and machinery
Between one and five years – fixtures, fittings and equipment
Greater than five years – land and property
Total commitment
Less: finance charges included above
Net present value of lease liabilities
Current
Non-current
2021
£000
960
32
21
37
1,050
2,775
22
8
77
2,882
940
4,872
(565)
4,307
887
3,420
2020
£000
1,038
30
34
36
1,138
3,245
22
17
57
3,341
1,425
5,904
(748)
5,156
947
4,209
23. Financial instruments
The Group’s policies on treasury management, capital management objectives and financial instruments are given in the Directors’ Report
commencing on page 38.
Fair value of financial instruments
Financial instruments include the borrowings set out in note 21. The Group enters into derivative financial instruments in order to manage
its interest rate and foreign currency exposure. The principal derivatives used include foreign currency options and interest rate swaps.
Material changes in the carrying values of these instruments are recognised in the Consolidated Statement of Comprehensive Income in
the periods in which the changes arise. Such recognition is treated as an adjusting item in the Consolidated Statement of Comprehensive
Income where the foreign currency hedge was entered into in order to protect profits in later accounting periods. In such cases, the charge
or credit will be reversed out of adjusting items in the accounting period for which the hedge was intended and will be shown in results before
adjusting items. All financial instruments denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet
date. The Directors believe that there is no material difference between the book value and fair value of all financial instruments.
Borrowing facilities
The Group has a revolving acquisition facility of £35.0 million (2020: £25.0 million). At 31 December 2021 the Group had drawn £nil
(2020: £15.0 million).
Trade payables
All amounts are short-term (all payable within six months) and their carrying values are considered reasonable approximations of fair value.
The values are set out in note 20.
Fair value hierarchy
The fair value hierarchy has the following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2:
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
Level 3:
inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The interest rate swaps and foreign currency hedges are measured at fair value in accordance with the fair value hierarchy and are classed
as level 2.
Judges Scientific plc
Annual report and accounts 2021
71
Strategic reportGovernance reportFinancial statements 23. Financial instruments continued
Fair value hierarchy continued
Summary of financial assets and financial liabilities by category
Financial assets – amortised cost
Trade and other receivables
Cash and cash equivalents
Financial assets – fair value
Derivative financial instruments
Total financial assets
Financial liabilities – amortised cost
Trade payables
Accruals
Other payables
Right-of-use lease liabilities
Current portion of long-term borrowings
Long-term borrowings
Financial liabilities – fair value
Derivative financial instruments
Total financial liabilities
Net financial liabilities
Non-financial assets and liabilities
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-use leased assets
Inventories
Prepayments
Social security and other taxes
Retirement benefit obligations
Payments-on-account
Current tax payable
Deferred tax assets
Deferred tax liabilities
Total equity
2021
£000
2020
£000
15,285
18,408
13,039
15,523
220
—
33,913
28,562
(6,438)
(6,039)
(805)
(4,307)
(4,657)
(12,351)
(5,907)
(3,556)
(1,318)
(5,156)
(3,857)
(17,358)
—
(118)
(34,597)
(37,270)
(684)
(8,708)
18,713
5,056
8,254
4,186
14,133
1,641
(1,023)
(1,324)
(5,068)
(1,726)
3,081
(1,845)
18,713
6,909
6,678
5,125
12,585
1,301
(972)
(3,295)
(3,957)
(1,539)
2,153
(1,945)
44,078
43,394
41,756
33,048
Financial assets
The Group’s financial assets (which are summarised above) comprise cash and cash equivalents and trade and other receivables.
The amounts derived from these assets and included as interest income in the Consolidated Statement of Comprehensive Income are
£2,000 (2020: £14,000) (see note 9).
Cash and cash equivalents are principally denominated in Sterling and earn interest at floating rates.
Financial liabilities
The Group’s principal financial liabilities are bank loans, trade and other payables and derivative financial instruments. The Group also holds
interest rate swaps and foreign currency forward contracts and options.
The costs attributable to these liabilities and included as interest expense in the Consolidated Statement of Comprehensive Income
amounted to £722,000 (2020: £654,000) (see note 9).
72
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 24. Share capital
Allotted, called up and fully paid – Ordinary shares of 5p each
1 January: 6,299,163 shares (2020: 6,226,291 shares)
Exercise of share options: 19,252 shares (2020: 72,872 shares)
31 December: 6,318,415 shares (2020: 6,299,163 shares)
2021
£000
315
1
316
2020
£000
311
4
315
Allotments of Ordinary shares in 2021 were made to satisfy the exercise of 19,252 share options in aggregate on 23 occasions during the
year when the share price was within the range 5900p to 7900p (2020: exercise of 72,872 share options when the share price was within
the range 4300p to 6300p).
Throughout 2020, the Group continued to award a free “matching share” under the Judges Scientific plc Share Incentive Plan for every
share purchased up to a maximum value of £600 per employee per tax year. During 2021, an average of 212 employees participated in
the scheme each month (2020: 163 employees), purchasing 5,049 shares in total, including matching shares (2020: 6,122 shares).
At 31 December 2021, there were 216 employee shareholders in this Share Incentive Plan.
The market price of the Company’s Ordinary shares at 31 December 2021 was 8400p. The share price range during the year was 5740p
to 8640p.
25. Share-based payments
Equity share options
At 31 December 2021, options had been granted and remained outstanding in respect of 201,460 Ordinary shares in the Company
(2020: 160,026), all priced by reference to the mid-market price of the shares on the date of grant and all exercisable, following a
three-year vesting period, between the third and tenth anniversaries of grant, as below:
2005 Approved Option Scheme
2005 Unapproved Option Scheme
2015 Approved Option Scheme
2015 Unapproved Option Scheme
At
1 January
2021
Number
15,500
5,200
27,816
111,510
160,026
Granted
Number
—
—
—
60,986
60,986
At
31 December
2021
Number
11,475
700
20,780
168,505
Exercised
Number
(4,025)
(4,500)
(6,736)
(3,991)
Of which
exercisable
Number
11,475
700
14,089
95,257
(19,252)
201,460
121,521
Lapsed
Number
—
—
(300)
—
(300)
Weighted
average
exercise
price (p)
1253.3
470.0
1541.3
1621.2
2005 Option Scheme
Exercise prices for the year ended 31 December 2021 ranged between 470.0p and 1690.0p per share (2020: between 470.0p and 1473.0p
per share). The unexercised options have a weighted average remaining contractual life of 1.69 years (2020: 2.02 years).
2015 Option Scheme
Exercise prices for the year ended 31 December 2021 ranged between 1402.5p and 1935.0p per share (2020: between 1402.5p and
2025.0p per share). The unexercised options have a weighted average remaining contractual life of 6.7 years (2020: 6.49 years).
In accordance with IFRS 2, a Black Scholes valuation model has been used. The key assumptions used in the model are as follows:
• interest rate – 1.19%;
• historical volatility – 31.2%;
• dividend yield – 0.7%; and
• expected life of option – 5.0 years.
Growth reward plan
The Group has an annual scheme for subsidiary management whereby upon achievement of certain compound growth targets they
will receive Judges shares. Any award, which is accounted for as equity settled, is deferred for three years, consistent with the vesting
of share options.
The total share-based payment charge for both of these plans for the year ended 31 December 2021 was £635,000 (2020: £317,000).
Judges Scientific plc
Annual report and accounts 2021
73
Strategic reportGovernance reportFinancial statements 26. Other reserves
Balance at 1 January 2021
Issue of share capital
Transactions with owners
Exchange differences on translation of foreign subsidiaries
Total comprehensive income
Balance at 31 December 2021
Balance at 1 January 2020
Issue of share capital
Transactions with owners
Exchange differences on translation of foreign subsidiaries
Total comprehensive income
Balance at 31 December 2020
Capital
redemption
reserve
£000
23
—
—
—
—
23
Capital
redemption
reserve
£000
23
—
—
—
—
23
Merger
reserve
£000
1,968
Translation
reserve
£000
(14)
—
—
—
—
1,968
Merger
reserve
£000
1,968
—
—
—
—
1,968
—
—
22
22
8
Translation
reserve
£000
68
—
—
(82)
(82)
(14)
Total
£000
1,977
—
—
22
22
1,999
Total
£000
2,059
—
—
(82)
(82)
1,977
27. Risk management objectives and policies
The Group is exposed to market risks, arising predominantly from currency exposure resulting from its export activities, interest rate
fluctuation on its loans and deposits and credit and liquidity risks. Risk management strategies are co-ordinated by the Directors.
Foreign currency sensitivity
The Group exports a substantial proportion of its sales, frequently denominated in foreign currencies (principally in US Dollars and Euros).
Exposure to currency rate fluctuations exists from the moment a sales order is confirmed through to the time when the related remittance
is converted into Sterling. This exposure is computed monthly (along with offsetting exposure on purchases, generally of minimal amounts)
and economically hedged, predominantly through the use of currency forward contracts and options. The net exposure to risk is therefore
substantially reduced. This does not, however, represent a hedge under IFRS 9.
The table below summarises the foreign currency hedged at year end, and which is expected to be settled within the first four months
of 2022. Residual exposure is the difference between the net exposure and the amounts of currency hedges, both translated into Sterling
at each measurement date.
31 December 2021
Amount of foreign currency hedged at year end
Residual exposure at year end – long/(short)
Impact on pre-tax profits of a 5% variation in exchange rate on year-end residual exposure
Impact on equity of a 5% variation in exchange rate on year-end residual exposure
31 December 2020
Amount of foreign currency hedged at year end
Residual exposure at year end – long/(short)
Impact on pre-tax profits of a 5% variation in exchange rate on year-end residual exposure
Impact on equity of a 5% variation in exchange rate on year-end residual exposure
Sterling
equivalent
of US$
£000
6,000
(309)
(15)
(12)
Sterling
equivalent
of US$
£000
3,250
524
26
21
Sterling
equivalent
of €
£000
3,500
(1,542)
(7)
(62)
Sterling
equivalent
of €
£000
1,500
473
24
19
In addition to the hedging of this foreign currency exposure, the Group seeks to mitigate the impact of currency fluctuations on future
trading performance. This was achieved at 31 December 2021 by entering into currency options to sell €6.0 million and $12.3 million for
the rest of 2022, at predetermined exchange rates.
The fair value of the hedging financial instruments is a liability of £148,000 (2020: £67,000).
74
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 27. Risk management objectives and policies continued
Interest rate sensitivity
The Group’s interest rate exposure arises in respect of its bank loans, which are LIBOR linked for interest rate purposes, and its cash, which
are bank base rate linked. To hedge this risk the Group is party to interest rate swaps at predetermined rates. The fair value of these financial
instruments has been recognised in these accounts and the fair value of interest rate swaps is an asset of £220,000 (2020: liability of
£50,000). The Group’s sensitivity to interest rate changes is as follows:
Unhedged bank loans outstanding at year end
Impact on pre-tax profits of a 1% change in LIBOR
Impact on equity of a 1% change in LIBOR
Cash at year end
Impact on pre-tax profits of a 1% change in bank base rates
Impact on equity of a 1% change in bank base rates
2021
£000
11,150
112
90
18,408
184
149
2020
£000
14,500
145
117
15,523
155
126
Credit risk
The Group’s exposure to credit risk is limited to the carrying amounts of financial assets recognised at the balance sheet date, as follows:
Cash and cash equivalents
Trade and other receivables
2021
£000
18,408
15,598
34,007
2020
£000
15,523
13,039
28,562
The Group reviews the credit risk relating to its customers by ensuring wherever possible that it deals with long-established trading
partners, and agents and government/university-backed bodies, where the risk of default is considered low. Where considered appropriate,
the Group insists on upfront payment and requires letters of credit to be provided. The Directors monitor the ageing of trade receivable to
identify balances where there is no reasonable expectation of recovery (see note 19). None of the financial assets are secured by collateral
or other credit enhancements.
Group companies generally trade through overseas agents and distributors, and credit exposure to an individual agent or distributor can
be significant at times. At 31 December 2021, no counterparty owed more than 10% of the Group’s total trade and other receivables
(2020: none).
The credit risk for liquid funds and other short-term financial assets is considered small. The substantial majority of these assets are
deposited with Lloyds Banking Group.
Liquidity risk
Longer-term finance is required to enable the Group to pursue its strategic goal of growing through acquisitions as well as through organic
development. This requirement for financing is satisfied for the foreseeable future by a £35.0 million revolving acquisition facility together
with a £6.0 million uncommitted accordion facility provided by Lloyds Banking Group. The Group’s strategy envisages the servicing of this
debt to be achieved from the cashflow arising from the businesses acquired. For short and medium-term financial needs, the Group
regularly compares its projected requirements with available cash and borrowing facilities.
The periods of maturity of the Group’s borrowings are set out in note 21. The maturity of all trade and other payables is within the period
of less than six months.
28. Acquisitions
Increased shareholding in Bordeaux Acquisition Limited
On 16 February 2021, Judges acquired 12.5% of the shares in Bordeaux Acquisition Limited for a cash consideration of £1.8 million,
increasing its shareholding from 75.5% to 88%. The transaction was financed from Judges’ existing cash resources.
Acquisitions of Heath Scientific Company Limited and Korvus Technology Limited
No changes were made to the provisional acquisition accounting as presented in the 2020 Annual Report and Accounts.
Judges Scientific plc
Annual report and accounts 2021
75
Strategic reportGovernance reportFinancial statements 29. Retirement benefit obligations
Defined benefit obligations
The Group’s subsidiary, Armfield Limited, operates a defined benefit scheme for certain of its employees. A full actuarial valuation was
carried out as at 31 March 2020 and the retirement benefit liability was independently revalued as at 31 December 2021. The scheme has
been closed to new members from 2001 and closed to new accrual in 2006. The average duration of the plan’s liabilities has been calculated
to be approximately 18 years. The trustees are drawn partly from Armfield’s employees and also from nominees of the Judges Group.
The full actuarial valuation carried out as at 31 March 2020 was in accordance with the scheme funding requirements of the Pensions Act
2004 and the funding of the plan is agreed between Armfield Limited and the pension trustees in line with those requirements. These in
particular require the surplus/deficit to be calculated using prudent, as opposed to best estimate, actuarial assumptions. It was agreed
with the trustees that annual contributions be increased to £400,000 with a 2.5% annual inflationary increase thereafter to eliminate
the existing deficit over a period of nine years. The next full actuarial valuation will be carried out no later than 31 March 2023. The asset
investment strategy is the responsibility of the trustees. There are four insured pensions which were separately valued at £270,000 as
at 31 December 2021. These pensions do not affect the overall valuation as they are a liability with a fully insured offsetting asset.
31 December
2021
£000
31 December
2020
£000
31 December
2019
£000
7,936
(9,260)
(1,324)
331
(993)
6,874
(10,169)
(3,295)
626
(2,669)
6,349
(8,449)
(2,100)
357
(1,743)
31 December
2021
£000
31 December
2020
£000
6,874
95
569
574
(7)
(169)
7,936
6,349
134
322
236
(1)
(166)
6,874
31 December
2021
£000
31 December
2020
£000
10,169
—
—
—
136
(6)
(72)
(798)
(169)
9,260
8,449
—
10
—
176
136
211
1,353
(166)
10,169
Summary
Fair value of plan assets
Present value of defined benefit obligation
Deficit in scheme
Deferred tax
Net retirement benefit obligation
Changes in the fair value of plan assets
1 January
Interest income
Return on plan assets (excluding amounts in interest income)
Contributions by the Company
Expenses
Benefits paid
31 December
The actual return on plan assets for the year ended 31 December 2021 was £664,000 (2020: £456,000).
Changes in the fair value of defined benefit pension obligations
1 January
Current service cost
Past service cost
Expenses
Interest expense
Actuarial losses due to scheme experience
Actuarial losses/(gains) due to changes in demographic assumptions
Actuarial losses due to financial assumptions
Benefits paid
31 December
There were no plan amendments, curtailments or settlements in the above years. The estimated Guaranteed Minimum Pension (“GMP”)
equalisation impact, which would equalise for the different effects of GMPs between men and women, is expected to have no material
impact on the defined benefit obligation above.
76
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 29. Retirement benefit obligations continued
Defined benefit obligations continued
Major categories of plan assets
Quoted equities
Bonds
Property
Cash and other assets
Principal actuarial assumptions
Discount rate
Inflation rate (RPI)
Inflation rate (CPI)
In payment pension increases
In deferment pension increases
31 December
2021
£000
31 December
2020
£000
31 December
2019
£000
4,578
3,086
—
272
7,936
3,570
2,598
498
208
6,874
3,423
2,421
495
10
6,349
31 December
2021
%
31 December
2020
%
1.90
3.50
2.80
3.55
5.00
1.35
3.10
2.30
3.35
5.00
The mortality assumptions used in valuing the liabilities of the plan in 2020 and 2021 are based 100% on the standard tables S3PxA,
projected using the CMI 2019 model with a 1.25% per annum long-term rate of improvement for males and a 1.00% per annum long-term
rate of improvement for females.
The life expectancies assumed are as follows:
Male retiring in current financial year
Female retiring in current financial year
Male retiring in twenty years
Female retiring in twenty years
31 December
2021
Life expectancy
at age 65 (years)
31 December
2020
Life expectancy
at age 65 (years)
22.1
24.3
23.4
25.4
22.1
24.2
23.4
25.4
Sensitivity
The significant actuarial assumptions in determining the defined benefit obligation are the discount rate, the rate of mortality and the rate
of inflation. Changes to these actuarial assumptions may impact this obligation as follows:
Discount rate – decrease by 0.25% per annum
Inflation rate – increase by 0.25% per annum
Mortality rate – increase of one year in life expectancy
31 December
2021
Change in
liabilities
£000
31 December
2020
Change in
liabilities
£000
423
42
400
500
91
456
The above shows the impact on the defined benefit obligation if the assumptions were changed as shown (assuming all other assumptions
remain constant). The sensitivity analysis may not be representative of the actual change in the obligation as it is unlikely that any change
in assumption would happen in isolation.
Risk management
There is a risk that changes in discount rates, price inflation, asset returns and/or mortality assumptions could lead to a materially greater
deficit. Given the long-term time horizon of the pension plan cashflows, the assumptions used are uncertain. The assumptions can also be
volatile from year to year due to changes in investment market conditions. A higher pension deficit could directly impact the Group’s equity
valuation and credit rating and may lead to additional funding requirements in future years. Any deficit relative to the actuarial liability for
funding purposes, which may differ from the funding position on an accounting basis, will generally be financed over a period that ensures
the contributions are reasonably affordable to the Group and in line with local regulations.
Judges Scientific plc
Annual report and accounts 2021
77
Strategic reportGovernance reportFinancial statements 30. Non-controlling interests
Summarised financial information of the Group’s non-controlling interests is set out below:
Non-current assets
Current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Total equity
Attributable to:
Owners of the parent
Non-controlling interest
Revenue
Profit for the year
Attributable to:
Owners of the parent
Non-controlling interest
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
Net cash inflow/(outflow)
31. Capital commitments
At 31 December the Group had capital commitments as follows:
Contracted for but not provided in these financial statements
2021
£000
2,225
6,676
8,901
(3,738)
(13)
(3,751)
5,150
4,532
618
2021
£000
8,857
1,651
1,429
222
2021
£000
2,914
(1,545)
(1,011)
358
2020
£000
425
6,184
6,609
(2,135)
(972)
(3,107)
3,502
2,644
858
2020
£000
8,901
1,747
1,319
428
2020
£000
2,346
(79)
(1,026)
1,241
2021
£000
98
2020
£000
69
78
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the consolidated financial statements continuedFor the year ended 31 December 2021 Parent company balance sheet
As at 31 December 2021
Fixed assets
Tangible assets
Right-of-use leased assets
Investments in subsidiaries
Current assets
Debtors
Cash and cash equivalents
Creditors: amounts falling due within one year
Right-of-use lease liabilities falling due within one year
Net current (liabilities)/assets
Total assets less current liabilities
Creditors: amounts falling due after more than one year
Right-of-use lease liabilities falling due after more than one year
Total net assets
Capital and reserves
Called up share capital
Share premium
Capital redemption reserve
Retained earnings
Shareholders’ funds
Note
2021
£000
2020
£000
3
4
5
6
7
9
8
9
11
587
180
66,550
67,317
4,377
—
4,377
(6,808)
(62)
(2,493)
64,824
(12,351)
(121)
52,352
316
16,667
23
35,346
52,352
632
233
51,980
52,845
18,362
—
18,362
(6,690)
(59)
11,613
64,458
(16,500)
(183)
47,775
315
16,429
23
31,008
47,775
The accompanying notes form an integral part of these financial statements.
In accordance with the exemptions permitted by section 408 of the Companies Act 2006, the Statement of Comprehensive Income
of the parent company has not been presented. Profit for the year totalled £6,824,000 (2020: £2,918,000).
These parent company financial statements were approved by the Board on 22 March 2022.
David Cicurel Brad Ormsby
Director
Director
Judges Scientific plc
Annual report and accounts 2021
79
Strategic reportGovernance reportFinancial statements Parent company statement of changes in equity
For the year ended 31 December 2021
Share
capital
£000
315
Share
premium
£000
16,429
Capital
redemption
reserve
£000
Retained
earnings
£000
23
31,008
—
1
—
—
—
1
—
—
—
238
—
—
—
238
—
—
316
16,667
311
15,453
—
4
—
—
4
—
—
—
976
—
—
976
—
—
—
—
—
—
—
—
—
—
23
23
—
—
—
—
—
—
—
315
16,429
23
31,008
Total
equity
£000
47,775
(3,630)
239
(53)
562
635
(2,247)
6,824
6,824
(3,630)
—
(53)
562
635
(2,486)
6,824
6,824
35,346
52,352
31,117
(3,231)
—
(113)
317
46,904
(3,231)
980
(113)
317
(3,027)
(2,047)
2,918
2,918
2,918
2,918
47,775
At 1 January 2021
Dividends
Issue of share capital
Purchase of own shares for Company reward scheme
Deferred tax on share-based payments
Share-based payments
Transactions with owners
Profit for the year
Total comprehensive income for the year
At 31 December 2021
At 1 January 2020
Dividends
Issue of share capital
Deferred tax on share-based payments
Share-based payments
Transactions with owners
Profit for the year
Total comprehensive income for the year
At 31 December 2020
The accompanying notes form an integral part of these financial statements.
80
Judges Scientific plc
Annual report and accounts 2021
Financial statements Notes to the parent company financial statements
For the year ended 31 December 2021
1. Statement of compliance
The financial statements were prepared in accordance with FRS 101 Reduced Disclosure Framework.
2. Summary of significant accounting policies
Basis of preparation
As permitted by FRS 101, for both periods presented, the Company has taken advantage of the disclosure exemptions available under that
standard in relation to financial instruments, capital management, presentation of a cashflow statement, share-based payments, fair value
measurements, comparative reconciliations for tangible and intangible assets, standards not yet effective, related party transactions with
other wholly owned members of the Group, and key management personnel compensation. Equivalent disclosures are, where required,
given in the publicly available Group accounts of Judges Scientific plc.
The financial statements have been prepared on the historical cost basis.
Use of key accounting estimates and judgements
Many of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and
estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to prior experience, but
actual results may differ from the amounts included in the financial statements. Information about such judgements and estimates
is contained in the accounting policies and/or the notes to the financial statements, and the key areas are summarised below.
Sources of estimation uncertainty
The carrying value of investments is assessed based on the current trading performance, the expected future performance and net assets
of the investment. If actual results differ or changes in expectations arise, impairment charges may be required which would adversely
impact the parent company result.
Tangible fixed assets
Tangible fixed assets are stated at historical cost, less accumulated depreciation.
Depreciation is provided at annual rates calculated to write off the cost less residual value of each asset over its expected useful life
at the following rate:
Leasehold improvements
Over the minimum term of the lease
Fixtures, fittings and equipment
Between three and seven years
Taxation
Current tax is provided at amounts expected to be paid or recovered either directly or through Group relief arrangements.
Deferred tax assets and liabilities are calculated at rates that are expected to apply to their respective period of realisation, provided
they are enacted or substantively enacted at the balance sheet date.
Employee benefits – defined contribution plans
The Company operates defined contribution pension schemes for employees and Directors. The assets of the schemes are held
by investment managers separately from those of the Company. The contributions payable to these schemes are recorded in the
Statement of Comprehensive Income in the accounting period to which they relate.
Share-based employee compensation
The Company operates equity-settled share-based compensation plans for remuneration of its Directors and employees.
All employee services received in exchange for the grant of any share-based compensation are measured at their fair values. The fair value
is appraised at the grant date and excludes the impact of any non-market vesting conditions (e.g. profitability or sales growth targets).
Share-based compensation is recognised as an expense in the Statement of Comprehensive Income with a corresponding credit to other
reserves. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available
estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number
of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share
options expected to vest differs from previous estimates.
The proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options
are exercised.
Foreign currencies
Monetary assets and liabilities denominated in foreign currencies are translated into Sterling at the rates of exchange prevailing at
the balance sheet date. Transactions in foreign currencies are recorded at the rate of exchange prevailing at the date of transaction.
All differences are taken to the Statement of Comprehensive Income.
Financial assets
Financial assets consist of loans, debtors, derivatives and investments in subsidiaries.
Judges Scientific plc
Annual report and accounts 2021
81
Strategic reportGovernance reportFinancial statements
Notes to the parent company financial statements continued
For the year ended 31 December 2021
2. Summary of significant accounting policies continued
Financial assets continued
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term deposits which are subject to an insignificant risk of changes
in value.
Debtors
Debtors are recognised and carried at the original invoice amount less an allowance for uncollectable amounts. An estimate of
uncollectable amounts is made upon initial recognition of the debtor, and also when collection of the amount is no longer probable.
Uncollectable amounts are written off to the Statement of Comprehensive Income when identified.
Investments
Fixed asset investments in subsidiaries are stated at cost less provision for impairment.
Financial liabilities
Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the
contractual provisions of the instrument. Financial liabilities are recorded initially at fair value net of direct issue costs if they are not
held at fair value through profit and loss. Derivatives are recorded at fair value through profit or loss. The fair value of derivative financial
instruments is determined by reference to active market transactions or using a valuation technique where no active market exists.
All financial liabilities with the exception of interest rate swaps and foreign currency options are recorded at amortised cost using the
effective interest method, with interest-related charges recognised as an expense in finance cost in the Statement of Comprehensive Income.
These financial liabilities include creditors and borrowings, including bank loans, subordinated loans and hire purchase commitments.
Finance charges, including premiums payable on settlement or redemption and direct issue costs, are charged to the Statement of
Comprehensive Income on an accruals basis using the effective interest method and are added to the carrying amount of the instrument
to the extent that they are not settled in the period in which they arise.
Interest rate swaps and foreign currency options are treated as derivative financial instruments and are accounted for at fair value through
profit and loss.
A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged or cancelled or expires.
Leases
Any contract entered into, which contains an identified asset, whose use the Company has the right to direct throughout the period of
the lease, and the right to obtain substantially all of the economic benefits from, is accounted for as a lease. At lease commencement date,
the Company recognises a right-of-use leased asset and a lease liability on the balance sheet. The lease liability is measured at the present
value of the total lease payments due, discounted using the interest rate implicit in the lease if readily available, or at the Group’s
incremental borrowing rate. The right-of-use asset is measured at cost, being the lease liability, plus any initial direct costs incurred by the
Group, or lease payments made in advance of the commencement date.
Right-of-use assets are depreciated on a straight-line basis to the end of the lease term. The Group assesses the right-of-use asset for
impairment when such indicators exist.
The lease liability is repaid over the life of the lease, through the lease payments, which includes interest which is accrued monthly at the
same rate used to calculate the liability. Lease liabilities are remeasured to reflect any reassessment or modification of the lease – when the
lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use leased asset, or in the Consolidated Statement
of Comprehensive Income if the asset is already reduced to zero.
Equity
Equity comprises the following:
Share capital
Share capital represents the nominal value of equity shares.
Share premium
Share premium represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses
of the share issue.
Capital redemption reserve
Capital redemption reserve represents amounts set aside from retained earnings on conversion of convertible redeemable shares equal
to the reduction then arising in the overall nominal value of share capital of all classes.
Retained earnings
Retained earnings represents retained profits and losses.
82
Judges Scientific plc
Annual report and accounts 2021
Financial statements 2. Summary of significant accounting policies continued
Dividends
Final dividend distributions payable to equity shareholders are included in trade and other payables when the dividends are approved
in general meeting but not paid prior to the balance sheet date. Interim dividends are recognised in the period in which they are paid.
Dividend income is recognised when the shareholder’s right to receive payment is established.
3. Tangible assets
Cost
1 January 2021
Additions
31 December 2021
Depreciation
1 January 2021
Charge for the year
31 December 2021
Net book value – 31 December 2021
Net book value – 31 December 2020
4. Right-of-use leased assets
Cost
At 1 January and 31 December 2021
Depreciation
1 January 2021
Charge for the year
31 December 2021
Net book value – 31 December 2021
Net book value – 31 December 2020
5. Investments in subsidiaries
Cost
1 January
Transfer of ownership of entity from a Group business*
Increased shareholding in existing Group business
Additions
Repayment of subordinated debt in Bordeaux Acquisition Limited
31 December
Property and
leasehold
improvements
£000
Fixtures,
fittings and
equipment
£000
797
—
797
210
29
239
558
587
87
7
94
42
23
65
29
45
Land and
property
£000
Fixtures,
fittings and
equipment
£000
329
111
49
160
169
218
18
3
4
7
11
15
2021
£000
51,980
12,737
1,833
—
—
66,550
Total
£000
884
7
891
252
52
304
587
632
Total
£000
347
114
53
167
180
233
2020
£000
40,611
—
—
11,953
(584)
51,980
* Scientifica Limited was transferred from Judges Capital Limited to the parent company during 2021 at book value.
Judges Scientific plc
Annual report and accounts 2021
83
Strategic reportGovernance reportFinancial statements Notes to the parent company financial statements continued
For the year ended 31 December 2021
5. Investments in subsidiaries continued
The Company’s subsidiaries at 31 December 2021, all of which are incorporated and domiciled in the United Kingdom (except as stated),
are as follows:
Company
Principal activity
Deben UK Limited*
Oxford Cryosystems Limited*
Sircal Instruments (U.K.) Limited*
Aitchee Engineering Limited
Quorum Technologies Limited
Fire Testing Technology Limited
PE.fiberoptics Limited
UHV Design Limited
Design and assembly of fire testing instruments
Design and assembly of fibre-optic testing instruments
Design and manufacture of instruments used to manipulate
objects in ultra-high vacuum chambers
Manufacture of engineering parts and finished products
Design, manufacture and distribution of instruments that
prepare samples for examination in electron microscopes
Moorfield Nanotechnology Limited* Design, manufacture and distribution of instruments that
prepare samples for examination in electron microscopes
Design, manufacture and distribution of rare gas purifiers
for use in metals analysis
Design and manufacture of devices to enable observation
of objects under a microscope
Design, manufacture and marketing of products for
crystallography and other markets
Design and manufacture of instruments used to test
the physical properties of soil and rocks
Design and manufacture of instruments used in
electrophysiology to enable or improve the observation
of objects under a microscope
Sale of instruments used in electrophysiology to enable
or improve the observation of objects under a microscope
Holding company
Holding company
Design and supply of research and training equipment
Manufacture of engineering parts and finished products
Dormant
Global Digital Systems Limited
Scientifica LLC (USA)*
Scientifica Limited
Bordeaux Acquisition Limited
Crystallon Limited*
Armfield Limited
RJ Lewis Limited
Armfield Technical Education
Company Limited*
Armfield Inc. (USA)*
CoolLED Limited
Dia-Stron Limited
Supply of research and training equipment
Design and manufacture of illumination systems for
fluorescence microscopy
Design and manufacture of systems to test the mechanical
properties of fibres
Sale of systems to test the mechanical properties of fibres
Design and manufacture of edge-welded bellows
Dia-Stron Inc. (USA)*
EWB Solutions Limited
Thermal Hazard Technology Limited Design and manufacture of calorimeters
Thermal Hazard Technology Inc. (USA)* Sale of calorimeters
Korvus Technology Limited
Judges Capital Limited
Judges Scientific (Dublin) Limited
Heath Scientific Company Limited* Dormant
Dormant
EM Technologies Limited*
Dormant
FTT Scientific Limited*
Dormant
GDS Instruments Limited*
Dormant
Polaron Instruments Limited*
Dormant
Stanton Redcroft Limited*
Design and manufacture of deposition systems
Holding company
Holding company
Class of shares
Ordinary £1
“A” and “C” Ordinary 1p
Ordinary £1
Ordinary £1
Ordinary £1
Ordinary £1
Ordinary £1
Ordinary £1
Ordinary £1
“A” and “B”
Ordinary £1
Ordinary £1
Ordinary £1
Ordinary £1
Ordinary £1
Ordinary £1
Ordinary £1
Common Shares
Ordinary £1
Ordinary £1
Common Shares
Ordinary £1
Ordinary £1
Common Shares
Ordinary £1
Ordinary £1
Ordinary €1
Ordinary £1
Ordinary £1
Ordinary £100
Ordinary £1
Ordinary £1
Ordinary £1
% held
100%
100%
100%
100%
100%
100%
100%
88%
88%
100%
100%
100%
88%
88%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
* Indirectly held.
The head office for each of the UK subsidiaries is 52c Borough High Street, London SE1 1XN. The address for each of the US subsidiaries
is 9 Trenton–Lakewood Road, Clarksburg NJ 08510, USA.
84
Judges Scientific plc
Annual report and accounts 2021
Financial statements 6. Debtors
Amounts owed by Group companies
Prepayments and accrued income
Deferred tax asset (note 10)
Corporation tax recoverable
Other debtors
2021
£000
1,943
758
1,251
102
323
4,377
2020
£000
16,440
657
1,265
—
—
18,362
Except as stated, all amounts are recoverable in less than one year. In accordance with IFRS 9, expected credit losses for amounts due from
subsidiaries has been determined at inception. There has been no significant increase in credit risk associated with the amounts due since
initial recognition. Included in amounts owed by Group companies were unsecured loans totalling £15,422,000 which were all settled in
full during 2021. All other intercompany balances are expected to be recovered via the operating cashflows of the related subsidiary
entities.
7. Creditors: amounts falling due within one year
Bank overdraft
Current portion of bank loans
Trade and other payables
Amounts owed to Group companies
Corporation tax
Social security and other taxes
Other creditors
Accruals and deferred income
8. Creditors: amounts falling due after more than one year
Bank loans
The bank loans are detailed in note 21 of the consolidated financial statements of the Group.
The repayment profile of borrowings is as follows:
Repayable in less than one year
Repayable in years one to five
Less: interest included above
2021
£000
951
3,800
342
40
—
313
44
1,318
6,808
2020
£000
1,868
3,000
333
82
63
309
417
618
6,690
2021
£000
2020
£000
12,351
16,500
Bank loans
£000
4,113
12,810
16,923
772
16,151
The Company enters into derivative financial instruments in order to manage its interest rate and foreign currency exposure. The principal
derivatives used include interest rate swaps and foreign currency forward contracts and options. The fair value of these financial
instruments is a liability of £148,000 (2020: £67,000), in addition to a fair value asset of £220,000 (2020: liability of £50,000) on interest
rate swaps. These transactions have been recognised in these accounts and are held within other creditors and other debtors respectively.
The parent company guarantees a bank loan advanced to its 88.0% owned subsidiary, Bordeaux Acquisition Limited, amounting to
£857,000 at 31 December 2021 (2020: £1,715,000).
Judges Scientific plc
Annual report and accounts 2021
85
Strategic reportGovernance reportFinancial statements 9. Right-of-use lease liabilities
The movement in the right-of-use lease liability over the year was as follows:
At 1 January 2021
New leases
Interest payable
Remeasurement of lease liabilities
Repayments of lease liabilities
At 31 December 2021
Lease liabilities mature as follows:
Minimum right-of-use lease liabilities falling due
Within one year – land and property
Within one year – fixtures, fittings and equipment
Between one and five years – land and property
Between one and five years – fixtures, fittings and equipment
Total commitment
Less: finance charges included above
Net present value of lease liabilities
Current
Non-current
10. Deferred tax asset
1 January
Adjustments in respect of prior years
Credit to the Consolidated Statement of Comprehensive Income in the year
Credit/(charge) to equity in the year
31 December
Deferred tax balances relate to temporary differences as follows:
Provisions allowable for tax in subsequent periods
Share options
2021
£000
242
—
5
—
(64)
183
2021
£000
63
4
67
116
8
124
191
(8)
183
62
121
2021
£000
1,265
29
(605)
562
1,251
(69)
1,320
1,251
2020
£000
281
18
10
(4)
(63)
242
2020
£000
63
4
67
178
12
190
257
(15)
242
59
183
2020
£000
1,364
(22)
36
(113)
1,265
(52)
1,317
1,265
Finance Act 2021 which was substantively enacted on 24 May 2021 included provisions to increase the corporation tax rate further to 25%
effective from 1 April 2023 and this rate has been applied when calculating the deferred tax at the year end.
11. Share capital and share-based payments
Details relating to the parent company’s share capital are set out in notes 24 and 25 to the consolidated financial statements.
12. Related party transactions
The Company is exempt under the terms of FRS 101.8 from disclosing transactions with its wholly owned subsidiaries.
Dividends paid in the year to Directors who hold shares amounted to £549,000 in aggregate (2020: £492,000).
86
Judges Scientific plc
Annual report and accounts 2021
Financial statementsNotes to the parent company financial statements continuedFor the year ended 31 December 2021 13. Directors and employees
Staff costs (including Directors)
Wages and salaries
Social security costs
Other pension costs
Total Directors’ emoluments
Emoluments
Defined contribution pension scheme contributions
Emoluments of the highest paid Director
Emoluments
During the year, one Director participated in a defined contribution pension scheme (2020: one).
Average number of persons employed
Directors
Administrative staff
Total
2021
£000
1,327
163
8
1,498
953
3
956
292
2020
£000
943
104
10
1,057
758
3
761
231
2021
Number
2020
Number
8
3
11
7
3
10
Judges Scientific plc
Annual report and accounts 2021
87
Strategic reportGovernance reportFinancial statements Ten year financial history
Dividends exclude the special dividend paid in December 2019.
88
Judges Scientific plc
Annual report and accounts 2021
Financial statements Auditor
Grant Thornton UK LLP
Statutory Auditor
Chartered Accountants
30 Finsbury Square
London EC2A 1AG
Bankers
Lloyds Bank Corporate Markets
25 Gresham Street
London EC2V 7HN
Solicitors
Sidley Austin LLP
70 St. Mary Axe
London EC3A 8BE
Registered in England and Wales, company no. 04597315
Company information
Directors
The Hon. Alexander Robert Hambro (Non-Executive Chairman)
David Elie Cicurel (Chief Executive)
Bradley Leonard Ormsby (Group Finance Director)
Mark Stephen Lavelle (Chief Operating Officer)
Ralph Leslie Cohen (Non-Executive Director)
Ralph Julian Elman (Non-Executive Director)
Charles John Arthur Holroyd (Non-Executive Director)
Lushani Kodituwakku (Non-Executive Director)
Company Secretary
Glynn Carl Reece
Registered Office
52c Borough High Street
London SE1 1XN
Registrar
Link Group
Unit 10
Central Square
29 Wellington Street
Leeds
LS1 4DL
Nominated Adviser
Shore Capital and Corporate Ltd
Cassini House
57 St. James’s Street
London SW1A 1LD
Stockbrokers
Shore Capital Stockbrokers Ltd
Cassini House
57 St. James’s Street
London SW1A 1LD
Liberum Capital Limited
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
CBP012171
Judges Scientific plc’s commitment to environmental
issues is reflected in this Annual Report, which has been
printed on Symbol Freelife Satin, an FSC® certified
material. This document was printed by Opal X using its
environmental print technology, which minimises the
impact of printing on the environment, with 99% of dry
waste diverted from landfill. Both the printer and the
paper mill are registered to ISO 14001.
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