Sunland Group Annual Report 2022

FY2022 Annual Report · Sunland Group

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Sanderson Design Group
Annual Report & Accounts 2022

live beautiful

WE ARE A
LUXURY
INTERIOR
FURNISHINGS
GROUP
UNITED IN
A SINGLE
PURPOSE
“To Bring the
Beautiful into
People’s Homes
and Lives.”

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CONTENTS

Strategic Report
2/Highlights
4/Chairman’s Statement
6/Chief Executive Officer’s Strategy
and Operating Review
13/Live Beautiful
17/Greenhouse Gas Emission and
Energy Consumption Reporting
18/Quintessentially British
38/Chief Financial Officer’s Review
43/Key Performance Indicators
44/Principal Risks
47/Section 172 Statement

Governance
50/Board of Directors
52/Group Leadership Team
53/Corporate Governance
56/Report of the Directors
58/Statement of Directors’ Responsibilities
59/Nomination Committee Report
60/Directors’ Remuneration Report
64/Audit Committee Report

Financial Statements
66/Independent Auditors’ Report to the
Members of Sanderson Design Group PLC
71/Consolidated Income Statement
72/Consolidated Statement of
Comprehensive Income
73/Consolidated Balance Sheet
74/Consolidated Cash Flow Statement
75/Consolidated Statement of
Changes in Equity
76/Notes to the Consolidated
Financial Statements
107/Company Balance Sheet
108/Company Statement of
Changes in Equity
109/Notes to the Company
Financial Statements
119/Glossary
121/Five-Year Record
122/Shareholder Information

KEY READS

4/Chairman’s Statement

6/Chief Executive Officer’s Strategic
and Operating Review

13/Live Beautiful

18/Quintessentially British

FINANCIAL HIGHLIGHTS

Revenue up 19.6% at £112.2m (FY2021: £93.8m; FY2020: £111.5m), reflecting the
receding impact of Covid-19 and the Group’s strategy for growth.

–

Third party manufacturing sales up 30.9% from FY2021 and up 8.0% against FY2020,
with total sales (including sales to Group brands) up 46.8% from FY2021 and up
17.5% against FY2020 contributing substantially to Group profitability.

–
Brand product sales up 17.8% compared with FY2021 and up 0.8% compared with
FY2020 in constant currency:

– Morris & Co. brand performing very well in all regions, up 32.4% on FY2021 and up 45.1%
on FY2020 in constant currency.

– North America has continued to deliver a very strong performance with all brands.

– Licensing income delivered £5.2m (FY2021: £3.7m; FY2020: £5.5m) including accelerated
licensing income of £1.4m (FY2021: £0.9m; FY2020: £2.3m) with strong and exciting
collaborations with NEXT, Bedeck and Blinds2Go in the UK, Sangetsu,
Nishikawa and Kawashima in Japan and Williams Sonoma in the US.

–
Adjusted underlying profit before tax of £12.5m (FY2021: £7.0m; FY2020: £7.5m)
reflecting stronger sales and the full-year impact of the operational measures
introduced to reduce and control discretionary and fixed costs.
Reported profit before tax of £10.4m is up 112.2% on the year ended
31 January 2021 (FY2021: £4.9m; FY2020: £4.5m).

–
Liquidity and headroom of £31.6m (FY2021: £27.9m; FY2020: £13.8m)
with net cash of £19.1m (FY2021: £15.1m; FY2020: £1.3m).

–
Proposed final dividend of 2.75p per share (FY2021: nil; FY2020: nil) to give a total
dividend of 3.50p (FY2021: nil; FY2020: 0.52p).

OPERATIONAL HIGHLIGHTS

Morris & Co. sales driven in part by its 160th anniversary year in 2021 with a compilation
of best-sellers performing significantly ahead of management expectations and the
Simply Morris collection showing encouraging sales since its September 2021 launch.

–

Sanderson One Sixty compilation collection of re-worked classic designs, has exceeded
management expectations with the positive impact of the Very Sanderson media
campaign, featuring British sports personality Maro Itoje, launched in April 2021.

–
Harlequin’s Own The Room TV campaign launched in September 2021 renewed the
momentum in the brand.

–
Direct-to-consumer digital incubator projects advanced with the launch of
our direct-to-consumer website franchise collaboration, Scion Living | Uplifting Design
For Your Home, and the online launch of Archive by Sanderson Design, a consumer
brand targeting a new customer demographic for the Group.

–
Planet Mark certification for Year 4 of carbon reduction, reflecting our
Live Beautiful sustainability pledge.

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HIGHLIGHTS

Sanderson Design Group PLC (AIM: SDG),
the luxury interior furnishings group, is pleased to
announce its financial results for the 12-month
period ended 31 January 2022.

£112.2m

£12.5m

Group revenue
2021: £93.8m (+19.6%)
2020: £111.5m (+0.6%)

Group adjusted underlying profit before tax*
2021: £7.0m (+78.6%)**
2020: £7.5m (+66.7%)**

11.1%

Group adjusted underlying
profit before tax (%)
2021: 7.5% (+3.6 bps)**
2020: 6.7% (+4.4bps)**

£19.1m

Net cash***
2021: £15.1m (+26.5%)
2020: £1.3m (>1,000%)

9.2%

Group profit before tax (%)**
2021: 5.2% (+4.0 bps)**
2020: 4.0% (+5.2 bps)**

13.75p

Adjusted
underlying EPS
2021: 7.89p (+74.3%)**
2020: 9.35p (+47.1%)**

£10.4m

Group profit before tax
2021: £4.9m (+112.2%)**
2020: £4.5m (+131.1%)**

10.93p

Basic EPS
2021: 5.39p (+102.8%)**
2020: 5.41p (+102.0%)**

* Excluding share-based incentives, defined benefit pension charge and non-underlying items see reconciliation on note 11.

** Refer to note 30 to the financial statement for details on the prior year restatements for FY2021 and FY2020.

*** Net cash is defined as cash and cash equivalents less borrowings. For the purpose of this definition
borrowings does not include lease liabilities.

CHAIRMAN’S STATEMENT

A STRONG
RECOVERY
WITH AN
EXCELLENT
MANUFACTURING
PERFORMANCE

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Introduction
The financial year ended 31 January 2022
was a successful year for the business
during which the receding impact of
Covid-19 and the Group’s strategy for
growth resulted in a year of strong trading
and cash generation. Trading highlights
included an excellent manufacturing
performance, continued strong growth from
our Morris & Co. brand, strong licensing
income and more than 40% sales growth
in the USA in constant currency.

Our business benefited from consumers’
growing interest in pattern, colour and
design, which has helped drive our three
key revenue streams of manufacturing,
brands and licence income.

Our manufacturing operations, which
print fabric and wallpaper for our own
brands and third parties, deserve special
mention. Third party manufacturing sales
in the year were up 30.9% compared with
the year ended 31 January 2021 (up 8%
on FY2020), reflecting the quality and
competitiveness of our printing along with
the design strength in our factories’ studios.
Manufacturing, particularly digital printing,
remains a significant opportunity for the
Group and our manufacturing order books
remain strong.

Our heritage brands, Morris & Co. and
Sanderson, continued to lead sales growth
in our brands portfolio whilst Clarke &
Clarke, our biggest selling brand, achieved
fantastic sales in the USA.

We have continued to advance our Group
strategy with the objective of becoming a
sustainable, efficient, and growing business.
Our sustainability strategy, Live Beautiful,
was launched in April 2021 and I am excited
by the motivation across the entire Group
to achieve our sustainability objectives.

Further details of the Group’s progress are
included in the Chief Executive Officer’s
Strategy and Operating Review.

Financial results
The results for the year ended 31 January
2022 show a strong recovery from Covid-19,
which had a very significant effect on
the first half of the previous financial
year. Adjusted underlying profit before
tax at £12.5m is up 78.6% on the year
ended 31 January 2021 (FY2021: £7.0m;
FY2020: £7.5m). Reported profit before
tax of £10.4m is up 112.2% on the year
ended 31 January 2021 (FY2021: £4.9m;
FY2020: £4.5m).

The Group’s balance sheet strengthened
considerably throughout the year, resulting
in net cash excluding leases at the year
end of £19.1m compared with £15.1m
at 31 January 2021 (FY2020: £1.3m).

Dividend
The Directors recommend the payment
of a final dividend of 2.75p per share
(FY2021: nil; FY2020: nil) which, subject
to shareholder approval at the Company’s
forthcoming Annual General Meeting,
will be payable on 12 August 2022 to
shareholders on the register as at 15 July
2022. This brings the total dividend for
the year to 3.50p per share (FY2021: nil;
FY2020: 0.52p).

The Board remains committed to a
progressive dividend policy as part of the
capital allocation priorities of the Group.

Going concern
The Directors reviewed a Management
Base Case (‘MBC’) model and considered
the uncertainties regarding the further
impact of Covid-19, supply chain and
inflationary pressures and the Russian
invasion of Ukraine for the assessment of
going concern. The Directors consider that,
having reviewed forecasts prepared by
the management team which have been
stress tested, the Group has adequate
resources to continue trading for the
foreseeable future. For this reason, they
continue to adopt the going concern basis
in preparing the financial statements.
Further details are included in note 1
to the financial statements.

Board and people
The Company’s Board continued to evolve
during the year. On 1 November 2021,
we were delighted to welcome Mike
Woodcock, who has a strong track record
in consumer and brand-based businesses,
as Chief Financial Officer. Mike replaced
Michael Williamson, who stepped down
as Chief Financial Officer on 31 October
2021. We thank Michael for his contribution
to the Company, particularly during the
challenging periods of Covid-19 and Brexit.

We were also pleased to appoint two
new independent Non-executive Directors,
Juliette Stacey and Patrick Lewis, who
joined the Board on 3 November 2021.
They bring a wealth of governance,
operational management and consumer
sector experience to the Board. Vijay Thakrar
stepped down as a Non-executive Director
on 27 November 2021 and we thank him for
his contribution to the Company.

The success of any business is built on its
people. On behalf of the Board, I would
like to thank all of our colleagues for their
commitment, hard work and adaptability
during a year in which Covid-19 continued
to impact many aspects of our lives. I am
profoundly grateful for the fortitude and
resilience of colleagues, which has enabled
the Company to emerge strongly from
the pandemic.

Outlook
I am extremely pleased to be able to report
a strong set of results, not only delivering
substantial growth against a year impacted
by Covid-19, but also against 2020, prior
to the pandemic. We delivered an excellent
performance from manufacturing, continued
strong growth from the Morris & Co. brand,
strong licensing income and more than
40% sales growth in the USA, a key target
growth market for us.

Trading in the first three months of the
current financial year has performed in line
with expectations, with continued demand
for manufacturing and strong brand sales,
particularly of Morris & Co. and Sanderson.
Licence income has also performed
strongly. The simplification of the Group has
continued with the closure of our French
subsidiary, with business in France now
managed directly from the UK.

We are mindful of the cost, supply chain
and geopolitical issues that impact
consumer confidence, along with specific
inflationary pressures in our home market.
We are monitoring costs closely and
passing on price rises where appropriate.
We suspended all trade with Russia on
24 February 2022, a distributor-based
region that represented only around 2%
of global sales for FY2022.

As we carefully navigate another potentially
challenging year, the Board remains
confident in its strategy and the results that
are being delivered.

Dianne Thompson
Non-executive Chairman
27 April 2022

CHIEF EXECUTIVE OFFICER’S STRATEGY
AND OPERATING REVIEW

STRATEGIC
PROGRESS
ACROSS THE
GROUP

CHIEF EXECUTIVE OFFICER’S STRATEGY

AND OPERATING REVIEW

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Introduction
We have delivered strong financial results
compared with both FY2021 and FY2020,
reflecting an improving trading environment
and progress delivered from our strategy
for the business. Group sales of £112.2m
and adjusted underlying profit before tax
of £12.5m represent significant growth on
FY2020, a year unaffected by Covid-19, in
which sales were £111.5m and adjusted
underlying profit before tax were £7.5m
(FY2021: revenue of £93.8m and adjusted
underlying profit before tax of £7.0m).
Reported profit before tax was £10.4m
(FY2021: £4.9m; FY2020: £4.5m) showing
the same trend as the adjusted measure.

Manufacturing was the star performer of our
three key revenue streams of manufacturing,
brands, and licensing. Our two manufacturing
businesses, Standfast & Barracks and Anstey,
are the printers of choice in our industry
for both UK and international customers.
Over the next two to three years, we intend
to increase investment at these factories
to deliver a step change in technology,
capability, and productivity and drive
capacity to achieve greater returns.

Brand product sales during the year
performed broadly in line with expectations
with a particularly strong performance
from Morris & Co., up 32.4% on FY2021 and
up 45.1% on FY2020 in constant currency.
Licensing income performed strongly during
the year, with income up 40.5% compared
with FY2021 in constant currency.

Geographically, North America delivered
an excellent performance, recording growth
of 42.3% against FY2021 and up 24.1%
against FY2020 in constant currency. Our
US subsidiary, Sanderson Design Group
Inc., had its best year in terms of sales and
profits since it was founded in 1998. This
performance reflected strategic initiatives,
including a greater showroom and road
presence in the North American market.

Strategy and progress
We set out our growth strategy for the
Group in October 2019 and this strategy
remains unchanged. The key elements are
summarised below:

Driving the brands: The Group has a
strong and broad portfolio of powerful
brands, each with clear market positioning.
Our intention is to focus precisely on
the individuality of each brand, giving
each its own market, channel, product,
and communications strategy; thereby
strengthening their appeal to drive demand
in their respective marketplaces.

Focusing on core products: The Group has
two strong manufacturing arms that benefit
the brands’ business. Our strategy is to
focus on our core products of wallpaper,
fabric and paint and to build our finished
goods offer with our licensing partners.

Partnering with core customers: The
strategic focus on the individuality of each
brand, and our tailored service, will help
cement relationships with key customers,
while enhanced communication will drive
demand for both heritage and contemporary
brands from consumers, through our interior
design partners, retail channels and hospitality
partners. We will continue to deepen our
relationships with existing licensing partners
and seek new opportunities.

Investing in people: People, and creativity,
are at the heart of our business. In our
industry, Sanderson Design Group is a
favoured destination for emerging new
designers, and we will benefit from doing
even more to bring in new creative and
other talent, nurture it and create a high-
performance culture.

Growing key geographies: Our brands
have significant international market
potential, reflected in their being sold
in more than 85 countries worldwide. To
ensure focus, we are concentrating our
efforts on building market share in three
key geographies: the UK, Northern Europe
and the USA. Our approach is tailored to
each individual region.

We have made significant progress during
the year in pursuing this strategy.

Efficiency
Improving the efficiency of the business
by reducing the number of stocked items
(‘SKUs’) is an integral part of our strategy.
Our focus has been on fewer, stronger
collection launches to reduce the number
of SKUs. Historically, only a proportion of
them sold particularly well whilst others
added to costs and inventory.

Launching collections digitally, rather than
through pattern books, and monitoring
online sample requests has helped us to
identify the most popular designs and
colourways in new collections. This has
saved cost on stock and improved efficiency.
The pattern books that we print to forecast
comprise designs and colourways that are
most likely to become best-sellers.

The Group has now reached its target of
SKU reduction. The number of collections
launched has reduced and each SKU is much
more targeted to the market’s requirements.
As a result, the number of sales per SKU is
increasing and a better return on investment
is being achieved. The intention is to keep
the number of SKUs at approximately
12,000 with a broadly one-in/one-out SKU
merchandising policy.

The simplification of the Group structure has
continued with the closure on 31 January
2022 of our French subsidiary, with business
in France now managed directly from the
UK. The one-off closure cost of £1.1m has
been included as a non-underlying item
in the accounts. The closure of the French
subsidiary, which traded only around
break-even at best over the past 25 years,
follows the liquidation of our Moscow-based
subsidiary as its sales were non-material to
the Group.

The Group now has just two trading
subsidiaries, one in the UK and one in the
US, and a network of distributors worldwide.

Sustainability
We launched our Live Beautiful sustainability
strategy in April 2021 with a broad range of
initiatives including two major commitments:
for the Company to be net carbon ZeroBy30
and to be the employer of choice in the
interior design and furnishings industry.

Our employee engagement survey carried
out in 2021 gave an overall employee
satisfaction rating of 78%, which compares
with 58% two years before, in 2019, when
the survey was last conducted. We have
since raised our target of 70% to 80% for
employee satisfaction as we continuously
strive for improvement. The survey will next
be conducted in 2023.

We were pleased to receive our Year 4
Planet Mark sustainability certification,
which measures our carbon footprint. In the
year to 31 January 2022, our total carbon
footprint was 7,452.9 tonnes, an increase
on FY2021’s 6,359.3 tonnes reflecting an
increase in productivity during the year, but
a decrease compared with FY2020’s 7,977.8
tonnes despite a sales performance ahead
of that year.

CHIEF EXECUTIVE’S STRATEGY
AND OPERATING REVIEW CONTINUED

Digital and direct-to-consumer initiatives
Through several incubator projects, we are experimenting with
digital and direct-to-consumer routes to market to identify the best
approach for brands in our portfolio.

During the year, we launched an online shop for the Scion brand
through a franchise; we launched our own direct-to-consumer brand
Archive by Sanderson Design; and we have just opened our first
store for Morris & Co. as a directly operated concession shop within
Harrods, London with the intention to also move that offer online
after the initial period. The insights we gain from these projects, and
other initiatives such as selling paint online from our brand websites,
will shape our future strategy in this area.

Operating Review
The table below shows the Group’s sales performance in the year ended 31 January 2022, compared with FY2021 and with FY2020, the most
recent pre-pandemic year. The table shows our three key revenue streams of manufacturing, brand product sales, and licensing income. It also
gives the four key geographies of our brand product sales: the UK, Northern Europe, North America and Rest of the World.

Year ended 31 January (£m)

Change (%) 2022 compared
with 2021

Change (%) 2022 compared
with 2020

UK Brand product sales

International Brand product sales

– North America

– Northern Europe

– Rest of the World

Total Brand product sales (includes carriage income)

Licensing income

Total Brand sales including Licensing

Total Manufacturing sales*

Intercompany eliminations*

Total Revenue*

* Does not report in constant exchange rate.

2022

43.7

40.4

16.6

13.2

10.6

84.1

5.2

89.3

41.7

(18.8)

2021

38.1

34.5

12.5

9.5

72.6

3.7

76.3

2020

Reported

Constant
currency

Reported

Constant
currency

44.9

39.8

14.4

13.0

12.4

84.7

14.7%

17.1%

32.8%

5.6%

11.6%

14.7%

21.3%

42.3%

7.8%

12.8%

(2.7%)

(2.8%)

1.5%

15.3%

1.5%

5.0%

24.1%

2.5%

(14.5%)

(13.5%)

15.8%

17.8%

(0.7%)

0.8%

5.5

40.5%

43.7%

(5.5%)

(2.2%)

90.2

17.0%

19.0%

(1.0%)

0.6%

28.4

(10.9)

35.6

(14.3)

46.8%

72.5%

112.2

93.8

111.5

19.6%

–

17.1%

31.5%

0.6%

–

Manufacturing
Our unique, integrated vertical supply chain is an important pillar in our growth strategy and will be the focus of increased investment in the
next two to three years.

The two factories, Standfast & Barracks and Anstey Wallpaper Company, print for our own brands and for third parties, positioning them at
the centre of our industry. Their third-party sales, in the UK, Europe and the USA, reflect their premium print technologies and world-class
excellence in manufacturing, customer service and innovation.

Both factories are printing an increasing proportion of their output through digital printing, which will be the focus of investment in the
years ahead.

Sales to Group brands

Third party sales

Total Manufacturing sales

Year ended 31 January (£m)

Change (%)
2022 compared
with 2021

Change (%)
2022 compared
with 2020

2022

18.8

22.9

41.7

2021

10.9

17.5

28.4

2020

Reported

14.3

21.2

35.5

72.5%

30.9%

31.5%

8.0%

46.8%

17.5%

CHIEF EXECUTIVE’S STRATEGY

AND OPERATING REVIEW CONTINUED

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Standfast & Barracks (‘Standfast’)
Standfast, our fabric printing factory, is widely regarded,
internationally, as the destination for creative, innovative and
high-quality fabric printing. Standfast continues to exploit its
extensive archive and original artwork, with a talented design
studio that reinterprets antique, heritage and classic design into
prints relevant for today.

Anstey Wallpaper Company (‘Anstey’)
Anstey, our wallpaper printing and paint-tinting business, is an
unrivalled factory in its range of wallpaper printing techniques on
one site. We continue to invest in new technology to extend the
potential of the factory and to build on its unique capabilities.
Third-party customers reference the unique ability of Anstey to work
consistently across the range of techniques and to combine them.

Total sales at Standfast increased significantly in the year to
£21.3m (FY2021: £14.4m; FY2020: £17.0m).

Total sales at Anstey increased to £20.4m (FY2021: £14.0m;
FY2020: £18.5m).

Digital printing at Standfast as a proportion of factory output
was 69% (FY2021: 61%; FY2020: 52%).

In line with the Group’s stated ambition to increase capacity, Anstey
has reviewed shift patterns and completed a restructure that opened
a total of 20 new roles in the business to ensure capacity for growth.

Digital printing at Anstey as a proportion of factory output was 18%
(FY2021: 15%; FY2020: 13%).

The Brands
The Brands segment comprises Sanderson, Morris & Co, Harlequin, Zoffany, Scion, Clarke & Clarke and Archive by Sanderson Design. During
the year, the relatively small Anthology brand was absorbed into Harlequin as detailed in our interim results announced 13 October 2021.
Existing Anthology products will continue to be sold and supported by Harlequin but no new products will be launched.

The Brands segment includes licensing income as well as global trading from the brands, including our overseas operations in the USA, Dubai,
Netherlands, and Germany.

Morris & Co.

Sanderson

Zoffany

Clarke & Clarke

Harlequin

Scion

Year ended 31 January
(£m)

Change (%) 2022
compared with 2021

Change (%) 2022
compared with 2020

2022

16.4

14.4

8.6

24.6

17.6

2.2

2021

12.6

11.6

7.8

21.7

16.0

2.4

2020

11.4

13.1

9.6

25.1

21.3

3.2

Reported

30.2%

24.1%

10.3%

13.4%

10.0%

Constant
currency

32.4%

26.2%

11.6%

14.8%

11.9%

(8.3%)

(5.9%)

Reported

43.9%

9.9%

(10.4%)

(2.0%)

(17.4%)

(31.3%)

Constant
currency

45.1%

11.4%

(8.8%)

(0.5%)

(16.0%)

(29.4%)

Morris & Co.
Brand product sales for Morris & Co. in the UK were up 31.6%, in
Northern Europe were up 6.6% and in North America were up 89.9%
in constant currency compared with FY2021 and up 24.7%, 37.6%
and 136.1% respectively compared with FY2020.

The brand’s sales were driven in part by Morris & Co.’s 160th
anniversary year in 2021, with an anniversary compilation collection
of the brand’s best sellers performing significantly ahead of our
expectations. Marketing around the anniversary is continuing
into the current financial year, with the brand staging its first-ever
show garden at the 2020 Chelsea Flower Show. Award-winning
garden designer Ruth Willmott has created an exciting and highly
imaginative show garden on the main avenue based on two
of William Morris’s best known wallpaper designs, Trellis and
Willow Boughs.

The Simply Morris collection, a new design concept for Morris & Co.,
targeted at sunshine states was launched on 25 September 2021.
This bright interpretation of Morris & Co. designs using clear
grounds represents a fresh take on maximalism. Initial sales have
been very encouraging.

We have recently announced several new Morris & Co. initiatives
to drive sales in the current year, including the launch of a second
capsule of wallpapers and fabrics in collaboration with Ben
Pentreath, the influential architect and designer. This new collection,
Cornubia, has just been launched to critical acclaim and featured in
our Chelsea Harbour showroom during London Design Week 2022.

CHIEF EXECUTIVE’S STRATEGY
AND OPERATING REVIEW CONTINUED

In February 2022, we relaunched Morris
& Co. paints, which have been out of
production since 2008 though frequently
requested by customers. This new range of
40 paints are in colours based on historic
William Morris colour recipes and on
documents from the Company’s extensive
Morris & Co. design archive. Initial sales
are exclusive to UK independent retailers
for six months, after which the product will
move to general distribution. Retailers
have responded positively with all point-
of-sale support material taken up and
subsequent feedback from sampling has
been very positive.

We are also excited by the recent opening
of the Morris & Co. Home Emporium, a new
shop-in-shop concept at Harrods’ flagship
Knightsbridge store in London. In addition
to fabric and wallpaper, the concession
store will sell the full breadth of Morris &
Co. products across furniture, bedlinen,
cushions, rugs, paint, tableware, scarfs, and
leather goods with a range of limited edition
products exclusive to the Emporium.

Sanderson
Brand product sales at Sanderson in the UK
were up 23.4%, in Northern Europe were up
17.5% and in North America were up 58.8%
in constant currency compared with FY2021
and up 6.0%, 6.6% and 63.8% respectively
compared with FY2020.

To celebrate the brand’s 160th anniversary,
in June 2021 Sanderson launched the
Sanderson One Sixty compilation collection
of re-worked classic designs of fabrics and
wallpapers, sales of which have exceeded
our expectations. The brand also began an
exciting collaboration with Maro Itoje, the
England rugby star, who, as a modern British
icon, features as the new face of the Very
Sanderson media campaign.

In line with our strategy of fewer, stronger
launches, Sanderson collections have been
rationalised to one big launch each year.
Following the successful Sanderson One
Sixty launch last year, we have just launched
Water Garden, which has been very well
received. Water Garden also features the
panel designed by our sponsored QEST
scholar, Rachel Spelling.

Zoffany
Zoffany’s brand product sales in the UK
were up 12.1%, in Northern Europe were
down 8.3% and in North America were up
36.2% in constant currency compared with
FY2021 and down 13.8%, down 15.2% and up
25.9% respectively compared with FY2020.

Increasing the proportion of the brand’s
wallpaper output, as historically the brand
has been almost exclusively fabric focused,
has been a key strategic ambition for the
brand. Further progress with this important
opportunity is expected later this year with
an autumn collection launch.

Harlequin
Harlequin’s brand product sales in the UK
were up 6.5%, in Northern Europe were
down 4.2% and in North America were
up 33.8% in constant currency compared
with FY2021 and down 19.4%, down 20.4%
and up 14.9% respectively compared
with FY2020.

Through a number of new initiatives, we are
seeking to drive renewed impetus behind
the Harlequin brand. In September 2021, the
Group used TV advertising for the first time
to promote the Harlequin brand through
a campaign called Own the Room, which
seeks to empower consumers to choose the
best designs and colours for emotional and
physical well-being.

The Own the Room campaign was based
on a specially commissioned white paper
by Professor Stephen Westland of Leeds
University, exploring our emotional and
physical responses to colour. This resulted
in a colour quiz being developed on the
Harlequin website, to help consumers
identify their ideal colour and design
choices. Harlequin collections are presented
as colour stories to suit each of our four
profiles: Rewild, Reflect, Retreat and Renew.
The quiz, the white paper and further details
of the Own the Room campaign can be
found at the Harlequin website via this link:
https://harlequin.sandersondesigngroup.
com/white-paper/.

The Kensington Walk collection of
wallpapers and fabrics was last year’s
key launch for the Zoffany brand and
was launched on 13 May 2021. Designer
Ruth Blanke’s addition to the Palladio
collection of wallpapers, Avalonis, was
launched in February 2022. Ruth won last
year’s Royal College of Art award to create
a new wallpaper for the Palladio wallpaper
collection, an award for new designers
offered annually by the Company.

Zoffany also launched a Luxury Coordinates
range of fabrics and paints to complement
the brand’s wallpapers. The range includes
a new paint finish, True Matt, which has
a chalky finish and is environmentally
friendly. True Matt, available in 156 colours,
has been very well received, winning the
Paint Collection category in Livingetc Style
Awards 2021.

Clarke & Clarke
Clarke & Clarke’s brand product sales in the
UK were up 12.6%, in Northern Europe were
up 14.5% and in North America were up
32.9% in constant currency compared with
FY2021 and up 2.4%, down 2.1% and down
4.6% respectively compared with FY2020.

FY2022 was a fantastic year for the
brand in North America, where it is
distributed by Kravet Inc. under a very
positive relationship.

Clarke & Clarke’s collections in the UK
with Emma J Shipley and Tess Daly have
continued to grow well. The brand’s exciting
partnership with heritage tableware
company Wedgwood resulted in the launch
of Wedgwood homewares in March this
year, including fabrics and wallpapers for
international distribution through both
brands’ networks.

CHIEF EXECUTIVE’S STRATEGY

AND OPERATING REVIEW CONTINUED

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Scion
Scion’s brand product sales in the UK
were down 0.2%, in Northern Europe were
down 11% and in North America were
down 16% in constant currency compared
with FY2021 and down 26%, 28.8% and
25.6% respectively compared with FY2020.
The smallest brand in the portfolio, the
strategically reduced investment in new
designs and the important proportion
of licensing, lead to a good level
of contribution.

As part of advancing the Group’s digital
strategy, the Company signed an agreement
in November 2020 with Design Online, a
business formed by the leading internet
retailer Jane Clayton and Company, to
launch a direct-to-consumer online shop,
Scion Living. The shop, which sells a broad
range of Scion’s wallpapers, fabrics and
licensed products, went live in June 2021 at
www.scionliving.com. The metrics of visitors
to the site, and sales, are beginning to
perform more strongly and we will provide
a further update with the current year’s
interim results.

Scion is proud to have recently entered
a collaboration with Designs in Mind, the
social enterprise and mental health charity,
whose mission is to support those living with
mental health challenges through creativity
in art. Scion will work with Designs in Mind
on a capsule collection of designs in a range
of fun and fresh prints, conceptualised
through workshops held at the studio.

Archive by Sanderson Design
Archive by Sanderson Design is a completely
new, direct-to-consumer brand launched
in September 2021. This maximalist brand,
which targets digitally native consumers,
who are new customers for the Group, is an
important part of our experimentation with
new routes to market. The brand leverages
the Company’s design archive, using
heritage designs predominantly from Arts &
Crafts period designers.

The brand’s first collection comprised
a capsule range of wallpapers, fabrics,
cushions and lampshades. A made-to-
measure service for curtains, blinds and
smaller furniture items is provided on the
brand’s website as part of developing the
brand as a lifestyle offering. Bedding is due
to launch in May 2022.

Selfridges, the leading luxury lifestyle
retailer, was the exclusive retail partner for
the launch of the brand, which took place in
store in mid-October 2021 with distribution
expected to widen after the initial period.

As the brand has only recently launched,
its sales in FY2022 were non-material but
we remain excited by its potential and
the insights to be gained from a direct-to-
consumer offering.

Licensing
Licensing income performed strongly during
the year, with revenue up 43.7% compared
with FY2021 in constant currency. Core
categories, including bedding and window
coverings, remained robust and some exciting
new licensing agreements were signed.

Licensing revenue of £5.2m (FY2021: £3.7m;
FY2020: £5.5m) includes £1.4m (FY2021:
£0.8m; FY2020: £2.3m) of minimum
guaranteed income which is recognised on
contract signature for both new agreements
and renewals in accordance with IFRS 15.

Our core licensing agreements include
bedding with Bedeck, window-coverings
with Blinds2Go and a number of important
strategic partners across the homewares
sector in Japan, including bedding with
Nishikawa, textiles with Kawashima and
wallcoverings with Sangetsu. The agreement
with Blinds2Go performed very strongly
during the year, particularly with the
Harlequin and Scion brands. Core licensing
income also benefits from many smaller
agreements across a wide range
of homewares.

Since signing our first licensing agreement
with NEXT in March 2020, NEXT has become
an increasingly important licensing partner
for the Group across the Morris & Co.,
Sanderson and Scion brands and across a
broad range of home and apparel products.

NEXT’s Morris & Co. womenswear was
successful from launch in April 2021
through the autumn/winter seasons and
it continues for two further seasons in the
current calendar year. Our most recent
licensing deal with NEXT was announced
in October 2021, comprising a homewares
collaboration with the Morris & Co. brand.

We also signed a number of other exciting
new licensing deals during the year. In
May 2021, we signed a new exclusive
agreement with Sangetsu for Morris &
Co. products in Japan and 14 countries in
east and southeast Asia. The first products
under this agreement are expected to be
launched in autumn this year. In August
2021, we signed our first major licensing
agreement in the US, again for the Morris &
Co. brand. This agreement, with kitchenware
specialist Williams Sonoma, covers a broad
range of tableware, cookware and kitchen
accessories, due to launch in August 2022.

A Sanderson collaboration with Paige jeans,
the upscale US fashion company, launched
in February 2022 as a capsule that sells in
luxury retailers internationally and on the
Paige.com website.

The Group is progressing a pipeline of
further licensing opportunities, leveraging
its brands and design archives.

Summary
We are very pleased with the performance
of the business during the year and the
strength with which it has emerged from
Covid-19. We were able to accelerate
some of our strategic initiatives during the
year, for example in achieving our five-
year SKU reduction in under three years.
We now have a much more efficient and
agile business with a strong balance sheet.
Investment in the near term will focus on our
manufacturing operations, where we see
significant further opportunities in digital
printing. Recent collection launches across
our portfolio of brands have been well
received and we continue to support the
brands with exciting marketing initiatives
and licensing agreements which gives us
confidence in the year ahead. Finally, I
would like to express my gratitude and
thanks to all of our colleagues for making
the business a success throughout another
challenging year.

Lisa Montague
Chief Executive Officer
27 April 2022

LIVE BEAUTIFUL

BRINGING THE
BEAUTIFUL INTO
PEOPLE’S HOMES
AND LIVES

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LIVE BEAUTIFUL

DELIVERING
SUSTAINABILITY

Our sustainability strategy, Live Beautiful,
was formally launched in April 2021 with
the clear vision “to lead the interiors
industry in transforming the way we design,
manufacture and distribute, enriching
people’s lives to live beautiful”. To Live
Beautiful means preserving our heritage
and craftsmanship for future generations to
enjoy. It means to live well with respect, care
and compassion for our world and everyone
who lives in it.

The launch of the strategy followed more
than two years of working with Planet Mark,
the sustainability certification organisation.
We were pleased to receive our Planet Mark
Year 4 certification earlier this year, for
the financial year ended 31 January 2022,
which marked the fourth financial year that
the sustainability of our business has been
measured by Planet Mark.

In launching Live Beautiful, we set out
two ambitious targets: to be net carbon
ZeroBy30 and to be the employer of choice
in our industry. Beneath these big targets
are multiple initiatives and workstreams,
many of which have started during the
past year.

We are very pleased by the progress to date across the three pillars of our sustainability
strategy – Product, People and Planet. These 3Ps form an integral part of our overall business
strategy as highlighted in the graphic below:

OUR LIVE BEAUTIFUL FRAMEWOR K

BRANDS

PRO DUCTS

CU STO MERS

GEOGRAPHIES

ELEVATE OUR
BRANDS AND CREATE
CONSUMER DEMAND

REIMAGINE OUR
PRODUCTS: FABRIC,
WALLPAPER, PAINT
AND HOMEWARES

EXCEED O U R
CUSTOMER S’
NEEDS I N A
DIGITAL WOR LD

G ROW OU R U K , US A
AN D NO RT H ER N
EU RO PE BU SI NES S ES

PEOPLE – EMPOWER OUR PEO PLE

FINANCIAL HEALTH – TI GHTLY MANAGE OUR INVENTORY, C ASH, OVERHEADS

AND COLLE CTION MAN AG EMENT (SKU EFFICIENCY)

PL ANET – IN SPIRE OUR WORLD

0/30

ZeroBy30
We are committed to being
net carbon ZeroBy30.

The employer of choice
We are committed to being a great
and happy place to work.

For the rest of the pillars – Brands, Customers, Geographies and Financial Health, they form a
crucial part of our long-term strategies as envisaged in the Chief Executive Officer’s Strategy
and Operating Review and Chief Financial Officer’s Review.

LIVE BEAUTIFUL

REIMAGINING THE
PRODUCT LIFE CYCLE

By reducing our carbon footprint, we are addressing nine of the United Nations’ Sustainable Development Goals.

Products
In this pillar of our sustainability strategy,
we are re-examining and reimagining the
entire life cycle of our products, from the
sourcing of raw materials through how
products are manufactured on to the
process of sales and distribution. The over-
riding objective is to minimise environmental
impact, which will in turn protect and
preserve the heritage of our brands and
the legacy of craftsmanship in our design
and manufacturing.

A sustainable, biodegradable plastic
alternative based on sugar cane is now used
for the packaging of fabrics. Our Clarke &
Clarke brand now uses re-useable fabric
tote bags instead of plastic to package all
of its bedding and ready-made products.
Paper tape instead of polypropylene is
being used for the packing of wallpaper
orders, which are shipped in cardboard, and
pattern books are now packed in cardboard
rather than plastic. Plastic air pockets have
also been replaced by recycled alternatives.

Reimagining our products and processes
to become more sustainable and meet our
carbon reduction targets has resulted in
a broad range of initiatives, which range
from printing substrate through production
processes to packaging.

Packaging has been a particular focus and
we have made significant progress in our
programme to replace the use of plastic by
using innovative recyclable materials and
paper-based products.

The packaging programme is ongoing but is
expected to be largely completed this year.

The majority of our 100% cotton base
fabrics, along with our cotton velvet and
some cotton linen blends, are sourced
through Better Cotton Initiative contracts,
which brings traceability to the supply chain
to ensure sustainability. Our Clarke & Clarke
brand launched its first Eco Sustainable
Weaves range last year, which uses a fabric
made entirely from recycled plastic bottles.
A further two collections are planned to be
launched by Clarke & Clarke this year using
the same fabric, which uses approximately
90 plastic bottles per metre of fabric.

Initiatives at the factories include the
development of production processes that
are more environmentally friendly. Standfast
& Barracks has developed the Ecofast™
pigment-based printing system, which
significantly reduces water use.

Changes to the marketing of our products
by using digital channels have brought
benefits in terms of sustainability. We now
launch all new collections digitally first,
with customer feedback determining which
designs and colourways to include in printed
pattern books. This avoids waste as the
pattern books now only include products
that will sell.

Across the Group, in our offices as well as
the factories, huge progress has been made
on recycling and re-use. Where possible,
reusable product is passed on to charities
and schools in our local communities.

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LIVE BEAUTIFUL

EMPOWERING
PEOPLE

People
Our goal is to be the employer of choice
in our industry, which will be achieved
through creating a culture of empowerment
in a commercially successful company.
We will embrace diversity, inclusivity and
opportunity underpinned by a strong focus
on health, safety and wellbeing.

People are at the centre of our business
and the health, safety and wellbeing of all
our colleagues continues to be our primary
concern, particularly in light of Covid-19.
Throughout the year we have continued
to change the way we work to provide a
secure environment at all our sites. This has
included regular Covid-19 testing along
with face masks, social distancing and
visitor controls.

Our overall focus is to maintain and build on
the Health and Safety culture throughout all
our operations. We have established Mental
Health First Aiders at all our sites, increased
our Institution of Occupational Safety and
Health (‘IOSH’) training and, through the use
of external independent audits, improved
health and safety at all our sites.

We continue to look at how we can
improve our performance. Our near miss,
or positive observation, policy continues
to be strengthened, we are establishing
what we need to do to achieve ISO45001
certification and we continue to focus on
manual handling across all our sites.

Whilst a high standard of health, safety
and wellbeing should be a prerequisite in
all businesses, our ambition is to be the
employer of choice in our industry, leading
our industry’s employment practices.

Employee engagement surveys are a
key tool in improving and progressing
workplaces. In May 2021, we had very
encouraging results from our latest survey
with employee satisfaction increasing from
58% in 2019 to 78% in 2021. Great progress
has been made compared with our 2019
results, including improved communication
and a clear strategic framework. Our
next survey will be in 2023 and we will
be aiming for an even higher level of
employee engagement.

We are creating a culture of empowerment,
which embraces diversity, inclusivity and
sustainability. We have improved the
company benefits for all staff, such as a
24-hour online GP service and a health
hub, and now offer birthday leave and
awards for long service. Our focus on
talent development includes the Sanderson
Futures Team.

Local community groups have been
introduced across the brands and at the
manufacturing sites in a network that
provides a forum for everyone to focus
on the core pillars of our Live Beautiful
strategy: Product, People and Planet. Every
employee across the Group has a personal
objective focused on sustainability.

The community groups have participated
in various charitable fundraising events
throughout the year, including events
organised by The Furniture Makers’
Company and QEST, the Queen Elizabeth
Sponsorship Trust, along with supporting
local charities.

LIVE BEAUTIFUL

COMMITTING
TO NET
CARBON ZERO

Planet
We have been working closely with Planet
Mark, and its ZeroBy30 programme, to enable
us to become net carbon zero by 2030,
an ambitious target and one of the flagship
commitments in our sustainability strategy.
We now have a roadmap on how to achieve
this target, which will see us move to carbon
neutral manufacturing processes.

The programme requires organisations to commit
to a rigorous and transparent definition of net
zero carbon, which is aligned to the net zero
requirements set out by the UN Race to Zero and
Science Based Targets Initiative (‘SBTI’):
– Direct greenhouse gas emissions from owned
or controlled resources and electricity (Scope
1 & 2) emissions have a target of zero.

– Indirect emissions (Scope 3) must be reduced
by at least 50% by 2030 against the baseline
year and must continue to be reduced after
2030 by at least 90% against the baseline
by 2050.

– Residual carbon remaining at the net
zero target date must be balanced by
carbon removal schemes (note that these
differ from carbon offsets, which avoid or
mitigate carbon).

The carbon reduction forecast/target trajectory
each year to FY2031 has been modelled and
provides annual targets for each element of
the roadmap, together with the estimated
financial impact where applicable. The financial
forecast is a ‘worst case scenario’ based on
current pricing and technology. Costs, especially
capital investments, may reduce as the
marketplace evolves and technology matures.
Impact of business growth has been factored
into the carbon forecast for Supply Chain and
Distribution to customers, where a direct impact
on carbon is anticipated.

We look forward to updating shareholders on
progress in due course.

SECR METHODOLOGY

We have reported our GHG emissions
and energy consumption in accordance
with the Companies and Limited Liability
Partnership Regulations. To calculate
our emissions, we have followed the
GHG Protocol Corporate Accounting and
Reporting Standard and the emissions
factors used were from BEIS conversion
factors 2021.

Our Scope 1 emissions were calculated
through monthly meter readings and
invoice data for stationary emissions
and mileage data for mobile emissions.
Company vehicle emissions are based on
the size, fuel type and annual mileage of
each company car during the year.

Our Scope 2 emissions were calculated
through monthly meter readings and
invoice data, showing market-based
emission factors to reflect the change
in electricity supply to 100% renewable
sourced. We have also calculated our
intensity metric both as location and
market based.

Our Scope 3 emissions data is business
travel in private cars, calculated from
refunded business mileage, and emissions
from UK Electricity Transmission and
Distribution. An average CV and CO2e
factor has been applied to the refunded
business mileage as individual private
vehicle details have not been provided.

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GREENHOUSE GAS EMISSION AND
ENERGY CONSUMPTION REPORTING

The Group has reported on greenhouse gas emissions in line with the UK Government’s
Environmental Reporting Guidelines, including Streamlined Energy and Carbon Reporting
(‘SECR’) guidance.

The Group’s UK energy usage is expressed as an annual quantity of emissions in tonnes of
carbon dioxide equivalent (‘CO2e’). The amounts disclosed under SECR relate to the total
UK energy use from electricity, gas and from transport where fuel is purchased directly by
the Company.

The table below shows the energy and GHG emissions from business activities involving the
combustion of gas and fuels, the purchase of electricity, and business mileage.

As emissions in FY2021 were affected by the closure of our manufacturing sites due to
Covid-19, we have included the comparator for FY2020.

Tonnes CO2e
Greenhouse Gas Emissions

FY2022

FY2021

FY2020

Scope 1

Scope 2

Scope 3

Total Greenhouse Gas
Emissions

Carbon intensity
(per £1m Revenue)

Total Energy Use kWh

Location based

Market based

Location based

Market based

Location based

Market based

5,749.7

1,555.9

18.8

147.3

7,452.9

5,915.8

66.4

52.7

4,854.5

1,373.1

131.8

6,359.3

67.8

5,976.2

1,802.5

198.6

7,977.8

71.6

38,545,715

32,124,696

39,161,466

We have selected a carbon intensity metric based on the energy consumption per tonnes of
CO2e per £1m of revenue. We will use this ratio to monitor our energy efficiency performance
over time.

Energy efficiency actions taken
Continuation of reduced business travel with more use of online meetings and elimination of
petrol and diesel powered fleet vehicle options as vehicle leases expire.

Continuation of the programme of rolling upgrades to LED lighting across all sites and heat-
loss and insulation programmes at the manufacturing locations. The main focus of the year
was working with Planet Mark to measure and plan our ZeroBy30 roadmap.

Our total energy use, greenhouse gas emissions and intensity ratio calculations have been
independently calculated by Planet Mark using activity data collected by us.

QUINTESSENTIALLY BRITISH

HERITAGE

CONTEMPORARY

QUINTESSENTIALLY BRITISH

ELEVATING
THE BRANDS

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DRIVING BRAND
ENGAGEMENT

Market-leading portfolio of British brands
–
Extensive historic archive of design gives us
authority, provenance and authenticity
–
Unique design expertise, specialised in
colour and scale
–
Strong international appeal
–
Design solutions for consumers of all ages
–
UK’s leading high-end wallcoverings and
printed fabric manufacturers
–
Innovative production techniques
including digital
–
Build engagement of the brands in
core markets
–
Digital marketing strategy
–
Targeted PR
–
Social media to attract consumers
–
Content plan to tell rich stories
–
Events and collaborations

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LUXURIOUS
DESIGN,
ARTFULLY
CRAFTED TO
THE HIGHEST
STANDARDS

By looking back to Zoffany’s first ever collection, a series
of innovatively reproduced wallpapers inspired by the
Tudor-Jacobean country house, Temple Newsam, a creative
relationship with the past emerges.

Speaking to a taste for sophisticated artistry, when Zoffany draws from its
extensive archive, it is never at the expense of producing exquisite designs
for modern settings.

Introducing an undeniable opulence, Zoffany captivates and inspires with its
decadent fabrics, wallcoverings, paint and furniture pieces. Produced using
the finest materials and richly coloured pigments, Zoffany’s new and archive
designs are celebrated worldwide for their artistry, integrity and authenticity.

POLISHED
LOOKS
EMBODYING
THE BEST OF
BRITISH
ECLECTICISM

As a forerunner of the Transitional Style,
Clarke & Clarke embodies an agile design ethos.

Recognising that interior design is an important expression of the self, the
brand responds to the everyday need for versatile, high-quality designs,
as well as products with a finger on the pulse of recent trends.

With its extensive portfolio of products appealing to customers and interior
designers alike, Clarke & Clarke’s business has continued to grow since its
inception 20 years ago. Boasting a global reach underpinned by impeccable
service, the company’s original creative vision remains.

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INSPIRED
COLOUR
STORIES
AND BOLDLY
EXPRESSIVE
PATTERN
CREATIONS

Inspired colour stories, boldly expressive pattern creations,
and luxurious production techniques: this, is Harlequin. Pushing
personal and industry boundaries, Harlequin is the perfect
vehicle for self-expression.

Uniting high-quality collections with vivacious colours and textures,
Harlequin’s ambition is to empower all people to express their best selves
through creative interior design.

Influenced by fashion and the luxury of boutique hotels, Harlequin brings
innovative textures and stunning colours to its range of fabrics and prints.
Chosen for interiors the world over, the brand’s successful design team are
renowned for their forward-thinking approach to creating a destination style.

COMBINING
A TIMELESS
BRITISH
SENSIBILITY
WITH HAND-
DRAWN
PATTERNS

Founded in 1860, Sanderson is one of the most renowned
interiors brands worldwide.

Combining a timeless British sensibility with hand-drawn patterns and bold
reinterpretations from a historic archive, every Sanderson design arrives with
the security that befits a brand of such a prestigious legacy.

Granted a Royal Warrant in 1923, Sanderson still supplies fabrics, paint and
wallcoverings to HM Queen Elizabeth II. In 2020, Sanderson celebrated its
160th Anniversary, making it the oldest surviving English brand in its field.

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BEAUTIFULLY
CRAFTED
PRODUCTS
THAT UPHOLD
THE LEGACY
OF AN ARTS &
CRAFTS ICON

William Morris (1834–1896) was one of the single most
influential figures of the nineteenth century. Under his direction
Morris & Co. grew into a flourishing Arts & Crafts icon.

Always guided by Morris’s creative intuition, new designs are inspired by
treasures in our archive, which houses historical log books, samples of every
wallpaper, printed and woven textiles and original wooden printing blocks.

As custodians of the original company founded by William Morris in 1861,
Morris & Co. embodies the ethos and decorative style of this important
cultural icon. The incredible Morris & Co. archive provides a wonderful
source of inspiration to our teams, ensuring that Morris’s legacy lives on with
expertly crafted products and reimagined designs.

PLAYFUL
BRITISH
DESIGNS
THAT BRING
JOY TO THE
EVERYDAY

Putting the joy back into the soul of interior design! Scion
presents an uplifting solution to any domestic scheme, with fresh
Scandi-inspired designs, zesty colours and rejuvenated ideas for
modern living.

Appealing to a broad audience eager for vibrancy, Scion collections are full
of spontaneous individuality whilst upholding an enduring appeal.

Packed with Scandi-inspired influences, sketchbook looks and flashes of
zesty colour, Scion is a joy to be around. Join Mr Fox and his friends as they
share Scion’s cheerful personality and upbeat style across a range of fabrics,
wallpapers and home accessories.

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WE’VE BLOWN
THE DOORS
OFF OUR
HISTORIC
ARCHIVE

Founded in 2021, Archive by Sanderson Design promises a fresh
(and boisterous) relationship with classic past design.

Maximalist to its core, Archive by Sanderson Design unleashes iconic designs
onto heroic colour stories, turning up the volume and doubling down on
patterned repeats. Step into Archive by Sanderson Design.

ONE OF
THE MOST
VERSATILE AND
DISTINCTIVE
FABRIC PRINTERS
IN THE WORLD

Winners of the Queen’s Award for Enterprise, Standfast &
Barracks is widely acknowledged as a leader in its field.

For more than 95 years, Standfast & Barracks has proudly produced beautiful
prints for many of the world’s finest design-led home furnishing and apparel
brands. Continued investment in digital printing and innovative techniques
ensure the company’s success, which was recognised this April with the
Queen’s Award for International Trade – the highest official UK award for
British businesses.

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OFFERING A
UNIQUE AND
UNPARALLELED
COMBINATION
OF PRINTING
PERMUTATIONS

Anstey Wallpaper Company is the largest contract wallcovering
printer in the United Kingdom and has the broadest machine
profile in Europe, backed by all the necessary design and
technical expertise required to allow us to offer a unique and
unparalleled combination of printing permutations on a wide
variety of substrates and widths.

Anstey is one of the world’s foremost printers of wallcoverings, providing
unrivalled versatility and capability throughout its 100-year history.
Innovative techniques and a unique combination of printing methods are at
the heart of the company’s business, which produces for Sanderson Design
Group as well as many third-party customers in the UK and around the world.

CHIEF FINANCIAL OFFICER’S REVIEW

A YEAR OF
STRONG
TRADING
AND CASH
GENERATION

CHIEF FINANCIAL OFFICER’S REVIEW

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The Chairman’s Statement and the Chief Executive Officer’s Strategic and Operating Review provide an analysis of the key factors
contributing to our financial results for the year ended 31 January 2022. The results show a year of strong trading and cash generation,
reflecting the receding impact of Covid-19 on the business and delivery of the Group’s strategy for growth.

Revenue
Our reported revenue for the year was £112.2m compared to £93.8m in FY2021 and £111.5m in the pre-Covid-19 year of FY2020.

Revenue

Brands

Licensing

Total Brands

Manufacturing – External

Group

FY2022
£m

84.1

5.2

89.3

22.9

112.2

FY2021

£m

FY2020

£m

72.6

3.7

76.3

17.5

93.8

84.7

5.5

90.2

21.3

111.5

Change
FY2021

15.8%

40.5%

17.0%

30.9%

19.6%

Change
FY2020

(0.7%)

(5.5%)

(1.0%)

7.5%

0.6%

Gross profit
Gross profit for the full year was £73.8m, compared with £56.9m in FY2021 and £68.2m in FY2020, whilst the gross profit margin at 65.8%
represents an increase of 510 basis points over FY2021 and 460 basis points over FY2020 (61.2%).

The Group has adjusted the profit figures for FY2021 and FY2020. Please refer to the end of this section on prior year adjustments for
further details.

Product

Revenue (£m)

Gross profit (£m)

Licence

Revenue (£m)

Gross profit (£m)

Total

Revenue (£m)

Gross profit (£m)

2022

107.0

68.6

64.1%

5.2

100%

112.2

73.8

65.8%

2021

90.1

53.2

59.1%

3.7

100%

93.8

56.9

60.7%

2020

106.0

62.9

59.3%

5.5

100%

111.5

68.2

61.2%

Excluding the impact of licence income, which generates 100% gross profit, margins improved to 64.1% in 2022 versus 59.1% in 2021 and
59.3% in 2020. This improvement was a result of a change in the sales mix towards higher margin brands within the portfolio and volume
driven efficiencies at the Group’s two manufacturing sites.

Profit before tax
Profit before tax was £10.4m, up from £4.9m in FY2021 and £4.5m in FY2020. This strong profit performance is driven by sales growth, gross
margin improvement and a continued focus on cost control.

Revenue

Gross profit

Distribution and selling expenses

Administration expenses

Net other income

Finance costs – net

Profit before tax

2022
£m

112.2

73.8

(25.1)

(42.8)

4.5

–

10.4

Restated
2021
£m

93.8

56.9

(19.1)

(36.5)

3.8

(0.2)

4.9

Restated
2020
£m

111.5

68.2

(22.9)

(45.8)

5.4

(0.4)

4.5

Distribution and selling expenses of £25.1m represented 22% of revenue in the year compared with 20% in FY2021 and 21% in FY2020.
A combination of Covid-19 impacts and Brexit contributed to higher container costs and carrier related capacity issues, particularly in the
first half of the financial year.

Administration expenses grew to £42.8m in FY2022 from £36.5m in FY2021. In the prior year, as a response to Covid-19, the business cut back
on discretionary expenditure, with significant reductions in marketing and travel and a hiring freeze across the business. Although many of
these activities recommenced in FY2022, the benefits of our restructuring and ongoing cost efficiency measures are seen in that administration
expenses are £3.1m below FY2020 (£45.8m).

CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED

Other operating income of £4,342,000 (FY2021: £3,822,000; FY2020: £5,358,000) comprises consideration received from marketing materials
of £4,046,000 (FY2021: £3,822,000; FY2020: £5,358,000) and a research and development expenditure credit (‘RDEC’) of £296,000 (FY2021:
£nil; FY2020: £nil).

Adjusted underlying profit before tax
Adjusted underlying profit before tax was £12.5m, up from £7.0m in FY2021 and £7.5m in FY2020.

Profit before tax

Amortisation of acquired intangible assets

Restructuring and reorganisation costs

Forgiveness of loan

Release of a provision for legal case

Underlying profit before tax

LTIP accounting charge

Net defined benefit pension charge

Adjusted underlying profit before tax

2022
£m

10.4

1.0

1.2

(0.4)

(0.6)

11.6

0.4

0.5

12.5

restated
2021
£m

restated
2020
£m

4.9

1.0

0.2

–

6.1

0.4

0.5

7.0

4.5

1.0

–

6.5

0.4

0.6

7.5

Non-underlying items comprise:
– Amortisation of intangible assets: £1.0m in respect of the acquisition of Clarke & Clarke in October 2016.
– Restructuring and reorganisation costs: As part of the Group’s policy to rationalise certain operational and support functions, the decision
was taken to close our French subsidiary and to manage all French operations from the UK. This resulted in a charge of £1.1m to reflect the
costs of this reorganisation. Other reorganisations in the UK cost £0.1m.

– Forgiveness of loan: On 7 May 2020 the Group entered into a loan contract with Wells Fargo for $0.6m (£0.4m) under the US Paycheck

Protection Programme. On 20 April 2021, our application for forgiveness of the loan in accordance with the US Government Small Business
Administration guidance was successful.

– Release of an accrual for a legal case: £0.6m release following the settlement of a legal claim in the USA with a former distributor.

Taxation
Tax for the year is charged on profit before
tax based on the forecast effective tax rate
for the full year. The estimated effective tax
rate (before adjusting items) for the year
was 25% (FY2021: 18%; FY2020: 15%).

The key driver behind the higher effective
tax rate is the impact of the rate at which
deferred tax is being recognised (from 19%
to 25%) following the announcement in
the March 2021 Budget that a Corporation
Tax rate of 25% will apply with effect from
1 April 2023.

During the year, the Group successfully
applied for £0.3m of research and
development expenditure credit (‘RDEC’) in
respect of FY2021 and FY2020. This amount
is recognised in other operating income.

Earnings per share
Basic reported EPS for the year was 10.93p
(FY2021 restated: 5.39p; FY2020 restated:
5.41p). The Group also reports an adjusted
underlying EPS which adjusts for the impact
of the LTIP accounting charge, net defined
benefit pension charge and other non-
underlying items. The adjusted underlying
basic EPS for the year was 13.75p
(FY2021 restated: 7.89p; FY2020 restated:
9.35p). The diluted EPS for the year was
10.80p (FY2021 restated: 5.27p; FY2020
restated: 5.37p).

Capital expenditure
Capital expenditure in the year totalled
£2.1m (FY2021: £1.0m; FY2020: £2.4m).
Overall capital expenditure was slightly lower
than planned due to later timing of projects.
For FY2023 we expect capital expenditure
to be around £6-7m as we step up our
investment in digital printing technology.

Inventories
Net inventory ended the year at £22.7m
compared to a prior year £19.6m and 2020
at £27.8m.

This increase on 2021 reflects a combination
of stock re-build following Covid-19 supply
chain disruption together with investment
to assure strong availability of best sellers
as we move into our spring/summer FY2022
trading season. The reduction versus 2020
is evidence of the success of our SKU
reduction programme in which we have
already achieved our five-year target,
set in October 2019, of approximately
12,000 SKUs.

The Group has adjusted the inventory values
for FY2021 and FY2020. See the section
below on prior year adjustments for further
details.

Trade receivables
Trade receivables increased to £13.5m
(FY2021: £11.7m; FY2020: £13.1m) due
to increases in Brands and Manufacturing
revenues.

The ageing profile of trade debtors shows
that payments from customers are close to
terms. The current economic environment
still presents a level of expected credit risk
and in addition to specific provisioning
against individual receivables, a provision
has been made of £0.5m (FY2021: £0.5m;
FY2020: £0.4m), which is a collective
assessment of the risk against non-specific
receivables calculated in accordance with
IFRS 9. The Group has experienced limited
bad debts and in the last 12 months has
enhanced its credit management procedures
to improve controls and mitigate potential
credit risk.

Cash position and banking facilities
Year-end net cash was £19.1m compared to
FY2021 of £15.1m and FY2020 of £1.3m.

In the prior year, owing to Covid-19, the
business significantly reduced expenditure
and inventory levels and deferred
corporation tax payments. Over the course
of FY2022 these positions have unwound
and we end the year with what we consider
to be a normal level of working capital for
the business. This contributed to the fall in
operating cash flow from £18.2m to £12.7m.

CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED

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All foreign currencies are bought and sold
centrally on behalf of the Group. Regular
reviews take place of the foreign currency
cash flows. The Group does not trade in
financial instruments and hedges are only
used for highly probable future cash flows
and to hedge working capital exposures.
No hedging contracts were put in place
in the year but the Group will keep this
assessment under review in light of levels of
trade in foreign currency and volatility.

The Group has banking facilities provided by
Barclays Bank plc. The Group has a £12.5m
multi-currency revolving committed credit
facility which is due for renewal in October
2024. The agreement also includes a £5m
uncommitted accordion facility option to
further increase available credit which
provides substantial headroom for future
growth. Our covenants under the facility
are EBITDA and interest cover measures.
In May 2020, the Group entered into a loan
contract with Wells Fargo for US$565,818
under the US Paycheck Protection
Programme scheme. In June 2021, this loan
was forgiven and the Group treated the
forgiveness as a grant for £440,000.

Net defined benefit pension
The Group operates two defined benefit
schemes in the UK. These comprise the
Walker Greenbank Pension Plan and the
Abaris Holdings Limited Pension Scheme.
These were both closed to new members
and to future service accrual from 30 June
2002 and 1 July 2005 respectively.

The triennial valuation of the schemes has
been carried out based on the schemes’
position on 5 April 2021 but has yet to
be finalised. The Group has appointed
independent pension and actuarial
specialists to support the Group through
the valuation process.

New deficit contribution schedules will be
agreed as part of finalising the valuations
and the business expects to continue
making cash contributions into the schemes
to make good any deficits, as well as
making contributions towards the ongoing
expenses incurred in the running of the
schemes. The business also intends to
continue actively looking at whether there
are appropriate actions which could be
taken to help reduce pension scheme risks
within our wider business objectives.

Under IAS 19, the net defined benefit
pension scheme asset that can be recognised
is the lower of the surplus and the asset
ceiling, i.e. the economic benefits available
in the form of refunds or reductions in future
contributions or a combination of both,
in accordance with IFRIC 14 ‘IAS 19—The
Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction’.
In order to determine whether there are any
restrictions on the surplus as outlined in IFRIC
14, the Schemes’ Trust Deeds and Rules were
reviewed and legal advice was acquired. It
is the Group’s understanding that, based on
the conditions at the balance sheet date, it
is able to: run the Schemes until there are no
remaining members; wind up the Schemes
at that point; and reclaim any remaining
monies. Consequently, the Group is able to
recognise in FY2022 the full surplus of £2.6m
(FY2021: net liability of £5.6m; FY2020: net
liability of £5.7m) calculated in accordance
with IAS 19 and IFRIC 14.

Dividend
As a result of the pandemic and in order to
protect the Group’s liquidity, no dividends
were declared or paid during FY2021. For
FY2022, an interim dividend of 0.75p per
share was paid on 26 November 2021.
A final dividend of 2.75p is now proposed,
taking the full year dividend to 3.50p. This
payment will be made on 12 August 2022
to the shareholders on the Company’s
register on 15 July 2022 if approved at the
Company’s forthcoming annual general
meeting. The Board remains committed to
a progressive dividend policy as part of the
capital allocation priorities of the Group.

Capital allocation policy
The improvement in the underlying
performance of the business in recent
years has left us with a business that is now
consistently cash generative.

The level of capital investment required in the
coming years is likely to be significantly above
historical levels as we look to boost our digital
printing capacity in both our factories whilst
also investing in improved systems to improve
our customer service proposition. Our forward
expenditure programme is closely aligned
to our Live Beautiful strategy with capital
maintenance projects only being approved
if they can be proven to support us on our
journey to ZeroBy30.

We remain committed to retaining a strong
balance sheet and acknowledge that we
have two defined benefit pension plans
that we are committed to supporting.
We continue to look at whether there are
appropriate actions which could be taken
to help reduce pension scheme risks within
our wider business objectives.

Prior year adjustments
The Group has rectified the error in previous
years of its cost absorption methodology
of the manufacturing units for establishing
the profit elimination within inter-group
inventories held at the year end. As a result of
this error, the value of inventory at 31 January
2021 has reduced by £717,000, the cost of
sales for the financial year ended 31 January
2021 has increased by £80,000 and opening
retained earnings and inventory at 1 February
2020 have reduced by £637,000. The total
impact of these adjustments for the financial
year ended 31 January 2022 is a reduction
of opening retained earnings of £717,000
with equivalent reduction in the value of
opening inventories. In addition, the cash
flow statement for the year ended 31 January
2021 and 31 January 2020 has been restated
to show a reduced profit before tax by
£80,000 with a compensating adjustment to
the moment in inventories. There is no overall
change to the reported operating cashflow.

The Group has analysed its minimum
guaranteed licensing receivables into its
current and non-current assets at 31 January
2022 and restated the 31 January 2021
and 31 January 2020 comparatives. This
determination is based on the assessment
of the operating cycle of the licensing
arrangement after considering the nature of
the agreement and the cash and invoicing
cycle. This assessment was not carried out
in the previous year and there have been
no changes in the facts and circumstances
and therefore a prior year adjustment has
been processed to reflect the split in the
previous year.

Going concern
The Directors reviewed a Management
Base Case (‘MBC’) model and considered
the uncertainties regarding the further
impact of Covid-19, supply chain and
inflationary pressures and the Russian
invasion of Ukraine for the assessment of
going concern. The Directors consider that,
having reviewed forecasts prepared by the
management team which have been stress
tested, the Group has adequate resources
to continue trading for the foreseeable
future. For this reason, they continue to
adopt the going concern basis in preparing
the financial statements. Further details of
the review are disclosed in note 1 to the
financial statements.

Mike Woodcock
Chief Financial Officer
27 April 2022

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KEY PERFORMANCE INDICATORS

REVENUE _ £M

PROFIT BEFORE TAX _ £M

112.2

93.8

111.5

Total current year revenue.

Statutory profit before tax.

ADJUSTED UNDERLYING PROFIT BEFORE TAX _ £M

PROFIT BEFORE TAX _ %

12.5

7.0

7.5

Underlying profit before tax adjusted for the share-based incentives,
defined benefit pension charge and non-underlying items.

Statutory profit before tax expressed as a percentage of
revenue.

ADJUSTED UNDERLYING PROFIT BEFORE TAX _ %

NET CASH _ £M

11.1

7.5

6.7

10.4

4.9

4.5

9.2

5.2

4.0

19.1

15.1

1.3

Underlying earnings adjusted for accounting charges relating to
the share-based incentives, defined benefit pension charge and
non-underlying items expressed as a percentage of revenue.

Year end cash and cash equivalents less borrowings and leases.
Borrowings do not include lease liabilities.

ADJUSTED EARNINGS PER SHARE _ PENCE

INVENTORY _ £M

13.75

7.89

9.35

Underlying earnings adjusted for accounting charges relating to
the share-based incentives, defined benefit pension charge and
non-underlying items, less tax at the effective rate, divided by
the weighted average number of shares in issue during the year.

Year end total inventory, net of provision.

BASIC EARNINGS PER SHARE_PENCE

CAPEX _ £M

10.93

5.39

5.41

22.7

19.6

27.8

2.1

1.0

2.4

Profit after tax, divided by the weighted average number of
shares in issue during the year.

Total capital expenditure less proceeds from disposal for the year.

The Group is committed to its’ sustainability strategy, Live Beautiful and further details of the relevant key performance measures and targets
are set out on page 17.

PRINCIPAL RISKS

The Group has put in place an ongoing process to identify, monitor and manage the risks faced by the Group. Risks are
ranked according to their potential financial impact and probability. The Board regularly reviews the risks faced by the
Group and the controls in place to mitigate any potential adverse impacts. There are general business risks faced by
the Group that are comparable to those faced by most other businesses.

In addition, there are a number of more specific risks which are more relevant to Sanderson Design Group and the industry in which
we operate. These risks are principal risks and uncertainties facing the Group that are material to our strategy. The Board recognises that
the nature and scope of risks can change; the list is not intended to be exhaustive, and regular review and monitoring form part of
the Board’s agenda.

KEY

Risk level
increased

Risk level
maintained

New

New Risk
identified

MARKETPLACE

CHANGE

CONTROLS TO MITIGATE

Trading environment
• Specific macroeconomic and geopolitical

factors can influence our business and ability
to trade across borders such as Russia’s
invasion of Ukraine. Governments in key
markets influence cross-border control,
which could make it more difficult for us to
source, buy and move products into and out
of the territories we operate in.

• The Group operates in major international
markets which have different drivers and
macroeconomic outlooks.

• Given that our products may be viewed

as discretionary, there is a risk that these
are impacted by consumer confidence. CPI
inflation rate is 6.2% and RPI inflation rate is
9.0% in March 2022 according to Office of
National Statistics.

• Change in consumer trends in interior

decoration.

Competition
• The Group operates in markets that are

highly competitive.

• The Group owns a rich design archive that
supports its heritage brands. There have
always existed various external credible
sources of historic designs globally. As the
visibility of the Group’s brands increases
through our own marketing activities, there
is an inevitable, growing risk of market
competition that is difficult to predict and
impossible to control.

• The Group monitors key markets closely to keep abreast of local changes or

developments globally, such as the impact and duration of Russia’s invasion of
Ukraine, and recommends changes or adaptations to our business operations to
mitigate the impact, and these are under constant review.

• Focus on product diversification through licensing opportunities, new product

categories including ready-made curtains, bedding and furniture all help to strengthen
our product offering and adapt to the increasing online homewares share of the
market. The change of business model in France is in line with the Group strategy of
simplification and agility.

• Global inflationary pressure is a reality in FY2023. The group offers a well-balance

portfolio of brands and products at the upper end of the market. Cost pressures are
carefully monitored and price increases passed on to protect margins.

• The Group is broad-based and the design teams constantly monitor trends within and
outside our marketplace. Current trends towards decorative style supports the sector
in which the Group operates.

• With seven key Brands, the Group has sought to differentiate itself through high-
quality luxury products and continues to develop new product categories and
extension of market positions.

• We have continued to invest in our British manufacturing sites through innovative

printing techniques, including in-house paint tinting and distribution.

• There is focus on product extension through global recognition of the Group’s heritage

brands and the contemporary design excellence, broadening the product range, including
selling finished products online and exploring worldwide licensing opportunities.

• The Group’s focus is on international expansion through the distribution and

marketing of our brands, in particular the US market.

• We are continuing to make progress with consumer e-commerce development. The

Group undertakes rigorous due diligence entering new markets or commencing new
business channels.

• To mitigate the threat of competitors launching similar looking products, the Group is
reinforcing its integrity and authority by investing in the nurturing of its design archive
assets, strengthening the organisation’s reputation as the destination for high-quality,
authentic design capability. This is further supported by our-in house manufacturing
skill that enables the Group to make high-value product that upholds the legacy of
the historic founders.

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FINANCIAL

CHANGE

CONTROLS TO MITIGATE

Foreign exchange
• A large proportion of the Group’s activities
and earnings are denominated in US dollars
and euros, giving rise to foreign currency
exposure.

• The Group monitors revenue and earnings to minimise exposure to foreign exchange

losses. Increasing exchange rate volatility may have an adverse effect on the balance
sheet and/or profit and loss account.

• We continue to monitor the implications of emerging macroeconomic risks to help

prepare for any volatility in foreign exchange movements with focus on the US dollar.
The Group has specific hedging contracts in US dollars and employs natural hedging
in other currencies where possible.

OPERATIONAL

CHANGE

CONTROLS TO MITIGATE

Recruitment and retention of
key employees
• The Group is reliant upon a number of key
employees to design, manufacture and sell
its products.

Reputation risk
• The Group prides itself on the high quality of

its product range.

• An unfavourable incident relating to a senior

executive, individuals or businesses associated
with the Group, erroneous media coverage
on products, failure to understand social
and cultural issues in marketing contents or
negative discussions on social networks could
damage the Group’s reputation.

Environmental risk
• The Group strives to become net carbon
ZeroBy30, complies with environmental
legislations and seeks to prevent excessive
emissions and effluent discharges resulting
in fines and closures.

Health and safety risk
• The Group has robust plans to ensure the

health and safety of all employees and third
parties are maintained on site, especially
during the time of the Covid-19 pandemic.

• The Group’s employees are its key asset. The depth of their experience is a real
benefit to the business and, accordingly, the Group focuses on attracting and
retaining employees.

• The Remuneration Committee monitors the levels and structure of remuneration
for Directors, senior management and colleagues generally, and seeks to ensure
that they are designed to attract, retain and motivate the key personnel to run the
Group successfully.

• In addition, the Group offers competitive remuneration packages including annual

bonus incentives and long-term incentive schemes designed to retain key individuals.

• The Group made a commitment to the Real Living Wage and introduced an all-

employee bonus scheme in 2020. The Group aims to be the employer of choice in
the industry.

• There is ongoing emphasis on high quality control throughout the various stages, right from

manufacturing through to delivery of the finished product and customer satisfaction.

• Monitoring of adherence by employees, contractors, suppliers and other associated
individuals and businesses to the requirements in the Group’s business principles.

• The Group has established corporate responsibility standards, which aim to ensure

compliance with labour, human rights, health and safety and environmental standards
across our operations and extended supply chain and put in place supplier audits.

• Uphold our approval processes and editorial controls to ensure all product and

content is reviewed and signed off prior to external release.

• The Group monitors its carbon emission targets by having relevant KPIs to measure
carbon footprints certified by Planet Mark and embedding the sustainability values
across the organisation.

• To deliver on the Group’s ZeroBy30 pledge, investment is planned with a medium
to long-term plan to adopt new technologies that will reduce energy consumption
and environmental impact, improve efficiency and increase capacity, keeping both
factories at the forefront of printing in the UK.

• There are ongoing reviews of environmental legislation through the membership of

professional and trade associations.

• Onsite incinerators (that processes vapours and fumes) are installed to ensure that
emissions are within the agreed limits and monitored frequently. Waste solvents are
barrelled and taken off site.

• Waste ink is filtered and the solid residue is taken off site.

• At our Anstey factory, Severn Trent monitors the water testing samples on a

regular basis.

• Effluent discharge at the Standfast factory is monitored daily and there are

preventative measures to avoid incidents and appropriate procedures to deal with
potential environmental disasters.

• The Group has immediate response capability via the Group Leadership Team when

required, especially for Covid-19.

• There are fire, health and safety groups on all sites.

• The Group publishes, monitors and reports on health and safety incidents internally
and in compliance with regulatory environments. There are established auditing and
monitoring systems.

PRINCIPAL RISKS CONTINUED

KEY

Risk level
increased

Risk level
maintained

New

New Risk
identified

OPERATIONAL CONTINUED

CHANGE

CONTROLS TO MITIGATE

• Business continuity and disaster recovery plans are regularly reviewed to ensure the

uninterrupted operation of the Group’s core business operations.

• The Group holds insurance cover to mitigate the financial consequences of a

major incident.

• Extensive flood defence measures have been installed at the Standfast site and these

measures are constantly monitored.

• For fire safety, the Group has emergency planning procedures in place and adequate

sprinkler systems together with an alarm system linked to the fire brigade.

• The segregation of the Group’s central warehousing facility with two warehouses has

helped to mitigate risk to stock.

• The Group has appropriate controls in place to mitigate the risk of systems failure,
including an IT disaster recovery plan, off-site and cloud back-up routines, virus
protection and network security controls. Security controls and processes are
assessed and updated on a regular basis with a continuous improvement plan.
IT capability has been strengthened to improve defences, taking account of increased
cyber risk to businesses of our size.

• The Group employs a framework of IT controls to protect against unauthorised

access to our systems and data, which includes the maintenance of firewalls, intruder
detection and encryption of data.

• The various business units have disparate platforms which helps to reduce the

overall risk.

• The implementation of the new ERP system at Standfast is progressing within budget

and under the supervision of a dedicated project manager.

New

• The Group has annual utility contracts until October 2023 to protect against the rise

in energy prices.

• Gas and electricity for various business units are negotiated on a collective basis.
The Group is monitoring raw material costs and expects to pass on product price
increases for margin protection as necessary.

• A strong commercial focus on procurement, pricing and cost improvement initiatives is

maintained along with ongoing monitoring of pricing performance.

• The Group is monitoring raw material costs and expects to pass on product price

increases for margin protection as necessary.

Major incident or disaster such as
a fire/flood
• The Group ensures that appropriate

measures are implemented to prevent and
deal with major incidents or disasters,
especially fire and flood.

IT
• The cyber security landscape is continuously

evolving, with threats becoming more
sophisticated and aggressive. A significant
failure of IT infrastructure or key IT systems,
deliberate or accidental, could result in a
loss of information, inability to operate
effectively, financial or regulatory penalties,
and negatively impact our reputation as a
result of the impact on the availability of our
products and consequently reduce sales.

Supply chain pressure
• The Group’s manufacturing operations are
exposed to global supply chain issues such
as disruptions from geopolitical instability,
Covid-19, trade restrictions, extreme
weather events and key supplier or sourcing
issues which could impact on its ability to
receive raw materials, purchased goods and
deliver orders timely to its customers.

• Higher energy, labour, raw materials and
other input costs have direct impact on
product margins. This risk may be influenced
by global supply and demand, supply
chain challenges, weather events, political
uncertainties, changes in regulations and a
new wave of Covid-19.

• Higher input costs will lead to either

reduction in margin or increased prices for
our customers.

The Group has removed Brexit and pension funding as principal risks. During the financial year, the Group has incorporated Brexit costs and
new processes into our operations. The defined benefit schemes are showing a pension asset position on 31 January 2022.

PRINCIPAL RISKS CONTINUED

SECTION 172 STATEMENT
ON THE DISCHARGE OF DIRECTORS’ DUTIES

The Board recognises the importance of
building and maintaining relationships with its
key stakeholders, and considering the external
and internal impact of the Group’s operations,
in order to achieve long-term success.

Our Group comprises a number of business
units, all of which have engagement with
their own unique stakeholders as well
as the other parts of the business that
form the Group. The Group’s governance
delegation of authority framework allows
local decision-making at business unit level
up to defined limits and is monitored by the
Board. This allows the individual business
units to take account of the needs of their
own stakeholders in their decision-making,
whilst the Board routinely monitors and
retains ultimate responsibility.

The Group Leadership Team (‘GLT’), which
comprises the leaders of each business
unit, meets weekly, and reports and
presentations are made to the Board by the
GLT regarding strategy, performance and
key decisions taken.

In its consideration of decisions and actions
to be taken in approval of business projects
and the Group’s strategy, the Board takes
care to ensure that it takes all views into
account in reaching conclusions that will
benefit the Group as a whole and that it
has regard to the likely consequences on all
stakeholders of the decisions and actions
it takes. Where possible, decisions are
carefully discussed with affected groups
so as to ensure they are understood and
supported, when actions are implemented.

In compliance with the Companies Act
2006, the Board of Directors is required
to act in accordance with a set of general
duties. During the year ended 31 January
2022, the Board of Directors consider they
have, individually and collectively, acted in
a way they consider, in good faith, would
be most likely to promote the success of the
Company for the benefit of its shareholders
as a whole, having regard to a number of
broader matters, including:
– the likely consequences of any decision in

the long term;

– the interests of the Company’s employees;
– the need to foster the Company’s

business relationships with suppliers,
customers and others;

– the impact of the Company’s operations
on the community and the environment;

– the desirability of the Company

maintaining a reputation for high
standards of business conduct; and

– the need to act fairly as between

members of the Company.

Principal decisions
Board and Committee activities are organised throughout the year to address matters reserved for the Board. In addition to the continued
strategic actions detailed in the operating review, the Board’s principal decisions taken during the year, and how stakeholders are affected,
are given below:

PRINCIPAL DECISION

STAKEHOLDERS AFFECTED

COMMENTARY

Expansion of the Board

All

Closure of French subsidiary

Customers
Suppliers
Colleagues
Shareholders

Colleagues
Customers
Shareholders

New Board appointments, increasing the number of Non-
executive Directors to four, bringing additional experience in
governance, operational management and the consumer sector.

The legacy IT platform at Standfast is being replaced with a new
ERP system. The project was initiated in July 2021 with the Board
updated monthly on progress. The new system will improve the
order process for customers and suppliers, with enhanced
reporting systems and efficiency savings for colleagues and
shareholders and improved governance and IT controls.

To further improve efficiency and simplify the Group structure, the
decision was taken to close the French entity. French customers
now order direct through the UK entity. The decision did
unfortunately result in the redundancy of seven employees.
Advice was obtained to ensure the process was done in a fair and
transparent way.

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SECTION 172 STATEMENT CONTINUED

Details of the Group’s key stakeholders and how we engage with them are set out below.

WHO ARE OUR
STAKEHOLDERS?

WHY WE FOCUS ON
THESE STAKEHOLDERS

HOW DO WE ENGAGE
WITH THEM?

HOW HAS THE BOARD TAKEN
ACCOUNT OF THESE INTERESTS?

Colleagues

Our people are key to the
success of the Group and we
want them to be successful
individually and as a team.
Our investment in our people
protects and strengthens
our culture.

Through our Live Beautiful
sustainability strategy, the
Group aims to foster a
sustainable workplace and
engender a working culture
that empowers all.

Customers and
clients

Good relationships with our
customers are important for the
success of our business.

Shareholders

As owners of the Group, we rely
on the support of shareholders
and their opinions are important
to us.

Our Shareholders want to work
with us to achieve long-term,
sustainable growth and returns.

We aim to secure long-term
sustainable growth and returns
by delivering our strategy.

There are many ways we engage with
and listen to our people, including a
bi-annual employee engagement
survey, Group-wide newsletters, a
weekly note to all staff from the CEO,
as well as business unit and site
briefings, informal meetings and
consultation with employees’
representatives.

In 2020, a Group intranet employee
wellbeing hub was introduced.

The Group intranet learning hub
facilitates personal development.

The employee engagement survey
carried out in 2021 gave an overall
employee satisfaction rating of 78%,
increased from 58% in 2019.

The Group has made known to the
employees its goal is to be the
employer of choice in our industry with
a target of at least 80% engagement
of our colleagues based on workplace
culture, diversity and inclusivity.

We build strong lasting relationships
with our customers and spend time
with them to understand their needs
and views and listen to how we can
improve our products and services
for them.

Improved customer experience is a
key focus and objective and various
initiatives to improve efficiency and
simplify the customer journey are
being implemented.

The results of the 2021 employee
engagement survey will be presented to
the Board with a follow-up programme of
two-way engagement by site and business
unit/function by HR teams across the
Group, with feedback reported regularly to
the Board.

There is regular review of talent and
succession, reward and benefits as well
as health and safety, wellbeing and
inclusivity programmes.

As reported last year, the Real Living Wage
and an all-employee bonus scheme were
introduced, enabling all colleagues to share
in the Company’s success.

As part of its regular monthly reporting
pack, the Board has introduced customer
and social media engagement feedback
as well as service level fulfilment statistical
information to better understand the
needs of customers and improve the
customer experience.

The Chief Executive Officer and Chief
Financial Officer have regular dialogue
with institutional investors in order to
develop an understanding of their
views. Presentations are made
bi-annually to analysts, investors and
prospective investors covering the
annual and interim results.

Discussions with shareholders cover a
wide range of topics, including financial
performance, strategy, outlook and
governance. Shareholder feedback along
with details of movements in our
shareholder base are regularly reported to
and discussed by the Board and their views
are considered as part of decision-making.

Our NOMAD has regular discussion and
review with the Board and advises on
wider market-related sentiment. Feedback
received is considered by the Board where
it impacts on strategy.

Communication methods include
investor presentations, regulatory
reports and market announcements.

The AGM is an important opportunity
for private shareholders to meet the
Board with all the Directors available
to listen to shareholders’ views
informally immediately following
the meeting.

The Company website has an investors
section giving private investors direct
access to business information and
reports and presentations; there is also
an enquiries mailbox facility.

SECTION 172 STATEMENT CONTINUED

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WHO ARE OUR
STAKEHOLDERS?

WHY WE FOCUS ON
THESE STAKEHOLDERS

HOW DO WE ENGAGE
WITH THEM?

HOW HAS THE BOARD TAKEN
ACCOUNT OF THESE INTERESTS?

Suppliers

We build strong relationships
with our suppliers to develop
mutually beneficial and lasting
relationships.

Engagement with suppliers and
business partners is primarily through
regular meetings and membership of
trade sector organisations.

Refreshed supplier manuals
communicating our values and
expected standards of service and
quality so we have shared goals to
build collective success.

Communities

We operate from a number of
different sites and seek to be a
good neighbour with the local
communities and to build trust
and understand the local issues
that are important to them.

We create opportunities to recruit and
develop local people and help to
support the local economy and look
after the environment.

Local charities and fund-raising are
supported, often through product and
time donations.

Government and
regulators

We wish to operate in an ethical
way and in compliance with laws
and regulations.

The Group has professional advisers in
terms of legal, tax and regulatory
compliance and all Directors have
access to independent advice.

The Board recognises that relationships
with suppliers are important to the
Group’s long-term success. Feedback
from attendance at trade events forms
part of the Board presentations. Key
areas of focus include product
development and innovation, with focus
on health and safety and sustainability,
as well as regular dialogue between our
management team and those of our
suppliers on increasing efficiency for
all parties.

The Board recognises the importance of
good community relations with both
internal and external stakeholders as well
as our wider social responsibilities. The
impact of our operations from an
environmental perspective, both locally
and globally, is recognised, e.g. capital
expenditure projects focused on efficiency
and reducing environmental emissions.
Further details are contained within our
Live Beautiful Sustainability section.

The Board is updated on legal and
regulatory developments and takes these
into account when considering future
actions. Key areas of focus for the Board
are compliance with laws and regulations,
health and safety and wellbeing of
employees and users of our products.

The Strategic Report was approved by the Board on 27 April 2022.

Lisa Montague
Chief Executive Officer
27 April 2022

BOARD OF DIRECTORS

NON-EXECUTIVE DIRECTORS

Dame Dianne Thompson
Non-executive Director

Christopher Rogers
Non-executive Director

Juliette Stacey
Non-executive Director

Dianne joined the Board in February 2019,
initially as a Non-executive Director. In April
2019, following the appointment of the new
Chief Executive Officer, Dianne became the
Non-executive Chairman. She is a highly
experienced sales and marketing executive
and is currently a non-executive director
of NEXT plc. From 2000 until 2014, Dianne
was chief executive of Camelot Group plc,
the UK National Lottery provider. Prior to
that role, she held marketing and general
management positions in a number of
consumer and building materials businesses
including Signet Group plc, Sandvik Saws &
Tools Ltd and ICI Paints.

Committee membership
– Audit Committee
– Remuneration Committee
– Nomination Committee

Christopher joined the Board in April 2018
as a Non-executive Director and Chair
of the Company’s Audit Committee. In
October 2018, on the departure of the
CEO, Christopher became Interim Executive
Chairman and held this role until April 2019
before returning to being a Non-executive
Director and Chair of the Remuneration
Committee. Other non-executive positions
held include Chairman of Wickes plc and
Non-executive Director at Kerry plc. He
also continues to be a Non-executive
Director of Vivo Energy plc until the
completion of the sale of the business,
after regulatory clearance later this year.
Christopher was an executive director of
Whitbread plc for 11 years from 2005, first
as Group Finance Director for seven years
and then as Global MD of Costa Coffee,
where he grew the brand internationally
to become the world’s second largest
coffee shop chain. Christopher is the
Senior Independent Director.

Committee membership
– Audit Committee
– Remuneration Committee
– Nomination Committee

Juliette joined the Board in November
2021 as a Non-executive Director and
chairs the Audit Committee. Other non-
executive positions she holds include Senior
Independent Director and Chair of the
Audit Committee at Fuller, Smith & Turner
PLC, the hospitality group, Non-executive
Director and Chair of the Audit Committee
of Reinshaw plc, and strategic adviser
to a privately held property consultancy,
Middleton Advisors. Prior to her non-
executive career, Juliette held executive
leadership roles as Group CEO of Mabey
Holdings Ltd, the engineering services
group, and property group Savills PLC,
having gained experience of advisory
work at EY, where she qualified as a
chartered accountant.

Committee membership
– Audit Committee
– Remuneration Committee
– Nomination Committee

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EXECUTIVE DIRECTORS

Patrick Lewis
Non-executive Director

Lisa Montague
Chief Executive Officer

Mike Woodcock
Chief Financial Officer

Patrick joined the Board as a Non-
executive Director in November 2021.
Prior to joining the Group, Patrick gained
extensive consumer and retail experience
with the John Lewis Partnership, whom he
joined in 1994, holding managerial roles
across the business before becoming CFO
in 2015. Patrick’s early career was at the
management consultant Bain & Company
followed by a move into industry at Procter
& Gamble, the consumer brands business.

Committee membership
– Audit Committee
– Remuneration Committee
– Nomination Committee

Lisa joined the Group in March 2019 as
an Executive Director and became Chief
Executive Officer on 10 April 2019.
Lisa is a highly experienced luxury goods
executive, with previous roles at Madrid-
based international fashion brand Loewe
SA, a Spanish luxury fashion house owned
by the LVMH Group, Aspinal of London
Group Ltd and Mulberry Group plc. She
has significant experience of leading and
developing UK and international brand-
based businesses with manufacturing and
multi-channel distribution.

Mike joined the Group in October 2021 and
became Chief Financial Officer in November
2021. Mike qualified as an accountant at
KPMG and has significant experience of
international luxury and consumer brands
in the quoted and private sectors. Prior to
joining the Group, Mike was at Richemont
Group, where his increasingly senior roles
included CFO of Alfred Dunhill and CFO of
Montblanc. Since leaving Richemont Group,
Mike has served as CFO in a number of
private equity backed companies.

Caroline Geary
Company Secretary

Caroline joined the Group in 2000. She is
a Chartered Secretary and was appointed
Company Secretary in 2012.

GROUP LEADERSHIP TEAM

Carla Barnett
Group Human Resources Director

Mauricio Solodujin
Global Commercial Director

Carla holds an MA from Warwick Business School, is CIPD qualified
and joined the Group in November 2016. She brings a wealth of
international experience in Human Resources across manufacturing
and commercial business units in a variety of roles. Carla has
previously worked at Burberry, Britvic, Scholastic Corporation,
Home Group and NEXT.

Nigel Hunt
Group Marketing & Digital Director

Nigel, a highly experienced marketing executive, joined the Group in
November 2019 as Group Marketing & Digital Director. He previously
worked at Tesco Bank, where he held the role of Brand, Marketing
& Corporate Affairs Director. Prior to Tesco Bank, he worked at
Barclays for 17 years in various commercial and marketing roles,
including Director, Global Brand & Marketing at Barclays plc.

Ben Naylor
Group Operations Director

Ben joined the Group in January 2020. Prior to this, Ben worked
at Amtico International, the luxury floorcoverings business,
for 13 years, where he built a track record in manufacturing,
procurement and logistics and a focus on cost, quality and service.
Prior to Amtico, he was at Uniq Prepared Foods and Unipart.

Mauricio joined the Group in September 2019 from LVMH, where
he had worked for almost 10 years in roles including Senior Vice
President of LVMH Fashion Group Americas, based in the US, and
Retail & Commercial Director of Loewe, based in Spain. Mauricio’s
previous experience includes more than 10 years at Liberty of
London, where he was Director of Operations. In the role of the
Group’s Global Commercial Director, Mauricio works across all
brands, markets and channels to drive sales growth at the Group.

Claire Vallis
Creative Director

Claire has been with the Group for 25 years. She brings a wealth
of experience and knowledge across manufacturing and design,
making her an unrivalled industry expert. She personifies the
integrity and history of the brands and uses this to inspire a creative
vision for the future.

Beth Holman
President, Sanderson Design Group, Inc.

Beth joined the Group in October 2019 with more than 20 years
of experience working for subsidiaries of European luxury fashion
houses in the United States. Prior to joining the Group, her most
recent position was with Celine, the LVMH luxury fashion house,
where she was Vice President of Wholesale. In the role of President
of SDG Inc, Beth manages the sales, distribution, marketing and
operations for the USA and Canada.

Mark Kennedy
General Manager
Clarke & Clarke

Mark joined Clarke & Clarke in 2010 and was an integral part of
the success that the brand continues to enjoy today. He brings over
17 years of industry experience with a strong sales and commercial
background in both the UK as well as international markets.

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CORPORATE GOVERNANCE

INTRODUCTION
FROM THE
CHAIRMAN

As Chairman of the Board, I am responsible for ensuring that
the Company has corporate governance arrangements in
place which are appropriate for the size and complexity of the
Company and that these arrangements are followed
in practice.

The Board is committed to ensuring high standards of
governance for the Company and considers that the Quoted
Companies Alliance Corporate Governance Code 2018 (the
‘QCA Code’) provides the most appropriate framework of
governance arrangements for a public company of our size and
complexity. The QCA Code includes 10 principles that focus
on the pursuit of medium to long-term value for shareholders.
How the Company has applied these principles is detailed in
the Corporate Governance section of the company’s website
https://sanderson.sandersondesigngroup.com. We have
complied with all principles of the QCA Code throughout
the year.

All members of the Board recognise the importance of good
governance in reducing risk and adding value to our business.
Delivering growth and long-term shareholder value with
effective and efficient decision-making is of high importance
to the Board.

The Board is committed to ensuring the highest legal and
ethical standards are upheld, and aims to ensure that the
Company and its employees conduct themselves respectfully
and honestly. A healthy corporate culture is promoted within
the business in various ways, including by linking employees’
appraisal objectives and reward and recognition schemes to
our vision and values.

The Board assesses the culture of the Group through
engagement with employees and other stakeholders, further
details of which can be found in the Section 172 statement.

This report, together with the information contained in the
Audit Committee Report, the Nomination Committee Report,
the Report of the Directors and the Directors’ Remuneration
Report explains the corporate governance framework within
which the Group operates.

Dame Dianne Thompson
Non-executive Director

The Board
The Company is supervised by the Board of Directors. The Board
comprises Executive and Non-executive Directors.

Board composition
The Board of Directors who served during the year ended 31 January
2022 and their attendance at meetings is shown in the adjacent
table. Biographical details of the current Board are given on pages
50 and 51. The Directors bring strong judgement and expertise
to the Board’s deliberations and with diversity achieves a balance
of skills and experience appropriate for the requirements of
the business.

During the year, new Directors joined the Board. Juliette Stacey
and Patrick Lewis joined as Non-executive Directors in November
2021 and Juliette became Chair of the Audit Committee when Vijay
Thakrar left the Company in November 2021. Mike Woodcock was
appointed to the Board as Chief Financial Officer in November 2021,
following the resignation of Michael Williamson.

Board programme
The Board meets at least 10 times each year in accordance with
its scheduled meeting calendar and the attendance by each Board
member at scheduled meetings is shown in the table on page 54.

The role of the Board
The Board is responsible to the shareholders and sets the Group’s
strategy for achieving long-term success. As explained fully within
our Strategic Report, our strategy is focused around five key areas,
and the Board is responsible for the management, governance,
controls, risk management, direction and performance of the
Group to ensure it promotes long-term value for shareholders,
whilst being mindful of its impact on others and the threats and
opportunities faced.

There is a formal schedule of matters reserved to the Board, which
includes approval of major capital expenditure projects; approval
of the annual and interim results; setting annual budgets; dividend
policy; and Board structure. It monitors the exposure to key business
risks and reviews the strategic direction of all trading subsidiaries,
their annual budgets, their performance in relation to those budgets
and their capital expenditure. The schedule of matters reserved to
the Board is available on the Company’s website.

All Directors receive regular and timely information on the Group’s
operational and financial performance. Relevant information is
circulated to the Directors in advance of meetings. The business
reports monthly on its performance against its agreed budget, and
the Board reviews the monthly update on performance, and any
significant variances are reviewed at each meeting.

Senior executives below Board level attend Board meetings where
appropriate, to present business updates.

In previous years, the Company’s various sites were visited through
the year, with Board meetings taking place at the sites giving,
in particular, the Non-executive Directors access to the Group’s
operations to gain a greater understanding of the Group’s activities
and to show the Board’s support of our colleagues throughout the
Group. Owing to Covid-19, during the financial year, most meetings
were held virtually. It is planned for the forthcoming year that site
meetings will be restored.

Directors are expected to attend all meetings of the Board, and of
the Committees on which they sit, and to devote sufficient time to
the Group’s affairs to enable them to fulfil their duties as Directors.

Board performance and evaluation
With the new appointments made to the Board during the year,
there has been no formal Board evaluation process undertaken.
The Board continually reflects on its performance and will initiate a
formal review process in the year ahead.

CORPORATE GOVERNANCE CONTINUED

Attendance at meetings of the Board and its Committees

Total number
of meetings

Meetings attended:

D Thompson

C Rogers

V Thakrar

J Stacey

P Lewis

L Montague

M Williamson

M Woodcock

Audit
Committee

Remuneration
Committee

Nomination
Committee

Board

11/11

9/9

3/3

11/11

8/8

3/3

2/2

1/1

–

5/5

0/0

–

1/1

0/0

–

The Board scheduled 11 meetings during the year and additional
meetings were convened to deal with specific matters and approval
of the financial results.

Board Committees
The Board has Remuneration, Audit and Nomination Committees,
each of which has written terms of reference which are available
on the Company’s website. The Committees are composed of the
Non-executive Directors. Details of the composition of each of the
Committees are included on page 56 of the Directors’ Report.

The Company Secretary acts as secretary to the Committees.
The Board is satisfied that the Committees discharged their
responsibilities appropriately.

Independent advice
All Directors are able to take independent professional advice in the
furtherance of their duties, if necessary, at the Company’s expense.
The Board reviews its AIM obligations with its Nominated Adviser
annually. In addition, the Directors have direct access to the advice
and services of the Company Secretary.

Independent Directors
The Board considers that each of the Non-executive Directors
bring an independent judgement to bear. Non-executive Directors
are expected to dedicate a minimum of 25 days per year, plus
Committee duties. The Non-executive Directors’ other time
commitments are reviewed regularly. All Non-executive Directors
have contracts which contain six-month notice clauses. These are
available for inspection at the Company’s registered office and at
the Annual General Meeting (‘AGM’). Further details of each of the
independent Directors are set out on pages 50 to 51.

Nomination Committee
The Nomination Committee is responsible for reviewing the size,
structure and composition of the Board, including consideration of
the skills, knowledge and experience of the Board members. The
Committee also considers the re-election of Directors retiring by
rotation, manages succession planning and selects potential new
Board candidates. The HR Director is invited to attend meetings,
when appropriate. Where necessary, external search consultants are
used to ensure that a wide range of candidates is considered. During
the year, Warren Partners were engaged to assist with identification
and selection of new Directors. Where new Board appointments are
considered, the search for candidates is conducted, and appointments
are made, on merit, against objective criteria and with due regard
for the benefits of diversity on the Board, including gender. Further
details of the work of the Committee are contained in the Nomination
Committee Report on page 59.

Remuneration Committee
The Remuneration Committee is responsible for determining the
remuneration policy and the application of the policy in relation
to the Executive Directors’ remuneration. In framing its policy,
the Remuneration Committee may seek advice from external
remuneration consultants and does take into account any
factors which it deems necessary, including industry standard
executive remuneration, differentials between executive and
employee remuneration and differentials between executives. The
remuneration of the Non-executive Directors is determined by the
Board, but no Director is involved in any decisions relating to their
own remuneration. Further details of the work of the Committee
is contained in the Directors’ Remuneration Report on page 60.

Audit Committee
The Audit Committee is responsible for monitoring and reviewing
the integrity of the financial reporting process, including the
appropriateness of any judgements and estimates taken in
preparing the financial statements; internal and external audit
functions and internal financial control. Further details of the work
of the Committee is contained in the Audit Committee Report on
page 64.

Directors are subject to reappointment at the Company’s Annual
General Meeting following the year in which they are appointed.
The Company’s Articles of Association stipulate that one third of
the Directors, or the nearest whole number below one third, shall
retire each year and that all Directors retire for re-election at least
every third year. In line with best practice, the Board has decided
to adopt voluntarily the practice that all continuing Directors submit
themselves for re-election annually.

Internal control
The Board acknowledges that it is responsible for the Group’s system
of internal control and for reviewing its effectiveness.

The Board keeps its risk control procedures under constant review,
particularly with regard to the need to embed internal control and
risk management procedures further into the operations of business,
both in the UK and overseas, and to deal with areas of improvement
which come to management’s and the Board’s attention.

As might be expected in a group of this size, a key control procedure
is the day-to-day supervision of the business by the Executive
Directors, supported by the senior managers with responsibility for
key operations.

Relations with shareholders
The Group encourages two-way communications with both its
institutional and private investors and responds in a timely fashion
to all queries received.

There is regular dialogue with individual institutional investors, in
order to develop an understanding of their views. Presentations are
made to analysts, investors and prospective investors covering the
annual and interim results.

The Company website https://sanderson.sandersondesigngroup.com
has an Investors section giving private investors direct access to
business information and Company reports. There is also an enquiries
mailbox facility.

All shareholders receive notice of the AGM, at which all committee
chairs will be available for questions.

The Executive Directors are involved in the budget-setting
process, regularly monitor key performance indicators and review
management accounts on a monthly basis, noting and investigating
any major variances. All significant capital expenditure decisions are
approved by the Board as a whole.

Risk management process
The Group’s significant risks, together with the relevant control and
monitoring procedures, are subject to regular review to enable the
Board to assess the effectiveness of the system of internal control.
During the course of its reviews the Board has not identified nor
been advised of any failings or weaknesses which it has determined
to be significant other than disclosed in the Strategic Report and the
Report of the Directors.

The Group’s system of internal control is designed to manage rather
than eliminate the risk of failure to achieve business objectives, and
can only provide reasonable and not absolute assurance against
material misstatement or loss. The Group’s systems are designed
to provide reasonable assurance as to the reliability of financial
information, ensuring proper control over income and expenditure,
assets and liabilities.

The Board has considered the need for an internal audit function, but
because of the size and nature of its operations does not consider it
necessary at the current time.

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REPORT OF THE DIRECTORS

The Directors submit their Annual Report together with the audited
financial statements of the Company and its subsidiary undertakings
(‘the Group’) for the year ended 31 January 2022. The Strategic
Report on pages 2 to 43 is incorporated by reference and deemed
to form part of this report.

Group result
Reported profit before tax of £10.4m is up 112.2% on the year
ended 31 January 2021 (FY2021: £4.9m; FY2020: £4.5m), and profit
after tax of £7.8m is up 105.3% on the year ended 31 January 2021
(FY2021: £3.8m; FY2020: £3.8m).

Business review and future developments
A review of the principal activities during the year and likely
developments of the business is contained in the Strategic Report,
together with key performance indicators. A description of the
Group’s exposure and management of risks is provided in the
Strategic Report.

Section 172(1) statement
A Section 172(1) statement, which sets out how the Directors have
had regard to the matters under s172 of the Companies Act 2006,
is also included in the Strategic Report on pages 47 to 49.

Dividend
The Directors recommend payment of a final ordinary dividend of
0.75p per share (excluding dividends on shares held by the employee
benefit trust) which will be recognised in the financial statements
for the following year (2021: nil per share). Subject to shareholders’
approval at the Annual General Meeting (‘AGM’) the final dividend
is expected to be paid on 12 August 2022 to shareholders on the
register at 15 July 2022.

An interim dividend of 0.75p per share was paid during the year.

Going concern
The Directors reviewed a Management Base Case (‘MBC’) model
and considered the uncertainties regarding the further impact of
Covid-19, supply chain and inflationary pressures and the Russian
invasion of Ukraine for the assessment of going concern. The
Directors consider that, having reviewed forecasts prepared by the
management team which have been stress tested, the Group has
adequate resources to continue trading for the foreseeable future.
For this reason, they continue to adopt the going concern basis in
preparing the financial statements. Further details of the review are
disclosed in note 1 to the financial statements.

Post balance sheet events
The Board considers that Russia’s invasion of Ukraine to be a
material non-adjusting post balance sheet event that occurred
between the end of the period and the date of publication of this
report. The Board has highlighted this risk as a principal risk and
factored it into the going concern assessment.

Financial risk management
Details of the Group’s financial risk management objectives and
policies are contained in the Strategic Report on page 45 and in
note 2 to the financial statements.

Research and development
The Group continues to invest in its products to retain and
enhance its market position. Details of the Group’s expenditure on
collection design development costs are set out in note 12 of the
financial statements.

Employees
The Group is a responsible employer, compliant with all relevant
human resources and health and safety regulations. The Group
keeps its employees informed on matters affecting them and
on the progress of the Group by way of informal meetings and
consultation with employees’ representatives. All Group businesses
apply the principles of equal opportunity in recruitment, career
progression and remuneration. Disabled persons are given full and
fair consideration for employment where an appropriate vacancy
occurs, having regard to their particular aptitudes and abilities.
Whenever possible, arrangements are made for the continuing
employment of persons who have become disabled during service
and for appropriate training of all disabled employees, who are
given equal consideration with all other employees in promotion and
career development.

Directors
The Board of Directors who served during the year ended 31 January 2022 and up to the date of reporting were as follows:

Name

Position

Date

Committees*

Dianne Thompson

Non-executive Director and Chairman

From 01.02.2021

Christopher Rogers

Non-executive Director

From 01.02.2021

Vijay Thakrar

Non-executive Director

From 01.02.2021 to 27.11.2021

Juliette Stacey

Non-executive Director

Patrick Lewis

Non-executive Director

Lisa Montague

Executive Director, CEO

Mike Woodcock

Executive Director, CFO

From 03.11.2021

From 01.02.2021

From 01.11.2021

Michael Williamson

Executive Director, CFO

From 01.02.21 to 31.10.2021

N, A, R

R, A, N

A, R, N

*Bold type denotes Chair

Details of the Directors’ service contracts are set out in the Directors’ Remuneration Report on pages 60 to 63. No Director has any
beneficial interest in the share capital of any subsidiary or associate undertaking. Biographical details of the Directors are set out on
pages 50 to 51.

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Appointment and retirement of Directors
Subject to applicable law, from time to time the Board may appoint
any person to be a Director. Under the Articles, any such Director
shall hold office until the next AGM and shall then be eligible for
election. The Articles require that at each AGM one-third of the
Board should retire as Directors by rotation and that each Director
stand for re-election at least every third year.

Share capital
The Company’s issued capital consists of 70,983,505 ordinary shares
with a nominal value of 1p each, with each share carrying the right
to one vote and the right to distributions from dividends or on
winding up of the Company. There are no restrictions on the transfer
of securities. No person has any special rights of control over the
Company’s share capital and all issued shares are fully paid.

Directors’ authority to issue and purchase shares
At the AGM in 2020, the Directors were authorised to allot ordinary
shares up to a nominal value of £234,245 and were further
authorised to make market purchases of up to 7,098,351 of the
Company’s ordinary shares. No purchases of Company shares were
made during the year. Details of shares allotted during the year are
shown in note 24 to the consolidated financial statements.

Substantial shareholdings
As at 7 April 2022, the Company was aware of the following
substantial shareholdings in its ordinary share capital. The
percentages are calculated from the 70,983,505 ordinary 1p shares
allotted, called and fully paid up. Comparatives at 7 May 2021
are shown.

Octopus Investments 13.91% (2021: 12.17%), Close Asset
Management 8.92% (2021: 2.67%), Ennismore Fund Management
7.54% (2021: 7.19%), BGF Investments 5.99% (2021: 5.99%),
Charles Stanley 5.09% (2021: 4.98%), Interactive Investor 5.07%
(2021: 3.98%), Schroder Investment Management 4.99% (2021:
4.99%), and Hargeaves Lansdown 4.94% (2021: 5.30%).

Independent auditors
The auditors, BDO LLP, were appointed by the Directors during the
year following a formal tender process as detailed further in the
Audit Committee Report on pages 64 to 66. BDO LLP have indicated
their willingness to continue in office, and a resolution that they be
appointed will be proposed at the AGM.

In our commitment to good corporate governance practice that
is relevant to our business, the Board has voluntarily adopted the
policy that all continuing Directors stand for re-election on an
annual basis, in line with the recommendations of the UK Corporate
Governance Code 2018. At the 2022 AGM, all of the Directors will
retire and offer themselves for re-election.

Directors’ interests in material contracts
None of the Directors had any material interest in any contract
during the year which was significant to the business of the Group.

Directors’ share interests
The interests of the Directors and their families in the shares of
the Company at the beginning and end of the financial year were
as follows:

D Thompson

C Rogers

L Montague

1p ordinary shares
31 January 2022
Number

1p ordinary shares
31 January 2021
Number

15,000

110,000

108,097

15,000

75,000

46,989

There have been no changes in the interests set out above between
31 January 2022 and 27 April 2022.

Directors’ and officers’ liability insurance
The Group maintains liability insurance for its Directors and officers,
including a qualifying third-party indemnity provision, that has
been in place during the financial year and to the date of approval
of this Report.

Pensions
The Group operates defined benefit and defined contribution
schemes in the UK and overseas for all qualifying employees. Further
information on the schemes and details of the valuations are given
in note 22 to the consolidated financial statements.

Political donations
The Group has not made any political donations (FY2021: nil).

Emissions and energy consumption
Details of the Group’s energy usage and disclosures under the SECR
framework are contained in the Strategic Report on page 17.

Annual General Meeting
The AGM will be held on 12 July 2022. The notice convening the
meeting will be sent to shareholders by way of a separate circular.
Explanatory notes on each resolution to be proposed at the meeting
will accompany the circular.

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 prepared
the Group financial statements in accordance with the UK adopted
international accounting standards.

Under Company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period.

In preparing the financial statements, the Directors are required to:
– select suitable accounting policies and then apply them

consistently;

– state whether applicable UK adopted international accounting

standards have been followed for the Group financial statements
and United Kingdom Accounting Standards, comprising FRS
101, have been followed for the Company financial statements,
subject to any material departures disclosed and explained in the
financial statements;

– make judgements and accounting estimates that are reasonable

and prudent; and

– prepare the financial statements on the going concern basis

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

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

The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Company’s website in accordance
with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity of
the Company’s website is the responsibility of the Directors. The
Directors’ responsibility also extends to the ongoing integrity of the
financial statements contained therein.

Directors’ confirmations
In the case of each Director in office at the date the Report of the
Directors is approved:
– so far as the Director is aware, there is no relevant audit

unless it is inappropriate to presume that the Group and Company
will continue in business.

information of which the Group and Company’s auditors are
unaware; and

– they have taken all the steps that they ought to have taken as
a Director in order to make themselves aware of any relevant
audit information and to establish that the Group and Company’s
auditors are aware of that information.

By order of the Board

Caroline Geary
Company Secretary
27 April 2022

Registered Office
Chalfont House
Oxford Road
Denham UB9 4DX
Registered number 61880

NOMINATION COMMITTEE REPORT

Roles and responsibilities
The role of the Committee is to support the Board in evaluating
the characteristics and performance of Board members and is
responsible for recommending to the Board on all matters relating
to the selection, number, appointment and removal of Executive and
Non-executive Directors. The Nomination Committee ensures that
the Company has adequate policies and procedures to maintain
equality of opportunity for all. In this context, the Nomination
Committee’s responsibilities are to:
– Review regularly the structure, size and composition, including the
skills, knowledge, experience and diversity, of the Board and make
recommendations to the Board.

– Monitor executive recruitment closely in order to be aware of

succession risks and opportunities.

– Carry out an annual examination of the Board’s performance and
competence in achieving the Company’s objectives and alignment
with the overall strategies, which allows them to make decisions
on the future of the Company.

– Develop clarity over the Company’s long-term strategies and
make Board recruitment decisions based on the needs of the
Company over different time horizons.

– Inform the new Directors about the Company’s strategies, goals,
culture and management, and plan the training and development
of the new Directors.

The full terms of reference for the Committee can be found on the
Company’s website.

Meetings
The Committee meets at least once a year and otherwise as required.

Each meeting is attended by the Committee’s members. A record of
the meeting attendance at formal meetings by Committee members
is set out in the Corporate Governance Report on page 53.

During the year, the Committee considered the selection and
recommended the appointment of Mike Woodcock, who was
appointed an Executive Director and Chief Financial Officer on
1 November 2021, and also Juliette Stacey and Patrick Lewis who
were appointed on 3 November 2021 as Non-executive Directors.

Dianne Thompson
Nomination Committee Chairman
27 April 2022

Membership
The Committee is comprised solely of independent Directors,
being myself as Chairman and the other Non-executive Directors,
Christopher Rogers, Juliette Stacey and Patrick Lewis.

The Company’s Articles of Association stipulate that one third of the
Directors or the nearest whole number below one third shall retire
each year. The Company requires all Directors to submit themselves
for re-election at least every three years. In line with best practice,
the Board has decided to adopt voluntarily the practice that all
continuing Directors submit themselves for re-election annually.

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DIRECTORS’ REMUNERATION REPORT

The Committee is comprised solely of independent Directors, being
myself as the Chair and the other Non-executive Directors, Dame
Dianne Thompson, Juliette Stacey (from 3 November 2021) and
Patrick Lewis (from 3 November 2021). Vijay Thakrar was also a
member of the Committee until he stepped down from the Board on
27 November 2021.

The number of meetings held during the year and the attendance
at each meeting is shown in the table on page 54 of the Corporate
Governance Report.

The Chief Executive Officer and the Group HR Director are invited
to attend meetings of the Committee, where relevant. However,
no Director is involved in any decisions relating to their own
remuneration. None of the Committee has any personal financial
interest (other than as shareholders), conflicts of interests arising
from cross-directorships, or day-to-day involvement in running
the business.

The Committee keeps itself informed of all relevant developments
and best practice in the field of remuneration. It seeks advice from
the Group HR Director and external advisers when it considers it is
appropriate. Deloitte LLP was retained during the financial year to
provide independent advice to the Committee.

During the year ending 31 January 2022, the Committee agreed to
the following to be effective from 1 February 2022:
– In keeping with the Real Living Wage policy introduced last

year, the Committee has agreed an uplift in line with the rates
announced by the Living Wage Commission, equating to an
increase of 4.22%;

– An annual cost of living increase to all other employees of 3%; and
– A continuation of the all-employee bonus scheme enabling

colleagues to share in the Company’s success with an element of
variable pay.

Remuneration policy
The Group’s remuneration policy is designed to ensure that the main
elements of the remuneration package are linked to the Group’s
annual performance, delivery of its long-term strategy, as well as
being appropriate in quantum and capable of attracting, motivating
and retaining Executive Directors and senior managers. The policy
aims to reward Executive Directors and senior managers by offering
them competitive remuneration packages which are prudently
constructed, sufficiently stretching and linked to long-term value
creation for all stakeholders.

In particular, the Committee strives to ensure that remuneration
packages are:
– aligned with the Group’s strategic plan;
– aligned with shareholder interests and the performance of

the Group;

– competitive and sufficiently flexible to support the recruitment

and needs of the business; and

– paid in a combination of cash and shares.

The performance measurements of the Executive Directors and
the determination of their annual remuneration package, including
performance targets and underpins, are undertaken by the
Remuneration Committee.

Summary of components of Executive Directors’ remuneration
There are four main elements of the remuneration package for
Executive Directors and other senior management:
– basic annual salary and benefits;
– annual bonus payments;
– long-term incentives; and
– pension arrangements.

As a company listed on the Alternative Investment Market
(‘AIM’), the Company is not required to comply with the Directors’
remuneration report requirements, set out in Schedule 8 of the Large
and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 as amended in August 2013 (the ‘Regulations’).
However, transparency with our shareholders is important to us.
Whilst the Company is not required to comply with the Regulations,
the Company has used them as guidance and voluntarily presents
selected disclosures in this report, where relevant and appropriate.

Introduction from the Chair of the Remuneration Committee
This report aims to provide shareholders with the information to
understand the Remuneration Policy and its linkage to the Group’s
financial performance and delivery of its long-term strategy. The
Remuneration Committee seeks to achieve a fair reward outcome
linked to both the Group’s results and the progress achieved in
delivering the strategy.

Operation of the Remuneration Committee
The Committee operates under the Group’s agreed terms of
reference. It is responsible for setting the framework and policy
for the remuneration of the Executive Directors and designated
senior managers. It determines specific elements of their
remuneration, their contractual terms and, where necessary,
compensation arrangements. In making remuneration decisions,
the Committee considers the Group’s overall performance against
its long-term goals.

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Basic salary and benefits in kind
Salary is normally reviewed annually in February or when
responsibilities change. In deciding the appropriate levels, the
Committee takes into account factors which it considers necessary,
including Group and individual performance, market levels of, and
trends in executive remuneration and relative pay levels within
the Group. For the forthcoming year ending 31 January 2023, the
Executive Directors were given the same inflationary increase of
3% which is in line with the increase awarded to most employees.
Effective from 1 February 2022, the base salary for the Chief
Executive Officer has been set at £353,702 (2022: £343,400) per
annum. The base salary for the Chief Financial Officer has been set
at £206,000 (2022: £200,000).

In addition to basic salary, each Executive Director is provided with
health care benefits and a car allowance, where applicable.

Annual performance-related bonus
The Executive Directors’ remuneration package includes a
performance-related bonus with maximum bonus potential of up to
100% of basic salary for the Chief Executive Officer and up to 75%
of basic salary for the Chief Financial Officer. Bonus achievement is
linked to performance against underlying profit targets. The portion
of bonus paid is then determined based on performance against
individual objectives. In the case of the Executive Directors, there
are normally four individual objectives, one of which relates to cash
flow generation and one of which relates to ESG.

Long-Term Incentive Plan (‘LTIP’)
As reported last year, the Committee undertook an extensive
review of our long-term incentive arrangements to ensure that they
continued to support the sustainable execution of our long-term
business strategy and the creation of value for shareholders.

As a result, the Committee determined that starting from 2020 a
restricted share plan (‘RSP’) would replace the existing long-term
incentive plan for Executive Directors. The Committee believes that
the characteristics of restricted shares better support the business
in its execution of strategy and fully aligns executives with the
shareholder experience. For the year ending 31 January 2022, the
CEO was awarded a maximum opportunity of 67.5% of salary, and
the CFO awarded a maximum opportunity of 45% of salary. This
represented a greater than 50% discount on the previous levels of
the long-term incentive award. The award will vest in year three,
with 40% payable on vesting, 40% in year four and 20% in year five,
subject to the Committee being satisfied with the achievement
of robust underpins at the date of vesting. These underpins are
detailed on page 63 of this report.

The Committee intends to continue to issue awards under this RSP
plan, with an award to be made to both Executive Directors later this
year in respect of the year ending 31 January 2023. The maximum
award will be 75% of salary for the CEO and 50% of salary for the
CFO. Subject to the Committee being satisfied with the achievement
of robust underpins, the award will vest in year three, with 40%
issued on vesting, 40% in year four and 20% in year five. In line with
best practice, malus and clawback will apply.

Dilution
All equity-based awards are subject to an overall limit on the number
of new shares issued of 10% within any 10-year period. The current
dilution against this limit is 6.06%.

Pensions
Both Lisa Montague and Mike Woodcock are members of a Group
Flexible Retirement Plan (‘the Plan’) sponsored by the Group. For
the purposes of determining employer contributions to that scheme,
annual performance-related bonuses are not included in the
pensionable pay of the Executive Directors.

Directors’ contracts
It is the Group’s policy that Executive Directors should have contracts
with an indefinite term providing for a maximum of one year’s notice
for the Chief Executive Officer and six months’ notice for the Chief
Financial Officer.

In the event of early termination, the Executive Directors’ contracts
provide for compensation of an amount equal to the gross salary
and benefits that they would have received during the balance of
the notice period, plus any bonus, once declared, to which they
would have become entitled had contractual notice been given.

Michael Williamson stepped down from the Board effective
31 October 2021. The Committee judged that Michael should be
treated as a good leaver for the purpose of his incentives and
therefore Michael remained eligible for a pro-rated annual bonus
for the year ended 31 January 2022 and continues to remain eligible
to receive pro-rata vesting from his outstanding LTIP awards.
Any vesting will be at the normal time, will remain subject to the
achievement of performance conditions and will be pro-rated based
on time in employment.

Director shareholding
To align with best practice, a shareholding guidance of 1x salary for
Executive Directors is in place, with the shareholding to be built over
time from retaining 50% (net of tax) of any LTIP/RSP awards
in shares.

Non-executive Directors
The remuneration of the Non-executive Directors comprises only
Directors’ fees and is determined by the Board.

All Non-executive Directors have service contracts with a three-
year initial term subject to a six-month notice provision. Their
remuneration is determined by the Board taking into account their
duties and the level of fees paid to Non-executive Directors of
similar companies. The Non-executive Directors do not participate
in the Company’s bonus or long-term incentive schemes and no
pension contributions are made in respect of them.

For the forthcoming year ending 31 January 2023, the Non-
executive Directors were given an inflationary increase of 3% which
is in line with the increase awarded to most employees, effective
from 1 February 2022.

Title

Chairman

FY2022 Fee

FY2023 Fee

Committee
Chair Fee

£110,000

£113,300

–

Non-executive Director

£45,450

£46,813

£5,000

DIRECTORS’ REMUNERATION REPORT CONTINUED

Directors’ remuneration (audited)
The following table summarises the total gross remuneration for the reporting period of the Directors who served during the period to
31 January 2022.

Year to 31 January 2022

Executive Directors:

Lisa Montague

Mike Woodcock (from 1/11/21)

Michael Williamson (up to 31/10/21)

Non-executive Directors:

Dianne Thompson

Christopher Rogers

Juliette Stacey (from 3/11/21)

Patrick Lewis (from 3/11/21)

Vijay Thakrar (up to 27/11/21)

Includes notice pay and accrued holiday pay of £107,000.

** No LTIP vested during the year.

Year to 31 January 2021

Executive Directors:

L Montague

M Williamson

Non-executive Directors:

D Thompson

C Rogers

V Thakrar

Salary
£000

Bonus
£000

LTIP**
£000

Benefits
£000

Pension
£000

358

255*

111

890

190

–

268

–

Salary
£000

Annual
bonus
£000

LTIP
£000

Benefits
£000

Pension
£000

339

190

105

730

–

Cash
allowance
in lieu of
pension
£000

–

Cash
allowance
in lieu of
pension
£000

–

Total
£000

572

320

111

1,192

Total
£000

361

199

105

761

Annual bonus for the year ended 31 January 2022
The Chief Executive Officer’s maximum bonus potential for the year ended 31 January 2022 was 100% of base salary and the Chief Financial
Officer’s maximum bonus potential was 75% of base salary, pro-rated for his time in employment. Bonus achievement was linked to performance
against underlying profit targets. The portion of bonus paid was then determined based on performance against individual objectives. Based
on profit growth for the year and the progress achieved against personal objectives the Committee judged that the Chief Executive Officer
should receive a bonus of £190,072. The Chief Financial Officer also received a bonus of £20,000. The former Chief Financial Officer retained
entitlement to a pro-rated bonus for the year based on performance and received a bonus of £57,754.

2019 LTIP award
The performance conditions for the 2019 award are based on a mixture of relative TSR performance to 21 November 2022 and targets set
for the financial performance of the Company for the year ending 31 January 2022. 25% of the award is against a measurement of TSR of
the Company against a comparator group of companies chosen from the retail and home goods sector, and 75% of the award is measured
against targets set for the financial performance of the Company based on (i) earnings per share, (ii) revenue and (iii) free cash flow
measurements, split 25% each.

The revenue performance target was not met but the earnings per share and free cash flow targets were met in full. TSR performance
is assessed from the date of grant of 21 November 2019 to the third anniversary and performance will be assessed at that point. TSR
performance is currently forecast to vest in full.

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Directors’ LTIP awards

L Montague

M Williamson3

Date of grant

Share price at
grant

Exercise
price

21/11/20191

11/11/20202

77.0p

68.0p

14/06/20212

175.0p

11/11/20202

68.0p

14/06/20212

175.0p

nil

Maximum
awards at
1 February
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662,337

292,500

–

132,454

122,757

–

48,177

Granted in
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Exercised in
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Lapsed in
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Maximum
awards at
31 January
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292,500

132,454

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39,686

42,061

6,116

–

1 In accordance with the rules of the LTIP, which were approved by shareholders at the 2015 AGM, shares awarded will vest three years after the date of grant subject
to continued service and the extent to which relevant performance conditions are achieved. The performance conditions for the 2019 award are based on a mixture
of compound growth in relative TSR and targets set for the financial performance of the Company for the financial year ending 31 January 2022. 25% of the award
is against a measurement of TSR of the Company against a comparator group of companies chosen from the retail and home goods sector, and 75% of the award is
measured against targets set for the financial performance of the Company based on (i) earnings per share, (ii) revenue and (iii) free cash flow measurements, split
25% each.

2 As noted above, the 2020 and 2021 awards were made under the restricted share plan. The performance underpins for the 2020 award are based on the adjusted
underlying profit before tax*, free cash flow achieved for the relevant measurement period and continuous improvement in sustainability based on a reduction in
carbon footprint and contribution to the UN Sustainable Development Goals plus there being no environmental, social or governance issues which have resulted
in material reputational damage to the Company. The awards for the Executive Directors will vest in year three subject to the Company meeting the underpins
outlined. If the Company fails to meet one or more of the underpins outlined, then the Committee retains the discretion to determine what level of scale back would
be appropriate. Vested awards will be released 40% on 11 November 2023, 30% on 11 November 2024 and 30% on 11 November 2025. The fair value at the date
of grant for this award has been determined based on the share price at the date of grant discounted by the estimated dividends payable on the shares over the
relevant vesting period. The relevant fair values are 61.3p for awards vesting on 11 November 2023, 59.2p for awards vesting on 11 November 2024 and 57.2p for
those vesting on 11 November 2025.

3 As noted above, the awards granted to Michael Williamson are shown pro-rated for his leaving date.

* Underlying earnings adjusted for accounting charges relating to share-based incentives, defined benefit pension charge and non-underlying items.

The performance underpins for the 2021 award are based on the underlying profit before tax and free cash flow achieved for the relevant
measurement period and continuous improvement in sustainability based on a reduction in carbon footprint and contribution to the UN
Sustainable Development Goals plus there being no environmental, social or governance issues which have resulted in material reputational
damage to the Company. Subject to the achievement of underpins, the awards will vest following the end of year three, with 40% being
released on 14 June 2024, 40% being released on 14 June 2025 and 20% being released on 14 June 2026.

The fair value at the date of grant for this award has been determined based on the share price at the date of grant discounted by the
estimated dividends payable on the shares over the relevant vesting period. The relevant fair values are 164.5p for awards vesting on 14 June
2024, 161.1p for awards vesting on 14 June 2025 and 157.8p for those vesting on 14 June 2026.

The full financial details of the performance underpins for each award are not disclosed as they are commercially sensitive but represent
outperformance against the recent historical performance of the business.

The share price reached a high of 233.5p and a low of 98.0p during the financial year ended 31 January 2022. The share price on 1 February
2021 was 109.0p, and on 31 January 2022 it was 168.0p.

Total Shareholder Return index for the five financial years ending 31 January 2022

200

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Jul 19

Jan 20

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Jan 21

Jul 21

Jan 22

Sanderson Design Group TSR, -8.6%

AIM All-Share TSR, 31.0%

Christopher Rogers
Chairman of the Remuneration Committee
27 April 2022

AUDIT COMMITTEE REPORT

– Oversee the relationship with the external auditors, reviewing
performance and advising the Board on their appointment,
independence and remuneration.

– Monitor the statutory audit of the Annual Report and financial

statements.

– Ensure appropriate arrangements are in place for individuals
to raise concerns regarding breach of conduct and legal and
regulatory compliance. A copy of the policy is available on the
corporate intranet.

The full terms of reference for the Committee can be found on the
Company’s website.

Meetings
The Committee meets at least three times a year to review the
external auditors’ audit plan for the annual audit; the draft Annual
Report and Accounts; and the Interim Report. At meetings, the
findings of the external auditors are discussed and key risks are
reviewed with management and the auditors, including how
management are mitigating key risks.

Each meeting is attended by the Committee’s members as well as,
by invitation, the Executive Directors and the external auditors,
where appropriate. A record of the meeting attendance at formal
meetings by Committee members is set out in the Corporate
Governance Report on page 54.

At each formal meeting, the Committee held a private meeting with
the external auditors, without management being present, to receive
feedback from them.

The Committee is kept up to date with changes to accounting
standards and developments in financial reporting, company law
and other regulatory matters through attendance at external
technical presentations and updates from the external auditors and
the Company Secretary.

The Committee undertook the following activities during the year:

Financial reporting
The Committee reviewed the Annual and Interim reports, including
the significant financial reporting issues and key judgements
contained therein. The Committee confirms that appropriate
accounting standards have been applied and that the financial
statements give a true and fair view and the disclosures made are
balanced. In reaching this conclusion, the Committee gave due
regard to a report prepared by the external auditors which included
significant reporting and key accounting matters, summarised below.

Tax
The Committee held two annual meetings with the tax advisers,
KPMG, to discuss matters relating to tax compliance, risks,
governance and advisory services.

Key accounting estimates and judgements
The major accounting issues discussed by the Committee with the
auditors and management in relation to the performance in the
financial year to 31 January 2022 were as follows:

a. Inventory
Due to the significant quantum of stock held, there is an ongoing
focus by management on inventory levels. The Group has
consciously reduced its inventory level through reduction of products
and number of collection launches. Inventory is discussed at both
Board and Committee level. Management applies a consistent
provisioning methodology with regard to the ageing of inventory.
There is also an additional management judgement overlay
based on specific factors. The continuing appropriateness of the
provisioning methodology is tested by both management and the
auditors. BDO brought to the Committee’s attention errors identified
in the historical inventory valuation methodology which resulted in
an over-absorption of the manufacturing units’ overhead costs.

On behalf of the Board, I am pleased to present the Audit
Committee Report for the year ended 31 January 2022.

During the year, a key area of work for the Audit Committee
has been the audit tender process which resulted in the appointment
of BDO LLP (‘BDO’). This process was led by my predecessor,
Vijay Thakrar, and I would like to thank him and my fellow members
of the Committee, and also the wider finance team for their support.

The formal appointment of BDO will be proposed at the AGM,
but we have been delighted with their support during the year end
and look forward to developing this relationship.

During the year we also welcomed a new CFO, Mike Woodcock.

Membership
The Committee is comprised solely of independent Directors,
being myself as Chairman and the other Non-executive Directors,
Dianne Thompson, Christopher Rogers and Patrick Lewis. The Board
is satisfied that I have significant and relevant experience to chair
the Audit Committee in line with the QCA Code.

Roles and responsibilities
The role of the Committee is to support the Board in carrying out its
responsibilities for oversight and governance of the Group’s financial
reporting, its key internal controls and risk management systems and
the relationship with the external auditors. In this context, the Audit
Committee’s responsibilities are to:
– Monitor the integrity of the financial statements of the Company,
reviewing any significant reporting issues and key judgements
they contain.

– Review the clarity of disclosure and information contained in the

Annual Report and Accounts.

– Challenge management on the effectiveness of the Group’s

internal control and risk management systems.

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The Committee reviewed the appropriateness of management’s
accounting in relation to each of these significant risks and agreed
to management’s proposed change for the cost absorption
methodology of the manufacturing units. Details of this work are
provided in BDO’s Auditors’ Report on pages 66 to 70 and the full
details of the prior year adjustments are given in note 30.

b. Defined benefit pension schemes
Details of the Group’s defined benefit pension plans are set out at
note 22. An independent firm of pension advisers continues to work
with the Group and the Trustees of the pension schemes to help
manage the Group’s costs going forward, while ensuring that the
Group’s obligations to scheme members are appropriately met.

Management also engaged a third-party actuary to assist them in
the preparation of the pension accounting and financial statements
disclosures. As at 31 January 2022, there was a surplus of assets
over liabilities of £2.5m (FY2021: deficit of £5.6m). Management
received legal advice in relation to the Pension Trust Deeds and
schemes rules which concluded that the Group has an unconditional
right to refund of the surplus on winding up of the pension schemes.
BDO considered the recognition of the pension asset as reasonable
and have reported as such in their Auditors’ Report on page 66.

c. Going concern and impact of Covid-19
As set out in the Report of the Directors on page 56 and the Board
decisions specific to the continuing impact of Covid-19 and the
impact of the invasion of Ukraine by Russia, the Group continues to
manage cash in light of these uncertainties. Management modelled
various stress tested trading and cash flow scenarios, which have
been shared with the auditors. These have been reviewed by the
Audit Committee and the Board, and the Board’s conclusion as
a whole is set out in the Report of the Directors at page 56. In
addition, the Committee has discussed with management and BDO
appropriate disclosures relating to the Group’s funding position at
note 21.

d. Non-underlying income and expenses
The Committee reviewed the appropriateness of management’s split
of income and expenses in the Strategic Report and the financial
statements between underlying and non-underlying and the relevant
disclosures to provide sufficient transparency. Items that are both
material or items considered to be non-operational in nature and
whose nature is sufficient to warrant separate disclosure and
identification as non-underlying or adjusted were discussed with the
auditors. Non-underlying items typically include amounts in relation
to acquisitions, unexpected external events, significant restructuring
and reorganisation or material one-off accounting charges.

e. Long term incentive plans
The Committee and BDO discussed the controls around calculating
the estimated costs of the Company’s long-term incentive plans.
BDO does not have any significant observations to report around
these incentive plans.

Internal controls and risk management
Management has an ongoing process to identify, evaluate and
manage the risks faced by the Group. Each business unit reports
monthly on key risks identified and measures that are being taken to
mitigate the risk. The Strategic Report includes further detail as to
the business risks identified and actions being taken. As part of the
year-end preparation, the management did a full refresh of the risk
register. This included a bottom-up review of risks across all sites and
areas of operation, revising or reconfirming ownership and updating
mitigating actions and controls.

The Company has an established internal control framework, the key
factors of which include clearly defined levels of responsibility and
delegation of authority, a comprehensive monthly reporting process,
monthly business performance review of actual results against
budget, together with commentary on significant variances and

updates of both profit and cashflow, together with a comprehensive
budgeting process. All significant capital expenditure is approved by
the Board.

Throughout the period, the Executive Directors provided relevant
and timely financial commentary to the Board to supplement the
financial reporting, ensuring the Board and Audit Committee were
informed of the financial position and result of the Group.

Internal audit
The Group does not have a formal internal audit function and the
Committee considers that management is able to derive assurance
as to the adequacy and effectiveness of internal controls and risk
management procedures without one.

External audit
As reported last year, the Committee decided to review the
external audit appointment and conducted a competitive audit
tender process. A number of firms were invited to tender, and the
two shortlisted firms presented their proposals to the Board.
Following careful consideration, the Audit Committee recommended
the appointment of BDO to conduct the audit of the Group’s
financial statements for the financial year 31 January 2022, and PwC
subsequently resigned.

At its meetings, the Committee had discussions with the external
auditors on audit planning, fees, accounting policies, audit findings
and internal controls. This included a review with the auditors
and management on how management are addressing control
recommendations made by the auditors. The effectiveness of the
audit was assessed through the review of audit plans, reports and
conclusions and through discussions with management and the
external auditors.

The Audit Committee reviewed the effectiveness of BDO’s
performance of the external audit process taking into account the
quality and scope of the audit plan, and evaluation of delivery
and performance against the plan; qualifications, efficiency and
performance of the audit team; the communication between
the Company and BDO and BDO’s understanding of the Group’s
business and industry sector. After considering these matters, the
Audit Committee was satisfied with the effectiveness of the year end
audit process and recommended to the Board that BDO should be
proposed for formal appointment at the Company’s AGM.

Auditor independence
To ensure auditor objectivity and independence, the Committee has
adopted a policy on the engagement of external auditors for the
provision of non-audit services, which include financial limits above
which the Audit Committee must pre-approve. The policy is available
on the website.

Any work by BDO where the fees are likely to be in excess of
£10,000 above the agreed annual audit fees must be pre-approved
by the Committee before the work commences. There has been no
engagement of BDO for provision of non-audit services during the
reporting period. Details of fees paid to BDO during the year are
disclosed in note 6 of the financial statements.

The Committee has confirmed it is satisfied with the independence,
objectivity and effectiveness of BDO.

Juliette Stacey
Audit Committee Chair
27 April 2022

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS
OF SANDERSON DESIGN GROUP PLC

OPINION ON THE FINANCIAL STATEMENTS
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 January
2022 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.

We have audited the financial statements of Sanderson Design
Group PLC (the ‘Parent Company’) and its subsidiaries (the
‘Group’) for the year ended 31 January 2022 which comprise the
Consolidated Income Statement, the Consolidated and Company
Statement of Comprehensive Income, the Consolidated and
Company Balance Sheets, the Consolidated Cash Flow Statement,
the Consolidated and Company Statements of Changes in Equity
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).

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 believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.

Independence

We remain 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.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our
evaluation of the Directors’ assessment of the Group and the Parent
Company’s ability to continue to adopt the going concern basis of
accounting included:
– Obtaining an understanding of how the Directors undertook the

going concern assessment process to determine if we considered
it to be appropriate for the circumstances;

– Obtaining the Directors’ trading forecasts underlying the going
concern assessment and challenging the Directors on the key
estimates and assumptions within the forecasts around the
forecast levels of revenue, gross profit and working capital
cycles, through analysis and comparison of forecasts with prior
year actuals;

– Performing data verification and logic checks to confirm the

mathematical accuracy of the forecast model;

– Reviewing the Directors’ ‘stress tested’ sensitivity analysis to

assess the quantum of adverse variance against forecast that
could be sustained without indicating material uncertainties over
the going concern assumption;

– Analysing post year end trading results compared to forecast
and current year to evaluate the accuracy and achievability of
forecasts; and

– Evaluating the adequacy of disclosures in relation to going concern.

Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group
and 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.

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

Overview

Coverage

97% of Group profit before tax

99% of Group revenue

98% of Group total assets

Key audit
matters

Inventory valuation and adequacy
of inventory provision

Accounting for retirement benefit
obligations

2022




Materiality

Group financial statements as a whole

£518,000 based on 5% of profit before tax

An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including the Group’s system of internal
control, and assessing the risks of material misstatement in the
financial statements. We also addressed the risk of management
override of internal controls, including assessing whether there was
evidence of bias by the Directors that may have represented a risk
of material misstatement.

We determined that the Group had five significant components,
being the UK Brands, US Brands, Anstey manufacturing and
Standfast manufacturing trading divisions and the Sanderson Design
Group PLC parent company. A full scope audit was performed by
the Group engagement team in respect of each of the significant
components and this achieved coverage of 97% of Group profit
before tax, 99% of Group revenue and 98% of total Group assets.

We determined that the remaining components of the Group were
not individually financially significant enough to require a full scope
audit for Group purposes, however we performed specific risk-
focused audit procedures in respect of cash, along with analytical
procedures in order to obtain sufficient appropriate audit evidence
to support our opinion on the Group financial statements as a whole.

All audit work was performed by the Group engagement team and
we did not utilise component auditors.

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, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources in
the audit, and directing the efforts of the engagement team. 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.

Key audit matter

Inventory valuation and
adequacy of inventory
provision

(see accounting policies,
critical accounting
estimates and judgements
in Note 3 (b), Note 16
Inventories and Note 30
Prior period adjustment)

The Group has inventory balances of £22.6m
which is stated net of material inventory provisions.
The provision is calculated based on a formula
driven factor table including whether the inventory
lines are classed as discontinued, the age of the
inventory and sales history. There is management
judgement in relation to the inventory provisioning
methodology.

Our audit testing identified errors in the inventory
valuation methodology applied which resulted
in an over-absorption of overhead costs and by
extension an overstatement to the carrying value of
inventory. This has led to a prior period adjustment
to restate the comparatives (see note 30).

There is a significant amount of judgement involved
in determining an appropriate basis of inventory
value and provision. There is also a risk of fraud
through manipulation of the inventory provision.

Owing to the magnitude of inventories held, and
the level of estimation and judgement involved in
determining both the eligibility of overheads for
inclusion within inventory cost and net realisable
value, we determined the valuation of inventories to
be a key audit matter.

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How the scope of our audit addressed the key audit matter

We challenged management on their original
inventory costing methodology, by testing overheads
absorbed into the cost of inventory and assessing
whether they were directly attributable product costs.

We performed audit procedures on the quantitative
analysis prepared by management to assess the
current and prior year overstatement of the inventory
carrying value due to the over-absorption of costs.
On a sample basis we substantiated the costs
absorbed into stock under the revised methodology
and considered the eligibility of costs included as
production overheads. Our assessment was based
on both the nature of the costs corroborated by
supporting evidence and also a physical inspection of
the manufacturing site.

We verified that the adjustments to the inventory
carrying value had been appropriately reflected in
the financial statements, including the restatement
of comparatives.

We reviewed the provisioning model and tested
the mathematical accuracy of the calculations and
verified that the provision was being appropriately
calculated in line with the factor tables. We performed
data integrity tests on the model to verify that the key
inputs to the calculation were appropriately derived
from underlying system data.

We considered the appropriateness of the
provisioning methodology applied in the factor
tables by quantifying exposures to inventory lines
without sales in the last 12 months and inventory
lines designated by management as ‘obsolete’. We
specifically tested that the provisioning methodology
had been applied on a consistent basis year on year
to mitigate the risk of manipulation of earnings.

We assessed the reasonability of the provisions by
performing a ‘look-back’ assessment which involved
comparing inventory written off in the year against
the prior year provision as well as inventory provisions
that were written back in the current year.

Key observations:

After the prior period restatement, we consider the
assumptions and methodology underpinning the
inventory provision were deemed to be reasonable,
and in line with the requirements of the accounting
standards.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS
OF SANDERSON DESIGN GROUP PLC CONTINUED

Key audit matter

Accounting for
retirement benefit
obligations

(see accounting policies,
critical accounting
estimates and judgements
in Note 3 (a) and
Note 22 Retirement
benefit obligation)

How the scope of our audit addressed the key audit matter

The pension obligation is calculated based on
actuarial estimates and assumptions related
to life expectancy, discount and inflation rates,
wages and salary changes, the rate of increase in
pensions payments, the market value of equities
bonds and other pension assets.

Recognition of a defined benefit pension asset
is subject to strict criteria being met and the
determination that the Group has an ‘unconditional
right’ to a refund of the pension surplus is based
upon legal advice.

Pension assets

We performed testing of the assets, that are
predominantly included in Pooled Investment Vehicles
(‘PIVs’) by:
– Obtaining controls reports relating to the asset
fund manager and asset custodian and reading
those reports to understand the controls in
place over the rights and custody, valuation and
information management, and to identify any
control findings; and

– Obtaining direct confirmation of the assets held.

Owing to the magnitude of both the pension
assets and obligations, the level of estimation
and complex judgement involved in determining
the present value of funded obligations and finely
balanced legal judgements involved in concluding
whether an ‘unconditional right’ to a refund of
the surplus exists, we determined accounting for
retirement benefit obligations to be a key
audit matter.

We reviewed the legal advice received by
management establishing that the Group did have
an ‘unconditional right’ to a refund of the surplus
and considered this by reference to the schemes’
Trust Deeds.

We verified that recognition of the pension asset
in the circumstances described was supported by
authoritative accounting literature.

Pension obligation

We assessed the competence, capabilities and
objectivity of the actuary used by management to
assist them in valuing the pension obligation.

With the assistance of an actuary, whom we engaged
as an ‘auditor’s expert’, we tested the actuarial
assumptions applied in valuing pension obligations.
We understood and challenged the appropriateness
of management’s assumptions used in calculating the
liability by benchmarking key assumptions to available
industry data and reviewed the consistency of the
nature of these assumptions with the prior year. We
confirmed the final assumptions applied are consistent
and within a reasonable range.

We performed tests to verify employer contributions
made during the year and agreed scheme membership
data to the latest audited pension scheme financial
statements.

Key observations:

The assumptions applied in valuing the present value
of funded obligations were found to be reasonable.

Recognition of the pension asset was considered
to be appropriate based on legal advice received
concerning the application of the scheme rules in a
wind-up situation.

Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that
are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily
be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a whole.

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Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality
as follows:

Materiality

Basis for determining
materiality

Rationale for the
benchmark applied

Group financial statements
2022
£000

518

Parent Company financial statements
2022
£000

259

5% of profit before tax

0.5% of total assets capped at 50% of Group materiality

Profit before tax is considered to be the key driver of
the Group’s value and is considered to be the measure
of most importance to the shareholders.

Total assets was considered to be the most appropriate
benchmark as the principal activity of the Parent
Company is a holding company.

The materiality of the Parent Company was capped
at a percentage of Group materiality to respond to
aggregation risk.

Performance
materiality

343

168

Basis for determining
performance
materiality

Set at 65% of materiality. A lower threshold has been
applied in recognition of this being the first year
we have audited the Group.

Set at 65% of materiality. A lower threshold has been
applied in recognition of this being the first year
we have audited the Parent Company.

Component materiality

We set materiality for each component of the Group based on a percentage of between 39% and 73% of Group materiality dependent on the
size and our assessment of the risk of material misstatement of that component. Component materiality ranged from £201,000 to £378,000.
In the audit of each component, we further applied performance materiality levels of 65% of the component materiality to our testing to
ensure that the risk of errors exceeding component materiality was appropriately mitigated.

Reporting threshold

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £20,000. We also agreed to
report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

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

We have nothing to report in this regard.

Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act
2006 and ISAs (UK) to report on certain opinions and matters as described below.

Strategic Report and
Directors’ Report

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.

In the light of the knowledge and understanding of the Group and 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.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS
OF SANDERSON DESIGN GROUP PLC CONTINUED

Responsibilities of Directors
As explained more fully in the Statement of Directors’
responsibilities, 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.

Extent to which the audit was 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. The extent to which our
procedures are capable of detecting irregularities, including fraud is
detailed below:

We gained an understanding of the legal and regulatory framework
applicable to the Group and the industry in which it operates and
considered the risk of acts by the Group which were contrary to
applicable laws and regulations, including fraud. These included,
but were not limited to compliance with the Companies Act 2006,
the AIM listing rules, the principles of the Quoted Companies
Alliance Corporate Governance Code and the applicable
accounting framework.

We focused on areas that could give rise to a material misstatement,
including fraud in the Group financial statements which, alongside
the key audit matter relating to inventory valuation, included a
fraud risk in relation to revenue recognition particularly in the period
before year end, the costs capitalised as collection design costs, and
the risk of management override of controls. Our testing included:
– enquiries of management and those charged with governance of
known or suspected non-compliance with laws and regulations
or fraud in the period and other unusual transactions. We
corroborated our enquiries through a review of minutes of Board
meetings throughout the year;

– obtaining an understanding of the control environment in

monitoring compliance with laws and regulations;

– challenge of key estimates and judgements, including those
applied to key audit matters by management in the financial
statements to test that they are free from management bias;

– identifying and testing to supporting documentation, a sample of

journal entries for the following journal types:

– any journals outside of the normal course of business or
indicative of manipulation of the financial statements;

– all journals posted to revenue to ascertain if any unusual
transactions exist which are outside the normal course of
business; and

– any manual or late journals posted at a consolidated level;

– performing, amongst others, the following revenue tests:

– review of the revenue nominal accounts for any unusual

transactions;

– testing a sample of transactions posted to the nominal
ledger in January 2022 to check that revenue had been
recorded in the correct period;

– review of the elimination of intra-group revenue and
associated unrealised profit within inventories at
consolidation level; and

– review of transfer prices applied on a sample of intra-group
revenue transactions to verify that arm’s length prices had
been applied;

– verification, on a sample basis, of costs capitalised as collection
design costs to ensure that the relevant recognition criteria had
been met and costs were not being capitalised to manipulate
reported earnings;

– consideration of management’s assessment of related parties
and any unusual transactions and evaluating the process for
identifying and monitoring any such transactions; and

– consideration of the total unadjusted audit differences for

indications of bias or deliberate misstatement.

We communicated relevant identified laws and regulations and
potential fraud risks to all engagement team members and remained
alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.

Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the risk of
not detecting a material misstatement due to fraud is higher than the
risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery, misrepresentations
or through collusion. There are inherent limitations in the audit
procedures performed and the further removed non-compliance with
laws and regulations is from the events and transactions reflected in
the financial statements, the less likely we are to become aware of it.

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

Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and the
Parent Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.

Gareth Singleton (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Birmingham, UK

27 April 2022

BDO LLP is a limited liability partnership registered in England and
Wales (with registered number OC305127).

CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31 JANUARY 2022

Revenue

Cost of sales

Gross profit

Net operating expenses:

Distribution and selling expenses

Administration expenses

Other operating income

Profit from operations

Finance income

Finance costs

Net finance income/(costs)

Profit before tax

Tax expense

Profit for the year attributable to owners of the parent

Earnings per share – Basic

Earnings per share – Diluted

Adjusted earnings per share – Basic*

Adjusted earnings per share – Diluted*

2022
Total
£000

(restated)
2021
Total
£000

Note

112,200

93,760

(38,365)

(36,855)

73,835

56,905

(25,052)

(42,796)

4,342

10,329

184

(154)

10,359

(2,600)

7,759

10.93p

10.80p

13.75p

13.59p

(19,129)

(36,502)

3,822

5,096

139

300

(161)

4,935

(1,109)

3,826

5.39p

5.27p

7.89p

7.71p

4–6

All of the activities of the Group are continuing operations.

The notes on pages 76 to 106 form an integral part of the consolidated financial statements.

Note 30 explains the effect of the prior year restatement for the year ended 31 January 2021.

A credit of £139,000 relating to unwind of discount on minimum guaranteed licensing income was presented as part of interest expense in the
prior year. The comparative has been represented to aid comparability.

* These are alternative performance measures as defined in the Glossary on page 119.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 JANUARY 2022

Profit for the year

Other comprehensive income/(expense):

Items that will not be reclassified to profit or loss

Remeasurements of defined benefit pension schemes

Deferred tax (charge)/credit relating to pension schemes

Total items that will not be reclassified to profit or loss

Items that may be reclassified subsequently to profit or loss

Currency translation gains/(losses)

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

Total comprehensive income for the year attributable to the owners of the parent

The notes on pages 76 to 106 form an integral part of the consolidated financial statements.

Note 30 explains the effect of the prior year restatement for the year ended 31 January 2021.

Note

2022
£000

(restated)
2021
£000

7,759

3,826

6,492

(1,233)

5,259

(1,565)

297

(1,268)

(301)

5,329

(1,569)

13,088

2,257

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CONSOLIDATED BAL ANCE SHEET
AS AT 31 JANUARY 2022

Non-current assets

Intangible assets

Property, plant and equipment

Right-of-use assets

Retirement benefit surplus

Minimum guaranteed licensing receivables

Current assets

Inventories

Trade and other receivables

Minimum guaranteed licensing receivables

Cash and cash equivalents

Total assets

Current liabilities

Trade and other payables

Lease liabilities

Borrowings

Net current assets

Non-current liabilities

Lease liabilities

Deferred income tax liabilities

Retirement benefit obligation

Total liabilities

Net assets

Equity

Share capital

Share premium account

Foreign currency translation reserve

Retained earnings

Other reserves

Total equity

Note

2022
£000

(restated)
31/01/2021
£000

(restated)
01/01/2020
£000

26,979

11,258

3,923

2,577

1,619

28,325

12,061

5,783

–

1,222

29,815

14,101

8,392

–

1,455

46,356

47,391

53,763

22,652

16,792

879

19,050

19,633

15,885

1,221

15,549

59,373

52,288

27,819

18,593

495

3,055

49,962

105,729

99,679

103,725

(20,115)

(1,983)

–

(20,472)

(22,940)

(2,676)

(412)

(2,810)

(1,719)

(22,098)

(23,560)

(27,469)

37,275

28,728

22,493

(1,920)

(1,998)

–

(3,206)

(514)

(5,637)

(5,603)

(802)

(5,659)

(3,918)

(9,357)

(12,064)

(26,016)

(32,917)

(39,533)

79,713

66,762

64,192

710

18,682

(796)

20,610

40,507

710

18,682

(866)

7,729

40,507

710

18,682

(565)

4,858

40,507

79,713

66,762

64,192

A third consolidated balance sheet as at 1 February 2020 has been shown above to show the effect of the prior year restatement as detailed
in note 30. Minimum guaranteed licensing receivables is analysed into current and non-current assets as detailed in note 18.

The financial statements on pages 76 to 106 were approved by the Board of Directors on 27 April 2022 and signed on its behalf by

Lisa Montague
Director

Registered number: 61880

Mike Woodcock
Director

CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31 JANUARY 2022

Profit before tax

Defined benefit pension charge

Net finance (income)/costs

Depreciation and impairment of property, plant and equipment and right-of-use assets

Amortisation

Loss on disposal of fixed assets

Share-based payment charge

Unrealised foreign exchange losses/(gains)

Forgiveness of a loan into a grant

Defined benefit pension cash contributions

Cash generated from operating activities

Changes in working capital:

(Increase)/decrease in inventories

(Increase)/decrease in trade and other receivables

Increase/(decrease) in trade and other payables

Cash generated from operations

Corporation tax paid

Net cash generated from operating activities

Cash flows from investing activities

Interest received

Purchase of intangible assets

Purchase of property, plant and equipment

Proceeds from disposal of property, plant and equipment

Net cash used in investing activities

Cash flows from financing activities

Payment of lease liabilities

Interest paid

Proceeds from borrowings

Dividends paid to Company’s shareholders

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Effect of exchange rate fluctuations on cash held

Cash and cash equivalents at end of year

Note

2022
£000

10,359

487

(30)

5,065

1,725

–

253

468

(412)

(2,209)

(restated)
2021
£000

4,935

531

161

5,697

1,735

294

(52)

–

(2,118)

15,706

11,255

(3,018)

(669)

716

8,186

2,310

(3,529)

12,735

18,222

(3,754)

(23)

8,981

18,199

(379)

(1,750)

–

(2,124)

(2,686)

(76)

–

(532)

(245)

(830)

(999)

(2,958)

(279)

412

–

(3,294)

(2,825)

3,563

15,549

(62)

14,375

1,336

(162)

19,050

15,549

The notes on pages 76 to 106 form an integral part of the consolidated financial statements.

Note 30 explains the effect of the prior year restatement for the year ended 31 January 2021.

Interest paid was presented as part of net cash generated from operations in the prior year. The comparative has been represented to
aid comparability.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 31 JANUARY 2022

Attributable to owners of the parent

Other reserves

(restated)
Retained
earnings
£000

Capital
reserve
(note 25)
£000

Merger
reserve
£000

Foreign
currency
translation
reserve
£000

(restated)

Total
equity
£000

5,495

(637)

4,858

3,826

(1,565)

297

–

2,558

–

294

43,457

(2,950)

(565)

64,829

–

(637)

43,457

(2,950)

(565)

–

(301)

–

64,192

3,826

(1,565)

297

(301)

2,257

–

294

Share
capital
(note 24)
£000

710

–

710

Share
premium
account
£000

18,682

–

18,682

–

Balance at 1 February 2020 as previously stated

Prior period restatement (note 30)

Balance at 1 February 2020 as restated

Profit for the year

Other comprehensive income/(expense):

Remeasurements of defined benefit
pension schemes (note 22)

Deferred tax relating to pension scheme liability
(note 15)

Currency translation differences

Total comprehensive income/(expense):

Transactions with owners, recognised directly
in equity:

Dividends

Long-term incentive plan charge

Related tax movements on long-term incentive plan
(note 15)

Balance at 31 January 2021

710

18,682

7,729

43,457

(2,950)

(866)

66,762

Attributable to owners of the parent

Other reserves

Share
capital
(note 24)
£000

Share
premium
account
£000

(restated)
Retained
earnings
£000

Capital
reserve
(note 25)
£000

Merger
reserve
£000

Foreign
currency
translation
reserve
£000

(restated)
Total
equity
£000

Balance at 1 February 2021 as previously stated

Prior period restatement (note 30)

Balance at 1 February 2020 as restated

Profit for the year

Other comprehensive income/(expense):

Remeasurements of defined benefit
pension schemes (note 22)

Deferred tax charge relating to pension scheme
assets (note 15)

Currency translation differences

Total comprehensive income/(expense):

Transactions with owners, recognised directly
in equity:

Dividends (note 26)

Long-term incentive plan charge

Related tax movements on long-term incentive
plan (note 15)

710

–

710

–

18,682

8,446

43,457

(2,950)

(866)

66,762

–

(717)

–

(717)

18,682

–

7,729

7,759

6,492

(1,233)

–

13,018

(532)

253

142

43,457

(2,950)

(866)

–

67,479

7,759

6,492

(1,233)

13,088

(532)

253

142

Balance at 31 January 2022

710

18,682

20,610

43,457

(2,950)

(796)

79,713

Note 30 explains the effect of the prior year restatement for the year ended 31 January 2021.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES AND GENERAL INFORMATION
General information
Sanderson Design Group PLC (‘the Company’) and its subsidiaries (together ‘the Group’) is a luxury interior furnishing group whose brands
include Morris & Co., Sanderson, Zoffany, Clarke & Clarke, Harlequin, Scion and Archive by Sanderson Design. The brands are targeted
at the mid to upper end of the premium market. They have worldwide distribution including prestigious showrooms at Chelsea Harbour,
London and the D&D Building, Manhattan, New York. Part of the Brand’s inventory is sourced in-house from the Group’s own specialist
manufacturing facilities of Standfast & Barracks, the fabric printing business situated in Lancaster, and Anstey Wallpaper Company, situated
in Loughborough. The manufacturing businesses produce for other interior furnishing businesses both in the UK and throughout the world.
The Company is a public limited company which is listed on the Alternative Investment Market of the London Stock Exchange and is
registered, domiciled and incorporated in the UK. The Company registration number is 61880 and the address of its registered office is
Chalfont House, Oxford Road, Denham, UB9 4DX.

Basis of preparation
The consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards and with
the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. On 31 December 2020, IFRS as
adopted by the European Union at that date was brought into the law in the UK and became UK-adopted international accounting standards,
with future changes being subject to endorsement by the UK Endorsement Board. The Group transitioned to UK-adopted international
accounting standards in its consolidated financial statements on 1 January 2021. There was no impact or changes in accounting from the
transition. The consolidated financial statements have been prepared under the historical cost convention, except for those assets and
liabilities measured at fair value, as described in the accounting policies. The accounting policies set out below have been consistently
applied to all periods presented unless otherwise indicated.

Going concern
In the context of the continuing Covid-19 outbreak and the impact of the invasion of Ukraine by Russia, the Board of Sanderson Design
Group PLC has undertaken an assessment of the ability of the Group and Company to continue in operation and meet its liabilities as they
fall due over the period of its assessment. In doing so, the Board considered events throughout the period of their assessment from the date
of signing of the report to 31 January 2024, including the availability and maturity profile of the Group’s financing facilities and covenant
compliance. These financial statements have been prepared on the going concern basis which the Directors consider appropriate for the
reasons set out below.

The Group funds its operations through cash generated by the Group and has access to a £12.5m Revolving Credit Facility (‘RCF’) which
is linked to two covenants. These covenants are tested quarterly at 30 April, 31 July, 31 October and 31 January each year until the debt
matures in October 2024. Throughout the financial year and up to the date of this report the Company has met all required covenant tests
and maintained headroom of well over £5m. The total headroom of the Group at 31 January 2022 was £31.6m (2021: £30.5m), including cash
and cash equivalents of £19.1m and the committed facility of £12.5m. The Group has also access to an uncommitted accordion facility of
£5.0m with Barclays. The Group had ended a temporary overdraft facility of £2.5m with Barclays during the financial year.

In assessing going concern management has taken account of the uncertainties caused by Covid-19 and the war in Ukraine. A Management
Base Case (‘MBC’) model has been prepared, together with alternative stress tested scenarios, given the uncertainty regarding the impact of
Covid-19 (including variants, further waves of the virus, disruption to supply chain and inflationary pressures) and the Ukraine war (including
impact of sanctions, duration of war and inflationary pressures). These scenarios indicate that the Company retains adequate headroom
against its borrowing facilities and bank covenants for the foreseeable future.

There remain significant uncertainties concerning the future effects of Covid-19 in terms of variants and the possible escalation of the Russian
invasion to other Eastern European countries. The actual results which will be reported will be undoubtedly different from the MBC and
other scenarios modelled by the Company. In the event that there are significant negative variations from the MBC, management would act
decisively, as they have done in the last year, to protect the business, particularly its cash position. Having considered all of the comments
above the Directors consider that the Group and the Company have adequate resources to continue trading for the foreseeable future and
will be able to continue operating as a going concern for a period of at least 12 months from the date of approval of the financial statements.
For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Adoption of new and revised accounting standards and interpretations
On 31 December 2020 EU-adopted IFRS was brought into UK law and became UK-adopted international accounting standards, with future
changes to IFRS being subject to endorsement by the UK Endorsement Board. This change has no impact on the preparation of the
financial statements. No new standards and interpretations issued and effective for the year have had any significant impact on the
preparation of the financial statements.

Basis of consolidation
The Group financial statements incorporate the financial statements of the Company and all its subsidiaries made up to the year end date.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those
used by the Group.

Subsidiary undertakings are all entities over which the Company has control. Control is achieved when the Company has the power over
the entity; is exposed, or has rights to, variable returns from its involvement with the entity; and has the ability to use its power to affect
its returns. The Company reassesses whether or not it controls an entity if facts and circumstances indicate that there are changes to one
or more of these three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary
and ceases when the Company loses control of the subsidiary. Subsidiary undertakings acquired during the year are recorded using the
acquisition method of accounting and their results are included from the date of acquisition. The separable net assets, including property,
plant and equipment and intangible assets, of the newly acquired subsidiary undertakings are incorporated into the consolidated financial
statements on the basis of the fair value as at the effective date of control. Intercompany transactions, balances and unrealised gains on
transactions between Group companies are eliminated on consolidation.

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At the time of the Group formation, the acquisition of the trading subsidiaries was achieved principally by way of share for share exchange
transactions. The Group determined an accounting policy based on the pooling of interest method provided the most relevant, reliable and
representative accounting treatment, which reflected the economic substance of the transaction. In applying this policy when preparing
the Group financial statements, the extent the carrying value of the assets and liabilities acquired is different to the cost of investment, the
difference is recorded in equity within the merger reserve in the statement of financial position. Under this method, the results of the Group
entities were combined from the beginning of the comparative presented as though the combining entities had always been part of the same
group. Comparatives were restated on a combined basis and adjustments made as necessary to achieve consistency of accounting principles.

The Employee Benefit Trust (‘EBT’) controlled by the Group is also included by consolidation. Until shares held by the EBT vest unconditionally
in and are transferred to employees, the consideration paid for those shares is deducted from equity. No gain or loss is recognised in the
statement of comprehensive income on the purchase, sale, issue or cancellation of shares, including transfers to and from treasury shares.
Dividends receivable on shares held by the EBT are excluded from the Income Statement and are excluded from amounts recognised as
dividends payable by the Group.

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 in note 3.

The financial statements of the Company as an entity are prepared in accordance with Financial Reporting Standard 101, ‘Reduced Disclosure
Framework’ (‘FRS 101’) and the Companies Act 2006 and are presented separately from the consolidated financial statements (pages 107 to 118).

Revenue
The Group derives its revenue principally from the following:
– Manufacturing sales. These comprise the sale of wallpaper and fabrics to Brands and third-party customers.
– Brand sales. Sale of home furnishings e.g. wallpaper, fabrics and ancillary interior products.
– Licensing arrangements. These comprise a combination of both minimum guaranteed incomes and time and sales-based royalties

receivable from Licensing Partners under contracts for the licensing of our products and designs.

Revenue comprises sales of goods to customers outside the Group less an appropriate deduction for actual and expected returns, discounts
and volume-related rebates, and is stated net of value added tax and other sales taxes. Revenue is recognised when performance obligations
are satisfied and goods are delivered to our franchise partners or the customer and the control of goods is transferred to the buyer. Online
sales are recognised when items are delivered, as this is when the performance obligation is deemed to have been satisfied.

Deposits received from customers in advance of the delivery of goods or services are recognised as deferred revenue. Revenue and cost of
sales are adjusted for expected returns values, which are estimated on historical returns experience. A refund liability is recognised within
‘trade and other payables’, and the asset to be recovered is recognised within stock. The validity of the historical data and assumptions and
estimates are assessed at each reporting date.

Licensing contracts give rise to performance-based variable consideration. Income dependent on the performance of the third-party
operations is recognised when it is highly probable that a significant reversal in the amount of income recognised will not occur. Fixed
minimum guaranteed income amounts receivable under single-year or multi-year licensing agreements from Licensing partners are recognised
from the point the licence and hence control has transferred to the licensee, provided there are no further performance obligations to fulfil,
and the recoverability of the income is deemed highly probable. The income is recognised as revenue and accrued income reduces as the
balance is settled when an invoice is issued upon delivery of the performance obligations.

Carriage costs relating to the delivery of the supply of goods, are classified within ‘revenue’ as these are contractual sales of distinct services
with a separate performance obligation from which consideration is received.

Consideration received or expenses relating to marketing materials and additional services to support the sale of the Group’s core products
are classified within ‘Other operating income’.

Foreign currencies
For the purpose of the consolidated financial statements, the results and financial position are expressed in sterling, which is the functional
currency of the Company, and the presentation currency for the consolidated financial statements.

Transactions in foreign currencies, which are those other than the functional currency of the Company, are recorded at the rate ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated at the rate ruling at the Balance Sheet
date. All unhedged exchange differences are recognised in the Income Statement for the period within administration expenses.

The assets and liabilities of the Group’s overseas subsidiaries on consolidation are translated at the rates of exchange ruling at the Balance
Sheet date. The income and expenses are translated at the weighted average rate during the period. Differences on translation are
recognised in a separate foreign currency translation reserve within equity.

Intangible assets – Goodwill
Goodwill arising on acquisition of subsidiaries is initially measured at cost, being the excess of the fair value of the consideration for the
acquisition, which includes the amount of any non-controlling interest recognised, over the Group’s interest in the net fair value of the
acquired entity’s identifiable assets and liabilities and any non-controlling interest in the acquiree at the date of acquisition.

Goodwill is not amortised, but reviewed for impairment annually; any impairment is recognised immediately in the Income Statement and is
not subsequently reversed. If a significant event occurs that may affect the carrying value of goodwill, an impairment review will be carried
out. No such events have occurred in the current or previous financial year. Goodwill is allocated to cash-generating units for the purpose
of impairment testing. The allocation is made to those cash-generating units that are expected to benefit from the business combination in
which the goodwill arose. The measurement basis for goodwill is cost less accumulated impairment.

1. ACCOUNTING POLICIES AND GENERAL INFORMATION continued
On disposal of a subsidiary or cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss
on disposal.

Intangible assets – Arthur Sanderson and William Morris Archive
The Arthur Sanderson and William Morris Archive comprises an historical record of unique designs that can be used at any point going
forward and is regularly used to generate a significant royalty income in the business. The Directors believe that the Archive has an indefinite
useful life and is therefore not subject to amortisation. The carrying value of this asset is reviewed annually and provision made for any
impairment in the carrying value if required. If a significant event occurs that may affect the carrying value of the Archive, an additional
impairment review will be carried out. No such events have occurred in the current or previous financial year. The measurement basis used for
the Archive is historical cost less accumulated impairment.

Intangible assets – Software
Acquired computer software licences are capitalised at the cost incurred to bring the asset into use, including where relevant directly
attributable internal costs incurred in preparing the software for operation. The costs are amortised to their estimated residual value, over
their estimated useful life, which range from three to ten years on a straight-line basis. Software amortisation commences when the asset
goes into operational use by the business. The measurement basis used for software is cost less accumulated amortisation and impairment.

Intangible assets – Collection design
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects relating to the design of new
collections are recognised as intangible assets when the following criteria are fulfilled:
– It is technically feasible to complete the new collection so that it will be available for use or sale.
– Management intends to complete the new collection and use it or sell it.
– There is an ability to use or sell the new collection.
– It can be demonstrated how the new collection will generate probable future economic benefits.
– Adequate technical, financial and other resources to complete the development and to use or sell the new collection are available.
– The expenditure attributable to the new collection during its development can be reliably measured.

Any costs relating to design of new collections that do not meet these criteria are recognised as an expense as incurred. Any such costs
recognised as an expense in previous periods are not recognised as an asset in a subsequent period. Capitalised collection design costs are
recognised as intangible assets and are amortised to their estimated residual value which is 25% of their historical cost, on a straight-line
basis over the life of the asset, and are tested for impairment if any impairment trigger events are identified in accordance with IAS 36. The
measurement basis used for Collection design is cost less accumulated amortisation and impairment.

Intangible assets – Brands
Brands acquired, separately or as part of a business combination, are capitalised if they meet the definition of an intangible asset and the
recognition criteria are satisfied. Strategic brands are well-known international/local brands with a strong market position and an established
brand name. Strategic brands have a finite useful economic life and are carried at cost less accumulated amortisation. Brands are amortised
on an individual straight-line basis over the estimated useful life of the brands, being 20 years.

Intangible assets – Customer-related intangibles
Customer-related intangibles are capitalised if they meet the definition of an intangible asset and the recognition criteria are satisfied. If the
amounts are not material, these are included in the brand valuation. The relationship between brands and customer-related intangibles is
carefully considered so that brands and customer-related intangibles are not both recognised on the basis of the same cash flows.

Customer-related intangibles acquired as part of a business combination are valued at fair value. Customer-related intangibles acquired
separately are measured at cost. Customer-related intangibles are amortised on a straight-line basis over the remaining useful life of the
customer relationships, currently being six years.

Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and any recognised impairment loss. Historical
cost comprises the purchase price and costs directly incurred in bringing the asset into use. The assets’ residual values and useful lives are
reviewed annually and adjusted, if appropriate, at each Balance Sheet date.

Depreciation is charged on a straight-line basis on the original costs (excluding freehold land) after deduction of any estimated residual
value. The principal annual rates are:

Freehold buildings
Leasehold improvements
Plant, equipment and vehicles
Computer hardware

2%
Over the length of the lease
Between 5% and 33%
33%

Government grants received for property, plant and equipment are included within other payables and deferred revenue and released to the
Income Statement over the life of the asset.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED

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Impairment of non-financial assets
Intangible assets with finite useful lives and property, plant and equipment are tested for impairments if events or changes in circumstances
(assessed at each reporting date) indicate that the carrying amount may not be recoverable. When an impairment test is conducted, the
recoverable amount is assessed by reference to the higher of the value in use (net present value of expected future cash flows of the relevant
cash-generating unit), or the fair value less cost to sell.

Goodwill and other intangible assets with an indefinite useful life are tested for impairment at least annually.

If a cash-generating unit is impaired, provision is made to reduce the carrying amount of the related assets to their estimated recoverable
amount. Impairment losses are allocated firstly against goodwill, and secondly on a pro rata basis against intangible and other assets.

Non-financial assets other than goodwill that suffer impairment are reviewed for possible reversal of the impairment at each reporting date.

Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials, on a first-in, first-out basis, and direct
labour, plus attributable production overheads based on a normal level of activity. Net realisable value is based on estimated selling prices
less anticipated costs of disposal. Provision is made for any slow-moving and obsolete inventory. Inventories include marketing materials
consisting of patterning books and other saleable marketing assets used to support the sale of the Group’s products.

Financial assets and liabilities – measurement basis
Financial assets and liabilities are recognised on the date on which the Group becomes a party to the contractual provisions of the instrument
giving rise to the asset or liability. Financial assets and liabilities are initially recognised at fair value plus transaction costs and are continually
reviewed for impairment going forward. Any impairment of a financial asset is charged to the Income Statement when incurred. Financial
assets are derecognised when the Group’s rights to cash inflows from the asset expire; financial liabilities are derecognised when the
contractual obligations are discharged, cancelled or expired.

Non-derivative financial assets are classified as either amortised cost or fair value through profit and loss. This category includes:

– ‘Trade and other receivables’ and ‘minimum guarantee licensing receivables’ – these are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They arise when the Group provides goods directly to a customer,
or advances money, with no intention of trading the loan or receivable. Trade receivables are recognised initially at the amount of
consideration that is unconditional. Subsequent to initial recognition, loans and receivables are included in the Balance Sheet at amortised
cost using the effective interest method less any amounts written off to reflect impairment, with changes in the carrying amount recognised
in the Income Statement within distribution and selling or administration expenses. The Group applies the IFRS 9 simplified approach to
measure expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit
losses, trade receivables have been grouped based on shared credit risk characteristics and days past due. The expected loss rates are
based on the payment profiles of sales over a period of 12 months before 31 January 2022 or 31 January 2021 respectively and the
corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-
looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. We use historical credit
loss experience for trade receivables to estimate the lifetime expected credit losses as relevant. We apply specific fixed provision rates
depending on the number of days that a receivable is past due. We group historical credit loss experience for different customer segments
being customer rating and type of customer. The carrying amount of the asset is reduced through the use of a provision account and the
amount of the loss is recognised in the Income Statement within distribution and selling expenses. When a trade receivable is uncollectible,
it is written off against the provision account for trade receivables. Subsequent recoveries of amounts previously written off are credited
against distribution and selling expenses in the Income Statement.

– ‘Cash and cash equivalents’ – these comprise deposits with an original maturity of three months or less with banks and financial

institutions, bank balances, bank overdrafts with the right of offset and cash in hand.

The Group’s non-derivative financial liabilities are classified as ‘Other liabilities’. Other liabilities are financial liabilities with fixed or
determinable payments that are not quoted in an active market. They arise when the Group receives goods or services directly from a
payable or supplier, or borrows money, with no intention of trading the liability. This category includes:

– ‘trade and other payables’ – these are typically non-interest bearing and following initial recognition are included in the Balance Sheet at

amortised cost using the effective interest method;

– ‘bank loans and overdrafts’ – these are initially recorded at fair value based on proceeds received net of issue costs and subsequently held

at amortised cost using the effective interest method; and

– ‘borrowings’ – these are recorded initially at the fair value, net of direct issue costs, and are subsequently stated at amortised cost. Finance
charges, including premiums payable on settlement, or redemption and direct issue costs, are accounted for in the Income Statement, using
the effective interest method, and are included within the carrying amount of the instrument to the extent that they are not settled in the
period in which they arise. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the end of the reporting period. Borrowing costs are capitalised as an increase to the carrying
value of software or property, plant and equipment on major projects where their impact is material.

Cash and cash equivalents
Cash and cash equivalents represent only liquid assets with original maturity of 90 days or less. Cash and cash equivalents include cash in
hand, deposits held at call with banks and bank overdrafts. Bank overdrafts that cannot be offset against other cash balances are shown
within borrowings in current liabilities on the Balance Sheet.

For the purposes of the Cash Flow Statement it is the Group’s policy to classify interest received within ‘cash flows from investing activities’
and interest paid within ‘cash flows from operating activities’.

1. ACCOUNTING POLICIES AND GENERAL INFORMATION continued
Offsetting financial assets and liabilities
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is a legally enforceable right to offset
the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally
enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of
default, insolvency or bankruptcy of the company or the counterparty.

Leases
Definition of a lease

Under IFRS 16, a contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in
exchange for consideration.

Lessee accounting

At the lease commencement date, a right-of-use asset is recognised for the leased item with a corresponding lease liability for any payments
due. The right-of-use asset is initially measured at cost, being the present value of the lease payments paid or payable (net of any incentives
received from the lessor), plus any initial direct costs and/or restoration costs.

Right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease to the earlier of the end of the asset’s
useful life or the end of the lease term. The lease term is the non-cancellable period of the lease plus any periods for which the Group is
‘reasonably certain’ to exercise any extension options. If right-of-use assets are considered to be impaired, the carrying value is reduced
accordingly.

For assets where the lessor transfers ownership of the underlying asset to the Group by the end of the lease term, or where the lease
contains a purchase option at a nominal/notional value, then these assets will be initially classified as property, plant and equipment, and
subsequently be depreciated in accordance with the depreciation policy.

The lease liability is initially measured at the value of future lease payments, discounted using the interest rate implicit in the lease. Where this
rate is not determinable, the Group’s incremental borrowing rate is used, which is then adjusted to reflect an estimate of the interest rate the
Group would have to pay to borrow the amount necessary to obtain an asset of similar value, in a similar economic environment, and with
similar terms and conditions.

After initial recognition, the lease liability is recorded at amortised cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate (e.g. an inflation related increase) or if the Group’s assessment of
the lease term changes. Any change in the lease liability as a result of these changes also results in a corresponding change in the recorded
right-of-use asset. Payments in respect of short-term and/or low-value leases continue to be charged to the income statement on a straight-
line basis over the lease term.

Employee benefits – retirement benefit obligations
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit retirement schemes, the funding of benefits is determined using the projected unit credit method, with full actuarial
valuations being carried out triennially.

The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted
for unrecognised service cost, and as reduced by the fair value of the scheme assets. Any asset resulting from this calculation is limited to
past service cost, plus present value of available refunds and reductions in future contributions to the plan.

The defined benefit obligation is calculated annually by qualified independent actuaries using the projected unit credit method. The present
value of the defined benefit obligation is determined by discounting the future cash outflows using interest rates of high quality corporate
bonds that have terms to maturity approximating to the terms of the related pension liability.

Scheme expenses met by the Group, expected returns on plan assets, and interest on pension scheme liabilities are classified within ‘Net
defined benefit pension charge’ within the Income Statement as the scheme is now closed to future accruals.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in full in the period in
which they occur. They are recognised outside the Income Statement and presented in the Statement of Comprehensive Income.

Past service costs are recognised immediately to the extent that the benefits are already vested, and otherwise are amortised on a straight-
line basis over the average period until the benefits become vested.

Employee benefits – share-based payments under Long-Term Incentive Plans (‘LTIP’)
The Group issues equity-settled share-based payments to certain employees which must be measured at fair value and recognised as an
expense in the Income Statement with a corresponding increase in equity.

The fair values of these payments are measured at the date of grant, taking into account the terms and conditions upon which the awards
are granted. The fair value is recognised over the period during which employees become conditionally entitled to the awards, subject to the
Group’s estimate of the number of awards which will lapse, either due to employees leaving the Group prior to vesting or due to non-market
based performance conditions not being met.

The total amount recognised in the Income Statement as an expense is adjusted to reflect the actual number of awards that vest. National
insurance contributions related to the awards are recognised as an expense in the Income Statement with a corresponding liability on the
Balance Sheet.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED81

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Employee benefits – short-term bonus plans
The Group recognises a liability and an expense for bonuses where contractually obliged or where there is a past practice that has created a
constructive obligation.

Provisions for liabilities and charges
Provisions are required for restructuring costs and employment related benefits when the Group has a present legal or constructive obligation
at the reporting date as a result of a past event and it is probable that settlement will be required of an amount that can be reliably estimated.

Other provisions reflect the Directors’ best estimate of future obligations relating to legal claims and litigation, together with dilapidation
costs for the maintenance of leasehold properties arising from past events such as lease renewals and terminations. These estimates are
reviewed at the reporting date and updated as necessary.

Share capital
Ordinary shares are classified as equity. Costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction,
net of tax, from the proceeds. Dividend distribution is set by the Board on a regular basis so long as sufficient funds are available.

Share premium
Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from
the proceeds.

Treasury shares
Consideration paid, including any directly attributable incremental costs (net of income taxes) on the purchase of the Company’s equity share
capital (treasury shares), is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued.
Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and
the related income tax effects, is included in equity attributable to the Company’s equity shareholders. The EBT is treated as an agent of the
Group and, as such, EBT transactions are treated as being those of the Group.

Taxation including deferred income tax
The tax expense represents the sum of the current tax and deferred tax charges or credits.

Current tax is based on the taxable profit for the year. Taxable profits differs from the net profit as reported in the Income Statement because
it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or
deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the Balance
Sheet date. Current tax includes withholding taxes from sales and licensing income in overseas territories.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet
liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised for
taxable temporary differences arising on investments in subsidiaries except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.

IAS 12 ‘Income taxes’ requires that the measurement of deferred tax should have regard to the tax consequences that would follow from
the manner of expected recovery or settlement at the Balance Sheet date of the carrying amount of its assets and liabilities. In calculating
its deferred tax liability the Group’s policy is to regard the depreciable amount of the carrying value of its property, plant and equipment to
be recovered through continuing use in the business, unless included within assets held for resale, where the policy is to regard the carrying
amount as being recoverable through sale.

Deferred tax assets are recognised only to the extent it is probable that future taxable profits will be available against which temporary
differences can be utilised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

A deferred tax asset is recognised relating to share-based payments equal to the intrinsic value (market price at the year-end less the
exercise price). Deferred tax is recognised in profit and loss based on the temporary difference between the tax base of the fair value of
the employee’s services received in the year. The amount recognised in equity is the excess deduction based on the difference between the
intrinsic value and the cumulative fair value of share-based payments recognised in profit and loss.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities
and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity
or different taxable entities and there is an intention to settle the balances on a net basis.

1. ACCOUNTING POLICIES AND GENERAL INFORMATION continued
Segmental reporting
The Group is a designer, manufacturer and distributor of furnishings, fabrics and wallpaper and manages its operations as two reportable
segments, which are Brands and Manufacturing.

Reportable segments consist of one or more operating segments. Aggregation of operating segments into reportable segments occurs when
aggregation criteria, as laid down in IFRS 8 ‘Operating Segments’ are satisfied, including similar economic characteristics or when operating
segments are less than the quantitative limits as laid down in IFRS 8.

The Group considers its Chief Operating Decision Maker (‘CODM’) to be the Board of Directors, who are responsible for the allocation of
resources and assessing performance of the operating segments.

Interest received
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

2. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk
and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain
risk exposures.

Risk management is carried out at Board level under policies approved by the Board of Directors. Executive Directors identify, evaluate and
where appropriate hedge financial risks in close cooperation with the Group’s operating units.

a) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect
to the US dollar and the euro. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are
denominated in a currency that is not the entity’s functional currency.

The Group’s policy is, where possible, to allow the Group’s entities to settle liabilities in their functional currency with the cash generated from
their operations in that currency. Where the Group’s entities have liabilities denominated in a currency other than their functional currency
(and have insufficient reserves of that currency to settle them) cash already denominated in that currency will, where possible, be transferred
from elsewhere in the Group.

For the year ended 31 January 2022, the average sterling to US dollar translation rate applied by the Group was £1:US$1.38. If the rate
had been £1:US$1.28 with all other variables held constant, profit before tax would have been higher by £339,000. If the rate had been
£1:US$1.48 with all other variables held constant, profit before tax would have been lower by £293,000.

For the year ended 31 January 2022, the average sterling to euro translation rate applied by the Group was £1:€1.19. If the rate had been
£1:€1.09 with all other variables held constant, profit before tax would have been higher by £36,000. If the rate had been £1:€1.29 with all
other variables held constant, profit before tax would have been lower by £30,000.

The sensitivities tested above reflect movements in the foreign currency exchange rates over the financial year. The sensitivity of movements
in other currencies is not considered material to the performance of the Group.

b) Interest rate risk
As the Group has no significant interest bearing assets, its revenue and cash generated from operations are substantially independent of
changes in market interest rates.

The Group’s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk.
The Group’s borrowings at variable rate are denominated in either sterling or euros. The Group regularly analyses its interest rate exposure,
calculating the impact on profit and loss of a defined interest rate shift. Based on the calculations the Board considers refinancing, renewal
of existing positions, alternative financing and hedging. The Group has not felt there has been a requirement during the current or previous
financial year to enter into any of these options.

In October 2019, the Group renewed its multi-currency revolving credit facility with Barclays Bank plc for a further five-year period. Variable
interest rates were negotiated on all the loans. The Board continues to monitor the interest rates monthly.

For the year ended 31 January 2022, had the benchmark interest rate levels been 0.5% higher/(lower) than the actual experience, with all
other variables held constant, the impact on profit before tax of the Group would have been negligible as the Group has no borrowings.
The 0.5% sensitivity is deemed a reasonable sensitivity analysis based on expected movements in the base rate for the next financial year.

c) Credit risk
Credit risk arises from the Group’s trade receivables, cash held with banks and derivative financial instruments. It is the risk that the
counterparty fails to discharge its obligation in respect of the instrument. Cash at bank and derivative financial instruments are predominantly
held with the Group’s major relationship bank, Barclays Bank plc, and the Group considers this credit risk to be minimal.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED83

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Prior to accepting new customers, an independent credit check is obtained. Based on this information, individual credit limits and payment
terms are established. If no independent credit ratings are available, customers are asked to pay on a proforma basis until creditworthiness
can be established. The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment period of one to
three months for its customers. The utilisation of credit limits is regularly monitored. Credit limits may only be exceeded with the authorisation
from key management: this is dependent on the amount expected to exceed the limit and the Group’s trading history with that customer.

There is no difference between the carrying amount and the maximum credit risk exposure. No collateral is held as security by the Group.

d) Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt
instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The maturity profile of the
Group’s debt and other financial liabilities is disclosed in note 23.

During the year the Group had facilities with Barclays Bank plc which are disclosed in note 24.

Management monitors rolling forecasts of the Group’s cash and loan facility utilisation on a monthly basis. The Group ensures that it has
adequate facilities available to cover both its short-term and medium-term commitments and complies with bank covenants. In addition,
the Group’s liquidity management policy is to project cash flows in major currencies and consider the level of liquid assets necessary to meet
these liabilities as they fall due. Surplus cash held over and above the balance required for working capital requirements is transferred to the
Group treasury and held in interest bearing accounts.

e) Capital risk management
The Group’s objectives when managing capital are:
– to safeguard the entity’s ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other

stakeholders; and

– to provide an adequate return for shareholders by pricing products and services commensurately with the level of risk.

The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in light of
changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, buy back issued shares, or
sell assets to reduce debt.

f) Fair value estimation
The carrying value less impairment provision of trade receivables and payables and cash and cash equivalents approximate their fair values.

g) Impairment of financial assets
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group uses judgement
in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s past history, existing market
conditions as well as forward looking estimates at the end of each reporting period.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group makes estimates and assumptions concerning future events. The resulting accounting estimates will seldom precisely equal the
related actual results. The Group applies its best endeavours in setting accounting estimates, and uses historical experience and other
factors, including input from experienced and specialist management. Estimates and assumptions are periodically re-evaluated and the
resulting accounting balances updated as new information, including actual outcomes, become apparent.

The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.

a) Retirement benefit obligations
The Group recognises its obligations to employee retirement benefits. The quantification of these obligations is subject to significant
estimates and assumptions regarding life expectancy, discount and inflation rates, wage and salary changes, the rate of increase in pension
payments, and the market values of equities, bonds and other pension assets. In making these assumptions the Group takes advice from a
qualified actuary about which assumptions reflect the nature of the Group’s obligations to employee retirement benefits. The assumptions are
regularly reviewed to ensure their appropriateness.

Under IAS 19, the net defined benefit pension scheme asset that can be recognised is the lower of the surplus and the asset ceiling i.e. the
economic benefits available in the form of refunds or reductions in future contributions or a combination of both, in accordance with IFRIC 14
‘IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction’. In order to determine whether there were
any restrictions on the surplus as outlined in IFRIC 14, the Schemes’ Trust Deeds and Rules were reviewed and legal advice was acquired. It is
the Group’s understanding that, based on facts and circumstances at the balance sheet date, it is able, without condition or restriction placed
on it by the trustees, to run the Schemes until there are no remaining members; wind up the Schemes at that point; and reclaim any remaining
monies. Consequently, the Group is able to recognise the full surplus calculated in accordance with IAS 19 and IFRIC 14.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS continued
The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine
the present value of estimated future cash outflows expected to be required to settle pension obligations. In determining the appropriate
discount rate, the Group considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the
benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability. Details of the estimates and
assumptions applied, and carrying amounts of retirement benefit obligations and pension assets, are set out in note 22.

b) Impairment of non-financial assets
The Group tests annually whether goodwill or its indefinite life intangible asset has suffered any impairment, in accordance with its
accounting policy. Other intangibles and property, plant and equipment are also reviewed whenever impairment triggers are apparent. The
recoverable amounts of cash-generating units have been determined based on value in use (‘VIU’) calculations. These calculations require use
of estimates of future sales, margins, and other operating and administration expenses, and of discount rates.

In assessing whether an impairment of goodwill is required the carrying value of the cash-generating unit (‘CGU’) or group of CGUs is
compared with its recoverable amount. The recoverable amounts for each CGU, being a division of the business operated at a separate site,
and collectively for groups of CGUs that make up the segments of the Group’s business, have been based on the value in use (‘VIU’).

The Group estimates the VIU using a discounted cash flow model (‘DCF’), where the projected cash flows for separate or collective groups of
CGUs are discounted using a pre-tax rate of 9.25% (2021: 10.1%). The discount rate used is the same across all segments.

The Group has used formally approved budgets for the first two years (2021: two years) of its VIU calculation, with extrapolation beyond the
last explicit year using an assumption of growth for future years ranging from 1% to 2% (2021: 1% to 2%) depending upon the CGU
being tested.

The cash flows used in the calculation of the VIU are derived from past experience and are based on operating profit forecasts, which in
turn rely upon assumptions relating to sales growth, price increases, margins and operating and administration expenses. The cash flows
have not included the benefits arising from any future asset enhancement expenditure and therefore exclude significant benefits anticipated
from future capital expenditure. The 2% growth rates included within the assumptions supporting the VIU calculations do not therefore
represent the Group’s anticipated total forecast growth, but rather only the growth deriving from capital expenditure completed at the
Balance Sheet date.

The Group makes provision for impairment in the carrying amount of its inventories and marketing materials. The nature of the Group’s
products are exposed to changes in taste and attitudes from time to time, which can affect the demand for those products. The Group has
skilled and experienced management who utilise historical sales information, and exercise their judgement, in making estimates about the
extent of provisions necessary based on the realisable value of inventory and expected future benefit to the Group of marketing materials
taking into account the estimated price and volume of future sales or usage, less the further costs of sale and holding costs.

c) Deferred tax recognition
The Group considers it appropriate to recognise at the Balance Sheet date deferred tax assets resulting from historical trading losses and
other temporary differences including pension deficits and the impact of awards under the Long-Term Incentive Plan (‘LTIP’). The amount of
deferred tax recognised is based on estimates of the timing and amount of future taxable profits of companies within the Group, which in turn
relies upon estimates of future operating profits and the occurrence, timing and tax treatment of significant items of income and expenditure
including contributions to pension schemes and the vesting of LTIP payment awards. The Group considers the sensitivity on deferred tax
recognition to be based on profits generated by the Group and tax rates substantively enacted. There has been no material impact on
sensitivity in the current or previous financial year.

4. SEGMENTAL ANALYSIS
The Group is a designer, manufacturer and distributor of luxury interior furnishings, fabrics and wallpaper. The reportable segments of the
Group are aggregated as follows:
– Brands – comprising the design, marketing, sales and distribution, and licensing activities of Morris & Co., Sanderson, Zoffany, Clarke &
Clarke, Harlequin, Scion and Archive by Sanderson Design brands operated from the UK and its foreign subsidiaries in the US, France,
Netherlands and Germany.

– Manufacturing – comprising the wallcovering and printed fabric manufacturing businesses operated by Anstey and Standfast &

Barracks respectively.

This is the basis on which the Group presents its operating results to the Board of Directors, which is considered to be the CODM for the
purposes of IFRS 8. Other Group-wide activities and expenses, predominantly related to corporate head office costs, defined benefit pension
costs, long-term incentive plan expenses, taxation and eliminations of inter-segment items, are presented within ‘intercompany eliminations
and unallocated’.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED85

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a) Principal measures of profit and loss – Income Statement segmental information

Year ended 31 January 2022

UK revenue

International revenue

Licence revenue

Revenue – external

Revenue – internal

Total revenue

Profit/(loss) from operations

Net finance income

Profit/(loss) before tax

Tax expense

Profit/(loss) for the year

Year ended 31 January 2021 (restated)

UK revenue

International revenue

Licence revenue

Revenue – external

Revenue – internal

Total revenue

Profit/(loss) from operations

Net finance costs

Profit/(loss) before tax

Tax expense

Profit/(loss) for the year

Brands
£000

Manufacturing
£000

Intercompany
eliminations
and unallocated
£000

43,682

40,425

5,159

89,266

–

14,173

8,761

–

22,934

18,807

–

(18,807)

Total
£000

57,855

49,186

5,159

112,200

–

89,266

41,741

(18,807)

112,200

5,479

–

5,479

6,602

–

6,602

–

6,602

(1,752)

10,329

(1,722)

(2,600)

10,359

(2,600)

(4,322)

7,759

Brands
£000

Manufacturing
£000

Intercompany
eliminations
and unallocated
£000

38,077

34,549

3,684

76,310

–

11,339

6,111

–

17,450

10,911

–

(10,911)

Total
£000

49,416

40,660

3,684

93,760

–

76,310

28,361

(10,911)

93,760

4,987

–

4,987

–

4,987

1,664

–

1,664

–

1,664

(1,555)

(161)

(1,716)

(1,109)

5,096

(161)

4,935

(1,109)

(2,825)

3,826

The segmental Income Statement disclosures are measured in accordance with the Group’s accounting policies as set out in note 1. The Group
has revised its segmental methodology during the year by reviewing the allocation of central costs to the Brands unit and restated the prior
year’s comparatives to improve usefulness of the segmentation. The amount reclassified from central costs to Brands for the year ended
31 January 2021 is £2.4m relating to administrative cost, share-based charges and IT costs. The reasons this is considered to be more
appropriate are the senior management at the central unit spend significant amount of time making strategic and operational decisions for
Brands and most of the IT costs are incurred for Brands. Note 30 explains the effect of the prior year restatement as at 31 January 2021.

Inter-segment revenue earned by Manufacturing from sales to Brands is determined on normal commercial trading terms as if Brands were any
other third party customer.

4. SEGMENTAL ANALYSIS continued
All defined benefit pension costs, and LTIP expenses, are recognised for internal reporting to the CODM as part of Group-wide activities and are
included within ‘intercompany eliminations and unallocated’ above. Other costs, such as Group insurance, rent and auditors’ remuneration which
are incurred on a Group-wide basis are recharged by the head office to segments on a reasonable and consistent basis for all periods presented
and are included within segment results above.

Tax charges have not been allocated to a segment.

b) Additional segmental revenue information
The segmental revenues of the Group are reported to the CODM in more detail. One of the analysis presented is revenue by export market
for Brands.

Brands international revenue by export market:

North America

Northern Europe

Rest of the World

2022
£000

16,644

13,189

10,592

2021
£000

12,521

12,480

9,548

40,425

34,549

Revenue of the Brands reportable segment – revenue from operations in all territories where the sale is sourced from the Brands operations,
together with contract and licence revenue:

Brand revenue analysis:*

Harlequin

Scion

Sanderson

Morris & Co.

Zoffany

Clarke & Clarke

Archive by Sanderson Design and other brands

Licensing

* The Brands reportable segments for the year ended 31 January 2022 have been redefined to provide additional focus on each Brand.

Revenue of the Manufacturing reportable segment – including revenues from internal sales to the Group’s Brands:

Manufacturing revenue analysis:

Standfast

Anstey

2022
£000

2021
£000

17,623

2,210

14,421

16,444

8,564

24,554

291

5,159

16,043

2,391

11,606

12,619

7,827

21,704

436

3,684

89,266

76,310

2022
£000

21,310

20,431

2021
£000

14,410

13,951

41,741

28,361

c) Other Income Statement segmental information
The following additional items are included in the measures of profit and loss reported to the CODM and are included within (a) above:

Year ended 31 January 2022

Depreciation and impairments

Amortisation

Impairment losses – trade receivables

Reversal of impairment losses – trade receivables

Net impairment losses – inventory

LTIP payment charge

Brands
£000

Manufacturing
£000

Unallocated
£000

3,795

1,270

418

–

(242)

539

–

(271)

–

1,295

–

406

Total
£000

5,065

1,725

(242)

268

406

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED87

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Year ended 31 January 2021

Depreciation and impairments

Amortisation

Impairment losses – trade receivables

Reversal of impairment losses – trade receivables

Net impairment losses – inventory (restated)

LTIP payment charge

Brands
£000

Manufacturing
£000

Unallocated
£000

4,274

429

–

1,952

–

1,423

–

396

–

1,291

–

345

Total
£000

5,697

1,735

–

2,348

345

Note 30 explains the effect of the prior year restatement for the year ended 31 January 2021.

d) Principal measures of assets and liabilities – Balance Sheet segmental information
Segment assets consist primarily of goodwill, intangible assets, property, plant and equipment, trade and other receivables including inter-
segment receivables, and inventories. Segment liabilities consist primarily of trade and other payables including inter-segment payables.
Unallocated assets and liabilities consist primarily of cash, deferred tax assets, borrowings, derivative financial instruments, and retirement
benefit obligations and elimination of inter-segment balances. Segment assets and liabilities and unallocated assets and liabilities are
measured in accordance with the Group’s accounting policies as set out in note 1. The Group has revised its segmental methodology during
the year and restated the prior year’s comparatives to improve usefulness of the segmentation.

Year ended 31 January 2022

Assets

Liabilities

Total net assets

Brands
£000

Manufacturing
£000

Unallocated
£000

Total
£000

44,267

(16,506)

15,249

(5,788)

46,213

(3,722)

105,729

(26,016)

27,761

9,461

42,491

79,713

Capital expenditure – intangible assets

Capital expenditure – property, plant and equipment

290

546

–

1,200

379

1,750

Year ended 31 January 2021 (restated)

Assets

Liabilities

Total net assets

Brands
£000

Manufacturing
£000

Unallocated
£000

Total
£000

43,617

(17,786)

14,533

(6,535)

41,529

(8,596)

99,679

(32,917)

25,831

7,998

32,933

66,762

Capital expenditure – intangible assets

Capital expenditure – property, plant and equipment

227

353

–

459

245

830

The Group has revised its segmental methodology of assets and liabilities during the year by reviewing the allocation of assets and liabilities
to the Brands and Manufacturing units from the Central unit and restated the prior year’s comparatives to improve usefulness of the
segmentation. The impact of the restatements on net assets is a decrease in Brands of £7.3m, a decrease in Manufacturing of £2.9m and
an increase in Central of £9.5m. The reasons for these restatements are the movement of cash and cash equivalents under Central control
and transfer of right-of-use assets from Central to Brands as these assets are used in Brands. Note 30 explains the effect of the prior year
restatement for the year ended 31 January 2021.

e) Additional entity-wide disclosures

Revenue by geographical location of customers:

United Kingdom

North America

Northern Europe

Rest of the World

2022
£000

60,347

22,199

15,892

13,762

2021
£000

51,535

16,811

14,329

11,085

112,200

93,760

4. SEGMENTAL ANALYSIS continued
No single customer of the Group accounts for 10% or more of total revenue for either the current or prior year.

Non-current assets by geographical territory:

United Kingdom

North America

2022
£000

45,625

731

2021
£000

46,352

1,039

46,356

47,391

Non-current assets included above comprise intangible assets, property, plant and equipment, right-of-use assets, retirement benefit surplus
and minimum guaranteed licensing receivables.

5. OTHER OPERATING INCOME
Other operating income of £4,342,000 (2021: £3,822,000) comprises consideration received from the sale of marketing materials and
additional services of £4,046,000 (2021: £3,822,000) and a research and development expenditure credit (‘RDEC’) of £296,000 (2021: £nil).

6. PROFIT FROM OPERATIONS

Group profit from operations is stated after charging/(crediting):

Depreciation and impairments of property, plant and equipment and right-of-use assets

Amortisation of intangibles

Amortisation of acquired intangibles

Cost of inventories recognised as expense in cost of sales (restated)

Net impairment of inventories

Impairment of trade receivables

Reversal of impairment of trade receivables

Government Covid-19 employee related support

Provision for closure of Sanderson Design Group Brands SARL in France

Transportation expenses

Advertising costs

Other selling costs

Establishment costs

Net foreign exchange losses/(gains)

Forgiveness of a loan into a grant

Losses on sale of fixed assets

Short-term rental expense:

– Hire of motor vehicles and plant and machinery

– Land and buildings

Note 30 explains the effect of the prior year restatement for the year ended 31 January 2021.

Auditors’ remuneration:

Fees payable to the Company’s auditors for the audit of the Parent Company and consolidated
financial statements

Fees payable to the Company’s auditors for other services: Audit of the Company’s subsidiaries pursuant
to legislation

Payroll related services

2022
£000

2021
(restated)
£000

5,065

709

1,016

29,548

268

(242)

103

1,100

9,126

5,176

10,994

3,476

468

(412)

–

5,697

719

1,016

28,021

2,268

–

(2,772)

–

5,094

1,920

10,433

3,400

(52)

–

2022
£000

2021
£000

195

–

255

197

278

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED89

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2
2

7. NET FINANCE INCOME/(COSTS)

Interest income:

Interest received on bank deposits

Unwind of discount on minimum guaranteed licensing income

Total finance income

Interest expense:

Interest payable on bank borrowings

Amortisation of issue costs of bank loans

Lease interest

Total finance costs

Net finance income/(costs)

2022
£000

179

184

(22)

–

(132)

(154)

2021
£000

138

139

(97)

(21)

(182)

(300)

(161)

Unwind of discount on minimum guaranteed licensing income was presented as part of interest expense in the prior year. The comparative
has been represented to aid comparability.

8. EMOLUMENTS OF DIRECTORS
Information on the remuneration of the Directors, including the highest paid director, is included in the Directors’ Remuneration Report set out
on pages 60 to 63.

The emoluments of the Directors are detailed below:

Short-term employee benefits (including short-term incentives)

Post-employment benefits (including pension costs)

Total per the Directors’ Remuneration Report

Share-based payment charge

9. EMPLOYEE INFORMATION

Wages and salaries

Social security costs

Other pension costs

Share-based payment charge

Employee benefit expense

2022
£000

1,162

1,192

202

1,394

2022*
£000

24,179

2,382

1,002

406

27,969

2021
£000

734

761

169

930

2021*
£000

22,987

2,144

1,435

345

26,911

* The 2021 employee benefit expense above is shown before deduction of net UK government Coronavirus Job Retention Support (‘CJRS’) in the year of £2,772,000

which has been set against the related employee wages and salaries in the income statement. In April 2021, the Group repaid voluntarily CJRS of £103,000.

The average monthly number of employees (including Directors) during the year

Brands, including warehousing

Manufacturing

Overseas

Corporate and administration

2022

286

270

613

2021

287

272

619

9. EMPLOYEE INFORMATION continued
Compensation of key management personnel

Short-term employee benefits (including short-term incentives)

Post-employment benefits (including pension costs)

Share-based payment charge

2022
£000

3,226

359

3,683

2021
£000

2,480

282

2,845

Key management personnel has been redefined to include only the Board of Directors and members of the Group Leadership Team. The
comparative figures of the prior year are adjusted to follow the new definition. LTIP awards reflect the charge in the Income Statement and
do not reflect the market value of shares expected to vest.

10. TAX EXPENSE

Current tax:

– UK current tax

– UK adjustments in respect of prior years

– overseas, current tax

– overseas, adjustment in respect of prior year

Corporation tax

Deferred tax:

– current year

– adjustments in respect of prior years

– effect of changes in corporation tax rates

Deferred tax

Total tax charge for the year

Reconciliation of total tax charge for the year

Profit on ordinary activities before tax

Tax on profit on ordinary activities at 19.00% (2021: 19.00%)

Fixed asset differences

Non-deductible expenditure

Income not subject to tax

Share-based payment

Group income

Adjustments in respect of prior years

Adjustments in respect of prior years – deferred tax

Overseas tax suffered

Movement in deferred tax not recognised

Current tax – other

Effect of changes in corporation tax rates

Total tax charge for year

Note 30 explains the effect of the prior year restatement for the year ended 31 January 2021.

2022
£000

2021
£000

1,973

224

117

(107)

1,018

–

2,207

1,081

157

179

393

–

2,600

1,109

2022
£000

2021
£000

10,359

4,935

1,968

173

(2)

–

117

(170)

–

373

938

(27)

(2)

(11)

(33)

141

(68)

2,600

1,109

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED91

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2

11. EARNINGS PER SHARE
11. (a) Earnings per share
Basic earnings per share (‘EPS’) is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number
of shares outstanding during the year, excluding those held in the Employee Benefit Trust (‘EBT’) and those held in treasury (note 24), which
are treated as cancelled. The adjusted basic earnings per share is calculated by dividing the adjusted earnings by the weighted average
number of shares.

Basic earnings per share

Effect of dilutive securities:

Shares under LTIP*

Diluted earnings per share

2022

Weighted
average number
of shares
(000s)

Earnings
£000

Per share
amount
Pence

Earnings
£000

2021 (restated)

Weighted
average number
of shares
(000s)

Per share
amount
Pence

7,759

70,983

10.93

3,826

70,980

5.39

850

1,652

7,759

71,833

10.80

3,826

72,632

5.27

Adjusted underlying basic and diluted earnings
per share:

Add back LTIP accounting charge

Add back net defined benefit pension charge

Non-underlying items (see below)

Tax effect of non-underlying items and other
add backs

Adjusted underlying basic earnings per share

Adjusted underlying diluted earnings per share

406

487

1,207

(96)

9,763

345

531

1,187

(287)

5,602

70,980

72,632

7.89

7.71

70,983

71,833

13.75

13.59

In calculating the diluted earnings per share, shares under LTIP arrangements have been included to the extent that performance conditions had been satisfied at the
balance sheet date. Awards of shares that are contingent on future performance conditions have been excluded. When preparing the calculation for the current year
it was noted that the prior year dilutive shares were subject to performance conditions that had not been satisfied at the previous year end and therefore should not
have been a dilutive impact of the outstanding LTIP shares. The prior year end reported results have not been restated as the impact is not material.

Sanderson Design Group PLC’s issued ordinary share capital with voting rights consists of 70,983,505 (2021: 70,983,505) ordinary shares of
which nil (2021: nil) ordinary shares are held in treasury and 220 (2021: 50,000) ordinary shares are held by the Walter Greenbank PLC EBT.
Shares held in treasury or by the EBT are treated as cancelled when calculating EPS.

The market value of shares held by the EBT at 31 January 2022 was £370 (2021: £56,000). The total number of shares held in the EBT at the
year end represented less than 0.1% (2020: 0.1%) of the issued shares. The number of potentially dilutive shares is 850,000 (2021: 1,652,000).

In calculating the adjusted earnings the Group adjusts for non-underlying items which are material non-recurring items or items considered
to be non-operational in nature. The nature of these adjustments is outlined in note 11(b) below. Note 30 explains the effect of the prior year
restatement as at 31 January 2021 and 31 January 2020.

11. (b) Adjusted underlying profit before tax
The Group uses an Alternative Performance Measure ‘adjusted underlying profit before tax’. This is defined as statutory profit before tax
adjusted for the exclusion of share-based incentives, defined benefit pension charge and non-underlying items. This is recognised by the
investment community as an appropriate measure of performance for the Group and is used by the Board of Directors as a key performance
measure. The table below reconciles statutory profit before tax to adjusted underlying profit before tax.

11. EARNINGS PER SHARE continued
Adjusted underlying profit before tax

Statutory profit before tax

Restructuring and reorganisation costs (a)

Amortisation of acquired intangible assets (b)

Forgiveness of loan under the Payment Protection Programme (c)

Release of a provision for a legal case (d)

Total non-underlying charge included in statutory profit before tax

Underlying profit before tax

LTIP accounting charge

Net defined benefit pension charge

Adjusted underlying profit before tax

2022
£000

10,359

1,190

1,016

(440)

(559)

1,207

11,566

406

487

12,459

2021
(restated)
£000

4,935

171

1,016

–

1,187

6,122

345

531

6,998

In calculating the adjusted underlying profit before tax, the Group adjusts for non-underlying items which are material non-recurring items or
items considered to be non-operational in nature. The nature of these adjustments is outlined as follows:

(a) Restructuring and reorganisation costs

These relate to the reorganisation of the Group and comprise of the rationalisation of certain operational and support functions. The
costs mainly comprise employee severance and professional fees associated with the closure of Sanderson Design Group Brands SARL in
France of £1,100,000 and other reorganisation costs of £90,000 (2021: £171,000).

(b) Amortisation of acquired intangible assets of £1,016,000 (2021: £1,016,000).

(c) In May 2020, the Group entered into a loan contract with Wells Fargo for US$565,818 under the US Paycheck Protection Programme

scheme. In June 2021, this loan was forgiven and the Group treated the forgiveness as a grant for £440,000.

(d) Release of an accrual of £559,000 for a legal case in the US that had concluded during the financial year.

Note 30 explains the effect of the prior year restatement for the year ended 31 January 2021.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED
93

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12. INTANGIBLE ASSETS

Cost

31 January 2020

Additions

Reclassifications

Disposals

31 January 2021

Additions

Reclassifications

Disposals

Arthur Sanderson
and William Morris
Archive
£000 (b)

Goodwill
£000 (a)

Collection
design
£000

Customer-related
intangibles

£000

Brand
£000

Software

£000

Total
£000

17,091

4,300

3,688

5,566

4,427

3,199

38,271

–

17,091

4,300

–

225

(19)

–

3,894

290

–

(19)

5,566

4,427

3,219

–

245

–

(19)

38,497

379

–

31 January 2022

17,091

4,300

4,184

5,566

4,427

3,308

38,876

Accumulated amortisation

31 January 2020

Charge

Reclassifications

Disposal

31 January 2021

Charge

Reclassifications

Disposal

31 January 2022

Net book amount

31 January 2022

31 January 2021

31 January 2020

841

–

841

–

841

–

1,868

418

(15)

–

2,271

418

–

928

278

–

1,206

278

–

2,462

738

–

3,200

738

–

2,357

301

(19)

2,654

291

–

8,456

1,735

–

(19)

10,172

1,725

–

2,689

1,484

3,938

2,945

11,897

16,250

4,300

1,495

1,623

1,820

4,082

4,360

4,638

489

1,227

1,965

363

565

842

26,979

28,325

29,815

(a) Goodwill (£15,691,000), brand (£5,566,000) and customer-related intangibles (£4,427,000) were recognised on the business combination

of Clarke & Clarke during the year ended 31 January 2017.

(b) The Arthur Sanderson and William Morris Archive was purchased as part of the acquisition of Arthur Sanderson & Sons on 29 August

2003. It comprises an historical record of unique designs that are used to generate royalty income in the business.

The total amortisation expense of £1,725,000 (2021: £1,735,000) in administration expenses is split £709,000 (2021: £739,000) in underlying
items and £1,016,000 (2021: £1,016,000) in non-underlying items. The amount included in non-underlying items relates to the amortisation of
acquired intangible assets.

Impairment tests for Goodwill and Arthur Sanderson and William Morris Archive
Within the total carrying value of goodwill at year end of £16,250,000 (2021: £16,250,000), £15,691,000 (2021: £15,691,000) is attributable
to the Brands segment and £559,000 (2021: £559,000) to the Manufacturing segment.

The carrying value of the Archive at the year end of £4,300,000 (2021: £4,300,000) is attributable to the Brands segment.

The Group tests goodwill and the Archive for impairment annually or more frequently if there are indications that they might be impaired.
There was no impairment charge recognised in the year (2021: £nil). A discount rate of 9.25% (2021: 10.1%) is applied.

The recoverable amount of the Archive intangible asset is estimated based on VIU, and comprises estimated future cash flows from royalty
income relating to the Archive. A discount rate of 9.25% (2021: 10.1%) is applied.

The Group does not consider it reasonably possible that any significant changes to the key assumptions will arise that would result in
impairment of either goodwill or the Archive as at 31 January 2022. The financial impact of climate change and the ‘Live Beautiful’ strategy is
not anticipated to be material within the timeframe of the forecasts used for impairment reviews and as such is not included. This will be kept
under review as the strategy progresses.

13. PROPERTY, PLANT AND EQUIPMENT

Freehold land
and buildings
£000

Leasehold
improvements
£000

Plant, equipment
and vehicles
£000

Computer
hardware
£000

Cost
31 January 2020
Additions
Disposals
Reclassifications
Currency movements

31 January 2021
Additions
Disposals
Currency movements

31 January 2022

Accumulated depreciation and impairment
31 January 2020
Charge
Disposals
Reclassifications
Currency movements

31 January 2021

Charge
Disposals
Currency movements

31 January 2022

Net book amount

31 January 2022

31 January 2021

31 January 2020

6,059
9
–
(15)
(8)

6,045
167
–
–

6,212

2,173
109
–
35
(1)

2,316

113
–
–

2,429

3,783

3,729

3,886

557
–
–
15
–

572
–
–
–

572

78
112
–
125
–

315

112
–
–

427

145

257

479

Total
£000

43,732
830
(1,739)
–
(32)

42,791
1,750
(344)
–

2,312
28
(141)
34
(1)

2,232
56
–
(1)

2,287

44,197

2,070
129
(141)
34
(1)

2,091

87
–
2

29,631
2,717
(1,598)
–
(20)

30,730

2,546
(344)
7

34,804
793
(1,598)
(34)
(23)

33,942
1,527
(344)
1

35,126

25,310
2,367
(1,457)
(194)
(18)

26,008

2,234
(344)
5

27,903

2,180

32,939

7,223

7,934

9,494

107

141

242

11,258

12,061

14,101

The total depreciation expense of £2,546,000 (2021: £2,717,000) has been allocated to the following categories: administration expenses of
£2,495,000 (2021: £2,666,000) and distribution and selling costs of £51,000 (2021: £51,000).

The net book amount of freehold land and buildings comprises:

Freehold land

Freehold buildings

Net book amount

2022
£000

450

3,333

3,783

2021
£000

450

3,279

3,729

Land and buildings are stated at historical cost less impairment where applicable.

All of the Group’s banking facilities remain secured by a fixed and floating charge over the carrying value of assets (land and buildings) of
£3,783,000 (2021: £3,729,000).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED95

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14. LEASES
As a lessee
Information about leases for which the Group is a lessee is presented below:

Right-of-use assets

Cost

31 January 2021

Additions

Disposals

Currency movements

31 January 2022

Accumulated depreciation and impairment

31 January 2021

Charge

Disposals

Currency movements

31 January 2022

Net book amount

31 January 2022

31 January 2021

Lease liabilities

Balance

31 January 2021

Additions

Amounts paid

Effect of discounting

Currency movements

31 January 2022

Maturity analysis – contractual undiscounted cash flows

Less than one year

One to five years

More than five years

Total undiscounted cash flows

Leasehold
properties
£000

Vehicles
£000

Plant and
equipment
£000

Total
£000

9,441

421

(174)

9,716

4,405

2,086

(108)

6,407

3,309

5,036

936

208

(368)

–

776

703

200

(354)

–

549

227

233

5,103

421

(2,226)

(20)

3,285

233

197

(232)

–

201

Leasehold
properties
£000

Vehicles
£000

Plant and
equipment
£000

1,107

11,484

108

(179)

(2)

737

(721)

1,034

11,526

593

234

(179)

(1)

647

387

514

546

(228)

(4)

5,701

2,520

(641)

7,603

3,923

5,783

Total
£000

5,882

716

(2,686)

(24)

417

3,903

2022
£000

2,077

1,949

–

4,026

2021
£000

2,719

3,544

6,303

14. LEASES continued
Maturity analysis – contractual lease liabilities

Current

Non-current

Total lease liabilities

15. DEFERRED INCOME TAX

Deferred tax (liabilities)/assets

Taxable temporary differences on property, plant and equipment

Taxable temporary differences on intangible assets

Taxable temporary differences on unutilised tax losses

Taxable temporary differences on share-based payments

Other temporary differences

Retirement benefit obligations

2022
£000

1,983

1,920

3,903

2022
£000

(899)

(1,140)

332

353

–

(1,354)

(644)

(1,998)

2021
£000

2,676

3,206

5,882

2021
£000

(647)

(1,060)

–

(1,585)

1,071

(514)

A deferred tax charge of £1,233,000 (2021: tax credit £297,000) arising on retirement benefit obligations has been recognised within the
Statement of Comprehensive Income.

At 31 January 2022, the Company had gross unused UK tax losses of £3,064,000 (2021: £3,225,000) available for offset against future
profits. Of the potential £766,000 deferred tax asset on these tax losses, a pro-rated deferred tax asset of £322,000 has been recognised on
a prudent basis as these are readily available for offset against the Company’s profits for the next three years under existing tax legislation
and therefore the realisation of these losses is considered probable. A further deferred tax asset of £444,000 from these tax losses is not
recognised as it is not considered that the asset will be utilised in the foreseeable future. In the previous year, the gross UK tax losses of
£3,225,000 was deemed not available for offset against future profits, therefore the deferred tax asset of £613,000 was not recognised.
The change of UK corporation tax rate from 19% to 25%, effective from 1 April 2023 and substantively enacted during the current year,
has also increased the amount of deferred tax asset in future years.

There are also unutilised capital tax losses at 31 January 2022 of £4,881,000 (2021: £4,881,000) but no deferred tax asset has been
recognised as it is not considered probable that these losses will be utilised in the foreseeable future.

Movements on the deferred income tax account are as follows:

Net deferred tax asset/(liability)

At 1 February

Income Statement charge

Tax (charge)/credit relating to components of other comprehensive income

Tax credited directly to equity

At 31 January

16. INVENTORIES

Raw materials

Work in progress

Finished goods

2022
£000

(514)

(393)

(1,233)

142

(1,998)

2022
£000

3,042

2,064

17,546

22,652

2021
£000

(802)

(28)

297

(514)

(restated)
2021
£000

3,035

1,628

14,970

19,633

There is no significant difference between the replacement cost of work in progress and finished goods and goods for resale and their
carrying amounts. Inventories are stated after provisions for impairment of £7,979,000 (2021: £8,228,000).

The cost of inventories recognised as an expense and included in cost of sales amounted to £29,548,000 (2021: £28,021,000).

Note 30 explains the effect of the prior year restatement for the year ended 31 January 2021.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED97

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17. TRADE AND OTHER RECEIVABLES

Current

Trade receivables

Less: provision for impairment of trade receivables

Net trade receivables

Corporation tax debtor

Other taxes and social security

Other receivables

Prepayments

2022
£000

14,262

(775)

2021
£000

12,632

(903)

13,487

11,729

339

842

307

1,817

–

1,346

849

1,961

16,792

15,885

There is no material difference between the carrying amount and the fair value of the trade and other receivables.

The only financial asset that is subject to IFRS 9’s expected credit loss model is trade receivables for sales of inventory.

The IFRS 9 simplified approach has been applied to measure lifetime expected credit losses for all trade receivables. Trade receivables have
been grouped based on shared credit risk characteristics and days past due. The expected loss rates are based on the payment profiles of
sales over a period of 12 months before 31 January 2021 or 31 January 2020 respectively and the corresponding historical credit losses
experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle the receivables.

On this basis, the total loss allowance for trade receivables is determined as follows:

31 January 2022
£000

Trade receivables

Loss allowance

31 January 2021
£000

Trade receivables

Loss allowance

Current

11,875

(489)

Current

10,611

(514)

1-30 days
past due

482

(14)

1-30 days
past due

172

(7)

More than
30 days
past due

More than
60 days
past due

More than
90 days
past due

1,105

(32)

277

(17)

523

(223)

More than
30 days
past due

More than
60 days
past due

More than
90 days
past due

815

(57)

502

(31)

532

(294)

Total

14,262

(775)

Total

12,632

(903)

Due to the nature of the Group’s products, there is a limited amount of inventory left in the possession of customers that could act as
collateral under terms of trade. As the value of this inventory is immaterial, it has not been disclosed in the financial statements.

Credit quality of financial assets
(i) Not past due

Included in the Group’s trade receivable balances are receivables with a carrying value of £11,875,000 (2021: £10,611,000) which are not
past due. Under the expected credit loss model a provision is held for the lifetime credit loss on these balances of £489,000 (2021: £514,000).
The nature of the Group’s business means that it has a long-standing relationship with the majority of its customers, who either have no
experience of historical default or only temporary late payments with full recovery of balances due.

(ii) Past due

Included in the Group’s trade receivable balances are receivables with a carrying value of £2,063,000 (2021: £1,475,000) which are past due
at the reporting date for which the Group does not consider the need to create a specific impairment provision against individually identified
receivables, but an expected credit loss provision has been made of £36,000 (2021: £63,000).

(iii) Past due – individually impaired

As at 31 January 2022, trade receivables of £324,000 (2021: £546,000) were individually determined to be impaired and provided for.
The amount of the provision was £250,000 (2021: £326,000). The main factor used to assess the impairment of trade receivables is the
circumstances of the individual customer. These receivables are analysed separately from IFRS 9’s expected credit loss model.

17. TRADE AND OTHER RECEIVABLES continued
As at the Balance Sheet date the carrying value of trade receivables by geographical territory of the customer was:

United Kingdom

Northern Europe

USA

Rest of the World

2022
£000

7,226

2,753

2,217

1,291

2021
£000

6,208

2,338

1,954

1,229

13,487

11,729

The carrying amounts of the Group’s net trade receivables, other receivables and prepayments are denominated in the following currencies:

Sterling

US dollars

Euros

Other

2022
£000

2021
£000

11,246

10,376

1,546

2,030

789

1,677

1,949

537

15,611

14,539

The closing loss allowances for trade receivables as at 31 January 2022 reconcile to the opening loss allowances as follows:

At 1 February

Increase in allowance recognised in income statement

Receivables written off in the year as uncollectible

Unused amounts reversed

At 31 January

Lifetime
ECL
£000

Credit
Impaired
£000

(514)

(11)

–

(525)

(389)

(86)

175

(250)

2022
£000

(903)

(97)

175

2021
£000

(1,025)

(268)

175

215

(775)

(903)

The creation and release of provisions for impaired trade receivables have been included within distribution and selling costs in the
Income Statement.

18. MINIMUM GUARANTEED LICENSING RECEIVABLES
The Group has analysed the minimum guaranteed licensing receivables into its current and non-current components and made a prior
year adjustment to reflect similar analysis in the comparatives. This determination is based on the assessment of the operating cycle of
the licensing arrangement taking into consideration the nature of the agreement and the cash and invoicing cycle. This assessment was
not carried out in the previous year and as such all amounts receivable were shown as current in error. A prior period adjustment has been
processed to reflect the split in the previous year (see note 30).

The following table analyses the Group’s minimum guaranteed licensing receivables into relevant maturity groupings based on the remaining
period to contractual maturity at the Balance Sheet date.

31 January 2022

31 January 2021

1 February 2020

19. CASH AND CASH EQUIVALENTS

Cash at bank and in hand

Current
Less than
1 year
£000

879

1,221

495

Non-current
Over
1 year
£000

1,619

1,222

1,455

Total
£000

2,498

2,443

1,950

2022
£000

2021
£000

19,050

15,549

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED99

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2
0
2
2

20. TRADE AND OTHER PAYABLES

Trade payables

Corporation tax payable

Other taxes and social security

Other payables

Accruals

21. BORROWINGS

Bank loan

Total borrowings

2022
£000

11,713

–

1,571

1,656

5,175

2021
£000

8,773

1,208

3,045

2,267

5,179

20,115

20,472

2022
£000

–

2021
£000

412

In October 2019 (amended and restated on 17 December 2021), the Group renewed its committed £12,500,000 multi-currency revolving
credit facility with Barclays Bank plc for a further five–year period. The agreement also included a £5,000,000 uncommitted accordion facility
option. During the year, the Group did not renew a temporary overdraft facility of £2,500,000 which expired in April 2021. The total facilities
from Barclays Bank plc in the year ended 31 January 2022 comprised the revolving credit facility and overdraft facility secured on the Group’s
freehold property which may be drawn down in either sterling or euro.

Under the Barclays Bank plc facilities, the Group is subject to compliance of two financial covenants: interest cover and leverage. Any
non-compliance with covenants could, if not remedied or waived, constitute an event of default with respect to any such arrangements.

Due to Covid-19, Management modelled possible downside scenarios to its base case trading forecast in the previous year. Having
considered these models, formal agreement was reached with Barclays Bank plc to waive the interest cover covenant condition for the tests
arising in July 2020, October 2020, January 2021, April 2021 and July 2021 and to waive the leverage covenant condition for October 2020,
January 2021 and April 2021. This was replaced by a liquidity covenant requirement that available headroom in the facility needs to remain
above £5,000,000 between 1 November 2020 and 31 July 2021. The Group has reported to Barclays Bank plc that it was in full compliance
with its agreed covenants at each of the testing points during the financial year ended 31 January 2022 and up to the date of this report.

The total Barclays Bank plc facilities are capped at £17,500,000 (2021: £17,500,000, including the £5,000,000 uncommitted accordion
facility); the utilisation of the facilities at 31 January 2022 was £nil (2021: £nil). The revolving credit facility bears interest at a variable rate
based on the SONIA (for sterling loans) or the EURIBOR (for euro loans).

In May 2020, the Group entered into a loan contract with Wells Fargo for US$565,818 (or £412,000) under the US Paycheck Protection
Payment scheme. In June 2021, this loan was forgiven and the Group treated the forgiveness as a grant for £440,000. This grant is classified
as a non-underlying item under note 12(b).

For the Group’s cash at bank, and the receivable component of derivative financial instruments, the counterparty to the financial instruments
is a major UK bank, and the Group does not consider there to be any significant credit risk from holding these financial assets.

The fair value of current borrowings approximates to their carrying amount, as the impact of discounting is not significant.

The following table analyses the Group’s financial liabilities, except corporation tax payable and other taxes and social security, into relevant
maturity groupings based on the remaining period to contractual maturity at the Balance Sheet date. The amounts disclosed in the table are
the contractual undiscounted cash flows. The maturity profile of undiscounted cash flows on variable interest rate borrowings has assumed
interest rates as at the Balance Sheet date.

31 January 2022

Trade and other payables

31 January 2021

Borrowings

Trade and other payables

Less than
1 year
£000

18,544

Less than
1 year
£000

412

16,219

16,631

Between
1 to 2 years
£000

Between
2 to 5 years
£000

–

Between
1 to 2 years
£000

Between
2 to 5 years
£000

–

Over
5 years
£000

–

Over
5 years
£000

–

100

21. BORROWINGS continued
The carrying amount of the Group’s borrowings is denominated in the following currency:

US Dollars – less than 1 year of contractual maturity

2022
£000

–

2021
£000

412

22. RETIREMENT BENEFIT OBLIGATIONS
Defined contribution schemes
The Group contributes to the defined contribution section of the Abaris Holdings Limited Pension Scheme and to a Group Personal Pension
Plan which is also a defined contribution scheme. Contributions are charged to the Income Statement as incurred and amounted to £285,000
(2021: £389,000). There are no outstanding or prepaid contributions at 31 January 2022 (2021: £nil). Active members of the schemes are also
able to make contributions.

Defined benefit schemes
Sanderson Design Group PLC operates two defined benefit schemes in the UK which both offer pensions in retirement and death benefits to
members: the Walker Greenbank Pension Plan and the Abaris Holdings Limited Pension Scheme. Pension benefits are related to the members’
final salary at retirement and their length of service. The schemes are closed to new members and to future accrual of benefits, although
deferred members still in service have a salary link to their benefits. This disclosure excludes any defined contribution assets and liabilities.

The Group’s contributions to the schemes for the year beginning 1 February 2022 are expected to be £2,391,000.

Plan assets held in the fund are governed by local regulations and practice in the UK. Responsibility for the governance of the plan, including
investment decisions and contributions schedules, lies with the Trustees of the schemes.

Actuarial valuations of the schemes were carried out as at 31 January 2022, based on membership data at 5 April 2021, updated to take
account of benefit outgoings since 5 April 2021, using actuarial assumptions at 31 January 2022. The major assumptions used by the actuary
were (in nominal terms) as follows:

Discount rate

Inflation assumption (RPI)

Inflation assumption (CPI)

Rate of increase in salaries

Rate of increase to pensions in payment, that increase in line with RPI subject to a maximum of 5% p.a.

Rate of increase to pensions (in excess of GMP) in deferment

The mortality assumptions imply the expected future lifetime from age 65 as follows:

Non-pensioner male currently 45

Pensioner male currently 65

Non-pensioner female currently 45

Pensioner female currently 65

2022

2021

2.20%

3.65%

3.15%

3.50%

3.15%

2022

22.8

21.8

25.4

24.2

1.35%

2.90%

2.10%

2.90%

2.80%

2.10%

2021

22.8

21.8

25.3

24.1

The fair value of the assets, which are not intended to be realised in the short term and may be subject to significant change before they are
realised, and the present value of the schemes’ liabilities, which are derived from cash flow projections over long periods and thus inherently
uncertain, were:

Equities, absolute return and property

Gilts

Fixed interest bonds

Liability driven investments

Insured annuities

Cash and cash equivalents

Fair value of scheme assets

2022
£000

2021
£000

30,698

16,294

3,573

21,085

145

4,906

76,701

29,505

6,006

15,289

22,474

690

5,325

79,289

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED101

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A
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&
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u
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t
s
2
0
2
2

All assets are invested with managers in the UK investing in the UK and overseas investments. The assets do not include the Group’s financial
instruments or property connected with the Group.

The actual return on assets over the year was a loss of £387,000 (2021: gain of £2,948,000).

Present value of funded obligations

Fair value of scheme assets

Surplus/(deficit) in funded scheme (net asset/(liability) in Balance Sheet)

Reconciliation of opening and closing balances of the present value of the defined benefit obligation

Benefit obligation at beginning of year

Interest cost

Remeasurement (gains)/losses – changes in financial assumptions

Remeasurement gains – changes in demographic assumptions

Remeasurement gains – experience

Benefits paid

Settlements

2022
£000

2021
£000

(74,124)

76,701

(84,926)

79,289

2,577

(5,637)

2022
£000

84,926

1,122

(6,086)

(51)

(1,797)

(3,646)

(344)

2021
£000

83,767

1,395

5,266

(1,347)

(719)

(3,436)

–

Benefit obligation at end of year

74,124

84,926

Reconciliation of opening and closing balances of the fair value of plan assets

Fair value of plan assets at beginning of year

Interest income on scheme assets

(Loss)/return on assets, excluding interest income

Contributions by employers

Benefits paid

Scheme administrative cost

Settlements

2022
£000

79,289

1,055

(1,442)

2,209

(3,646)

(420)

(344)

2021
£000

78,108

1,313

1,635

2,118

(3,436)

(449)

–

Fair value of scheme assets at end of year

76,701

79,289

Analysis of amounts charged against profits
Amounts recognised in the income statement in respect of defined benefit retirement plans are as follows:

Expected return on pension scheme assets

Interest on pension scheme liabilities

Scheme expenses met by the Group

Net charge

2022
£000

1,055

(1,122)

(420)

(487)

2021
£000

1,313

(1,395)

(449)

(531)

102

22. RETIREMENT BENEFIT OBLIGATIONS continued
Remeasurements of the net defined benefit liability/(asset) to be shown in the Statement of Comprehensive Income

Net remeasurement – financial

Net remeasurement – demographic

Net remeasurement – experience

Return/(Loss) on assets, excluding interest income

2022
£000

(6,086)

(51)

(1,797)

1,442

2021
£000

5,266

(1,347)

(719)

(1,635)

Total remeasurements of the net defined benefit (asset)/liability

(6,492)

1,565

Sensitivity analysis
The table below shows the impact on the defined benefit obligation of changing each of the most significant assumptions in isolation.
The figures in the table as at 31 January 2022 have been calculated using the same valuation method that was used to calculate the defined
benefit obligation above and are consistent year on year.

Discount rate

Rate of inflation (RPI)*

Rate of inflation (CPI)*

Assumed life expectancy

Estimated impact of Covid-19 on life expectancy**

Impact on scheme liabilities 2022 (£m)

Impact on scheme liabilities 2021 (£m)

Change in assumption

Increase

Decrease

Increase

Decrease

0.25% movement

1 year movement

(2.8)

1.3

0.7

3.8

N/A

2.9

(1.3)

(0.7)

(3.8)

N/A

(3.4)

1.5

0.6

4.8

N/A

3.6

(1.5)

(0.6)

(4.8)

(1.9)

Extrapolation of the sensitivity analysis beyond the ranges shown may not be appropriate.

* With corresponding changes to the salary and pension increase assumptions.

** The Group with its advisers has assessed the potential impact of Covid-19 on the mortality assumptions used to calculate the deficit. The figure above represents
a best estimate of the long-term impact at 31 January 2022. Given the continuing uncertainties around Covid-19, the Group has not made any adjustment to the
reported deficit for the effect of the pandemic.

Risk exposure
Through its defined benefit pension plans, the Group is exposed to a number of risks, the most significant of which are detailed below:
– Asset volatility: The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets

underperform this yield, this will create a deficit.

– Changes in bond yields: A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase

in the value of the plans’ bond holdings.

– Inflation risks: Some of the Group’s pension obligations are linked to salary inflation, and higher inflation will lead to higher liabilities
(although, in most cases, caps on the level of inflationary increases are in place to protect the plans against extreme inflation). The
majority of the plans’ assets are either unaffected by fixed interest bonds or loosely correlated with equities inflation, meaning that an
increase in inflation will also increase the deficit.

– Life expectancy: The majority of the plans’ obligations are to provide benefits for the life of the member, so increases in life expectancy will

result in an increase in the plans’ liabilities.

The weighted average duration of defined benefit obligations is 16 years.

23. FINANCIAL INSTRUMENTS
The accounting policies for financial instruments have been applied to the line items below:

31 January 2022

Assets as per Balance Sheet

Net trade receivables and other receivables

Minimum guaranteed licensing receivables

Cash and cash equivalents

Total

Amortised
cost
£000

Assets at
fair value
£000

Derivatives
used for
hedging
£000

13,794

2,498

19,050

35,342

–

Total
£000

13,794

2,498

19,050

35,342

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED103

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s

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A
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t
s
2
0
2
2

Liabilities at
fair value
£000

Other
financial
liabilities
£000

Derivatives
used for
hedging
£000

–

3,903

18,544

22,447

–

Amortised
cost
£000

Assets at
fair value
£000

Derivatives
used for
hedging
£000

12,578

2,443

15,549

30,570

–

Liabilities at
fair value
£000

Other
financial
liabilities
£000

Derivatives
used for
hedging
£000

–

412

5,882

16,219

22,513

–

Total
£000

–

3,903

18,544

22,447

Total
£000

12,578

2,443

15,549

30,570

Total
£000

412

5,882

16,219

22,513

Number of
shares

31 January 2022

Liabilities as per Balance Sheet

Borrowings

Lease liabilities

Trade and other payables

Total

31 January 2021

Assets as per Balance Sheet

Net trade receivables and other receivables

Minimum guaranteed licensing receivables

Cash and cash equivalents

Total

31 January 2021

Liabilities as per Balance Sheet

Borrowings

Lease liabilities

Trade and other payables

Total

24. SHARE CAPITAL

Ordinary shares of 1p each:

Allotted and fully paid:

31 January 2022, 31 January 2021 and 31 January 2020

70,983,505

709,835

Sanderson Design Group PLC’s issued ordinary share capital with voting rights consists of 70,983,505 (2021: 70,983,505) ordinary shares of
which nil (2021: nil) ordinary shares are held in treasury and 220 (2021: 50,000) ordinary shares are held by the Walker Greenbank Plc EBT.
Shares held in treasury or by the EBT are treated as cancelled when calculating EPS.

The market value of shares held by the EBT at 31 January 2022 was £370 (2021: £56,000). The total number of shares held in the EBT at the
year end represented less than 0.1% (2021: 0.1%) of the issued shares.

Shares held by the EBT and the treasury shares are held for the purpose of satisfying awards under incentive plans to Executive Directors and
senior management.

Long-Term Incentive Plans (‘LTIPs’)
The Group operates an LTIP. There have been 14 awards under this plan and its predecessor, in which Executive Directors and senior
management of the Group participate. The LTIP has previously been approved by the shareholders at an Annual General Meeting.

Awards under the scheme are granted in the form of nil-priced share options, and are to be satisfied either using market-purchased shares or
by the issuing of new shares. The awards vest in full or in part dependent on the satisfaction of specified performance targets at the end of the
vesting period applying to each award. The number of awards that vest is dependent upon the performance underpinned at the date of grant.

Award Twelve criteria is based on revenue, adjusted profit before tax (‘PBT’), the adjusted earnings before interest and tax (‘EBIT’), free
cash flow achieved for the relevant measurement period, and the Group’s Total Shareholder Return (‘TSR’) during the vesting period within a
comparator group. Award Thirteen and Award Fourteen criteria are based on the adjusted earnings before interest and tax (‘EBIT’), free cash
flow achieved for the relevant measurement period and continuous improvement in sustainability based on a reduction in carbon footprint
and contribution to the UN Sustainable Development Goals.

104

24. SHARE CAPITAL continued
Award Twelve has a quarter of the award based on vesting conditions that are market based and with a further quarter based on each of
the absolute adjusted EPS, revenue and free cash flow respectively. The weighted average fair value of options granted during the year that
related to market-based vesting conditions (TSR), determined using the Monte-Carlo valuation model, was 42.50p per option. The significant
inputs into the model were weighted average share price of 77p at the grant date, exercise price shown above, dividend yield of 3.28%,
an expected option life of three years, and an annual risk-free interest rate of 0.56%. The volatility measured at the standard deviation of
continuously compounded share returns is based on statistical analysis of daily share prices over the last three years. The fair value of the
options granted based on vesting conditions of absolute adjusted EPS, revenue and free cash flow, determined using the Black-Scholes
valuation model, was 70.0p.

Details of Award Twelve are set out below:

Grant date of awards

21 Nov 2019

Grant date fair value of award (pence per award)

42.5

70.0

Award Twelve

Vesting date of awards

Maximum number of awards

Vesting condition based on

Relevant date for determination of vesting conditions

20 Nov 2022

404,638

TSR with
PBT floor

TSR as at
20 Nov 2022
PBT for
year ending
31 Jan 2022

EPS

Revenue Free cash flow

EPS for
year ending
31 Jan 2022

Revenue for
year ending
31 Jan 2022

Free cash
flow for
year ending
31 Jan 2022

The vesting dates for Award Thirteen are split 40% on 11 November 2023, 36% on 11 November 2024, and 24% on 11 November 2025. The
fair value at the date of grant for this award has been determined based on the share price at the date of grant discounted by the estimated
dividends payable on the shares over the relevant vesting period. The relevant fair values are 61.3p for awards vesting on 11 November 2023,
59.2p for awards vesting on 11 November 2024 and 57.2p for those vesting on 11 November 2025.

The vesting dates for Award Fourteen are split 40% on 14 June 2024, 40% on 14 June 2025, and 20% on 14 June 2026. The fair value at
the date of grant for this award has been determined based on the share price at the date of grant discounted by the estimated dividends
payable on the shares over the relevant vesting period. The relevant fair values are 164.5p for awards vesting on 14 June 2024, 161.1p for
awards vesting on 14 June 2025 and 157.8p for those vesting on 14 June 2026.

Details of Award Thirteen and Award Fourteen are set out below:

Award Thirteen

Award Fourteen

Grant date of awards

11 Nov 2020

14 Jun 2021

Grant date fair value of award
(pence per award)

See above

Vesting date of awards

See above

Maximum number of awards

344,361

143,725

Vesting condition based on

Relevant date for determination
of vesting conditions

EBIT

Free cash

flow

EBIT for the
year ending
31 Jan 2023

Free cash flow
for the year
ending 31 Jan
2023

Sustainability
improvement

Sustainability
improvement
for the year
ending 31 Jan
2023

EPS

Free cash

flow

EBIT for the
year ending
31 Jan 2024

Free cash flow
for the year
ending 31 Jan
2024

Sustainability
improvement

Sustainability
improvement
for the year
ending 31 Jan
2024

Further details of vesting conditions are set out in the Directors’ Remuneration Report on pages 60 to 63. ‘EBIT’ is the adjusted underlying
profit before tax.

The expense recognised in the Income Statement for share options granted to employees is disclosed in note 9.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUED105

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2
0
2
2

Movements in the number of awards outstanding, assuming maximum achievement of vesting conditions, are as follows:

At 1 February

Granted

Exercised

Forfeiture

Lapsed

At 31 January

25. CAPITAL RESERVE

Capital reserve represents:

Share premium of companies acquired under merger accounting principles

Capital reserve arising on consolidation

Capital redemption reserve on capital restructurings

At 31 January 2022 and 2021

2022 Number

2021 Number

2,200,222

431,175

–

(242,453)

–

1,587,588

1,033,084

–

(72,989)

(347,461)

2,388,944

2,200,222

£000

1,276

293

41,888

43,457

26. DIVIDENDS
During the year to 31 January 2022, the Group has paid an interim dividend of 0.75p (£532,000) on 26 November 2021. In the prior year to
31 January 2021, the Group had not paid any dividend. An interim dividend of 0.52p (£369,000) was paid for the year to 31 January 2020.

The Board has proposed a final dividend of 2.75p per share to be paid on 12 August 2022 to the shareholders on the Company’s register on
15 July 2022 if approved at the Company’s forthcoming Annual General Meeting.

27. ANALYSIS OF NET FUNDS/(DEBT)

Cash and cash equivalents

Total funds

Short-term loan

Finance lease liabilities

Total debts

Net funds/(debts)

1 February
2021
£000

15,549

(412)

(5,882)

(6,294)

Cash flow
£000

3,562

–

2,685

Other
non-cash
changes
£000

(61)

412

(706)

(294)

31 January
2022
£000

19,050

–

(3,903)

9,255

6,247

(355)

15,147

Other non-cash changes are exchange gains/(losses) from the retranslation of bank balances held in non-sterling bank accounts and new
additions to right-of-use assets.

28. COMMITMENTS
Capital commitments
Capital expenditure contracted for at the Balance Sheet date but not yet incurred is as follows:

Property, plant and equipment

2022
£000

957

2021
£000

711

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29. PRINCIPAL SUBSIDIARY UNDERTAKINGS
The principal Group operating companies that traded during the year, and are wholly owned, and which are included in these consolidated
financial statements, are as follows:

Name of subsidiary undertaking

Sanderson Design Group Brands Limited

Globaltex Limited, trading as Clarke & Clarke*

Sanderson Design Group Inc*

Sanderson Design Group Brands SARL*

Sanderson Design Group Brands GmbH*

* Shares held by subsidiary company.

Investments in Group companies are ordinary shares.

Country of
incorporation and
place of business

Registered office

France

Germany

Chalfont House, Oxford Road, Denham, UB9 4DX

800 Huyler Street, Teterboro, New Jersey, 07608

19 Rue de Mail, Paris, 75002

Thurn-und-Taxis Platz 6 60313, Frankfurt am Maine, Germany

The principal activities of the Group, including all subsidiaries, are design, manufacture, marketing and distribution of wallcoverings,
furnishing fabrics and associated products for the consumer market.

During the year, the Group changed the names of the following companies listed above:
Sanderson Design Group Brands SARL (formerly Arthur Sanderson & Sons SARL)
Sanderson Design Group Brands GmbH (formerly Style Library GmbH)

Style Library (Rus) LLC, a previous subsidiary company, was liquidated by Sanderson Design Group Brands Limited.

For a full list of subsidiary companies refer to note 8 to the financial statements of the Company as an entity (page 115).

30. EXPLANATION OF PRIOR YEAR ADJUSTMENTS FOR THE YEARS ENDED 31 JANUARY 2021 AND 31 JANUARY 2020
The Group has rectified the error in previous years of its cost absorption methodology of the manufacturing units for establishing the profit
elimination within inter-group inventories held at the year end. As a result of this error, the value of inventory at 31 January 2021 has reduced
by £717,000, the cost of sales for the financial year ended 31 January 2021 has increased by £80,000 and opening retained earnings and
inventory at 1 February 2020 have reduced by £637,000.

The total impact of these adjustments for the financial year ended 31 January 2022 is a reduction of opening retained earnings of £717,000
with equivalent reduction in the value of opening inventories. In addition, the cash flow statement for the year ended 31 January 2021 has
been restated to show a reduced profit before tax by £80,000 with a compensating adjustment to the movement in inventories. There is no
overall change to the reported operating cashflow.

The Group has analysed the minimum guaranteed licensing receivables into its current and non-current components and made a prior
year adjustment to reflect similar analysis in the comparatives. This determination is based on the assessment of the operating cycle of
the licensing arrangement, taking into consideration the nature of the agreement and the cash and invoicing cycle. This assessment was
not carried out in the previous year and as such all amounts receivable were shown as current in error. A prior period adjustment has been
processed to reflect the split in the previous year. This restatement has no effect on the result, equity or retained earnings brought forward in
the prior year.

The following table analyses the Group’s minimum guaranteed licensing income into relevant maturity groupings based on the remaining
period to contractual maturity at the Balance Sheet date. The impact is to increase non-current assets and reduce net current assets by
£1,222,000 as at 31 January 2021 and by £1,455,000 as at 31 January 2020.

31 January 2021

31 January 2020

Current
Less than
1 year
£000

1,221

495

Non-current
Over
1 year
£000

1,222

1,455

Total
£000

2,443

1,950

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUEDCOMPANY BAL ANCE SHEET
AS AT 31 JANUARY 2022

Fixed assets

Tangible assets

Right-of-use assets

Investments

Deferred income tax asset

Current assets

Trade and other receivables

Cash and cash equivalents

Creditors: amounts falling due within one year

Net current liabilities

Total assets less current liabilities

Creditors: amounts falling due after one year

Net assets

Capital and reserves

Called-up share capital

Share premium account

Retained earnings

Capital redemption reserve

Total shareholders’ funds

Note

2022
£000

2021
£000

919

80,441

689

82,051

2,894

927

3,821

1,371

80,441

113

81,929

3,356

7,791

11,147

(18,280)

(23,624)

(14,459)

(12,477)

67,592

69,452

(349)

(758)

67,243

68,694

710

18,682

5,963

41,888

710

18,682

7,414

41,888

67,243

68,694

The Company made a loss of £1,195,000 (2021: profit of £630,000).

The financial statements on pages 107 to 118 were approved by the Board of Directors on 27 April 2022 and signed on its behalf by

Lisa Montague
Director

Registered number: 61880

Mike Woodcock
Director

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COMPANY STATEMENT OF CHANGES IN EQUITY
AS AT 31 JANUARY 2022

Balance at 1 February 2020

Profit for the year as reported

Total comprehensive income

Transactions with owners, recognised

directly in equity:

Dividends

Long-term incentive plan charge

Related tax movements on long-term incentive plan

Balance at 31 January 2021

Loss for the year

Total comprehensive income

Currency translation differences

Transactions with owners, recognised

directly in equity:

Dividends

Long-term incentive plan charge

Related tax movements on long-term incentive plan

Called-up
share capital
£000

Share
premium
account
£000

Retained
earnings
£000

Capital
redemption
reserve
(note 15)
£000

Total
shareholders’
funds
£000

710

18,682

6,471

41,888

67,751

–

710

18,682

–

630

–

294

7,414

(1,195)

(119)

(532)

253

142

–

41,888

–

630

–

294

68,694

(1,195)

(119)

(532)

253

142

Balance at 31 January 2022

710

18,682

5,963

41,888

67,243

The notes on pages 107 to 118 form an integral part of these financial statements.

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NOTES TO THE COMPANY FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES AND GENERAL INFORMATION
Basis of consolidation
These financial statements present information relating to the entity Sanderson Design Group PLC (‘the Company’), and are not consolidated.
The consolidated financial statements of Sanderson Design Group PLC and its subsidiaries (’the Group’) of which the Company is the parent
are separately presented within the Annual Report and Accounts and are prepared in accordance with International Financial Reporting
Standards as adopted by the European Union (‘IFRSs’).

Basis of preparation
The financial statements have been prepared in accordance with the FRS 101. The financial statements have been prepared under the
historical cost convention, and with the accounting policies set out below, which have been consistently applied to all periods presented
unless otherwise indicated.

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the
foreseeable future. Therefore, the Company continues to adopt the going concern basis in preparing its financial statements as detailed in the
Group’s going concern analysis.

No Income Statement is presented for the Company as it has applied the exemption provided by Section 408 of the Companies Act 2006.

In accordance with FRS 101, the following exemptions from the requirements of IFRSs have been applied in the preparation of these
financial statements:
– Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based payment’ (details of the number and weighted average exercise prices of share

options, and how the fair value of goods or services received was determined).

– IFRS 7, ‘Financial Instruments: Disclosures’.
– Paragraphs 91 to 99 of IFRS 13, ‘Fair value measurement’ (disclosure of valuation techniques and inputs used for fair value measurement of

assets and liabilities).

– Paragraph 38 of IAS 1, ‘Presentation of financial statements’ comparative information requirements in respect of:

paragraph 79(a)(iv) of IAS 1;

(i)
(ii) paragraph 73(e) of IAS 16 ‘Property, plant and equipment’;
(iii)

paragraph 118(e) of IAS 38 ‘Intangible assets’ (reconciliations between the carrying amount at the beginning and end of the period);
and

(iv) paragraphs 76 and 79(d) of IAS 40 ‘Investment Property’.

– The following paragraphs of IAS 1, ‘Presentation of financial statements’:

(i)
(ii)

10(d) (statement of cash flows);
10(f) (a statement of financial position as at the beginning of the preceding period when an entity applies an accounting policy
retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial
statements);

(iii) 16 (statement of compliance with all IFRS);
(iv) 38A (requirement for minimum of two primary statements, including cash flow statements);
(v) 111 (cash flow statement information); and
(vi) 134-136 (capital management disclosures).

– IAS 7, ‘Statement of cash flows’.
– Paragraphs 30 and 31 of IAS 8 ‘Accounting policies, changes in accounting estimates and errors’ (requirement for the disclosure of

information when an entity has not applied a new IFRS that has been issued but is not yet effective).

– Paragraph 17 of IAS 24, ‘Related party disclosures’ (key management compensation).
– The requirements in IAS 24, ‘Related party disclosures’ to disclose related party transactions entered into between two or more members of

a group.

– Paragraphs 130(f)(ii), 130(f)(iii), 134(d) to 134(f) and 135(c) to 135(e) of IAS 36, ‘Impairment of Assets’.
– The requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of

IFRS 3 ‘Business Combinations’.

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its
judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.

Adoption of new and revised accounting standards and interpretations
On 31 December 2021 EU-adopted IFRS was brought into UK law and became UK-adopted international accounting standards, with future
changes to IFRS being subject to endorsement by the UK Endorsement Board. No new standards and interpretations issued and effective for
the year have had any significant impact.

Foreign currencies
For the purpose of the financial statements, the results and financial position are expressed in sterling, which is the functional and
presentation currency of the Company.

Transactions in foreign currencies, which are those other than the functional currency of the Company, are recorded at the rate ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated at the rate ruling at the
Balance Sheet date.

Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and any recognised impairment loss. Historical cost
comprises the purchase price and costs directly incurred in bringing the asset into use. The assets’ residual values and useful lives are reviewed
annually and adjusted, if appropriate, at each Balance Sheet date.

110

NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED

1. ACCOUNTING POLICIES AND GENERAL INFORMATION continued
Depreciation is charged on a straight-line basis on the original costs after deduction of any estimated residual value. The principal annual
rates are:

Plant, equipment and vehicles
Computer hardware

Between 5% and 33%
33%

Investments
Investments in subsidiary undertakings are recorded at cost plus incidental expenses less any provision for impairment. Impairment reviews
are performed by the Directors when there has been an indication of potential impairment. In accordance with IAS 39, the Company has
adopted the cost-based approach for subsequent changes in the value of contingent consideration which represent a financial liability or
asset. These are treated as part of the cost or a reduction in the cost of the investment.

Impairment of non-financial assets
Property, plant and equipment are tested for impairment if events or changes in circumstances (assessed at each reporting date) indicate
that the carrying amount may not be recoverable. When an impairment test is conducted, the recoverable amount is assessed by reference
to the higher of the value in use (net present value of expected future cash flows of the relevant cash-generating unit), or the fair value less
cost to sell. If a cash-generating unit is impaired, provision is made to reduce the carrying amount of the related assets to their estimated
recoverable amount. Non-financial assets that suffer impairment are reviewed for possible reversal of the impairment at each reporting date.

Financial assets and liabilities – measurement basis
Financial assets and liabilities are recognised on the date on which the Company becomes a party to the contractual provisions of the
instrument giving rise to the asset or liability. Financial assets and liabilities are initially recognised at fair value plus transaction costs and are
continually reviewed for impairment going forward. Any impairment of a financial asset is charged to the Income Statement when incurred.
Financial assets are derecognised when the Company’s rights to cash inflows from the asset expire; financial liabilities are derecognised when
the contractual obligations are discharged, cancelled or expired.

Non-derivative financial assets are classified as either amortised cost or fair value through profit and loss. This category includes:
– ‘Trade and other receivables’ – these are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They arise when the Company provides goods directly to a customer, or advances money, with no intention of trading
the loan or receivable. Trade receivables are recognised initially at the amount of consideration that is unconditional. Subsequent to
initial recognition, loans and receivables are included in the Balance Sheet at amortised cost using the effective interest method less any
amounts written off to reflect impairment, with changes in the carrying amount recognised in the Income Statement within administration
expenses; and

– ‘Cash and cash equivalents’ – these comprise deposits with an original maturity of three months or less with banks and financial

institutions, bank balances, bank overdrafts with the right of offset and cash in hand.

The Company’s non-derivative financial liabilities are classified as ‘Other liabilities’. Other liabilities are financial liabilities with fixed or
determinable payments that are not quoted in an active market. They arise when the Company receives goods or services directly from a
payable or supplier, or borrows money, with no intention of trading the liability. This category includes:
– ‘Creditors’ – these are typically non-interest bearing and following initial recognition are included in the Balance Sheet at amortised cost

using the effective interest method;

– ‘Bank overdrafts’ – these are initially recorded at fair value based on proceeds received net of issue costs and subsequently held at

amortised cost using the effective interest method; and

– ‘Borrowings’ – these are recorded initially at the fair value, net of direct issue costs, and are subsequently stated at amortised cost. Finance
charges, including premiums payable on settlement, or redemption and direct issue costs, are accounted for in the Income Statement, using
the effective interest method, and are included within the carrying amount of the instrument to the extent that they are not settled in the
period in which they arise. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement
of the liability for at least 12 months after the end of the reporting period. Borrowing costs are capitalised as an increase to the carrying
value of software or property, plant and equipment on major projects where their impact is material.

Leases
Definition of a lease

Under IFRS 16, a contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in
exchange for consideration.

Lessee accounting

Right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease to the earlier of the end of the asset’s
useful life or the end of the lease term. The lease term is the non-cancellable period of the lease plus any periods for which the Company
is ‘reasonably certain’ to exercise any extension options. If right-of-use assets are considered to be impaired, the carrying value is reduced
accordingly.

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For assets where the lessor transfers ownership of the underlying asset to the Company by the end of the lease term, or where the lease
contains a purchase option at a nominal/notional value, then these assets will be initially classified as property, plant and equipment, and
subsequently be depreciated in accordance with the depreciation policy.

The lease liability is initially measured at the value of future lease payments, discounted using the interest rate implicit in the lease. Where this
rate is not determinable, the Company’s incremental borrowing rate is used, which is then adjusted to reflect an estimate of the interest rate
the Company would have to pay to borrow the amount necessary to obtain an asset of similar value, in a similar economic environment, and
with similar terms and conditions.

After initial recognition, the lease liability is recorded at amortised cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate (e.g. an inflation related increase) or if the Company’s assessment
of the lease term changes. Any change in the lease liability as a result of these changes also results in a corresponding change in the
recorded right-of-use asset. Payments in respect of short-term and/or low-value leases continue to be charged to the income statement on a
straight-line basis over the lease term.

Employee benefits – retirement benefit obligations
Sanderson Design Group operates both defined benefit and defined contribution pension schemes for the benefit of its employees.

Defined benefit pension schemes are accounted for within the separate financial statements of the Company’s trading subsidiary, Sanderson
Design Group Brands Limited (formerly Abaris Holdings Limited). The Company recognises contributions to defined contribution schemes in
respect of its employees as expenses when incurred.

Employee share ownership plan (‘ESOP’)
Where the Company’s issued share capital is acquired by an ESOP trust sponsored by the Company, the cost of acquisition is deducted from
retained earnings.

Employee benefits – share-based payments under Long Term Incentive Plans (‘LTIPs’)
The Company issues equity-settled share-based payments to certain employees which must be measured at fair value and recognised as an
expense in the Income Statement with a corresponding increase in equity.

The fair values of these payments are measured at the date of grant, considering the terms and conditions upon which the awards are
granted. The fair value is recognised over the period during which employees become conditionally entitled to the awards, subject to the
Company’s estimate of the number of awards which will lapse, either due to employees leaving the Company prior to vesting or due to non-
market based performance conditions not being met.

Employee benefits – short-term bonus plans
The Company recognises a liability and an expense for bonuses where contractually obliged or where there is a past practice that has created
a constructive obligation.

Provisions for liabilities and charges
Provisions are required for restructuring costs and employment related benefits when the Company has a present legal or constructive
obligation at the reporting date as a result of a past event and it is probable that settlement will be required of an amount that can be
reliably estimated.

Share premium
Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from
the proceeds.

Treasury shares
Consideration paid including any directly attributable incremental costs (net of income taxes) on the purchase of the Company’s equity share
capital (treasury shares) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued.
Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and
the related income tax effects, is included in equity attributable to the Company’s equity shareholders. The EBT is treated as an agent of the
Company and as such EBT transactions are treated as being those of the Company.

112

NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED

1. ACCOUNTING POLICIES AND GENERAL INFORMATION continued
Taxation including deferred tax
The tax expense represents the sum of the current tax and deferred tax charges or credits.

Current tax is based on the taxable profit for the year. Taxable profit differs from the net profit as reported in the Income Statement because
it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable
or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the
Balance Sheet date. Current tax includes withholding taxes from sales and licensing income in overseas territories.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance
sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and such assets and liabilities
are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised
for taxable temporary differences arising on investments in subsidiaries except where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

IAS 12 ‘Income taxes’ requires that the measurement of deferred tax should have regard to the tax consequences that would follow from the
manner of expected recovery or settlement at the Balance Sheet date of the carrying amount of its assets and liabilities. In calculating its
deferred tax liability the Company’s policy is to regard the depreciable amount of the carrying value of its property, plant and equipment to
be recovered through continuing use in the business, unless included within assets held for resale, where the policy is to regard the carrying
amount as being recoverable through sale.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the Income Statement, except when it relates to items charged or credited directly to equity, in which
case the deferred tax is also dealt with in equity. A deferred tax asset is recognised relating to share based payments equal to the intrinsic
value (market price at the year-end less the exercise price). Deferred tax is recognised in the profit and loss based on the temporary
difference between the tax base of the fair value of the employee’s services received in the year. The amount recognised in equity is the
excess deduction based on the difference between the intrinsic value and the cumulative fair value of the share based payments recognised
in profit and loss.

Dividend income
Dividend income is recognised when the right to receive payment is established.

Dividend distributions
Dividend distributions to the Company’s shareholders are recognised as a liability in the Company’s financial statements in the period in which
the dividends are approved by the Company’s shareholders.

2. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The Company makes estimates and assumptions concerning future events. The resulting accounting estimates will seldom precisely equal the
related actual results. The Company applies its best endeavours in setting accounting estimates, and uses historical experience and other
factors, including input from experienced and specialist management. Estimates and assumptions are periodically re-evaluated and the
resulting accounting balances updated as new information, including actual outcomes, becomes apparent.

The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.

Deferred tax recognition
The Company considers it appropriate to recognise at the Balance Sheet date deferred tax assets resulting from historical trading losses and
other temporary differences including pension deficits and the impact of awards under the Long-Term Incentive Plan. The amount of deferred tax
recognised is based on estimates of the timing and amount of future taxable profits of the Company, which in turn relies upon estimates of future
operating profits and the occurrence, timing and tax treatment of significant items of income and expenditure including contributions to pension
schemes and the vesting of LTIP payment awards. Further disclosures relating to the amount of deferred tax asset recognised and other relevant
disclosures are included in note 10. The Company considers the sensitivity on deferred tax recognition to be based on profits generated by the
Company and tax rates substantively enacted. There has been no material impact on sensitivity in the current or previous financial year.

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3. AUDITORS’ REMUNERATION

Audit fee – fees payable to the Company’s auditor for the audit of the Parent Company and the consolidation
of the Group financial statements

4. EMPLOYEE INFORMATION

Wages and salaries

Social security costs

Other pension costs

Share-based payment awards, including NIC thereon

Employee benefit expense

The average monthly number of employees (including Directors) during the year

Corporate and administration

2022
£000

2021
£000

2,995

2,058

212

406

170

115

345

3,708

2,688

2022

2021

The Directors’ emoluments are disclosed in the Directors’ Remuneration Report on pages 60 to 63 of these financial statements.

5. EMOLUMENTS OF DIRECTORS
Information on the remuneration of the Directors, including the highest paid director, is included in the Directors’ Remuneration Report set out
on pages 60 to 63.

The emoluments of the Directors are detailed below:

Short-term employee benefits (including short-term incentives)

Post-employment benefits (including pension costs)

Total disclosed in the Directors’ Remuneration Report

Share-based payment charge

6. TANGIBLE ASSETS

Cost

31 January 2020, 31 January 2021 and 30 January 2022

Accumulated depreciation

31 January 2020

Charge

31 January 2021

Charge

31 January 2022

Net book amount

31 January 2022

31 January 2021

31 January 2020

The total depreciation expense of £2,000 (2021: £2,000) is included in administration expenses.

2022
£000

1,162

1,192

202

1,394

Plant, equipment
and vehicles
£000

Computer
hardware
£000

–

2021
£000

734

761

169

930

Total
£000

131

125

127

129

114

NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED

7. LEASES
As a lessee
Information about leases for which the Company is a lessee is presented below:

Cost

31 January 2021

Additions

Disposals

31 January 2022

Accumulated depreciation and impairment

31 January 2021

Charge

Disposals

31 January 2022

Net book amount

31 January 2022

31 January 2021

Leasehold
properties

£000

Vehicles
£000

Total
£000

2,292

–

2.292

940

442

–

1,382

910

1,352

(92)

(77)

2,384

(92)

2,310

1,013

455

(77)

1,391

919

1,371

Additions to right-of-use assets during 2022 were £18,000 (2021: £303,000). Depreciation of right-of-use assets during the year was
£455,000 (2021: £581,000).

Lease liabilities

Balance

31 January 2021

Additions

Amounts paid

Effect of discounting

31 January 2022

Leasehold
properties

£000

1,305

–

(504)

828

Vehicles
£000

Total
£000

(24)

1,320

(528)

838

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Lease liabilities

Maturity analysis – contractual undiscounted cash flows

Less than one year

One to five years

More than five years

Total undiscounted cash flows

Maturity analysis – contractual lease liabilities

Current (note 12)

Non-current

Total lease liabilities

8. INVESTMENTS

Shares in subsidiary undertakings:

Cost

Provision for impairment

Net book amount at 31 January

2022
£000

509

378

–

887

489

349

838

2022
£000

2021
£000

515

1,042

–

1,557

562

758

1,320

2021
£000

80,441

–

80,441

Sanderson Design Group PLC is registered and domiciled in the United Kingdom. It is the Parent Company of the Sanderson Design Group.
The Company’s subsidiary undertakings at 31 January 2022, all of which are wholly owned, were as follows:

Name of subsidiary undertaking

Sanderson Design Group Brands Limited

Globaltex 2015 Limited

Globaltex Limited*

Sanderson Design Group Inc*

Clarke & Clarke Inc*

Sanderson Design Group Brands SARL*

Sanderson Design Group Brands B.V.*

Sanderson Design Group Brands GmbH

Abaris Holdings Limited*

Abaris (Overseas) Holdings Limited*

Anstey Wallpaper Company Limited*

Anthology Fabrics and Wallcoverings Limited*

Arthur Sanderson & Sons Limited*

Barracks Fabric Printing Company Limited*

Cirka Limited*

Design Edition Limited*

Harlequin Fabrics & Wallcoverings Limited*

Morris & Co. (Artworkers) Limited*

Sanderson of London Limited*

Scion Fabrics & Wallcoverings Limited*

Scion Living Limited*

Standfast Dyers and Printers Limited

Strines Textiles Limited*

Style Library Limited*

Walker Greenbank Distribution Limited*

Walker Greenbank Limited*

William Morris Wallpapers Limited*

Zoffany Limited*

Country of
incorporation and
place of business

France

Netherlands

Germany

Sanderson Design Group Brands (Ireland) Limited*

Ireland

Holding

Ordinary shares

Proportion of voting
rights/shares held
by the Company

100%

Nature of business

Luxury interior furnishings

Holding company

Inactive

Luxury interior furnishings

Dormant

Luxury interior furnishings

Sales support

Dormant

Style Library (Rus) LLC, a previous subsidiary company, was liquidated by Sanderson Design Group Brands Limited.

Indicates that the shares are held by a subsidiary company.

116

NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED

8. INVESTMENTS continued
Registered offices of the Company’s related undertakings, all of which are wholly owned, are as follows:

Name of subsidiary undertaking

Registered office

Sanderson Design Group Inc*

Clarke & Clarke Inc*

Sanderson Design Group Brands SARL*

Sanderson Design Group Brands B.V. *

800 Huyler Street, Teterboro, New Jersey, 07608, USA

2416 Camino Oleada, San Clemente, California, 92673, USA

19 Rue de Mail, Paris, 75002, France

Postbus 372, 1970 AJ IJMUIDEN, Netherlands

Sanderson Design Group Brands GmbH*

Wiesenhüttenstrasse 11, 60329 Frankfurt am Main, Germany

All undertakings other than the ones listed above

Chalfont House, Oxford Road, Denham, UB9 4DX, UK

Sanderson Design Group Brands (Ireland) Limited

12 Merrion Square, Dublin 2, Dublin, Ireland DO2 H79

Indicates that the shares are held by a subsidiary company.

9. TRADE AND OTHER RECEIVABLES

Current

Other taxes and social security

Prepayments and other receivables

10. CASH AND CASH EQUIVALENTS

Cash at bank and in hand

2022
£000

843

2,051

2,894

2022
£000

927

2021
£000

1,297

2,059

3,356

2021
£000

7,791

11. DEFERRED INCOME TAX
A net deferred tax asset of £689,000 (2021: £113,000) is recognised in respect of unutilised tax losses, future deductions for LTIP payments
and other temporary differences.

At 31 January 2022, the Company had gross unused UK tax losses of £3,064,000 (2021: £3,225,000) available for offset against future
profits. Of the potential £766,000 deferred tax asset on these tax losses, a pro-rated deferred tax asset of £322,000 has been recognised on
a prudent basis as these are readily available for offset against the Company’s profits for the next three years under existing tax legislation
and therefore the realisation of these losses is considered probable. A further deferred tax asset of £444,000 from these tax losses is not
recognised. In the previous year, the gross UK tax losses of £3,225,000 was deemed not available for offset against future profits, therefore
the deferred tax asset of £613,000 was not recognised. The change of tax rate from 19% to 25% has also increased the amount of deferred
tax asset in future years.

Taxable temporary differences on property, plant and equipment

Taxable temporary differences on deductible tax losses carried forward

Taxable temporary differences on share-based payments

Other temporary differences

2022
£000

332

353

–

689

2021
£000

–

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12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Trade creditors

Amounts owed to subsidiary undertakings

Other creditors

Leases (note 6)

Accruals

2022
£000

14,159

1,230

489

2,355

2021
£000

111

21,052

–

562

1,899

18,280

23,624

Amounts owed to subsidiary undertakings are non-interest bearing and are unsecured. These loans are payable by the Company on demand
should payment be required but have no fixed date of repayment.

13. BORROWINGS
In October 2019, the Group renewed its committed £12,500,000 multi-currency revolving credit facility with Barclays Bank plc for a further
five-year period. The agreement also included a £5,000,000 uncommitted accordion facility option. During the year, the Group did not
renew a temporary overdraft facility of £2,500,000 which expired in April 2021. The total facilities from Barclays Bank plc in the year ended
31 January 2022 comprised the revolving credit facility and overdraft facility secured on the Group’s freehold property which may be drawn
down in either sterling or euro.

Due to Covid-19, Management modelled possible downside scenarios to its base case trading forecast in the previous year. Having taken
into account these models, formal agreement was reached with Barclays Bank plc to waive the interest cover covenant condition for the tests
arising in July 2020, October 2020, January 2021, April 2021 and July 2021 and to waive the leverage covenant condition for October 2020,
January 2021 and April 2021. This was replaced by a liquidity covenant requirement that available headroom in the facility needs to remain
above £5,000,000 between 1 November 2020 and 31 July 2021. The Group has reported to Barclays Bank plc that it was in full compliance
with its agreed covenants at each of the testing points during the financial year ended 31 January 2022 and up to the date of this report.

The total Barclays Bank plc facilities are capped at £12,500,000 (2021: £17,500,000, including the expired £5,000,000 uncommitted accordion
facility); the utilisation of the facilities at 31 January 2022 was £nil (2021: £nil). The revolving credit facility bears interest at a variable rate
based on the SONIA (for sterling loans) or the EURIBOR (for euro loans).

The table below analyses the Company’s financial liabilities into relevant maturity groupings based on the remaining period to contractual
maturity at the Balance Sheet date. The amounts disclosed in the table are the contractual undiscounted cash flows. The maturity profile of
undiscounted cash flows on variable interest rate borrowings has assumed interest rates as at the Balance Sheet date.

31 January 2022

Creditors: amounts falling due within one year

31 January 2021

Creditors: amounts falling due within one year

Less than
1 year
£000

18,280

Less than
1 year
£000

23,624

Between
1 to 2 years
£000

Between
2 to 5 years
£000

–

Between
1 to 2 years
£000

Between
2 to 5 years
£000

–

14. FINANCIAL INSTRUMENTS BY CATEGORY
The accounting policies for financial instruments have been applied to the line items below:

31 January 2022

Assets as per Balance Sheet

Cash at bank and in hand

Total

31 January 2022

Liabilities as per Balance Sheet

Creditors: amounts falling due within one year

Total

At amortised
cost
£000

Assets at
fair value
£000

Derivatives
used for
hedging
£000

927

–

Liabilities
at fair value
£000

Other
financial
liabilities
£000

Derivatives
used for
hedging
£000

–

18,280

–

18,280

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Over
5 years
£000

–

Over
5 years
£000

–

Total
£000

927

Total
£000

118

NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED

14. FINANCIAL INSTRUMENTS BY CATEGORY continued

31 January 2021

Assets as per Balance Sheet

Cash at bank and in hand

Total

31 January 2021

Liabilities as per Balance Sheet

Creditors: amounts falling due within one year

Total

15. CALLED UP SHARE CAPITAL

Ordinary shares of 1p each:

Called up and fully paid:

31 January 2022

31 January 2021

31 January 2020

At amortised
cost
£000

Assets at
fair value
£000

Derivatives
used for
hedging
£000

7,791

–

Liabilities
at fair value
£000

Other
financial
liabilities
£000

Derivatives
used for
hedging
£000

Total
£000

7,791

Total
£000

–

23,624

–

23,624

Number of
shares

70,983,505

709,835

70,983,505

709,835

70,983,505

709,835

Sanderson Design Group PLC’s issued ordinary share capital with voting rights consists of 70,983,505 (2021: 70,983,505) ordinary shares of
which nil (2021: nil) ordinary shares are held in treasury and 220 (2021: 50,000) ordinary shares are held by the Walter Greenbank Plc EBT.
Shares held in treasury or by the EBT are treated as cancelled when calculating EPS.

Shares held by the EBT and the treasury shares are held for the purpose of satisfying awards under incentive plans to Executive Directors and
senior management.

Long-Term Incentive Plans (‘LTIPs’)
The Group operates an LTIP. There have been 14 awards under this plan, in which Executive Directors and senior management of the Group
participate. Further details are included in note 24 of the consolidated financial statements of the Group, which are separately included within
the Annual Report and Accounts.

16. CAPITAL REDEMPTION RESERVE

The capital redemption reserve represents:

Capital redemption reserve on capital restructurings

At 31 January 2022 and 2021

£000

41,888

17. DIVIDENDS
During the year to 31 January 2022, the Group has paid an interim dividend of 0.75p (£532,000) on 26 November 2021. In the prior year to
31 January 2021, the Group had not paid any dividend.

18. CONTINGENT LIABILITY
The Company is party to a cross-guarantee relating to the borrowings of its subsidiary undertakings in the UK under funding arrangements
with Barclays Bank plc. The amount of contingent liability is £nil (FY2021: £nil).

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GLOSSARY

The Group monitors several alternative performance measures (‘APMs’) in managing its business, which are not defined or specified under
the requirements of IFRS because they exclude amounts that are included in, or include amounts that are excluded from, the most directly
comparable measure calculated and presented in accordance with IFRS or are calculated using financial measures that are not calculated in
accordance with IFRS.

The Group believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders
with additional helpful information on the performance of the business. These APMs are consistent with how the business performance is
planned and reported within the internal management reporting to the Board. Some of these APMs are also used for the purpose of setting
remuneration targets.

These APMs should be viewed as supplemental to, but not as a substitute for, measures presented in the consolidated financial information
relating to the Group, which are prepared in accordance with IFRS. The Group believes that these APMs are useful indicators of its
performance. The Group may have some APMs bearing the same names as reported by other companies but they may not be comparable
due to differences in the way they are calculated.

CLOSEST EQUIVALENT
STATUTORY
MEASURE

RECONCILING ITEMS
TO STATUTORY
MEASURE

DEFINITION AND PURPOSE

APM

Income Statement measures

Revenue growth at
constant currency

None

Not applicable

Underlying profit from
operations

Profit from
operations

Adjusted underlying
profit before tax

Profit before tax

Adjusting items
(see note 11)

Adjusted underlying basic
earnings per share

Earnings per share

Adjusting items
(see note 11)

Adjusted underlying diluted
earnings per share

Diluted earnings
per share

Adjusting items
(see note 11)

Underlying EBITDA1

Reported EBITDA1

Not applicable

The Group reports some financial measures, primarily
international sales and licensing income, on both a
reported and constant currency basis. The constant
currency basis retranslates the previous year revenues
at the average actual periodic exchange rates used in
the current financial year. This measure is presented
as a means of eliminating the effects of exchange rate
fluctuations on the year-on-year reported results.

Profit from operations before the impact of
non-underlying adjusting items.

Profit before the impact of non-underlying adjusting
items and tax. The Group considers this to be an
important measure of Group performance and is
consistent with how the business performance is
reported and assessed by the Board.

This is a measure used within the Group’s incentive
plans – see the Remuneration Report.

Profit after tax attributable to owners of the parent
and before the impact of non-underlying adjusting
items, divided by the weighted average number of
ordinary shares in issue during the financial year.

This is a measure used within the Group’s incentive
plans – see the Remuneration Report.

Profit after tax attributable to owners of the parent and
before the impact of non-underlying adjusting items,
divided by the weighted average number of ordinary
shares in issue during the financial year adjusted for
the effects of any potentially dilutive options.

Calculated as profit before the impact of adjusting
items, net finance costs, tax, depreciation and
amortisation as disclosed on the face of the
consolidated income statement. This measure is used
in calculating the return on capital employed for
the Group.

1 EBITDA is not defined within IFRS but is a widely accepted profit measure being earnings before interest, tax, depreciation and amortisation.

120

GLOSSARY CONTINUED

APM

Balance Sheet measure

CLOSEST EQUIVALENT
STATUTORY
MEASURE

RECONCILING ITEMS
TO STATUTORY
MEASURE

DEFINITION AND PURPOSE

Net cash

None

Cash flow measures

Free cash flow

None

Capital expenditure

None

Analysis of net funds
(see note 27)

Calculated as year end cash and cash equivalents less
borrowings. This measure is a good indication of the
strength of the Group’s Balance Sheet position and is
widely used by credit rating agencies.

Analysis of net funds
(see note 27)

Not applicable
(see Group
Cash Flow
Statement)

The cash generated from the Group’s operating
activities less capital expenditure, cash lease payments
and interest paid but excluding dividends paid. This is
a measure of cash retained by the Group.

Calculated as the purchase of property, plant and
equipment, investment property and intangible assets
during the year, less proceeds from asset disposals
excluding any assets acquired or disposed of as part
of a business combination or through an investment in
an associate.

FIVE-YEAR RECORD

2018*
£000

112.2

12.7

11.3%

14.77

13.0

11.6%

11.9

16.95

17.7

6.8

(5.3)

29.5

3.5

689

2.7

61.8

3.06p

0.69p

3.68p

2019*
£000

113.3

9.5

8.4%

10.80

5.6

4.9%

4.4

6.15

10.4

8.8

0.4

28.0

3.0

684

3.1

60.9

3.68p

0.69p

2.55p

(restated)
2020
£000

111.5

7.5

6.7%

9.35

4.5

4.0%

3.8

5.41

12.2

3.1

1.3

27.8

2.4

660

2.2

64.2

2.55p

0.52p

–

(restated)
2021
£000

93.8

7.0

7.5%

7.89

4.9

5.2%

3.8

5.39

12.6

14.0

15.1

19.6

1.0

619

–

66.8

–

2022
£000

112.2

12.5

11.1%

13.75

10.4

9.2%

7.8

10.93

16.8

4.5

19.1

22.7

2.1

613

0.5

79.7

–

0.75p

2.75p

Revenue (£m)

Adjusted underlying profit before tax (£m)

Adjusted underlying profit before tax (%)

Adjusted EPS (p)

Profit before tax (£m)

Profit before tax (%)

Profit after tax (£m)

Basic EPS (p)

EBITDA (£m)

Free cash flow (£m)

Net cash (£m)

Inventory (£m)

Capital expenditure (£m)

Average number of employees

Dividends paid in year (£m)

Shareholders’ funds (£m)

Dividend per share

– Final (prior year end) – paid

– Interim (current year end) – paid

– Final (current year end) – proposed

* FY2018 and FY2019 are not restated as the impact of the prior year adjustment as described in note 30 is deemed immaterial.

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SHAREHOLDER INFORMATION

12th July 2022

October 2022

122

Financial calendar

Annual General Meeting

Announcement of half-year results

Sanderson Design Group
Chalfont House
Oxford Road
Denham, UB9 4DX

T: 0845 126 5582
F: 0845 126 5583