Vitec Group plc Annual Report 2022

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FY2022 Annual Report · Vitec Group plc

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Enabling the
capture and
sharing of
exceptional
content

Annual Report
and Accounts 2022

Capture.
Share.

Our purpose is to enable
the capture and sharing
of exceptional content.

Discover our Divisions:

Media
Solutions

Production
Solutions

Creative
Solutions

See page 20

See page 26

See page 30

Videndum plc Annual Report and Accounts 2022

We are a leading global provider of
premium branded hardware products
and software solutions to the
growing content creation market.

Contents

Strategic Report

Corporate Governance

Financial Statements

2022 financial highlights
Our global footprint
About us and our brands
Strategic framework
Business model
Market opportunity
Stakeholder value creation
Chairman’s welcome
CEO’s review
Media Solutions
Production Solutions
Creative Solutions
Operational and financial review
Key Performance Indicators
Principal risks and uncertainties
Responsible business
Governance framework
ESG targets
Videndum’s roadmap to net zero
Task Force on Climate-related
Financial Disclosures report (“TCFD”)
Environment
Our people
Giving back
Responsible practices
Non-Financial Information Statement

02
04
06
08
09
10
12
14
16
20
26
30
34
42
44
50
52
54
56

57
70
72
76
78
81

163
Independent auditor’s report
170
Introduction and table of contents
171
Primary statements
176
Section 1 – Basis of Preparation
178
Section 2 – Results for the Year
187
Section 3 – Operating Assets and Liabilities
197
Section 4 – Capital Structure
206
Section 5 – Other Supporting Notes
Company Financial Statements
216
Glossary of Alternative Performance Measures 224
Five Year Financial Summary
229
Shareholder Information and Financial Calendar 230

Chairman’s statement
A snapshot of governance
Board of Directors
Leadership, purpose, values and culture
The role of the Board
Key Board activities in 2022
Section 172 statement
The Board and our stakeholders
The Board’s major decisions in 2022
Division of responsibilities
Composition, succession and evaluation
Nominations Committee report
Audit, risk and internal control
Audit Committee report
Remuneration report
Directors’ Remuneration Policy
Annual Report on Remuneration
Directors’ report

82
84
86
88
90
94
96
97
100
102
105
109
113
116
122
128
138
159

Cover image: Josefin Kuschela

Image above: Felix Belloin

videndum.com

2022 financial highlights

Revenue

Net debt*

£451.2m

£193.5m

Up 14%

2022

2021

2020

£451.2m

£394.3m

£290.5m

2022

2021

2020

£193.5m

£145.2m

£90.8m

Recommended final dividend
per share

25.0p

Up 4%

Adjusted operating profit*

Statutory operating profit

Interim dividend per share

£60.0m

Up 30%

2022

2021

2020

£9.9m

£60.0m

£46.2m

£31.5m

Down 6%

15.0p

Adjusted operating margin*

Statutory operating margin

13.3%

Up 160 bps

7.0%

Down 150 bps

Recommended total
dividend per share

40.0p

Up 14%

Adjusted basic Earnings Per Share*

Basic Earnings Per Share

90.1p

Up 29%

Read more on page 16

* Management estimates.

Strategic ReportVidendum plc Annual Report and Accounts 2022

The internet

Subscription TV

Retail e-commerce drives demand for digital visual content as
new products need to be photographed and filmed frequently
to be published online, for example across the fashion, food,
real estate and hospitality industries.

We estimate that c.30% of the Group’s revenue is exposed
to retail e-commerce which we serve with intuitive products
used in studios and a growing number of enterprise facilities.
This drives demand for our professional photography and
videography equipment, including supports, backgrounds,
lighting and carrying solutions, mainly benefiting our Media
Solutions Division.

Spending on original content creation for subscription TV
channels like Netflix, Amazon Prime Video and Disney+ drives
demand for our equipment.

We estimate that c.30% of the Group’s revenue is exposed
to subscription TV, including: our video transmission and
monitoring systems, and camera accessories in Creative
Solutions; lighting equipment, mobile power and supports
in Production Solutions; and supports and audio capture
in Media Solutions.

TikTok and YouTube

Live streaming

There has been significant growth in vloggers and influencers
creating and sharing video and audio content on social media
platforms like TikTok and YouTube. We estimate that there are
more than 40 million vloggers (with a following of over 1,000
people) who share and monetise their videos or podcasts.
Improving the quality of their content is enormously important
to their success – and that is what Videndum products help
them do.

We estimate that c.10% of the Group’s revenue is exposed to
vloggers and influencers who use our JOBY supports, lights
and microphones, and our backgrounds to create high-quality
content. The JOBY customers of today will potentially
transition to Videndum’s other premium brands, as they
become the film-makers, broadcasters and professional
photographers of the future.

Live streaming of video has grown strongly across multiple
verticals, such as broadcasting, medical, industrial and
gaming to maintain communications and facilitate remote
collaboration. For example, governments, schools, houses
of worship and businesses rely on high-quality, secure, zero
or low delay video transmission to communicate with their
communities, customers and employees.

This market growth driver accounts for c.5% of the Group’s
revenue and is increasing. There is a high demand for remote
wireless video within hospital operating rooms, where
Amimon’s proprietary zero delay technology is being used
by the leading medical equipment providers.

Creative Solutions has developed a new high end streaming
technology called ART (“Adaptive Reliable Transport”) which
delivers secure, ultra-low latency, broadcast-quality video and
audio for mission-critical video transport over public networks.
The team is working on miniaturising ART into smaller devices
and to embed ART across the Teradek product range.

Technology advancement driving
shorter product replacement cycles

Sustained R&D investment in innovative new technology to
improve our customers’ productivity is key to enabling our
premium brands to maintain their already strong market
positions and, in places, gain share. Last year, about half of
our revenue came from new products launched in the last
three years.

These four market growth drivers above, plus technology
advancement, mean that our business has been growing in
three key ways. First, our core businesses, e.g. professional
photography, broadcast TV and on-set monitoring.

Second, growth in new areas, e.g. vloggers and professional
influencers, or on-camera microphones, which are crucial to
enhancing the quality of video content being shared. Third,
growth in new verticals enabled by video transmission and
live streaming. Here, we are expanding into new market
segments with our Amimon live streaming technology,
expanding from just cine on-set monitoring to broadcasting,
medical, industrial and other enterprises.

Stakeholder value creation

A strong understanding of our
stakeholders and their views is integral
to Videndum’s strategic planning
and operational delivery. Our key
stakeholder groups are set out below:

Customers
Our success is dependent
on our ability to understand
and respond to our customers’
needs. They include
broadcasters, film studios,
photographers, independent
content creators (“ICCs”),
vloggers, influencers, gamers,
professional sound crews
and enterprises.

Suppliers
We have a large number
of suppliers globally, as the
majority of our operations are
relatively low-volume, small
batch processes. We source
materials from suppliers close
to our manufacturing facilities
where possible.

Employees
Our employees are the
best in the sector, our single
greatest asset and critical
to our success. We aim to
offer a safe, inclusive and
engaging work environment.

2022 outcomes and highlights

– Delivered strong business

performance and issued several
trading updates during the year
demonstrating strong demand
and interest from end markets.

– Expanded into new end markets –
notably high end on-camera audio
capture, where our strategy was
enabled by the acquisition of Audix
in January 2022.

– Launched innovative new products
with c.50% of the Group’s revenue
coming from products launched in
the last three years.

Our Section 172 statement, which sets
out how the Board takes stakeholder
interests into account when making
decisions, can be found on page 96

Group Chief Executive review and
Divisional operating reviews on
pages 16 to 19 and 20 to 33

– 2022 saw continued pressure on
supply chains but our businesses
successfully managed this via
strong working relationships and
close contact with key suppliers,
and sourcing alternative suppliers
where necessary.

– Videndum has developed a Group-
wide methodology for evaluating
suppliers on all dimensions of ESG.

Responsible practices on page 78

– Employees felt safe and protected in

our facilities as the pandemic subsided
and staff returned to work.

– 2022 employee survey demonstrated

high level of engagement and
employee satisfaction.

– Ensured those working from

home had the IT support required;
introduced Microsoft Teams as a
new communications tool.

– Offered competitive incentives
and opportunities for personal
development and career progression.

– Published our first standalone

ESG and TCFD report.

Employee engagement led by Caroline
Thomson on pages 73 and 98
Employee survey overview on page 73
Diversity information on page 74
Health and safety in Videndum on page 75
Whistleblowing service on page 79

Strategic ReportVidendum plc Annual Report and Accounts 2022

Videndum has provided fantastic opportunities to learn
and develop my skills. I have had some great managers
who have pushed me out of my comfort zone and helped
with my career progression from a Mechanical Engineer
to managing a team of 18 as Head of Mechanical
Engineering for Videndum Production Solutions.

James Guest
Head of Mechanical Engineering, Videndum Production Solutions, UK

Communities
We have a number of
manufacturing and office
facilities around the world
and aim to support the
communities we work in,
limiting any negative impact
on the environment and
protecting natural resources
to create long-term
sustainability for the business.

Shareholders
Videndum maintains close,
open and regular contact
with our shareholders.
Shareholders play an
important role in helping
to shape our strategy
and monitor governance.

2022 outcomes and highlights

– Videndum committed to becoming

carbon net zero by 2035 for
Scope 1 and 2 emissions.

– Results presentations, investor
roadshows and meetings held
virtually or in person.

– Approved science-based targets,
aligned to limit global warming
to 1.5°C.

– ESG Committee oversees
our Environmental, Social
and Governance programme.

– By implementing smarter ways

of working and investing in
infrastructure, we have already
achieved a greater than 20%
reduction across the Group’s
Scope 1 and 2 emissions since 2019.

– Capital Markets Day held in June

2022 at the London Stock Exchange,
showcasing new products and
presenting Strategic Ambition.

– Engagement with investors

and analysts.

– Annual General Meeting held in
person following the pandemic,
with all resolutions approved
by shareholders.

– Regular updates given to the

market on business performance.

More information on our community
and environmental initiatives can be
found in the Responsible business report
on pages 70 to 71 and 76 to 77

Further information on page 97

Image: Felix Belloin

Chairman’s welcome

2022 was a year of significant
progress for Videndum, despite
the current macroeconomic and
geopolitical uncertainties.

Ian McHoul
Chairman

Videndum continued its recovery
from the pandemic, delivering strong
financial results for the year, and
is committed to long-term growth.
Videndum’s market-leading, premium
brands, highly skilled and motivated
workforce, and the strength of the
growth drivers in the content creation
market give the Board confidence for
the Group’s continued future success.

Videndum delivered record revenue
and adjusted profit before tax* in
2022, despite the challenges faced
during the year, and our detailed
financial performance is set out in this
Annual Report. On the strength of this
performance, the Board recommends
a final dividend of 25 pence per
ordinary share which, subject to
shareholder approval at the 2023
AGM, will be paid on 19 May 2023.

In June, we held a Capital Markets
Day that set out our strategic and
financial ambitions for 2025. While
2022 had increasing challenges,
especially in the second half of the
year, we remain committed to this
ambition, however the timing is likely
to be delayed due to the current
macroeconomic environment.

After the AGM in May, we changed
the Company name to Videndum,
differentiating ourselves from other
companies around the world who also
operate under the Vitec name. The
new name and associated branding
were successfully rolled out in 2022
and provided a platform for us to
recommunicate our Code of Conduct
to our employees and stakeholders,
setting out our values and what can
be expected of Videndum. For any
organisation to be successful it must
have the right values and behaviours

in place and Videndum’s Code is
central to our governance and culture.
The Governance section of this
report covers this in greater detail.

During 2022, for the first time since
the pandemic, the Board visited two
of our key operations. First, in June
we visited the Production Solutions
site at Bury St Edmunds, UK and
in September we visited our Media
Solutions operations in Feltre and
Cassola, Italy. These visits were
exceptionally important and enabled
your Board to see operations first-
hand and to meet with a wide
number of employees. Such visits
are invaluable to build knowledge
and understanding, and to ensure
that the right values and culture
exist within Videndum. Further
Board visits to our operations will
take place in 2023 and beyond.

2022 also saw significant progress
on Board succession. Duncan Penny
stood down as an independent Non-
Executive Director at the conclusion
of the 2022 AGM in May. Christopher
Humphrey, after nine years’ service
as an independent Non-Executive
Director, Chair of Audit Committee
and Senior Independent Director, stood
down from the Board on 14 December
2022. On behalf of the Board and our
shareholders, I would like to thank Chris
for his service to the Company in these
roles. We appointed Erika Schraner,
with effect from 1 May 2022, as a new
independent Non-Executive Director,
and successor to Chris as Chair of the
Audit Committee. Richard Tyson further
succeeded Chris as Senior Independent
Director. On 24 November 2022,
we appointed Teté Soto as a new
independent Non-Executive Director

Strategic ReportVidendum plc Annual Report and Accounts 2022

and in December 2022 announced
that Anna Vikström Persson will
join the Board with effect from
1 May 2023 as an independent Non-
Executive Director. These changes
have refreshed the independent
Non-Executive members of your Board
and demonstrate continued progress
around succession planning and diversity.

On 14 December 2022, we announced
that Martin Green had stood down
from the Board as Group Finance
Director and that he will leave the
Group in 2023, after 20 years’ service.
Martin was succeeded on the Board
by Andrea Rigamonti, as Group
Chief Financial Officer. The Board
and I would like to thank Martin
for his service and contribution to
the growth of the Group, and wish
Andrea every success in this role.

2022 was our first face-to-face AGM
since 2019, due to the pandemic.
The 2023 AGM will be held on
11 May 2023 at 41 Portland Place,
London, W1B 1QH and the enclosed
Notice of Meeting sets out details
for the meeting including business
to be covered. I look forward to
seeing as many shareholders as
possible at the 2023 AGM.

Finally, it is my pleasure on behalf
of the Board, to thank all of our
employees for their dedication,
passion and hard work. They
have driven Videndum forward to
achieve the significant progress in
2022 and towards achieving our
strategic and financial ambitions.

Ian McHoul
Chairman
27 February 2023

Investment case

Videndum is uniquely placed to take advantage of the
growing content creation market and deliver long-term
sustainable growth and value to our stakeholders.

Market-leading, premium brands with innovative and
proprietary technology in defensible niches

Organic growth driven by the Group’s exposure to strong
market trends and technology advancement driving
shorter product replacement cycles

Margins on track to mid-to-high teen level as volumes
grow and we deliver operating leverage

Strong M&A track record and disciplined approach to
capital allocation

A responsible business with a clear purpose and strategy

CEO’s review

Organic strategic ambition*

Revenue

Operating profit

Operating profit
margin

Net debt: EBITDA

c.£600m

>£100m

16-18%

<1.5x

Our strategy

1. Organic growth

2. Margin improvement

3. M&A activity

We have a strong M&A track
record and a clear capital
allocation strategy.

Market growth is being driven by
technology advancement driving
shorter product replacement cycles
and by four different structural
growth drivers, all growing double-
digit; 75% of the Group’s business
is exposed to these. We invest in
innovative new technology in the
faster-growing areas of the market
to enable our premium brands to
maintain their already strong market
positions and, in places, gain share.
We also continue to invest in our
digital capabilities to benefit from
the ongoing transition to the higher
margin e-commerce channel.

We are focused on improving our
operating profit margins towards
our mid-to-high teen goal as
volumes grow and we deliver
operating leverage. Our margin
improvement drivers include
targeted pricing increases to reflect
product quality and brand strength,
growing online sales, continued
operating efficiencies, in-sourcing,
driving margin improvements in
our Creative Solutions Division,
and capturing synergies from
acquisitions. We also intend to take
a number of self-help actions to
further streamline our cost base and
deliver cross-Divisional synergies to
ensure that the business is well set
up for continued long-term growth.

Subject to no significant deterioration in market conditions.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Videndum delivered another
record performance, despite
a challenging H2 2022
macroeconomic environment.
This is testament to the quality
of our people, operational
excellence and our leading,
premium brands which allow us
to manage pricing to more than
offset inflationary headwinds.

We executed well on our strategy,
delivering organic growth, margin
improvement, good cash generation
and growth through M&A.

2022 financial overview

The Group achieved record revenue
and adjusted profit before tax*
despite some significant headwinds,
including weakening consumer
confidence as the year progressed.
This most significantly impacted
revenue from our non-professional
customers, which represents c.10%
of total Group revenue. Business
confidence was also low in H2 and

Image: Felix Belloin

Stephen Bird
Group Chief Executive

as a result, we saw retailer destocking
across all Divisions but predominantly
in Media Solutions.

These external factors meant that
full year organic, constant currency
growth was 1%. The acquisitions
of Savage and Audix have been
successfully integrated and
contributed to full year revenue
growth of 8% on a constant currency
basis, and 14% on a reported basis.

The drop through from higher
revenue combined with tight control
of the cost base delivered a 160 bps
increase in the adjusted operating
margin* to 13.3%. There was a
24% drop through of revenue to
profit on a reported basis, which
was 40% at constant currency.

Adjusted profit before tax* included
a £3.6 million favourable foreign
exchange effect after hedging
compared to 2021, due to a stronger
US Dollar partly offset by a slightly
weaker Euro than in 2021. The impact
on 2023 adjusted profit before tax*
from a one cent stronger/weaker
US Dollar/Euro is expected to be an
increase/decrease of approximately

CEO’s review continued

£0.3 million and £0.3 million
respectively. Adjusted profit before tax*
was £54.0 million; £11.6 million higher
than 2021. On an organic, constant
currency basis, adjusted operating
profit* and adjusted profit before tax*
were 11% and 3% up respectively
on 2021.

Statutory profit before tax of
£24.7 million (2021: £29.6 million)
further reflects adjusting items of
£29.3 million (2021: £12.8 million),
which primarily relate to the
amortisation of acquired intangibles,
acquisition related charges, and
restructuring. These charges were
higher compared to 2021 primarily due
to the recent acquisitions, particularly
those of Savage and Audix, and the
Creative Solutions’ restructuring
announced at the November trading
update. As a result, statutory operating
margin decreased from 8.5% to 7.0%.

Free cash flow* was £4.6 million lower
than 2021. Cash conversion* was 83%,
and across the last three years has
cumulatively been 108%.

Net debt* at 31 December 2022
was £48.3 million higher than at
31 December 2021 (£145.2 million)
and £0.6 million lower than at
30 June 2022 (£194.1 million).

We have an exceptionally experienced
leadership team at Videndum and
I am really proud of what the business
achieved last year. I would like to
thank all of our employees for their
commitment and contribution to
these record results.

Market and strategy update

Videndum is uniquely positioned right at
the heart of the content creation market,
with market-leading, premium brands
in defensible niches; approximately
90% of our revenue comes from
professional content creators.

We continue to execute well on our
long-term strategy to deliver organic
growth, improve margins and to grow
through M&A.

The business is committed to
continually improving the sustainability
of our products and reducing the direct
and indirect emissions of the Group.

Managing climate change risks is a
critical aspect of our global strategy.
Details of our ESG and TCFD progress
are set out later in this report.

1. Organic growth
Organic growth is being driven by
technology advancement and by the
significant changes in the way people
now capture, consume and share
content. We estimate that 75% of
the Group’s business is exposed to the
four main structural market growth
drivers on pages 10 to 11, which have
all been experiencing double-digit
growth. We continue to develop
innovative new technology to improve
our customers’ productivity by
developing products which reduce set
up time and lower operating costs.
This is becoming increasingly
important to our customers and drives
demand for new and replacement
products. Our vitality index is strong
and last year, again, about half of
our revenue came from new products
launched in the last three years.

2. Margin improvement
We expect continued margin
improvement as volumes grow and
we deliver operating leverage. We also
intend to take a number of self-help
actions to further streamline our cost
base and deliver cross-Divisional
synergies to ensure that the business
is well set up for continued long-term
growth. Our actions will include:

– Operational excellence, e.g. targeting
3% year-on-year productivity gains
by driving lean manufacturing and
continuous improvement initiatives
across the Group.

– Targeted pricing improvements to
reflect product quality and brand
strength; price increases were
implemented in 2022 which will
ensure that we will continue to stay
ahead of inflationary pressures.
We will continue to monitor inflation.

– Increasing mix of higher margin,
higher technology products,
e.g. 4K/HDR technology replacement
cycle in Creative Solutions and new
advanced automated solutions with
our prompting and robotics products.

– Driving margin improvement in

Creative Solutions; 2022 saw the
Division’s operating profit margin
improve 240 bps year-on-year, and
this is expected to improve further
following the recently announced
reorganisation of the Division.

– Growing online sales, e.g. in FY 2022
c.50% of Media Solutions’ revenue
(excluding from B2B customers)
was from online sales, of which
5% was direct e-commerce
compared to 4% in FY 2021.
– Higher margin acquisitions and

capturing synergies, e.g. in
Media Solutions we have further
strengthened our go-to-market
effectiveness in the US and
leveraged greater organisational
efficiencies in line with the
integration plans for Audix
and Savage, and also Rycote.

– Optimising the use of our sites and
rationalisation of our site portfolio,
e.g. we will look to relocate
employees into alternative
or smaller properties. In 2022,
we closed our Chatsworth, US site
and employees were relocated to
a nearby existing facility.

3. M&A activity
We have a strong M&A track record
and a clear capital allocation strategy.

We have increased our addressable
markets by expanding our product
portfolio, customer base and
technology capabilities, through
carefully selected acquisitions. The
Group has been focused on the fastest
growing market segments of the
content creation market, mainly in
the two key strategic growth areas
of video transmission/streaming in
Creative Solutions and content creation
in Media Solutions, including allocating
more attention to audio capture,
where we see a sizeable opportunity.

Strategic ReportOutlook

The Group is uniquely positioned right
at the heart of the growing content
creation market with attractive
market drivers. In H1 2023, against a
strong comparator period in H1 2022,
we expect that some macroeconomic
headwinds will continue to affect our
consumer segment (c.10% of Group
revenue) and business confidence
more generally, with additional
retail destocking and some purchase
deferral by independent content
creators. However, we are seeing signs
of improvement, particularly in the
US. We continue to develop innovative
new technology to improve our
customers’ productivity by developing
products which reduce set up time
and lower operating costs. This is
becoming increasingly important
to our customers and drives shorter
product replacement cycles. We are
also executing on a number of self-
help actions to further streamline our
cost base and deliver cross-Divisional
synergies to ensure that the business
is even better positioned for long-term
growth. We therefore expect to
deliver a stable FY 2023 adjusted
profit before tax* compared to FY
2022, with higher operating profit
offset by increased interest charges,
albeit with a higher than usual H2
weighting due to the macroeconomic
environment mentioned above.

We remain committed to our
previously stated organic strategic
ambition of c.£600 million revenue
and greater than £100 million adjusted
operating profit, however, the timing
is likely to be delayed due to the
current macroeconomic environment.
The content creation market is a
great place to be and Videndum is
well positioned to deliver growth
and value for shareholders.

Stephen Bird
Group Chief Executive
27 February 2023

Videndum plc Annual Report and Accounts 2022

In addition to statutory reporting, Videndum reports alternative performance measures (“APMs”) which are not
defined or specified under the requirements of International Financial Reporting Standards (“IFRS”). The Group
uses these APMs to aid the comparability of information between reporting periods and Divisions, by adjusting for
certain items which impact upon IFRS measures, to aid the user in understanding the activity taking place across
the Group’s businesses. APMs are used by the Directors and Management for performance analysis, planning,
reporting and incentive purposes. A summary of APMs used and their closest equivalent statutory measures is
given in the Glossary on pages 224 to 228.

Media Solutions

Revenue

£217.8m

Up 11.9%

Adjusted operating profit*

£33.1m

Up 24.4%

Revenue

2022

2021

2020

£217.8m

£194.7m

£156.7m

Adjusted operating profit*

2022

2021

2020

£9.7m

Statutory operating profit

2022

2021

2020

£5.8m

£33.1m

£26.6m

£23.4m

£23.8m

Operational ReviewVidendum plc Annual Report and Accounts 2022

Our pioneering R&D and
focused acquisitions have
broadened our portfolio
to enable our customers
to stand out in an industry
where more content is being
produced and shared across
more digital platforms
than ever before.

Marco Pezzana
Group Chief Operating Officer
and Divisional Chief Executive,
Videndum Media Solutions

Media Solutions continued

The Media Solutions Division
designs, manufactures and
distributes premium branded
equipment for photographic
and video cameras and
smartphones, and provides
dedicated solutions to professional
and amateur photographers
and videographers, independent
content creators, vloggers/
influencers, gamers, enterprises
and professional musicians.

This includes camera supports and
heads, smartphone and vlogging
accessories, lighting supports and
controls, LED lights, motion control,
audio capture and noise reduction
equipment, carrying solutions and
backgrounds, marketed under the
most recognised accessories brands
in the industry.

Media Solutions represents c.50%
of Group revenue.

Addressable market*
The TAM for Media Solutions is
c.£1.5 billion per annum and we
estimate the market CAGR (2022–25)
will be c.4%.

Strategy
Our strategy is focused on developing
innovative new products to improve
our customers’ productivity in order
to grow our core professional business,
mainly driven by e-commerce and the
demand for original content creation,
as well as growth in new areas of
vlogging accessories and audio capture.

Market position
Videndum is the market leader in
most of its product categories. We
sell our products globally via multiple
distribution channels and increasingly
online via our own direct e-commerce
capability and third-party platforms.

Target audience

Our brands
Market position* shown in brackets

Supports and Stabilisers (#1)

Avenger

JOBY

Gitzo

Manfrotto

National Geographic**

Carrying solutions (#1)

Gitzo

Lowepro

Manfrotto

National Geographic**

Lighting and controls (#2)

JOBY

Manfrotto

Smartphonography (#1)

JOBY

Audio capture

Audix (US leader***)

JOBY (new entrant)

Rycote (#1***)

Backgrounds (#1)

Colorama

Savage

Superior

Photographic market: 60%
Cine/scripted TV/ICC market: 40%

* Management estimates by sales value in the market

segments in which these products are sold.

** Manufactured under licence.
*** In our niche.

Operational ReviewVidendum plc Annual Report and Accounts 2022

Case studies

Demand for original content drives
growth in lighting stands
Driven by the high demand for original content
for streaming and video-on-demand platforms,
there are a growing number of smaller, more mobile
production crews who require compact lighting
stands to maximise space in transit and on set. Cine/
scripted TV lighting fixtures are substantial in weight
and size, and the new Avenger Buccaneer is a unique,
ground-breaking lighting stand, as it is the most
compact on the market with the lowest loading
height to enable smaller teams to mount heavy duty
lighting fixtures safely and securely.

Launched in September 2022, the Avenger
Buccaneer has been incredibly well received across
the globe.

Manfrotto Studio
TetherGear collection
The growing demand for digital visual content
means that imagemakers need to increase their
productivity by improving their content creation
workflow. Manfrotto’s latest collection of five
essential Tethered Shooting Accessories, allows
professional content creators to set up a fully
tethered workstation or video village to enable them
to produce more content, more quickly and instantly
review it with clients. Tethered photoshoot has
become a must-have in every professional studio
production, from fashion to still life.

Social media growth fuels JOBY software innovation
With grips, supports, lights, on-camera microphones, motion control and
now workflow management apps, JOBY provides the only complete eco
system of accessories for the monetising creators on TikTok and YouTube.

The JOBY One App is a unique digital hub which enables content creators
to easily control JOBY products directly from their smartphone, via an
intuitive user interface. It is also connected to the JOBY store, allowing
users to easily access the entire JOBY product catalogue. The JOBY One
App controls the sound parameters of the Wavo PRO on-camera
microphone, the setup of Swing and Spin motion control, and also
manages the tones and output power of the Beamo lights, allowing
creators full control at one touch.

JOBY is also joining forces with Lightstream to market JOBY’s first
cloud-based service, responding to creators’ needs for a reliable solution
to create professional live streams. JOBY Studio is a cloud-based
streaming platform which enables creators to multi-stream their content
simultaneously across different digital platforms, expanding their reach
and increasing monetising possibilities.

Media Solutions continued

Case studies

Audio capture represents one of the
most significant growth opportunities
for Videndum
Audio capture is an essential part of video creation as it
enhances the quality of content. Our acquisition of Audix
in January 2022 accelerated our audio strategy, bringing
specialist R&D and manufacturing capabilities to the
Group to enable our three audio brands to release a
range of highly targeted, innovative microphones.

JOBY
Our JOBY brand addresses independent content
creators with on-camera and mobile microphones.
During 2022, JOBY launched six new on-camera
microphones for vloggers and streamers, including the
flagship Wavo PRO, incorporating technology far ahead
of the competition. Launched via a digital-first brand
activation campaign, featuring YouTuber Casey Neistat,
JOBY has been progressively growing revenue by
expanding its audio leadership, gaining share of voice
and increasing its creator community.

I have to say the JOBY microphone is the
only one I’ve used for my last 20 videos. It’s
stellar; it’s a perfect YouTuber’s microphone.

Rycote
Our Rycote brand focuses on the broadcast and
production market. 2022 saw the launch of a complete
range of innovative new pencil microphones, available as
individual or matched stereo pairs, and perfect for use
in professional broadcasting, location sound recording
for cinema and TV, field recording and sound design.

Audix
Audix is our premium brand, serving professional studio
and live applications. Live video streaming and podcasting
are growing, especially in corporate and gaming
applications, and content creators are looking for new
ways to differentiate themselves. Audix recently
launched the first ever microphone dedicated to live
streaming, voice-over artists and professional
podcasters which delivers broadcast-quality sound
without the need for additional amplification.

Innovation and design excellence remain
at the core of our Audix operations. Our
vertically integrated US facility incorporates
world-class engineering capabilities,
precision machining and talented teams to
provide the highest quality audio products
and to push the boundaries of best-in-class
consumer experience.

Casey Neistat
American YouTuber

Chris Pagella
VP Operations – Audix, Videndum Media Solutions, US

Operational ReviewVidendum plc Annual Report and Accounts 2022

Casey Neistat American YouTuber26

Production Solutions

Revenue

£137.8m

Up 13.1%

Adjusted operating profit*

£31.4m

Up 12.1%

Revenue

2022

2021

2020

£137.8m

£121.8m

£80.1m

Adjusted operating profit*

2022

2021

2020

£7.6m

Statutory operating profit

2022

2021

2020

£6.7m

£31.4m

£28.0m

£30.1m

£27.1m

Operational ReviewVidendum plc Annual Report and Accounts 2022

Our innovative developments
in automated production
technology, LED lighting
and Image-Based Lighting
for Virtual Production mean
we are uniquely placed to
provide the next generation
of products and services
demanded by broadcasters
and cinematographers alike.

Nicola Dal Toso
Divisional Chief Executive,
Videndum Production Solutions

Production Solutions continued

The Production Solutions Division
designs, manufactures and
distributes premium branded
and technically advanced products
and solutions for broadcasters,
film and video production
companies, independent content
creators and enterprises.

Products include video heads, tripods,
LED lighting, batteries, prompters and
robotic camera systems. It also supplies
premium services including equipment
rental and technical solutions.

Production Solutions represents
c.30% of Group revenue.

Addressable market*
The TAM for Production Solutions is
c.£0.4 billion per annum and we
estimate that the market CAGR
(2022 –25) will be c.3%.

Strategy
Our strategy is focused on growth
in our core business of professional
equipment for original content
creation in cine/scripted TV, products
for on-location news and sporting
events, as well as innovative new
technology like robotic camera
systems and voice-activated
prompting to enable automation
and cost efficiencies in TV studios.

Market position
Videndum is the market leader in
most of its product categories and
is well positioned due to our broad
geographical reach and premium
products. We have a global sales team
that offers a full range of products
and services to our customers all
over the world, either directly or via
distributors, both online and in stores.

Target audience

Our brands
Market position* shown in brackets

Supports (#1)

OConnor

Sachtler

Vinten

Prompters (#1)

Autocue

Autoscript

Lighting (#2)

Litepanels

Quasar Science

Mobile power (#1)

Anton/Bauer

Robotic camera systems (#2)

Camera Corps

Vinten

Distribution, rental
and services (#1)

Camera Corps

The Camera Store

Broadcast market: 50%
Cine/scripted TV/ICC market: 50%

* Management estimates by sales value in the market

segments in which these products are sold.

Operational ReviewVidendum plc Annual Report and Accounts 2022

Case studies

Pioneering studio automation with
robotics and prompting
Investment in advanced automated solutions is key
to increasing TV studio efficiency without affecting
broadcast production standards. The innovative
technology in our market-leading Vinten and
Autoscript robotics and prompting solutions is many
years ahead of our competitors. Automated and
IP-networked solutions enable efficient studio
production with fewer technical operators, delivering
clear and long-lasting operational overhead savings.

Voice prompts efficiency project at Rundfunk
Berlin-Brandenburg (“RBB”)

RBB is the first German broadcaster to incorporate
advanced voice-controlled prompting into its daily
programming. It installed Autoscript’s revolutionary
“Voice” at its state-of-the-art Crossmedia News
Centre where automation reduces the number of
control staff required to broadcast breaking news.

Presenters can control their own prompter script as
“Voice” automatically advances the words as they
are spoken. Real-time speech recognition, with
proprietary algorithms and advanced pattern
matching, ensures perfect script synchronisation
with the presenter.

Studio robotics reduce operational costs for
Nine Network

Australia’s “The Nine Network” invested in Vinten’s
state-of-the-art robotic camera support systems to
reduce operational costs at its new Sydney HQ. The
fully digital facility moved from manual studio floor
operations to automated control via Internet Protocol
(“IP”), integrating Vinten Studio Robotics and
Autoscript IP Prompting solutions into a proprietary
automation system.

Technology advancement driving
growth in LED lighting
Lighting is a key strategic growth opportunity for the
Group. With virtual production increasing, there is a
strong demand to enhance virtual environments with
realistic lighting. Quasar Science leads the industry
with unique “Image-Based Lighting” which augments
LED video walls to enhance extended reality sets.
This, paired with Litepanels’ high output cinematic
lighting, places Videndum at the forefront of this
fast-growing market.

Lighting a vast forbidden forest for Disney’s
“Hocus Pocus 2” required lightweight versatility and
powerful output. Quasar Science LED tubes created
the atmospheric magic hour scenes, producing
vibrant saturated colours and intense white light.

Advances in colour control technology
from Quasar Science and Litepanels
represent new grading levels. Now,
effects which were once only possible in
post-production are possible in real life.

Elliot Davis
Cinematographer, Hocus Pocus 2

Independent production “The Lion and the Firebird”
used virtual reality technology to produce a budget
prehistoric adventure. Using Litepanels and Quasar
Science products, the action-packed film cost a
fraction of traditional productions without
compromising on quality.

For independent film-makers, virtual
production is huge. Now we can be
anywhere in time and space, limited
only by imagination. This transformative
technology is the future of film-making.

Daniel Byers
Director, The Lion and the Firebird

Creative Solutions

Revenue

£95.6m

Up 22.9%

Adjusted operating profit*

£12.5m

Up 50.6%

Revenue

2022

2021

2020

£95.6m

£77.8m

£53.7m

Adjusted operating profit*

2022

2021

2020

£3.3m

£12.5m

£8.3m

Statutory operating profit

-£3.3m

2022

2021

2020

-£4.8m

-£0.6m

Operational ReviewVidendum plc Annual Report and Accounts 2022

The need for HDR/4K low
latency video transmission and
monitoring is growing rapidly
in multiple markets for multiple
applications. Our proprietary
zero delay technologies are
uniquely positioned to fulfil
those demands.

Creative Solutions mainly focuses on the
fast- growing, global content creation market
as daily screen time and video consumption
expand across numerous platforms. We make
the tools to help tell the stories, share the news,
engage an audience and spread the word.

Marco Vidali
Divisional Chief Executive,
Videndum Creative Solutions

Creative Solutions continued

The Creative Solutions Division
develops, manufactures and
distributes premium branded
products and solutions for film
and video production companies,
independent content creators,
gamers, enterprises (e.g. medical
and industrial) and broadcasters.

Products include wired and wireless
video transmission and lens control
systems, live streaming solutions,
monitors, camera accessories and
software applications.

Creative Solutions represents
c.20% of Group revenue.

Addressable market*
The TAM for Creative Solutions
is larger than £1.0 billion per annum
and we estimate that the market
CAGR (2022–25) will be c.10–15%.

Strategy
Our strategy is focused on continuing
to deliver the 4K/HDR replacement
cycle as well as developing innovative
new technology to improve our
customers’ productivity in the
growing areas of remote monitoring,
collaboration and streaming in the cine/
scripted TV and enterprise markets.

Market position
Videndum is the market leader in most
of its product categories. We have this
strong position due to our premium
brands, market-leading technology
and dedicated team of innovative
product specialists with extensive
experience in shooting both professional
and amateur video content. We sell
our products globally via multiple
distribution channels and increasingly
online via our own direct e-commerce
capability and third-party platforms.

Target audience

Our brands
Market position* shown in brackets

Video transmission systems (#1)

Teradek

Monitors (#1**)

SmallHD

Lens control systems (#3)

Teradek

Live streaming (#1**)

Teradek

Lightstream

IP video (#3)

Teradek

Camera accessories (#3)

Wooden Camera

Cine/scripted TV/ICC market: 80%
Medical/Enterprise market: 20%

* Management estimates by sales value in the

market segments in which these products are sold.

** In our niche.

Operational ReviewCase studies

Videndum plc Annual Report and Accounts 2022

SmallHD Production Monitors
SmallHD has become the industry standard for ultra-bright on-camera
monitors, and we solidified our entry into a new segment of the monitor
market in 2022 with our line of 4K production monitors. Not only have we
challenged the market leaders in price, but in technology, capability and, most
importantly, image quality. We have spent the last three years maturing
our 4K large-format platform and we now ship seven different models.

The SmallHD OLED 22 monitor is the premiere option for
in-camera accuracy – I trust the colours on this monitor
more than I do my laptop. I’ve been able to operate with
confidence and never second-guess what I am seeing on
the screen. It’s a non-negotiable staple in my kit.

Gina Manning
Director and Photographer

Adaptive Reliable Transport (“ART”),
the video-aware, ultra-low latency
streaming protocol
ART, a protocol jointly developed by our Amimon and
Teradek engineers, delivers secure, ultra-low latency,
broadcast-quality video and audio for mission-critical
video transport over public networks. It utilises joint
source channel coding to evaluate video content and
network characteristics simultaneously, optimising
for both in one step. The result is a highly resilient,
adaptive video stream that ensures the quality and
integrity of content over the most challenging network
conditions, overcoming video pixelation, stuttering,
freezing, sync loss, delays and total dropouts. ART
provides more natural, lifelike bi-directional streaming
interaction between presenters and guests, wherever
they are located across the globe.

Zero latency wireless video solutions
for the medical market
4K real-time video is widely used by surgeons and
medical professionals to provide optimal visualisation
during diagnosis and surgical procedures. The need to
wirelessly connect video sources to display monitors,
recording devices and wall control panels is becoming
essential in order to improve clinical workflow, efficiency
and patient outcomes. Amimon’s unique, award-winning
wireless zero latency video technology means we can
now deliver high fidelity, ultra-low latency video over
a secure and reliable link. Our medical products are

utilised in thousands of installations within operating
rooms, replacing current wired solutions. This increases
flexibility for healthcare professionals, in addition to
attractive economies of scale and increased operating
room availability.

How NATO streamed to 88 countries
in three days with Teradek
NATO has historically transmitted video using the
private fibre and satellite network from the European
Broadcasting Union, but wanted to find better synergy
between their broadcast and internet solutions to
reach a worldwide audience, while improving cost
efficiency. They are working with Teradek to be ready
for a future where broadcast-quality video might no
longer be transmitted via expensive fibre and satellites,
but instead public TV stations might send the same
quality video through more cost-effective consumer
internet connections.

Without Teradek we could not have
pulled off what we did over the past
half year. It has become clear that
with Teradek, we’ve invested well
at a relatively minimal cost compared
to transmission via fibre or satellite.

Bart Vandendorpe
NATO

Operational and financial review

Financial performance

2022

Adjusted*
2021

Statutory

% change

2022

2021

Revenue

£451.2m £394.3m

+14% £451.2m £394.3m

Operating profit/(loss) £60.0m £46.2m

+30%

£31.5m £33.5m

Profit before tax

£54.0m £42.4m

+27%

£24.7m £29.6m

Earnings per share

90.1p

69.9p

+29%

71.4p

56.4p

Cash flow

£m

Statutory operating profit

Add back adjusting items

Adjusted operating profit*

Depreciation(1)

Adjusted working capital (inc)/dec*

Adjusted provisions (inc)/dec*

Capital expenditure(2)

Other(3)

Adjusted operating cash flow*

Cash conversion*

Interest and tax paid

Earnout and retention bonuses

Restructuring and integration costs

Transaction costs

Free cash flow*

2022

31.5

28.5

60.0

22.6

(19.4)

(0.8)

(20.2)

7.6

49.8

83%

2021

33.5

12.7

46.2

18.7

1.1

(0.8)

(21.7)

6.2

49.7

Variance

(2.0)

15.8

13.8

3.9

(20.5)

–

1.5

1.4

0.1

108% (25)%pts

(16.6)

(11.0)

(1.3)

(2.0)

(1.4)

28.5

(2.2)

(1.9)

(1.5)

33.1

(5.6)

0.9

(0.1)

0.1

(4.6)

(1) Includes depreciation, amortisation of software and capitalised development costs.

(2) Purchase of Property, Plant & Equipment (“PP&E”) and capitalisation of software and development costs.

(3) Includes share-based payments charge (excluding retention) and other reconciling items to get to the

adjusted operating cash flow*.

Net cash from operating activities of £48.7 million (2021: £54.7 million) comprises £28.5 million free cash
flow (2021: £33.1 million) plus £20.2 million capital expenditure (2021: £21.7 million) less nil proceeds from
sale of PP&E and software (2021: £0.1 million).

Image: Daniel Kordan

Strategic ReportVidendum plc Annual Report and Accounts 2022

The Group achieved record revenue and adjusted
profit before tax *

£1.6 million due to careful
management of the cost base across
H2 to mitigate against the macro-
economic headwinds.

The drop through from higher revenue
combined with tight control of the cost
base delivered a 160 bps increase in the
adjusted operating margin* to 13.3%.
There was a 24% drop through of
revenue to profit on a reported basis,
which was 40% at constant currency.

Adjusted profit before tax* included
a £3.6 million favourable foreign
exchange effect after hedging
compared to 2021, due to a stronger
US Dollar partly offset by a slightly
weaker Euro than in 2021. The impact
on 2023 adjusted profit before tax*
from a one cent stronger/weaker US
Dollar/Euro is expected to be an
increase/decrease of approximately
£0.3 million and £0.3 million,
respectively.

Adjusted net finance expense* of £6.0
million was £2.2 million higher than in
2021. This was driven by higher debt,
following the recent acquisitions, and
rising interest rates; partly offset by
net gains on the translation of
intercompany loans and cash
balances. In 2023, an average of c.65%
of our borrowings will be fixed through
swaps at an average rate of c.4%
(including margin), partly mitigating
the risk of further interest rate
increases. Our floating debt currently
has an average interest rate of c.6%
(including margin). Net finance
expense also includes interest on the
lease liabilities and the defined benefit
pension scheme, amortisation of loan
fees, and net currency translation
gains or losses.

Adjusted profit before tax* was
£54.0 million; £11.6 million higher than
2021. On an organic, constant currency
basis, adjusted operating profit* and
adjusted profit before tax* were 11%
and 3% up respectively on 2021.

Statutory profit before tax of £24.7
million (2021: £29.6 million) further
reflects adjusting items of £29.3
million (2021: £12.8 million), which
primarily relate to the amortisation
of acquired intangibles, acquisition
related charges, and restructuring.
These charges were higher compared
to 2021 primarily due to the recent
acquisitions, particularly those of
Savage and Audix, and the Creative
Solutions’ restructuring announced
at the November 2022 trading update.
As a result, statutory operating
margin decreased from 8.5% to 7.0%.

The Group’s effective tax rate (“ETR”)
on adjusted profit before tax* was
23.1% (2021: 24.3%). Statutory ETR
was a 33.2% credit (2021: 12.5% cost)
due to the recognition of historical
US tax losses of £14.3 million.

Adjusted basic earnings per share*
was 90.1 pence. Statutory basic
earnings per share was 71.4 pence.

Cash flow and net debt

Cash generated from operating
activities was £65.3 million (2021:
£65.7 million) and net cash from
operating activities was £48.7 million
(2021: £54.7 million).

Free cash flow* was £4.6 million lower
than 2021. Cash conversion* was 83%,
and across the last three years has
cumulatively been 108%.

Adjusted working capital* increased
by £19.4 million in 2022. Inventory
increased by £12.2 million in H1, which
was expected following cost inflation,
capacity constraints and component
shortages but fell by £2.0 million
across H2 as we managed our cash
position carefully. Receivables
increased by £5.0 million in part due
to price rises, and payables decreased
by £4.2 million mainly due to
year-on-year movements in accruals.

Andrea Rigamonti
Group Chief Financial Officer

Income and expense

Adjusted gross margin of 43.9% was
in line with 2021 (43.9%). As expected,
Litepanels’ royalties were lower than
in 2021; excluding royalties from
both periods, the gross margin*
has increased from 43.3% to 43.7%.
The effect of price increases more
than offset the high inflation on
raw materials, freight, duty, utilities
and labour.

Adjusted operating expenses* of
£138.1 million were £11.1 million higher
than 2021. On an organic, constant
currency basis, they declined by

Operational and financial review continued

Capital expenditure included:

– £7.1 million of property, plant and
equipment compared with £10.8
million in 2021, which included the
insourcing of JOBY to Feltre;

– £12.1 million capitalisation of R&D
(2021: £10.1 million) primarily at
Creative Solutions to develop our next
generation products; and £1.0 million
capitalisation of software (2021: £0.8
million). Gross R&D was higher than
2021, as expected, and grew in line
with revenue (6.3% of revenue in 2022
compared to 6.4% in 2021).

£m

2022

2021

Variance

Gross R&D

28.2

25.2

Capitalised

(12.1)

(10.1)

Amortisation

6.4

P&L impact

22.5

4.8

19.9

3.0

(2.0)

1.6

2.6

‘Other’ primarily relates to share-
based payments.

Interest and tax paid increased by
£5.6 million compared to 2021 mainly
due to higher interest costs from fees
for the Audix term loan and accordion
agreement, as well as the increased
P&L charge.

Earnout and retention bonuses
relate to Lightstream and Quasar.
Restructuring cash outflow reflects
costs associated with rebranding from
The Vitec Group plc to Videndum plc
and the exit costs that were paid in
2022, the remainder to be paid in 2023.

Adjusting items

(145.2)

28.5

Adjusting items in profit before tax
were £29.3 million versus £12.8 million
in 2021.

(0.3)

£m

2022

2021

Amortisation of acquired
intangible assets

10.9

7.2

Acquisition related
charges(3)

Integration and
restructuring costs

Finance expense –
amortisation of loan
fees on borrowings
for acquisitions

9.3

4.6

8.3

0.9

0.8

0.1

Adjusting items

29.3

12.8

(1) Net debt is stated before arrangement fees; EBITDA is
based on adjusted EBITDA* for the applicable 12-month
period (see Glossary), before non-cash share-based
payment charges; and after interest on employee
benefits and FX movements, and the amortisation
of arrangement fees; it also includes the 12-month pro
forma effect of acquisitions. Our loan covenant is 3.25x.

(2) Return on capital employed (“ROCE”) is calculated
as adjusted operating profit* for the last 12 months
divided by the average total assets (excluding
non-trading assets of defined benefit pension and
deferred tax), current liabilities (excluding current
interest-bearing loans and borrowings), and
non-current lease liabilities. 2021 has been restated
to exclude the deferred tax asset, which was included
in the 2021 calculation.

(3) Includes earnout charges, retention bonuses, transaction

costs relating to the acquisition of businesses, and the
effect of fair valuation of acquired inventory.

December 2021 closing net debt*
(£m)

Free cash flow*

Upfront loan fees,
net of amortisation

Dividends paid

Employee incentive shares

Acquisitions

Net lease additions

(18.0)

(1.4)

(33.2)

(8.6)

(15.3)

December 2022 closing net debt*
(£m)

(193.5)

Net debt* at 31 December 2022
was £48.3 million higher than at
31 December 2021 (£145.2 million)
and £0.6 million lower than at 30 June
2022 (£194.1 million).

The ratio of net debt to EBITDA was 2.1x
at 31 December 2022 (2021: 2.0x), on
the basis used for our loan covenants(1).
Given the expected H2 weighting in
2023, the ratio will increase at
30 June 2023 but is then expected
to materially decline thereafter.

Cash outflow on acquisitions mostly
relates to the purchase of Audix on
11 January 2022, net of the cash
acquired.

Net lease additions mainly consist of
a new lease at Savage and also a lease
as part of the acquisition of Audix.

There was a £15.3 million adverse
impact from FX; primarily from the
translation of our US Dollar debt,
following the strengthening of the
US Dollar against Sterling.

Liquidity at 31 December 2022 totalled
£102.1 million; comprising £86.3 million
unutilised Revolving Credit Facility
(“RCF”) and £15.8 million of cash.
The £35 million RCF accordion was
executed on 30 December 2022 taking
the total RCF facility from £165 million
to £200 million.

ROCE* of 18.8%(2) was higher than
the prior year (2021: 18.0%), which
reflects the higher adjusted operating
profit*, partly offset by increased
capital employed because of the
recent acquisitions.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Viability Statement

In accordance with the 2018 UK
Corporate Governance Code, the
Directors have assessed the viability
of the Group over a three-year period,
taking account of the Group’s current
financial and trading position as
summarised in this Annual Report, the
principal risks and uncertainties set
out on pages 44 to 49, and the latest
management forecasts.

The Directors believe that a three-
year period is an appropriate period
over which a reasonable expectation
of the Group’s longer-term viability
can be evaluated and is aligned with
the Group’s business and strategic
planning time horizon. It reflects the
nature of the Group’s key markets,
its businesses and products, and
its limited order visibility. While the
Directors have no reason to believe
that the Group will not be viable over
a longer period, they believe that the
three-year period presents readers of
the Annual Report with a reasonable
degree of confidence.

The Group’s strategic and financial
planning process reflects the
Directors’ best estimate of the future
prospects of the Group, but they have
also considered a range of scenarios
through to the end of 2025. Modelling
is impacted by a number of factors
including assumptions around the
overall global economic environment,
the growth of our end markets and
the creation of original content.

The Directors have reviewed the
forecast scenarios set out below:

– The Group’s latest forecast,
which projects a progressive
trading performance in 2023
and beyond, despite the
uncertain macroeconomic
outlook facing the Group.

– Two severe downside scenarios
which primarily vary the length
of a global recession with the key
changes to estimates being a
severe reduction in revenue and
cash generation of the Group,
reflecting an extreme scenario
similar to the 2008 global
financial crisis.

The severe downside scenarios are
considered possible but not probable
and factor in mitigating cost savings
activities from management actions
which would be taken to partly offset
a decline in trading performance.
These are proportionate and do not
take into account all discretionary
actions which could be taken; nor do
they consider renegotiation of the
covenants of the RCF, which for
example, occurred during 2020.
The Directors have considered the
potential risk of lower revenue and,
while monitoring developments, they
currently consider there to be minimal
risk of breaching covenants. Under the
most severe scenario modelled, the
lowest point of cash headroom in the
next 12 months would be at February
2024, when cash headroom under the
RCF would be £28 million.

The Group has also modelled a reverse
stress test scenario. This models the
decline in sales that the Group would
be able to absorb before breaching
any financial covenants. Such a
scenario, and the sequence of events
that could lead to it, is considered to
be remote. Revenue in 2022 increased
by 14% versus 2021. Revenue would
need to decline by 16% in 2023 versus
our latest forecast to result in a
breach of the covenants.

The Directors have also considered
the Group’s capacity to remain viable
after consideration of future cash
flows, expected debt service
requirements, undrawn facilities
and access to capital markets.

The Group’s main committed
borrowing facilities at 31 December
2022 was the £200 million RCF, where
the Group had utilised £113.7 million
(57%); under the terms of the RCF the
loans have a maturity of £165 million
at 14 February 2026, with the residual
£35 million expiring at the original
date of 14 February 2025.

The Group’s committed borrowing
facilities also include a three-year
$53.0 million (£43.8 million) amortising
Term Loan signed on 15 November
2021 to finance the acquisition of
Savage, and a three-year $47.0 million
(£38.8 million) amortising Term Loan
signed on 7 January 2022 to finance

the acquisition of Audix. The balance
outstanding on these Term Loans at
31 December 2022 was $75.0 million
(£62.0 million).

Based on this assessment, the
Directors confirm that they have
a reasonable expectation that the
Group will be able to continue in
operation and meet its liabilities
as they fall due over the period from
the date of this Annual Report to
31 December 2025, subject to the
Group retaining the ability to acquire
funding in order to refinance its
committed facilities when they fall
due, which is expected to be the case.

Dividend

The Board has recommended a
final dividend of 25.0 pence per share
amounting to £11.6 million (2021: 24.0
pence per share amounting to £11.1
million). The final dividend, subject
to shareholder approval at the 2023
Annual General Meeting, will be paid
on Friday, 19 May 2023 to shareholders
on the register at the close of business
on Friday, 21 April 2023. This will bring
the total dividend for the year to 40.0
pence per share (2021: 35.0 pence per
share). A dividend reinvestment
alternative is available with details
available from our registrars, Equiniti
Limited. The Board’s objective is for a
progressive and sustainable dividend
and believes it is appropriate for the
Group to target a total dividend cover
of 2.0–2.5 times adjusted EPS.*

Andrea Rigamonti
Group Chief Financial Officer
27 February 2023

In addition to statutory reporting, Videndum plc
reports alternative performance measures (“APMs”)
which are not defined or specified under the
requirements of International Financial Reporting
Standards (“IFRS”). The Group uses these APMs to aid
the comparability of information between reporting
periods and Divisions, by adjusting for certain items
which impact upon IFRS measures, to aid the user in
understanding the activity taking place across the
Group’s businesses. APMs are used by the Directors
and Management for performance analysis, planning,
reporting and incentive purposes. A summary of
APMs used and their closest equivalent statutory
measures is given in the Glossary on pages 224 to 228.

Operational and financial review continued

Media Solutions

Macroeconomic market conditions
had a significant impact on Media
Solutions and drove an organic,
constant currency revenue decline
of 7%. The acquisitions of Savage
and Audix have been successfully
integrated and along with a tailwind
from a stronger Euro and US Dollar
resulted in reported revenue for
Media Solutions increasing by 12%.

High inflation drove weakening
consumer confidence, which started
towards the end of H1 and continued
throughout H2. The consumer
segment (c.20% of the Division)
was most significantly impacted
with lower demand from hobbyists
and vlogger/influencers.

Business confidence was subsequently
low in H2 and retailer destocking
impacted across the Division, including
in the independent content creator
segment (c.55% of the Division).

Our premium lighting supports are
best-in-class and have been in high
demand, and we saw significant
growth in the high end professional
segment (c.25% of the Division).
We launched our Avenger Buccaneer
for the cine/scripted TV market
in September, which is a unique,
ground breaking lighting stand.

Higher reported revenue drove a
24% increase in adjusted operating
profit* with the operating margin*
increasing by 150 bps. Operating
profit* declined by 3% on an organic,
constant currency basis.

Statutory operating profit was
£23.4 million (2021: £23.8 million),
reflecting £9.7 million of adjusting
items (2021: £2.8 million).

Our brands
Supports and stabilisers

Avenger
JOBY
Gitzo
Manfrotto
National Geographic

Carrying solutions

Gitzo
Lowepro
Manfrotto
National Geographic

Lighting and controls

JOBY
Manfrotto

Smartphonography

JOBY

Audio capture

Audix
JOBY
Rycote

Backgrounds
Colorama
Savage
Superior

Revenue

£217.8m

Up 11.9%

Revenue

2022

2021

2020

Statutory operating profit

£217.8m

£194.7m

2022

2021

£156.7m

2020

£5.8m

£23.4m

£23.8m

Adjusted operating profit*

£33.1m

Up 24.4%

2022

2021

2020

£9.7m

£33.1m

£26.6m

In addition to statutory reporting, Videndum plc reports alternative performance measures (“APMs”) which are not defined or specified under the requirements of International Financial
Reporting Standards (“IFRS”). The Group uses these APMs to aid the comparability of information between reporting periods and Divisions, by adjusting for certain items which impact
upon IFRS measures, to aid the user in understanding the activity taking place across the Group’s businesses. APMs are used by the Directors and Management for performance analysis,
planning, reporting and incentive purposes. A summary of APMs used and their closest equivalent statutory measures is given in the Glossary on pages 224 to 228.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Production Solutions

Production Solutions had a stand-out
year as it was less affected by the
macroeconomic conditions with
all their products catering for
professionals. Organic, constant
currency revenue increasing by 6%,
and the stronger US Dollar resulted
in reported revenue for Production
Solutions increasing by 13%.

The broadcast segment returned to
pre-pandemic levels, significantly
increasing studio spend year-on-year;
driving high growth in studio supports
and prompting. Our voice-activated
prompting, launched in 2021,
continued to drive growth in this
area as well.

Outside of the studio, our market-
leading flowtech tripods and aktiv
fluid heads helped to drive material
growth in non-studio supports. The
Litepanels Gemini 2x1 Hard launched
in May and was very well received by
the market, with some significant
first year revenue.

Camera Corps provided bespoke
cameras to the Winter Olympics in H1,
although H2 year-on-year comparisons
are unfavourable given the Summer
Olympics in H2 2021.

The higher revenue drove a 12%
increase in adjusted operating profit*
and 10% on an organic, constant
currency basis. The operating margin*
decreased by 20 bps as royalties
received for the Litepanels brand were
lower than seen in 2021, with 100% of
the revenue decline dropping through
to profit. Excluding the royalties,
the operating margin* was 22.1%
(2021: 20.3%).

Statutory operating profit was
£30.1 million (2021: £27.1 million),
which included £1.3 million of
adjusting items (2021: £0.9 million).

Our brands
Supports
OConnor
Sachtler
Vinten

Prompters
Autocue
Autoscript

Lighting

Litepanels
Quasar Science

Mobile power
Anton/Bauer

Robotic camera systems

Camera Corps
Vinten

Distribution, rental
and services

Camera Corps
The Camera Store

Revenue

£137.8m

Up 13.1%

Revenue

2022

2021

2020

Statutory operating profit

£137.8m

£121.8m

2022

2021

£30.1m

£27.1m

£80.1m

2020

£6.7m

Adjusted operating profit*

£31.4m

Up 12.1%

2022

2021

2020

£7.6m

£31.4m

£28.0m

In addition to statutory reporting, Videndum plc reports alternative performance measures (“APMs”) which are not defined or specified under the requirements of International Financial
Reporting Standards (“IFRS”). The Group uses these APMs to aid the comparability of information between reporting periods and Divisions, by adjusting for certain items which impact
upon IFRS measures, to aid the user in understanding the activity taking place across the Group’s businesses. APMs are used by the Directors and Management for performance analysis,
planning, reporting and incentive purposes. A summary of APMs used and their closest equivalent statutory measures is given in the Glossary on pages 224 to 228.

Operational and financial review continued

Creative Solutions

The continuation of the 4K/HDR
rollout drove Creative Solutions
revenue to increase by 10% on an
organic, constant currency basis,
and the stronger US Dollar resulted
in reported revenue for Creative
Solutions increasing by 23%.

Our Teradek Bolt transmitters and
receivers are exclusively now 4K/HDR,
as are a third of the sales of SmallHD
monitors. Total 4K/HDR sales were
c.$47 million (c.$13 million of which
were monitors). Wooden Camera saw
continued significant growth, and
overall the cine/scripted TV segment
grew materially.

Less remote working compared to
2021 and a repositioning of our brand
towards the higher margin, higher end
of the enterprise market saw revenue
decline year-on-year in this market,
as expected. However, high demand
for our Amimon medical products did
result in continued significant growth
in this market segment.

The higher revenue drove a 51%
increase in adjusted operating profit*
with the operating margin* increasing
by 240 bps. Operating profit*
increased by 41% on an organic,
constant currency basis.

In November, we announced a
reorganisation in Creative Solutions.
Following a period of significant
investment in R&D in Creative
Solutions, the future focus is on
leveraging our unique technologies
and platforms to drive further growth
in strategic markets. Consequently,
the sales and marketing teams were
reorganised into specialist vertical
segments to maximise the Division’s
growth potential, and to focus on high
end, high margin, mission-critical
products incorporating patented
Amimon technology, exiting the low
margin, low end of the wireless
video streaming market where our
products do not incorporate the
Amimon technology.

These actions are expected to reduce
the annual Divisional cost base by
c.$3.5 million. The total cash cost of
the reorganisation is expected to be
c.$2.5 million ($0.7 million in 2022),
with non-cash write-offs in 2022 of
$4.5 million.

Statutory operating loss was
£3.3 million (2021: £0.6 million loss),
which reflects £15.8 million of
adjusting items, including those
above (2021: £8.9 million).

Our brands
Video transmission systems

Teradek

Monitors
SmallHD

Lens control systems

Teradek

Live streaming

Teradek
Lightstream

IP video
Teradek

Camera accessories

Wooden Camera

Revenue

£95.6m

Up 22.9%

Revenue

2022

2021

2020

Statutory operating profit

£95.6m

£77.8m

2022

2021

-£3.3m

-£0.6m

£53.7m

2020

-£4.8m

Adjusted operating profit*

£12.5m

Up 50.6%

2022

2021

2020

£3.3m

£12.5m

£8.3m

In addition to statutory reporting, Videndum plc reports alternative performance measures (“APMs”) which are not defined or specified under the requirements of International Financial
Reporting Standards (“IFRS”). The Group uses these APMs to aid the comparability of information between reporting periods and Divisions, by adjusting for certain items which impact
upon IFRS measures, to aid the user in understanding the activity taking place across the Group’s businesses. APMs are used by the Directors and Management for performance analysis,
planning, reporting and incentive purposes. A summary of APMs used and their closest equivalent statutory measures is given in the Glossary on pages 224 to 228.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Operational and financial review continued
Key Performance Indicators

Health and safety: accident record
Number of accidents resulting in greater than
three days’ absence.

Constant currency revenue
(decline)/growth
Change in revenue on operations at constant
exchange rates.

Performance

2022

2021

2020

Progress

Our target is zero accidents.

Link to strategy

n/a

7.7%

Performance

7.7%

-22.9%

43.5%

2022

2021

2020

Progress

Increase driven by M&A activity, growth in lighting, studio
and broadcast supports and 4K-HDR; partly offset by
declining consumer confidence and destocking.

Link to strategy

Adjusted operating profit margin*
Adjusted operating profit* divided by revenue.

Adjusted profit before tax*
Adjusted profit before tax.*

13.3%

Performance

2022

2021

2020

Progress

3.4%

Increase driven by higher volumes.

Link to strategy

£54.0m

13.3%

11.7%

Performance

2022

2021

2020

£5.5m

Progress

£54.0m

£42.4m

Increase driven by higher volumes, partly offset by higher
net finance expense.

Link to strategy

* A summary of APMs is given in the Glossary on pages 224 to 228.

ROCE for 2020 and 2021 has been restated to include the non-current lease liabilities and excludes deferred tax assets, which were not previously included/excluded respectively.

Strategic Report

Videndum plc Annual Report and Accounts 2022

Adjusted basic EPS*
Adjusted profit after tax* divided by weighted average
number of shares outstanding during the period.

Return on Capital Employed*
Adjusted operating profit* divided by the average total
assets (excluding non-trading assets of defined benefit
pension and deferred tax), current liabilities (excluding
current interest-bearing loans and borrowings), and
non-current lease liabilities.

90.1p

Performance

2022

2021

2020

Progress

9.0p

90.1p

69.9p

18.8%

Performance

2022

2021

2020

Progress

4.1%

18.8%

18.0%

Increase driven by higher adjusted profit after tax* and
lower effective tax rate.

Link to strategy

Increase driven by higher adjusted operating profit*, partly
offset by increased capital employed because of the recent
acquisitions.

Link to strategy

Cash conversion*
Adjusted operating cash flow* divided by
adjusted operating profit.*

Revenue in APAC
Revenue from selling to countries in the Asia Pacific region
as a percentage of total revenue.

83%

Performance

83%

108%

257%

2022

2021

2020

Progress

15.6%

Performance

2022

2021

2020

Progress

15.6%

18.9%

Tight control of cash despite expected higher inventory due
to pricing and increased volumes.

In line with prior year, with higher growth areas outside
of APAC since 2020.

Link to strategy

Principal risks and uncertainties

The Group has a well-established and effective framework
for reviewing and assessing risks and has appropriate
processes and procedures to mitigate against them.

– The risk relating to “Foreign exchange
and interest rates” has increased
due to significantly higher cost of
servicing debt. We have implemented
derivative swaps to fix 75% of the
interest on Group borrowing.
– The risk relating to “People” has
reduced. There have been several
HR initiatives which have improved
the retention of engineers, wider
market pressures relating to
competition for talent have eased,
and in addition there has been
an easing of health and safety
restrictions related to COVID-19.
– Several “Restructuring” activities
have been announced to take
place in 2023, therefore this is
now a principal risk.

– Cyber risk remains elevated in view

of the high number of cyber security
breaches and ransomware activity
affecting the corporate sector. We
continue to focus on strengthening
our cyber security defences and
have increased budgets allocated
to security. We keep our framework
under review; however, this risk
remains inherently high and cannot
be eliminated.

Overview

To achieve its strategic objectives,
Videndum recognises that it will
take on certain business risks.

The Company aims to take business
risks in an informed and proactive
manner, such that the level of risk
after mitigating action is aligned
with the potential business rewards.
Management regularly reviews risk
exposures against current business
risk level tolerances.

Videndum aims to be a sustainable
business, minimising its impact upon
the environment, supporting and
working to improve the societies in
which it operates and with a rigorous
governance framework ensuring
the longevity of the business and
minimising risks around its operations.

The risk management framework
includes formal risk reviews and risk
registers maintained at Group,
Divisional and individual site level.

Our approach is underpinned by a
commitment to fairness and honesty
in our relationship with customers,
suppliers, our people and all our
stakeholders. The Group is risk averse
with respect to risks that could
negatively affect the safety of our
employees and products, our brands
or reputation, or risks that could lead
to breaches of laws and regulations
or endanger the future existence
of the Company.

We have a disciplined financial
management approach and in
particular we seek to minimise
the impact of short-term currency
fluctuations on our business. The
Group is committed to full compliance
with all statutory obligations and
full disclosure to tax authorities.

To support our strategic priorities,
we have several business objectives
which influence the way in which
we proactively manage risks. These
include: being a strong innovator and
investing in research and development;
optimising supply chain efficiency
and operational excellence; robust
HR processes for resourcing and talent
development; and identification of
acquisition opportunities.

Update since 2021

– We believe that the risks relating to
“Demand for Videndum’s products”
remains stable overall, in spite of
the challenging economic outlook
affecting our consumer-oriented
brands, the war in Ukraine, higher
inflation and interest rates,
currency fluctuations, supply chain
disruptions, and some markets still
affected by COVID-19. The order
book going into 2023 is healthy, and
the Group’s diversification strategy
continues to bear fruit with certain
newer segments (e.g. Audio,
Lighting) continuing to perform
strongly. We believe the long-term
fundamentals for the content
creation industry remain strong.
– The risk related to “New markets/

channels of distribution” is
incorporated into the risk “Demand
for Videndum’s products”. We
no longer consider this to be a
standalone risk given that the
diversification into new segments
and rollout of a digital strategy
are substantially complete.

– “Cost pressure” remains high but
has reduced since 2021. Videndum
has been able to implement price
increases to more than offset the
increase in costs, and we continue
to control the cost base carefully.
In addition, the availability of critical
components has improved since 2021.

Image: Daniel Kordan

Strategic ReportVidendum plc Annual Report and Accounts 2022

Principal risks

Movement in 2022

h
g
H

t
c
a
p
m

w
o
L

Strategic

Operational and compliance

Financial

Low

Likelihood

High

Key

Increased

Stable

Reduced

1. Demand for Videndum’s products

7. Reputation of the Group

2. Cost pressure

8. Foreign exchange and interest rates

3. Dependence on key suppliers

9. Business continuity including cyber security

4. Dependence on key customers

10. Climate change

5. People

6. Laws and regulations

11. Restructuring – new risk

12. Acquisitions

Principal risks and uncertainties continued

Principal risk

Mitigation

Strategic priority

1. Demand for Videndum’s products

This risk is stable as the fundamentals of the content
creation industry remain strong. We have premium,
market-leading brands and continue to launch innovative
products; business activity has further diversified
following the acquisitions of Audix and Savage.

The order book for 2023 remains healthy and the
Group has a varied product portfolio, and segments
such as Lighting and Audio continue to experience
strong growth.

Global recessionary and inflationary pressures are
reducing consumers’ disposable income, which has
impacted demand for consumer-oriented products,
which account for c.10% of the Group’s revenue.

– Close monitoring of target markets and user

1. Organic growth

2. Margin improvement

3. M&A activity

requirements.

– Continuous investment in new product development
and marketing, and phasing out of old products.
c.50% of the Group’s revenue comes from products
launched in the last three years.

– Continued emphasis on diversification away

from traditional markets and channels towards
e-commerce and products with a higher
technological content, as well as accessories.

– Growth pursued in new/adjacent markets and

emerging markets, through organic growth and
acquisitions.

The discontinuation of sales to Russia as a consequence
of the Ukraine conflict has a moderate impact on our
revenues (approximately £5 million per annum).
The Chinese market is no longer as impacted by
COVID-19 following the easing of lockdown measures.

– Close relationship maintained with key customers.

– The operational footprint and build plans for our
manufacturing plants are adjusted to respond
to changes in demand condition.

2. Cost pressure

Cost pressure and general inflationary pressures
continue to remain high, affecting many categories
of spend, but the pressure has reduced since 2021.

We are experiencing fewer shortage issues on
critical components. However, as cost of living
concerns increase, we may experience significant
wage inflationary pressures during 2023.

Generally, the strong differentiation and premium
nature of our brands allows the Group to increase
prices in line with inflation. There is also a careful
monitoring of costs in order to protect margins.

3. Dependence on key suppliers

– Programmes of carefully evaluated sales price

2. Margin improvement

increases have offset additional costs.

– Careful monitoring of costs versus budgets,

production and sourcing activities are continually
reviewed for cost-saving opportunities.

– Labour efficiency improvements through initiatives

such as Lean principles.

– Key supplier agreements regularly re-tendered

to achieve optimal value.

– Salaries and benefits are regularly benchmarked.

We source materials and components from many
suppliers in various locations, and in some instances
are more dependent on a limited number of suppliers
for particular items.

If any of these suppliers or subcontractors fail to meet
the Group’s requirements, we may not have readily
available alternatives, thereby impacting our ability
to provide an appropriate level of customer service.

– Where possible, dual sourcing is in place for all
materials and components, using suppliers in
different territories.

– Monitoring of service levels against pre-defined

KPIs. Strong relationships are maintained.

– In-sourcing opportunities have been identified
to improve margins and reduce key supplier
dependencies.

In 2021, Videndum faced shortages of certain
raw materials and components, in particular semi-
conductors. This issue has eased somewhat during 2022.

– Formalised Sales and Operations Planning (“S&OP”)
in place, which enables us to anticipate requirements
for raw materials and other components.

– Business interruption insurance (within deductible
limits) provides coverage for named key suppliers.

1. Organic growth

2. Margin improvement

Strategic ReportVidendum plc Annual Report and Accounts 2022

Key

Increased

Stable

Reduced

Principal risk

Mitigation

Strategic priority

4. Dependence on key customers

While the Group has a wide customer base, the loss
of a key customer, or a significant worsening in their
success or financial performance, could result in a
material impact on the Group’s results.

Videndum’s largest customer accounted for
approximately 10% of the Group’s total turnover
in 2022. The business also works with a variety of
customers on large sporting events and the extent
of these activities varies year-on-year, although
as the Group has grown the relative importance
of the revenue from these events has decreased.

5. People

– Development of strong relationships and dedicated

1. Organic growth

account management teams for key accounts.

– Strict monitoring of receivable balances. Credit

insurance schemes in place covering approximately
50% of total trade debtor balance.

– The increased investment in digital platforms will
enable the Group to better serve end customers
and reduce reliance on third-party distributors.

2. Margin improvement

We employ approximately 1,900 people and are
exposed to a risk of being unable to retain or recruit
suitable diverse talent to support the business.

– Employees’ health and safety is taken very seriously

1. Organic growth

and risks and issues are carefully monitored.

– Wellness and counselling support facility provided

3. M&A activity

We manufacture and supply products from a number
of locations and it is important that our people operate
in a professional and safe environment.

Competition for engineering talent remains strong
and there is still a risk that some key engineers
may leave Videndum, thereby adversely affecting
the development of new products. The risk around
retention of talent has eased in the last few
months, hence we consider this risk reduced.

to employees.

– Employees are rewarded fairly with competitive

remuneration packages.

– Appropriate recruitment, appraisal, talent

management and succession planning strategies are
in place to ensure we recruit and retain diverse, good
quality people and leadership across the business.

– Retention plans are continually reviewed and adapted.

6. Laws and regulations

We are subject to a comprehensive range of legal
obligations in all countries in which we operate.

As a result, we are exposed to many forms of legal risk.
These include, without limitation, regulations relating
to government contracting rules, sanctions regimes,
environment and climate change, taxation, data
protection regimes, anti-bribery provisions,
competition, and health and safety laws in
numerous jurisdictions around the world.

Failure to comply with such laws could significantly
damage the Group’s reputation and could expose
Videndum to fines and penalties.

– Dedicated legal and regulatory compliance resources

1. Organic growth

2. Margin improvement

supported by external advice where necessary.

– Monitoring of developments in the regulatory
environment in which our companies operate,
including the effect of tax changes.

– We enhance our controls, processes and employee
knowledge to maintain good governance and to
comply with laws and regulations. Our Code of
Conduct sets out standards expected of Videndum
and our employees.

– Intellectual Property is actively protected; Videndum

seeks to enforce its Intellectual Property rights.

– A compliance search engine is used to monitor

and vet third parties, including for possible issues
relating to sanctions regimes.

Principal risks and uncertainties continued

Principal risk

Mitigation

Strategic priority

7. Reputation of the Group

Damage to our reputation and our brand names can
arise from a range of events such as poor product
performance, unsatisfactory customer service, and
other events either within or outside our control.

We are mindful of the increasing levels of regulatory
and stakeholder scrutiny of companies’ affairs,
coupled with the widespread impact of social media.

The societal impact of our brands and the
sustainability of our operations are increasingly
important to consumers of Videndum products
and our investor community.

There is increased scrutiny of Videndum’s ESG
credentials, and a need to comply with increasing
ESG regulations (“ESOS”, “TCFD”).

8. Foreign exchange and interest rates

The global nature of the Group’s business means
it is exposed to volatility in currency exchange rates
in respect of foreign currency denominated
transactions, and the translation of net assets and
income statements of foreign subsidiaries and equity
accounted investments. The Group is exposed to a
number of foreign currencies, the most significant
being the US Dollar, Euro and Japanese Yen.

Due to its debt, the Group is also affected by higher
financing charges linked to increases in interest rates.

– Strong standards of product quality and customer

1. Organic growth

service are enforced.

– Business is managed in a safe and professional way,

in accordance with corporate values.

– All employees and stakeholders are expected to

abide by Videndum’s Code of Conduct which was
relaunched in 2022.

– A whistleblowing service is in place for employees

to escalate any concern.

– Third party due diligence framework includes
compliance searches and inspections, and
consideration of reputational issues.

– A structured, Group-wide, ESG programme is in

place. This includes initiatives to improve product
sustainability and reduce waste and emissions.

– Use of appropriate hedging activities on forecast

2. Margin improvement

3. M&A activity

foreign exchange net exposures.

– Overseas investments partly financed through
the use of foreign currency borrowings in order
to provide a net investment hedge over the
foreign currency risk that arises on translation.

– 75% of the interest charge for 2023 is fixed

through the use of swap instruments, thereby
minimising the impact of any major increases.

– Group is currently prioritising cash generation

to repay debt.

9. Business continuity including cyber security

There are risks relating to business continuity resulting
from specific events such as natural disasters including
earthquakes, floods, fires, or pandemic flu, and climate
change-induced disasters.

These may impact our manufacturing plants
or supply chain, particularly where these account
for a significant amount of our trading activity.

We are also dependent on our IT platforms continuing
to work effectively to support our business and
therefore there is a cyber security risk for the Group.

– A business continuity and disaster recovery planning

1. Organic growth

policy is in place.

– Significant investment made in implementing new

security tools and processes.

– IT security controls and training programmes

continually improved with appropriate investment.

– We have global insurances in place which provide
cover for certain business interruption events.
We review coverage annually to determine
whether adjustments are needed.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Key

Increased

Stable

Reduced

Principal risk

Mitigation

Strategic priority

10. Climate change

We understand the serious nature of the challenges
relating to climate change and the implications this
may have on our operations and business model.

– A climate change risk management framework has
been established, details set out in the TCFD report
from page 57.

1. Organic growth

We consider the physical risks to people, assets and
supply operations based on a projected increase in
the frequency of natural disasters caused by climate
change, and the impact of gradual changes such as
increasing temperature.

Additional resource is needed to manage this issue and
meet additional reporting requirements. Additional
cost may arise, in particular with regards to: property
and business continuity insurance; carbon tax and
offsetting; and meeting product regulation.

See the TCFD report from page 57 for a more detailed
overview of this risk.

11. Restructuring – new risk

Several restructuring initiatives are ongoing and/or
in the process of being implemented, which are
supplemented by other operational improvement
initiatives. The main objective of these is to implement
synergies, often identified as part of recent
acquisitions.

There is a risk that these projects do not achieve the
planned outcomes, or that the day-to-day operations
are impacted.

12. Acquisitions

In pursuing our business strategy, we regularly explore
opportunities to expand our business through
development activities such as strategic acquisitions.

This involves a number of calculated risks including:
acquiring desired businesses on economically
acceptable terms; integrating new businesses,
employees, business systems and technology; and
realising satisfactory post-acquisition performance.

Recent acquisitions have enabled Videndum to
further increase its presence in important segments
(LED lighting/streaming/audio), while acquiring
complementary capabilities.

– We have established clear targets and trajectory
for achieving carbon neutrality and subsequently
net zero emissions.

– Group-wide ESG programmes (see ESG report

from page 50).

– Projects are monitored closely by senior operational
management with regular updates provided to the
Divisions/Group.

1. Organic growth

2. Margin improvement

– Detailed plans put in place and tracked against

3. M&A activity

milestones.

– Regular review of controls/risks at a Divisional level
to confirm that standard procedures are in place.

– Clear acquisition strategy with a robust valuation

3. M&A activity

model.

– Stringent due diligence processes are completed
including the use of external advisers where
appropriate.

– A plan is developed to integrate the acquired

businesses in an effective way.

– The post-acquisition performance of each business

is monitored closely.

Responsible business
A snapshot of ESG

Videndum has a clear purpose
and strategy, and strongly
believes in doing business the
right way. These behaviours
are well embedded within the
organisation and are closely
monitored by the Board.

Throughout 2022, the
Company further developed its
Group-wide ESG programme,
increasingly focusing on the
end-to-end supply chain
as well as direct operations.

Stephen Bird
Group Chief Executive

Contents

Governance framework

ESG targets

Videndum’s roadmap to net zero

Task Force on Climate-related
Financial Disclosures Report (“TCFD”)

Environment

Our people

Giving back

Responsible practices

Strategic ReportVidendum plc Annual Report and Accounts 2022

Our ESG strategy and commitment

We are a small company with a global footprint and are
committed to working responsibly. We have a coordinated Group-
wide approach to ESG which focuses on the material issues that
affect our business and our stakeholders. We engage with our
stakeholders – including our employees, shareholders, customers,
supply chain and rating agencies – to develop, deliver and evolve
the Group’s ESG strategy according to their needs.

Our strategy includes clear objectives
and targets, prioritising actions that
can deliver the greatest impact. It is
also designed to positively contribute
to the success of the Company,
to reduce the impact of the business
on the environment, to continue
to prioritise the health and safety
of our employees, and to improve
the diversity and inclusivity of
our workplaces.

Throughout 2022, we strengthened
our relationship with our independent,
specialist ESG company, Inspired ESG,
working to enhance our ESG strategy
and to improve our data collection in
order to comprehensively, clearly and
consistently report our progress and
credentials. To reflect Videndum’s
commitment to ESG, we published our
second standalone ESG Report which
details our 2022 ESG performance,
and is available on our website. This
Annual Report contains an overview
of our ESG activities.

Stephen Bird
Group Chief Executive

ESG frameworks that inform our strategy
Both mandatory and voluntary ESG disclosures
inform Videndum’s ESG strategy, details of
which can be found in our 2022 ESG Report
which is available on our website.

Read more online at
www.videndum.com/responsibility

Responsible business continued
Governance framework

The Videndum Board provides
oversight and has overall
responsibility for the Group’s
ESG performance. The ESG
Committee is chaired by the
Group Chief Executive Stephen
Bird and comprises senior
executives representing the
Group and each Division.

The Committee is mandated to meet the Board’s
growing ESG standards and ambitions, lead
initiatives across the Group, and ensure compliance
with emerging regulations. The Committee meets
at least once a quarter, reporting Divisional ESG
progress and it updates the Board on Videndum’s
ESG performance. A percentage of the Group Chief
Executive’s remuneration is tied to the Group’s
climate action and wider ESG performance,
including the progress made towards achieving
our net zero targets. More details can be found
in the Remuneration report from page 122.

In 2022, we established a dedicated ESG Working
Group which includes ESG coordinators from each
of our Divisions and the Group Risk Assurance
Manager. The Working Group meets bi-weekly and
is responsible for achieving the Group’s wider ESG
targets. During 2022, the Board, ESG Committee,
ESG Working Group, and broader Management
continued to address material issues affecting
business operations and Videndum’s stakeholders.

Strategic ReportVidendum plc Annual Report and Accounts 2022

How Videndum manages its ESG performance

ESG Committee led by

Stephen Bird
Group Chief Executive (Sponsor)

Jon Bolton
Group Company Secretary (Executive Lead)

Chris Jorio
Group Risk Assurance Manager (Coordinator)

Enrico Grando
Media Solutions

Julio Lizano
Production Solutions

Marco Vidali
Creative Solutions

Jennifer Shaw
Investor Relations

Meron Kiflu
ESG Coordinator

Alejandro Jiron
ESG Coordinator

Chris Reem
ESG Coordinator

Key focus areas

We have a robust governance
framework and a Code of Conduct
that sets out our values and the
behaviour expected from Videndum,
our people and our supply chain.
ESG governance has been integrated
into our existing processes, and this
framework underpins a sustainable
and responsible business for our
stakeholders.

s p o n s i b l e business priorities
E n vironment

Embed
sustainability
into our product
life cycle

Reduce
packaging
and waste

Formalise
the integrity
of our
supply chain

Reduce carbon
emissions

Videndum’s
positive
impact

Prioritise
health
and safety

Positively
impact the
communities
in which we
operate

Improve diversity,
equality and
inclusion

Giving back

O ur people

R
e
s
p
o
n
s

Image: Daniel Kordan

Videndum BoardESG Working Group
54

Responsible business continued
ESG targets and pathway to net zero

Target

Progress achieved in 2022

2023 KPIs and deliverables

Environment

Reduce packaging and waste

The bulk of our paper and cardboard
packaging usage sits within Media
Solutions, of which 47% was FSC-graded
and 72% from recycled material in 2022.

Further develop methodology for
measurement of plastic waste and
implement substitution strategies such
as biodegradable polymers.

Water consumption now measured at
all key sites.

0.03% of waste from our Feltre site ended
up in landfill in 2022.

50% of current
cardboard packaging
consumption will be
replaced by sustainable,
FSC-grade cardboard
or eliminated.

50% reduction in annual
consumption of single-
use plastics by 2024.

Continue to reduce
waste in landfills.

Start recording water
consumption.

Embed sustainability into our product life cycle

Continued rollout of PLCA across Media
Solutions, with several initiatives underway
– see page 71.

PLCA methodology applied to at least five
of Production Solutions’ most significant
product lines.

Scope 1 and 2 emissions have reduced by
more than 20% since 2019 (excluding the
impact of newly acquired businesses).

Air travel emissions have reduced by 6.8%
relative to a 2019 benchmark. This reflects
increased environmental conscientiousness
and reduced attendance at trade shows.

Scope 3 emissions are now calculated
up to 2022. We have engaged several
key suppliers to understand their energy
consumption and identify improvement.

Employee survey conducted to measure
the impact of employee commuting and
identify opportunities to reduce emissions.

Actions have been identified to further
reduce emissions for Scope 1 and 2. This
includes: further solar panel projects
(Feltre, Italy and Arizona, US); increased
LED lighting coverage; investment in more
energy-efficient machinery; and continued
conversion of Company cars to electric as
and when leases expire.

Implement measures to reduce Scope 3
emissions from supply chain, business travel
and employee commuting.

PLCA (cradle to grave)
for five of the top-
emitting products
we sell by 2025.

Reduce carbon emissions

Reduce our Scope 1 and 2
emissions by 25% by
2024; by 35% by 2027;
by 50% by 2030; and
by 90% by 2035, based
on our 2021 baseline
of 3,979.82 tCO₂e.

Reach carbon neutrality
by 2025.

Reach net zero by 2035
in Scope 1 and 2.

Reduce business air
travel by 50% by 2024
(compared to a 2019
benchmark of
c.1,000 tCO₂e).

Strategically reduce
our Scope 3 emissions
to meet our 2045
net zero target.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Target

Our people

Progress achieved in 2022

2023 KPIs and deliverables

Prioritise health and safety

No major lost-time
accidents resulting
in >three days.

We continue to improve our health and
safety management systems but there
were two accidents >three days in 2022. All
accidents are subject to a rigorous review
process to ensure that key learnings are
taken and shared across the Group.

Improve diversity, equality and inclusion

No major lost-time accidents.

Over the next five years,
aim to improve the
Group’s overall gender
diversity from 70% men,
30% women.

At a senior leadership
level, we expect the
ratio of women to
be at least 30%.

At the end of 2022, 43% of the Group’s
Board of Directors were female compared
to 14% at the end of 2021. 15% of the
Group’s Operations Executive were female,
compared to 8% in 2021. 14% of the Group’s
senior management team were female,
compared to 15% in 2021. 31% of the rest of
the Organisation were female, compared to
29% in 2021. We are continuously working
to improve the Group’s overall gender
diversity, particularly our senior
management.

The Board will continue to monitor progress
on equality and the Group’s gender
breakdown.

We aim to continue developing our
processes to foster a culture of inclusivity
across the Group, including the Hire 2
Develop programme and apprenticeships
focused on engineering, sales, operations
and IT departments where females are
under-represented.

Giving back

Over a four-year period*, positively impact the communities in which we operate

In 2022, the Group positively impacted 443
disadvantaged people.

Continue monitoring and measuring
progress.

Positively impact one
disadvantaged person
for every Videndum
employee in the
communities we operate.

Responsible practices

Formalise the integrity of our supply chain

Work with our top
five biggest suppliers
by revenue to request
supplier-specific data
on products by 2025.

A detailed ESG survey has been completed
with Videndum’s seven most significant
vendors.

Supplier due diligence and supplier audit
programme has been strengthened to
focus on all relevant ESG dimensions.

Rollout of ESG survey to top 30 suppliers.

* Excluding 2020 due to COVID-19 lockdowns.

Strategic Report

Responsible business continued
Videndum’s transition plan – a roadmap to net zero

Targets

Scope Area Short term (to 2025)

Medium term (2025–2035)

Long term
(2035–2050)

2022

2023

2024

2025

2027

2030

2035

2045

Scope
1 and 2

Near-term
target

Ensure that 100% of Group operations
capture and report on CO2 emissions.

25% reduction.

Carbon neutral.

35% reduction.

50% reduction.

90% reduction.

Key actions

Improve energy efficiency of electricity and gas – Measurable actions have been identified to further reduce emissions for Scope 1 and
2. This includes: further solar panel projects (Feltre, Italy and Ashby, UK); increased LED lighting coverage; investment in more
energy-efficient machinery; and continued conversion of Company cars to electric as and when leases expire.

Electricity

Solar panel
installation to the
roof of Cartago,
Costa Rica and
Bury St. Edmunds,
UK.

100% completion
of compressed
air leak detection
and repairs, and
heating and air
conditioning
controls in Feltre,
Italy.

Installation of
solar panels at
Feltre, Italy and
Ashby, UK
(reducing
approximately
750 tCO2e
per annum).

Energy metering
and circuit level
monitoring.

LED lighting
upgrade in Feltre,
Italy and Ashby, UK.
Implementation
of LED lighting in
Arizona, US.

Conduct
environmental
survey in respect
of key US sites.

Carbon fibre
upgrade and other
investment in more
modern and energy
efficient machinery.

Reduction in size
of property
portfolio (under
utilised sites) will
reduce annual
emissions by
500 tCO2e
per annum.

Introduce energy
efficiency
measures across
our US sites
following energy
site surveys
(reducing
approximately
500 tCO2e per
annum).

Continue to
implement the
more complex/
expensive site
survey
recommendations
to ensure further
reductions.

All site survey
recommendations
implemented and
residual Scope 2
emissions that
cannot be
eliminated are
offset using
“carbon removal
offsets”.

Gas

Leverage Solar PV installation to install electric systems
thereby substituting natural gas for heating purposes
at our Feltre and Ashby sites (reducing approximately
800 tCO2e).

Reduce Scope 1 and 2 emissions as much as possible.

Carbon
neutral
target

Net zero
target

All Company
cars will be
substituted
to electric or
hybrid by 2025
thereby reducing
approximately
150 tCO2e.

Begin to
implement
site survey
recommendations
to improve
efficiency of gas
consumption.

Continue to
implement the
more complex/
expensive site
survey
recommendations
to ensure
year-on-year
reductions.

All site survey
recommendations
implemented and
residual Scope 1
emissions that
cannot be
eliminated are
offset using
“carbon removal
offsets”.

From 2025, we will purchase offsets annually to be carbon neutral until
we reach our Scope 1 and 2 net zero target in 2035. At the end of 2025,
we expect that c.1600 tCO2e i.e. the remaining emissions, will be offset
using quality offset programmes available including afforestation/
reforestation, or carbon removal woodland projects. We are also
investigating tree planting opportunities on land owned by the Group.

Net zero.

Scope
3

Near-term
target

Ensure that 100% of Group operations
capture and report on CO2 emissions.

50% reduction
in business
air travel.

–

90% reduction.

Key actions

Implement measures to reduce Scope 3 emissions from supply chain, transportation of goods and employee commute.
This includes:

– Conduct PLCA (cradle to grave) for five of the top-emitting products we sell by 2025.
– Work with our top five biggest suppliers by revenue to request supplier-specific data on products by 2025.

Net zero
target

Net zero.

In 2022, we worked to develop our transition plan and a strategy to support us on our journey to net zero for Scope 1 and 2
by 2035 and Scope 3 by 2045. We analysed and improved the data for Scopes 1, 2 and 3 in accordance with the Greenhouse
Gas (“GHG”) Protocol; more details can be found on page 65. Our interim targets detailed above outline the necessary steps
we plan to take to meet our long-term targets.

While at a minimum we aim to reduce our Scope 1 and 2 emissions by 25% by 2024, our ambition is to reduce these emissions
as far as possible before becoming carbon neutral by 2025. From 2025, we will purchase offsets annually to be carbon
neutral until we reach our Scope 1 and 2 net zero target in 2035. In the SECR report on page 67, we have set out our energy
efficiency measures for the next five years to begin decarbonising our Scope 1 and 2 emissions.

Videndum committed to having near-term and long-term net zero emission reduction targets validated by the Science
Based Targets Initiative (“SBTi”) in 2022, demonstrating our commitment to the UK’s Nationally Determined Contribution
(“NDC”) under the Paris Agreement 2015 to limit global warming to 1.5°C. We are currently in the process of reviewing our
targets to align with the latest SBTi criteria. We have rebaselined our proposed Scope 1, 2 and 3 SBTi targets on 2021 data.
We plan to submit them for review in 2023 for validation by the SBTi.

Videndum plc Annual Report and Accounts 2022

Responsible business continued
Task Force on Climate-related Financial Disclosures Report (“TCFD”)

In 2022, we continued to develop our TCFD reporting,
as we further embedded the recommendations and
latest guidance into our existing processes. We aim to
continuously improve our TCFD reporting over time as
guidance evolves and our responsible business
programme progresses.

Climate resilient business strategy

Videndum has a well-established
strategy and purpose. To ensure
business longevity, we have worked
to understand the impact of climate
change on the Group’s operations,
strategy and financial planning.

Adopting the TCFD recommendations
within our existing risk management
processes has enabled Videndum
to develop a climate-risk impact
framework. We have assessed the
impact of both physical risks (the
physical impact of climate change)
and transition risks (the risk
associated with the transition to
a decarbonised economy). To do this,
a detailed climate scenario analysis
was carried out again in 2022,
reassessing the analysis completed
in 2021, on 33 of our operational sites,
to identify any changes in impact.
We then widened our climate scenario
analysis to include all newly acquired
sites across the Group as well as
our top supplier locations and key
supplier routes.

In 2022, Videndum reported in
line with the FCA Listing Rule
9.8.6R by including climate-related
financial disclosures consistent
with the TCFD recommendations
and recommended disclosures. We
recognise that climate change is a
complex issue and, although the risk
to the Group’s operations is currently
assessed as moderate overall, we
have worked closely with Inspired
ESG to rigorously assess the impact
of climate change on the business.

Climate governance

The Board provides oversight
to climate-related risks and
opportunities which have been
integrated into our business strategy
and targets. The Board considers
climate change in long-term financial
planning, demonstrated through
our areas of capital allocation for
onsite renewable energy generation,
and research and development
into improving our sustainable
products. To support their role and
responsibility, training was provided
for all Board members in 2022
on climate change risks and their
associated impact on Videndum’s
operations. There was also an
overview discussion of progress made
in reducing emissions since 2019. The
Audit Committee continues to review
financial and non-financial risks
outlined in the Group Risk Register,
including the Climate Change Principal
Risk. The Group Risk Assurance
Manager provides updates on TCFD
to the Audit Committee at least once
a year. The external auditor, Deloitte,
provided an overview of climate
change regulatory requirements to
the December 2022 Audit Committee.

The responsibility for managing
climate-related risks is delegated to
senior management throughout the
Group. The Group Risk Assurance
Manager coordinates work between
the ESG Committee and Divisional
management across the business
to ensure that climate risks and
opportunities are identified, the
potential impacts are accurately
reported, and risk mitigation
measures are adopted.

Our ESG Working Group, comprised of
ESG Coordinators and the Group Risk
Assurance Manager, is responsible
for managing climate-related risks
and opportunities, and achieving the
Group’s carbon reduction targets.
The Group Risk Assurance Manager
regularly reviews mitigation plans
on behalf of the ESG Committee and
provides annual updates on climate-
related matters impacting Group
operations.

We work closely with our independent,
specialist ESG company, Inspired ESG,
to assess the potential climate-related
risks for the short, medium and long
term across all sites and selected
supply chain operations. Several
climate risk management workshops
were held in 2022, further developing
our climate analysis across our
operations and supply chain.
These were attended by Inspired ESG,
Divisional ESG coordinators, the
Group Risk Assurance Manager,
and the relevant operational lead,
together with finance representation.

Responsible business continued
TCFD continued

Scenarios warming pathways

Below 2°C Scenario
– Organisations begin
to align more closely
with the Paris
Agreement and SBTi
(1.5°C) for an orderly
and coordinated
transition to a low-
carbon economy.

Between 2–3°C
Scenario – Businesses
respond to patchwork
policies with
intermittent action,
aligning with current
forecasts.

Above 3°C Scenario –
Bank of England models
a recession; minimal
climate action and
global emissions rise
unchecked.

Time horizons

Short
term (up
to 2025)

Medium
term
(2025–
2035)

Long
term
(2035–
2050)

The time horizons can be explained
as follows:

– Short term (up to 2025) aligns to

the Viability Statement three-year
lookout period, and is also consistent
with the Group’s first major
milestone which will be the
achievement of carbon neutrality by
the end of 2025.

– Medium term (2025–2035) is

consistent with the Group’s net zero
target by 2035.

– Long term (2035–2050) is

consistent with the UK Government
net zero pledge by 2050.
Videndum’s long-term goal is to
become net zero by 2045.

The findings of the climate scenario
analysis were presented in the
divisional climate risk management
workshops to the Group Risk
Assurance Manager, ESG Committee
members, supply chain management
and site managers to reassess and
ensure that the classification of the
potential climate-related risks and
opportunities across Videndum’s
operations remained appropriate.
New risks were also assessed and
classified suitably. We have added
new risks, for example in relation
to sites added during the year.

The Group Risk Assurance Manager,
together with the Group Chief
Financial Officer, assess if the
potential climate-related risks and
opportunities will significantly increase
the Climate Change principal risk
criteria in the short, medium and long
term. Initial risk levels were considered
before determining a final risk level
based on mitigating measures. The
following tables summarise the risks
and opportunities that were identified
which cumulatively feed into Climate
Change being reported as a principal
risk. While we have identified Climate
Change as a principal risk, this process
determined that Climate Change and
its impact is low for the Group in the
short/medium term, and the risk is
therefore categorised as moderate
overall. There is no material impact
in relation to 2022.

In accordance with the 2018 UK
Corporate Governance Code, the
Directors have assessed the viability
of the Group over a three-year period,
taking account of the principal risks
and uncertainties set out on pages
44 to 49 which include the climate-
related risk. The Directors believe that
a three-year period is an appropriate
period over which a reasonable
expectation of the Group’s longer-
term viability can be evaluated and
is aligned with the Group’s business
and strategic planning time horizon.

The climate-related risk and
opportunities do not materially
impact the Group’s longer-term
viability assessment. The maximum
annuity impact of climate change,
based on the impact ranges below,
was factored into the long-term
financial modelling for the Group’s
cash-generating units (“CGUs”).
There is no material impact on the
available headroom. Any impact
assessed in respect of 2023 is
already incorporated in the budget,
for example in relation to additional
headcount/consultancy costs.

Cross-industry metrics form the
basis of estimating the financial
impact of climate-related risks
and opportunities on our business.
These metrics include GHG emissions,
transition and physical risks, climate-
related opportunities, capital
deployment, carbon pricing and
remuneration. We have considered
all the cross-industry metrics as per
TCFD guidance. Details of the metrics
are located within the narratives
from pages 57 to 69. We will look to
continuously develop these metrics
as our climate reporting progresses.

Strategic ReportVidendum plc Annual Report and Accounts 2022

To assess the impact of climate change on our organisation we consider a range of scenarios. A climate scenario is a
plausible representation of future climate that has been constructed for explicit use in investigating our future exposure
to the impacts of climate change. We modelled our climate scenarios across three time horizons using several established
models: Climada natural catastrophe damage model; CORDEX regional climate projections; and IAMs (“Integrated
Assessment Models”).

Target

Transitional risks

Increased reporting and resourcing requirements relating
to climate change in the <2ºC and 2–3ºC scenario.

Explanation and mitigation: This impact refers to the additional cost of
reporting; Management time and additional resources to manage the
ESG-related initiatives, including climate change. Increased costs reflect
the incremental headcount required to deliver initiatives related to climate
change and reporting thereof, increased Management effort, steering
Group activities and third-party consulting costs.

We recognise that regulation will increase as the EU aims to reduce carbon
emissions by 55% by 2030. We are reviewing emerging regulation which will
impact Videndum and our supply chain, including regulation on battery life
cycles. We continuously review emerging regulation over time to understand
the impact.

We are working with external consultants to help support our PLCA
programme. The maximum cost per annum is approximately £0.1 million.

Carbon costs associated with carbon taxes and offsetting
to hit our emissions goals in the <2ºC and 2–3ºC scenario.

Explanation and mitigation: This risk would be of highest impact in the
2–3°C scenario, where carbon costs are projected to peak as governments
are having to bring in carbon taxation abruptly. An additional cost of
£0.3 million per annum is derived by reference to available carbon cost
benchmarks, applied to Videndum’s projections for Scope 1 and 2 emissions
over the next 15 years. This includes projections for any offset cost from
2025 onwards.

In addition, the EU Carbon Border Adjustment Mechanism (“CBAM”)
regulation being introduced in 2026 may result in up to a £0.3 million per
annum cost due to the import of aluminium in our Media Solutions Division.
As we reduce our carbon emissions on our journey to be net zero by 2035 for
Scope 1 and 2 we will minimise this risk.

Timeline

Impact

Short/Medium/
Long term
(2022–2050)

Additional expenditure
of between £0.3
million–£0.7 million
per annum.

Additional cost for
2023 is factored into
the Group’s 2023
budget.

Medium/
Long term
(2025–2050)

Additional expenditure
of up to £0.6 million
per annum.

Our projections have
increased due to the
EU Carbon Border
tax which was recently
announced and will
apply to certain
commodity imports
into Italy from 2026
onwards.

Mandates on and regulation of existing products and services
in the <2ºC and 2–3ºC scenario.

Explanation and mitigation: The impact is currently minor based on new/
imminent legislation but may increase in the future as countries introduce
new forms of environmental taxes. We are investigating alternative
sustainable packaging options and aim to roll them out throughout our
product range.

Short/Medium/
Long term
(2022–2050)

Increased direct costs;
at this point the
impact is deemed
minor (less than
£0.1 million per annum).

Responsible business continued
TCFD continued

Target

Transitional risks

Increased cost of energy and materials in the <2ºC
and 2–3ºC scenario.

Explanation and mitigation: Climate change may result in increased energy
prices and cost of raw materials. We aim to procure more sustainable
materials which are likely to be more expensive, resulting in increased
operating costs for the business. For example, initial reviews of recycled
certified packaging material costs are 5–15% higher than their non-
recycled and non-certified counterparts.

The impact will be reduced by Videndum’s ability to pass incremental input
costs onto customers, an increased demand for sustainable products, and
reduced energy usage through energy efficiency measures and reduced
energy consumption.

At this point, we are not able to estimate the impact of climate change on
cost of energy and materials; the increases we have seen recently are linked
to geopolitical issues and post COVID-19 supply chain issues. Our 2023
budget reflects assumptions of increased energy costs and higher inflation
mainly due to the war in Ukraine. At this point, we assess the impact to be
neutral based on initiatives to reduce energy consumption. We also seek
operational efficiencies and implement cost reduction initiatives.

Changing consumer preferences and increased sensitivity
to ESG in the <2ºC and 2–3ºC scenario.

Explanation and mitigation: As sustainability grows in importance, our
customers may alter their consumer habits to make more sustainable
choices. Although the Group’s brands are market-leading, if Videndum
does not remain on top of these trends, catering to changing customer
preferences, our position in the market may be at risk. This is a significant
concern; however, we believe that Videndum is well positioned, given the
development of our ESG programme and the focus already underway to
improve the sustainability of Videndum’s products. We are planning to
implement PLCA (cradle to grave) methodology and tools across a wider
range of products. As part of our R&D efforts we continue to research
environmentally sustainable solutions.

Timeline

Impact

Short/Medium
term
(2022–2035)

Increased operating
costs. Net impact not
quantified but we
expect to be broadly
offset by initiatives
to manage energy
consumption.

Short/Medium/
Long term
(2022–2050)

Decreased revenue
due to reduced
demand for products
and services.
Financial impact
is not quantifiable
at this point.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Timeline

Impact

Short/Medium
term
(2022–2035)

Capital and financing
– Decreased access
to capital.

Short/Medium
term
(2022–2035)

Short/Medium-
term
(2022–2035)

Reallocation of R&D
expenditure effort
to more sustainable
products. The impact
is not quantifiable
but likely to be a
straight reallocation
so no net impact.

Capital expenditure
expected to increase
by £1 million to
£2 million over the
next couple of years.
Depreciation will be
offset by energy
savings.

Target

Transitional risks

Increased stakeholder concern damaging our reputation
in the <2ºC and 2–3ºC >3°C scenario.

Explanation and mitigation: Failing to communicate our ESG strategy
and plans to reduce our carbon emissions could result in low investment
opportunities and potential damage to our reputation. We minimise the
impact on our reputation by monitoring our stakeholders’ feedback closely
and responding to their concerns. As our ESG strategy is continuously being
developed with our stakeholders’ areas of focus in mind, we do not believe
there is any significant risk in respect of this.

Substitute existing products for lower-emissions alternates
in the <2ºC and 2–3ºC scenario.

Explanation and mitigation: An increasing proportion of our R&D will be
directed to the development of more sustainable products and services.
This programme will be further accelerated in 2023 with the expansion
of PLCA programmes. The increased capital expenditures associated with
this risk will be mitigated by our opportunity to increase revenue from an
increased demand for sustainable products.

Costs to transition to lower-emissions technology in the <2ºC
and 2–3ºC scenario.

Explanation and mitigation: To meet our net zero targets, we will have
to invest in lower-emissions technology across our operations as more
innovative technology is developed. During 2022, approximately £1.0 million
worth of capital expenditure was allocated to the implementation of energy
efficiency initiatives.

From the results we have seen to date, we believe this is a low risk to the
business as the payback associated with the use of lower-emissions energy
use (energy efficiency technology and renewable power generation)
outweighs the upfront cost of investment. Significant capital expenditure
is projected to take place at several sites over the next two years including
but not limited to: rollout of solar panels in Feltre, Italy and Ashby, UK;
continued investment in LED solutions; upgrade of carbon fibre cell; and
other more energy-efficient machinery. In all these cases, there is a
compelling payback.

We are also planning several site rationalisations which will help towards
progress on achieving net zero target.

Responsible business continued
TCFD continued

Target

Physical risks

Timeline

Impact

Medium/Long
term
(2025–2050)

Cost of property and
business interruption
insurance may
increase by up to £0.2
million per annum.
Other risks of supply
chain disruption are
difficult to quantify
at this point.

We may need to
increase safety stock,
therefore affecting
working capital.

Extreme weather events in the >3ºC scenario.

Explanation and mitigation: Increased frequency of natural disasters
including flooding, wildfires and heatwaves may impact Videndum sites
causing severe damage to property, plant and equipment as well as
disruptions to logistics and key supply chain operations. We have assessed
the value of assets located in high flood risk sites to understand the
potential impact on our operations. The majority of our valuable assets
are not located in high flood risk areas and are therefore less vulnerable
to direct damage from climate change. Following a rigorous assessment,
we have determined that most Videndum sites are currently rated as low
risk from a climate change perspective. Our key sites are built to robust
standards, often to withstand seismic pressure and climate threats.
Nonetheless, we recognise the risk of damage to property and surrounding
infrastructure increases with time under the >3ºC scenario. We mitigate
this risk through additional site mitigation measures (e.g. improved
drainage systems), business continuity plans, and global insurance for
property damage and business interruption, covering loss of earnings.

Extreme weather events have a higher potential impact on our supply
chain operations, with many suppliers or supply chain routes located across
higher risk locations. Asia has the potential to be the most significantly
impacted region in the near term. This, combined with geopolitical issues,
may lead the Group to reduce its overall dependence on that region from
a sourcing point of view, or to have to increase its stock holdings.

Our suppliers may be impacted by increasing frequency and intensity
of weather events such as typhoons. This may delay the shipment of
components which could jeopardise the fulfilment of large orders or lead
them to be cancelled.

Where possible, we diversify our supplier base and sourcing away from
countries with higher risk from a climate change perspective. For example,
we have in-sourced some of the production relating to JOBY. Our business
is less reliant on the camera industry which had been severely impacted by
natural disasters in the Far East.

Climate change is expected to result in an overall increase in insurance
premiums due to increased frequency of natural disasters. We factor
an increase in property and business interruption insurance cost of
£0.2 million per annum. Extreme weather events may also result in higher
working capital due to increased buffer stock needs and disruption to
logistics, as we would be no longer able to rely on just-in-time operations.
Mitigation efforts remaining following the COVID-19 pandemic, such as
safety stock, increased lead times and enhanced supplier communication
can help to reduce the impact of this risk. Our supplier engagement
questionnaire launched in 2022 has initiated a discussion around climate
change risk and mitigation plans which we will be developing over time.

We will monitor the risk rating of each site on an annual basis, where
necessary, considering the options to relocate operations.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Target

Physical risks

Timeline

Impact

Long term shifts in climate patterns in the >3ºC scenario.

Explanation and mitigation: Long-term shifts in climate patterns such as
rising mean temperatures, sea level rising and water stress may result in
increased costs for the business.

Long term
(2035–2050).

Expenditures –
Increased direct
and indirect costs.

No quantified impact.

Increased rising mean temperatures may cause a higher demand for
cooling to maintain optimum temperatures for our staff and products,
resulting in higher energy costs. Increased energy usage in summer
months will obstruct our progress in reaching our targets to be net zero
for Scope 1 and 2 by 2035.

There may also be an impact on productivity, for example having to arrange
break times, or health and safety concerns. Possible loss of efficiency and
changes to work patterns assessed during the recent heatwaves in 2022
were estimated to have cost the business less than £0.1 million.

While we are not a big user of water in our production processes, our
supply chain relies on water as a resource for its operations. Location in
an area of extremely high water stress may impact the ability to conduct
day-to-day activities as fresh water becomes less available.

Rising sea levels may result in damage to ports along key supply chain
routes resulting in delays and increased costs for the business. In the
longer term, some sites may no longer be viable, or so inhospitable that
workforce cannot be attracted. This risk is felt Group-wide, however
certain regions are more impacted, for example Phoenix and Arizona, US
with significant rising mean temperatures.

Opportunity

Dispose of under utilised sites through improved
management of property portfolio.

Explanation: One of our strategies for reducing emissions is to optimise the
use of our sites and the rationalisation of our site portfolio. For example,
we look to lease and relocate employees into smaller properties where
there is unutilised space. In 2022, the Chatsworth site in the US was closed
and employees were relocated to a nearby existing facility, which resulted
in savings of £0.3 million per annum and will lead to a net reduction of
an estimated 49.5 tCO2e per annum. Due to the relatively high number
of sites, this is a significant opportunity for the business. This strategy
will ultimately result in a substantial cost saving which is currently
unquantified, but likely to be greater than £1.0 million per annum.

Short/Medium/
Long term
(2022–2050).

Reduced indirect
(operating) costs.

Major benefit >£1.0
million per annum.

Responsible business continued
TCFD continued

Target

Opportunity

Timeline

Impact

Use of lower-emission sources of energy.

Explanation: Use of lower-emission technology such as LED lighting,
Building Energy Management Systems and solar panels improves energy
efficiency and reduces energy usage, therefore reducing energy costs over
time.

Short/Medium
term
(2022–2035)

Reduction in operating
expenses because of
increased efficiency
(for example, energy
costs).

Moderate benefit
>£0.25 million per
annum.

The payback associated with the use of lower-emissions energy (energy
efficiency technology and renewable power generation) outweighs the
upfront cost of investment. Projects are already generating a financial
return. For example, the solar panels installed in Bury St Edmunds have
a payback of less than four years, including tax incentives, as well as
generating additional revenue through exported energy of around
£0.05 million per annum.

Ongoing energy efficiency projects in Media Solutions, including LED
lighting, heater controls and compressed air leak repairs, will save
approximately £0.1 million per annum, with an estimated reduction
of 110 tCO2e.

Use of more efficient production and distribution processes.

Explanation: Where possible, we diversify our supplier base and source
away from countries with higher risk from a climate change perspective.
For example, we have in-sourced some of the production relating to JOBY.
Our business is less reliant on the camera industry which had been severely
impacted by natural disasters in the Far East.

This is beneficial from an ESG standpoint as it increases the utilisation
of Videndum sites that have sound environmental credentials (Feltre, Italy
and Cartago, Costa Rica) and reduces emissions relating to transport.

This is financially beneficial due to a greater proportion of margin remaining
within the Group. While the impact is unquantified, it is likely to be greater
than £1.0 million per annum as in-sourcing opportunities are numerous
(such as prompters, batteries, LED Lights, etc.).

Development of new products or services through R&D
and innovation.

Explanation: As sustainability grows in importance, there will be an
increased demand for sustainable products. We believe that Videndum
is well positioned to capitalise on this opportunity, given the development
of our ESG Programme and the focus already underway to improve the
sustainability of our products.

As we enhance the sustainability of our products, our Creative Solutions
Division is exploring service and repair activity for our customers. This
revenue stream for Creative Solutions remains extremely small. However,
as pressure grows for products to be made more durable, there is an
opportunity to increase this revenue stream.

The development of sustainable packaging in our Media Solutions Division
is predicted to result in significant cost savings. Savings of around
£0.2 million per annum may be generated from using monocolours,
and reducing and simplifying packaging.

Short/Medium
term
(2022–2035)

Reduced indirect
(operating) costs.

Major benefit
>£1.0 million
per annum.

Short/Medium
term
(2022–2035)

Increased revenues
resulting from
increased demand for
products and services.

Benefit not quantified
at this point but likely
to be major.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Climate risk management
We have a well-established framework for identifying and
assessing our risks and assigning mitigation actions from
years of development in a competitive business landscape,
of which the Board has ultimate responsibility. In 2022, we
worked on our climate risk management process to improve
the identification, evaluation and management of potential
risks and opportunities associated with climate change
to our operations. We followed four interconnected steps:

Step 1 – Potential climate-related risks and opportunities
facing Videndum were identified in 2021 during our first
round of TCFD reporting, through research, stakeholder
engagement and risk workshops. In 2022, we repeated this
process on existing climate risks to determine whether they
were still relevant to Videndum or if there are any new ones.
To enhance our process, we worked to identify the risks
and opportunities at new sites acquired during the year
as well as across our top suppliers. In total, ten climate-
related risks and four opportunities were identified in 2022.

Step 2 – We assessed each risk and opportunity by
estimating impact and likelihood. Building upon our previous
year of analysis, our risk assessment process now considers
the vulnerability of our supply chain, and key supplier routes,
to climate change.

Step 3 – We continue to appraise our risk management
options, ensuring that the response remains relevant and
most effective. In 2022, we assessed the quality of existing
risk mitigation options and where necessary, investigated
potential options to manage the impact of risks and
opportunities at new sites and within our supply chain.
We recognise that all good decisions rely on the effective
analysis of alternate options. A risk management response
was agreed on depending on how it helped build our resilience
to the climate-related issue.

Step 4 – Finally, we addressed each risk and opportunity,
and controls were implemented to prevent, reduce or
mitigate downside risks, or increase the likelihood of
opportunities. In 2022, mitigation actions remained in
place from 2021. Following an assessment of their progress,
additional measures have been introduced at new sites and
through our relationships with our suppliers. We recognise
that residual risks will remain and communicate this across
the business as appropriate. At a minimum, our management
teams review risk exposures against business risk level
tolerances annually. More information on how we manage
and mitigate our climate-related risks and opportunities can
be found in our 2022 TCFD Report.

Metrics and targets
We use a wide variety of metrics to measure climate-related
impacts. These metrics consist of Videndum’s greenhouse
gas inventory, including the Group’s Scope 1, 2 and 3 carbon
emissions and our emissions reduction pathway which is
aligned with the Paris Agreement 1.5°C warming scenario.

We have set several ambitious targets to manage the
climate-related risks described above (pages 59 to 64), and
to reduce our impact on the environment, such as becoming
carbon neutral for Scope 1 and 2 by 2025, net zero for
Scope 1 and 2 by 2035, and net zero for Scope 3 by 2045.

Videndum’s other environmental indicators (pages 70 to
71) on energy efficiency measures, waste reduction, water
consumption, product sustainability and supply chain
integrity, contribute towards mitigating some transition and
physical risks, and capitalise on the potential opportunities
in substituting products to lower-emission alternatives. In
2022, we measured and monitored severe weather events
across our sites, and aim to repeat this process annually.

Reducing our greenhouse gas emissions
Reducing the Group’s carbon footprint is a priority for
Videndum. We began to calculate our entire Scope 3
emissions for the first time in 2021, following the GHG
Protocol Corporate Value Chain (Scope 3) Accounting and
Reporting Standard, using 2020 data. In 2022, we worked to
align our Scope 3 reporting to our financial reporting period,
calculating both our 2021 and 2022 carbon footprints.

Under the GHG Protocol, there are 15 reporting categories,
of which 11 apply to the Group. Categories which are not
applicable to Videndum include Category 8: Upstream
leased assets, Category 10: Processing of sold products,
Category 14: Franchises and Category 15: Investments.
In 2022, we introduced measures to improve the accuracy
of our data collection. We conducted an all employee
commuting survey to improve our analysis of Category
7: Employee Commuting. This year we launched an
ESG Supplier Questionnaire, engaging with seven of
our top suppliers based on spend. The questionnaire
requested details of our suppliers’ Scope 1 and 2 carbon
emissions, energy usage, reduction targets and wider ESG
programmes. Moving forward, we will use this information
to improve the accuracy of our Category 1: Purchased
Goods and Services and Category 2: Capital Goods data.
The top seven suppliers engaged with in 2022 account for
13% of the Group’s Scope 3 carbon emissions. We deem this
approach to be effective and will widen the scope over time.

Our Divisions are working to improve data collection,
progressing from spend-based to activity-based for the
likes of Category 5: Waste Generated in Operations, and
Category 6: Business Travel, resulting in more granular
data for analysis. Category 9: Downstream Transportation
and Distribution remains omitted as there is no feasible
system to capture this data at this time. Further, given
the magnitude of assessing the carbon emissions of our
value chain, we have set annual milestones to extend
the reporting boundaries of complex categories.

By widening our emissions data collection, we
better understand the high emitting areas of our
operations and value chain, which will help us develop
our roadmap to achieve net zero in 2035 for Scope
1 and 2, and net zero by 2045 for Scope 3.

Responsible business continued
TCFD continued

Our 2022 Scope 1 and 2 emissions represent 2% of our total Group emissions, with our 2022 Scope 3 emissions representing
98%. Details of our full carbon balance sheet can be found in our 2022 TCFD and ESG Reports which are available on our
website.

Scope 1, 2 and 3 emissions

Emissions Scope

Scope 1

Scope 2

Scope 3

Total

2022 Gross
emissions
(tCO2e)

2021 Gross
emissions
(tCO2e)

2020 Gross
emissions
(tCO2e)

2019 Gross
emissions
(tCO2e)

Interim
target

Net zero
target year

1,467

2,773

1,456

2,524

3,535

4,580

50% reduction
by 2030

173,148

154,550

130,8202

177,388

158,530

134,355

not fully
captured

–

2035

2045

–

1 We have restated our 2021 Scope 1 figure which was previously 1,357.08 tCO2e due to recalibration of our natural gas emissions. This has resulted in a slight increase in our overall emissions

for 2021.

2 We have restated our 2020 Scope 3 figure which was previously 119,435 tCO2e due to recalibration of our Category 1 emissions. This has resulted in an overall increase in our 2020

Scope 3 emissions.

Wider environmental metrics impacting our climate risks

Area

Metric

Improving the
sustainability
of our
products

We are committed to conducting PLCA (from cradle to grave) for five of the top emitting products we sell
by 2025. PLCA methodology and Sustainable Design Principles are embedded in internal design processes
in Media Solutions and used to support R&D decisions around sustainability.

In 2022, PLCA was completed for Gitzo and Manfrotto products with a main goal of identifying and
understanding the environmental impacts of our products (from cradle to grave) and hence establish
a benchmark for tripod production.

Lowepro launched the Adventura III and Tracker light lines, made from up to 85% and 80%, respectively,
of recycled and solution-dyed materials. By 2024, all Lowepro products and packaging will have the green
line which clearly shows our commitment to sustainable product development. The green line bar
represents the percentage of recycled fabric content and percentage of solution-dyed fabric calculated
using GRI 301 – 2 standards.

A new Eco version of Manfrotto PIXI is at a design phase (launch date to be determined). The emissions
associated with this new product will be significantly reduced.

For top selling products, we will conduct a customer study to ascertain the method of disposal and
identify opportunities to reduce the environmental impact.

Production Solutions is currently developing a PLCA programme which will commence in 2023.

Reducing
waste

50% of current cardboard packaging consumption will be replaced by sustainable, FSC-grade cardboard
or eliminated. The bulk of our paper and cardboard packaging usage sits within Media Solutions, of which
47% was FSC-graded and 72% from recycled material in 2022.

We are committed to a 50% reduction in annual consumption of single use plastics by 2024. Our largest
manufacturing sites have very active programmes to reduce and where possible eliminate waste to
landfill. These programmes are underpinned by ISO environmental accreditations.

Tradebe in the US recycles electronic waste from our Shelton, US site, partnering with a certified
downstream vendor.

Industrial scraps from our aluminium and magnesium stages of production are targeted for waste
reduction. In Productions Solutions, steel, aluminium and magnesium are recycled with a third party.

Waste to energy projects are being explored at our Feltre, Italy site.

A large recycling effort in Cartago, Costa Rica sorts materials which are given to a third-party recycling
company.

We re-evaluate the condition of returned products, to resell or reuse parts within the manufacturing
processes.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Streamlined Energy and Carbon Reporting
This report summarises the energy usage, associated emissions, energy efficiency action and energy performance for the
Group, under the government policy Streamlined Energy and Carbon Reporting (“SECR”), as implemented by the Companies
(Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.

Total Consumption (kWh) figures for energy supplies reportable by the Group are as follows:

Utility and Scope

Scope 1 – gaseous and other fuels (voluntary)
Scope 1 – transport (company fleet)
Scope 2 – electricity
Scope 2 – purchased heat, steam and cooling
Scope 3 – grey fleet

UK (kWh)
2022

UK (kWh)
2021

Global
(excluding
UK) (kWh)
2022

Global
(excluding
UK) (kWh)
2021

Total kWh
2022

Total kWh
2021

872,109
275,041
1,328,047
2,675
35,880

945,124
243,081
1,716,613
9,148
51,642

6,042,044
672,259
8,942,427
–
69,097

5,184,4501
6,914,153
1,104,929
947,300
8,784,640 10,270,474
2,675
104,977

–
53,895

6,129,574
1,348,010
10,501,253
9,148
105,537

Total energy use – all Scopes

2,513,752

2,965,608

15,725,827

15,127,914

18,239,579 18,093,522

1 We have restated our 2021 global kWh consumption of Scope 1 fuels which was previously 4,639,214 kWh. This is due to recalibration of our natural gas usage. As a result, our total kWh

consumption for 2021 has increased when compared to our previously stated figure.

The total emission (tCO2e) figures for energy supplies reportable by Videndum are as follows:

Location-based

Utility and Scope

Scope 1 total
Scope 1 – gaseous and other fuels
Scope 1 – transport (Company fleet)
Scope 1 – refrigerants

Scope 2 total
Scope 2 – electricity
Scope 2 – purchased heat, steam and cooling

Scope 3 total
Scope 3 – grey fleet

UK
(tCO2e)
2022

UK
(tCO2e)
2021

Global
(excluding
UK)
(tCO2e)
2022

Global
(excluding
UK)
(tCO2e)
2021

159.29
65.17
–

173.14
56.77
–

1,083.65
159.07
–

952.731
259.03
14.23

256.82
0.46

364.49
1.56

2,515.49
–

2,158.10
–

8.30

11.92

16.31

11.74

Total
(tCO2e)
2022

1,467.19
1,242.94
224.25
–

2,772.76
2,772.31
0.46

24.61
24.61

Total
(tCO2e)
2021

1,455.67
1,125.87
315.80
14.23

2,524.15
2,522.59
1.56

23.67
23.67

Total emissions – all Scopes

490.04

607.88

3,774.52

3,395.83

4,264.56

4,003.71

An intensity metric of tCO2e per £m turnover has been applied for the annual total consumption.

Intensity Metric

tCO2e/£m T/O

UK
Intensity
Metric
2022

UK
Intensity
Metric
2021

Global
(excluding
UK)
Intensity
Metric
2022

Global
(excluding
UK)
Intensity
Metric
2021

Total
Global
Intensity
Metric
2022

Total
Global
Intensity
Metric
2021

3.7

4.82

11.9

12.72

9.5

10.22

1 We have restated our 2021 global emissions arising from the use of Scope 1 fuels which was previously 853.91 tCO2e. As a result, our overall Scope 1 emissions have increased when compared

to our previously stated figure.

2 We have restated our 2021 intensity metrics as a result of now applying a UK only specific £m revenue value to UK only emissions. This methodology has also been applied to global

(excluding UK) intensity metric calculations. i.e., applying a global (excluding UK) only £m revenue value to global (excluding UK) emissions.

Responsible business continued
Streamlined Energy and Carbon Reporting continued

Energy efficiency improvements
The Group is committed to year-on-year improvements in our operational energy efficiency. A register of energy efficiency
measures has been compiled and will be implemented within five years.

Measures undertaken in 2021:

– The installation of 11 high-efficiency air compressors at the Feltre site, Italy, resulted in a 20% energy reduction and

cost-saving of €15,000 per annum.

– Power supply contracts at the Feltre, Italy and Ashby and Byfleet, UK sites were moved to Renewable Energy Guarantees

of Origin (“REGO”) backed supplies guaranteeing energy from renewable sources.

– The Byfleet, UK site installed insulation in the roof void to reduce the gas usage requirements associated with space

heating.

– Media Solutions has reduced business travel by 25% since 2019 resulting in a €0.5 million per annum saving.

Measures ongoing and undertaken through 2022:

– Solar panels installation to the roof of the Cartago site, Costa Rica and Bury St. Edmunds, UK were implemented and

commissioned in Q1 2022.

– 25% completion of energy metering and circuit level monitoring was implemented in Feltre, Italy which is an estimated

saving of 10 tCO2e. This is to be completed 2023.

– 80% completion of LED lighting upgrade in Feltre, Italy with an estimated annual saving of 61 tCO2e .

– 100% completion of compressed air leak detection and repairs in Feltre, Italy will result in a total annual CO2e saving of

16.46 tCO2e.

– 50% completion of LED lighting upgrade initiative at Ashby, UK. This will lead to a total annual CO2e saving of 3.6 tCO2e

upon completion in H1 2023.

– 100% implementation of heating and air conditioning controls resulting in an estimated annual CO2e saving of 13.8 tCO2e.

– Across the Group, we are seeing considerable reduction in air travel versus 2019 benchmark.

– In 2022, we closed our Chatsworth, US site, saving £0.3 million and reducing an estimated 49.5 tCO2e per annum.

– Irvine, US switched to 100% renewable energy procurement in April 2022. All UK and Italian sites now procure electricity

using renewable energy contracts.

Measures prioritised for implementation in 2023/24:

– Solar panels installation to the roof at the Feltre, Italy site and Ashby, UK site is under evaluation with suppliers, and

planned for installation by early 2024.

– The complete transition to LED lighting in Feltre, Italy by 2023 will result in an estimated 80% reduction in electricity

consumption for lighting and cost savings of €70,000 per annum.

– LED lighting conversion for Arizona, US is under evaluation with suppliers and planned for 2023. Likewise for other smaller

sites (Germany, Japan).

– Continue conversion of motor vehicles to electric once they have reached end of life.

– Site rationalisation continues to be a key priority.

Strategic ReportVidendum plc Annual Report and Accounts 2022

SECR methodology
Scope 1 and 2 consumption and CO2e emission data for UK sites have been calculated according to the 2019 UK Government
environmental reporting guidance, the GHG Protocol. An operational reporting boundary was used. Consistent with the
guidance, the following emissions factors utilising the current kWh gross calorific value (“CV”) and kgCO2e emissions factors
relevant to reporting year 1 January – 31 December 2022 were applied:

– To convert Scope 1 natural gas usage in the UK, the UK BEIS 2022 emissions factors database was used. For the US, the
United States Environmental Protection Agency GHG Emissions Factors Hub 2022 was used. For Australia, the Australia
National GHG Account Factors 2021 database was used. For remaining countries, we default to the UK BEIS 2022
emissions factors database.

– Scope 2 country-specific electricity emissions factors were used based on the sources in the table below:

Country

Source used

Country

Source used

Australia

Australia National GHG Accounts 2021

Italy

European Environmental Agency 2022

China

IGES 2022

Japan

Bureau of Environment – Tokyo Met Government

Costa Rica

IRENA 2019

New Zealand Default to BEIS 2022

France

European Environmental Agency 2022

Singapore

IGES 2022

Germany

European Environmental Agency 2022

BEIS 2022

Hong Kong

Hong Kong Electric

Ukraine

Default to BEIS 2022

India

Israel

IGES 2022

Default to BEIS 2022

USA

–

EPA 2022

–

– Scope 1 (Company fleet) and Scope 3 (grey fleet) – the UK BEIS 2022 emissions factors database was used to convert

transport fuel consumption in the UK into CO2e emissions. For the US, the United States Environmental Protection Agency
GHG Emissions Factors Hub 2022 was used. For Australia, the Australia National GHG Account Factors 2021 database
was used. For remaining countries, we default to the UK BEIS 2022 emissions factors database.

Where billing data was missing for properties directly invoiced to the Group, usage was estimated at the meter level by
pro-rating the kWh/day known consumption. The estimations equate to 1% of reported consumption. For properties where
the Group is indirectly responsible for utilities (i.e. via a landlord or service charge), average kWh/m2 consumption for
properties with similar operations was calculated at meter level and applied to the properties with no available data.

Intensity metrics have been calculated utilising the 2022 reportable figures for the following metrics, and tCO2e for both
individual sources, and total emissions were then divided by this figure to determine the tCO2e per metric.

Total turnover 2022 (£m)

2021

451.2

394.3

Responsible business continued
Environment

Our vision
Ensuring we limit any negative impact on the environment and protect
the natural resources we rely on creates long-term sustainability for
the business.

Overview
We aim to adopt technologies, materials and processes that ensure
we minimise our impact on the environment and maximise our use
of sustainable resources.

Our efforts and environmental awareness continue to evolve to comply
with regulations and make our business better and more sustainable.
We have a wide range of initiatives aimed at sustaining and protecting
the environment. These cover water use and waste, sustainable materials,
packaging and waste disposal. The Metrics and Targets section of the
TCFD disclosure (page 66), shows how we use energy efficiency and are
reducing carbon emissions, as well as wider environmental metrics
to manage our climate risks and opportunities. We also encourage
a culture of environmentally sustainable behaviour at work and ensure
that our employees understand how they can contribute. Our standalone
ESG Report details our environmental progress in 2022.

Read more at: www.videndum.com/responsibility

Our targets

Reduce packaging
and waste

Progress in 2022
The bulk of our paper and cardboard
packaging usage sits within Media
Solutions, of which 47% was FSC-graded
and 72% from recycled material in 2022.

Water consumption is now measured at
all key sites.

0.03% of waste from our Feltre, Italy site
ended up in landfill in 2022.

Image: Tim Laman

Embed sustainability
into our product
life cycle

Reduce carbon
emissions

Progress in 2022
Continued rollout of PLCA across Media
Solutions. Several initiatives are
underway – see page 71.

Progress in 2022
Scope 1 and 2 emissions have reduced by
more than 20% since 2019 (excluding the
impact of newly acquired businesses).

Air travel emissions have reduced by
6.8% relative to a 2019 benchmark.
This reflects increased environmental
conscientiousness and reduced
attendance at trade shows.

Scope 3 baseline is calculated up to 2022.
We have engaged several key suppliers
to understand their energy consumption
and identify improvement.

Employee survey conducted to measure
the impact of employee commuting and
identify opportunities to reduce emissions.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Packaging and product sustainability

Our products and services have a
comparatively low impact on the
environment. We use low hazard
materials and minimise the use of
resources during the manufacturing
process. In 2022, PLCA methodology
was embedded into Media Solutions’
internal design processes and used
to support R&D decisions around
sustainability. Production Solutions
is currently developing a PLCA
programme which will commence
in 2023.

Sustainable alternative packaging,
including FSC-graded paper and
cardboard, and recycled plastic,
and non-plastic bags continues to
be investigated and implemented.
We continue to share our learnings
across the Group, testing and trailling
different packaging materials to find
the best-suited material.

Waste management

Various initiatives around the Group
have built on our work to reduce the
amount of waste created in our
operations. We recycle waste
products, materials, paper and
other recyclable items at all our sites.
In 2022, we improved our waste data
collection for more accurate analysis
and understanding of processes. We
recycle electronic waste and industrial
scraps, and encourage the reselling or
reuse of returned products.

Across the Group we continue to work
with waste management companies
to see how the collection and sorting
can be improved.

Water stewardship

While our water usage is relatively
low, used mostly for human
consumption, we are reducing our
usage where possible. All Divisions
have, or are, implementing water-
saving initiatives, such as waterless
urinals, limiting flushing options on
toilets and installing motion-
controlled taps in lavatories.
Production Solutions has explored
rainwater collection at their Cartago,
Costa Rica site to be stored for
industrial use, irrigation of green
areas, sanitary services, and more,
which is a promising initiative for
the future.

Biodiversity

Although the Group has little direct
contact with biodiversity, we recognise
its importance for the planet. Across
our Divisions we ensure our sites emit
little pollution and are not disruptive
to any nearby wildlife. Production
Solutions donated £8,000 to “The
Rainforest Trust” in 2022. This
donation is enough to ensure the
protection of 1,146 acres in the
Peruvian Amazon Watershed,
which is equivalent to 230,000 tCO2e.
This project also helps protect the
endangered Andean Night Monkey
local to the area.

Case study
Carbon fibre cell upgrade
Our focus on continuous improvement and our
environmental footprint led us to upgrade our unique
flowtech carbon fibre manufacturing facility in Bury
St Edmunds, UK. No competitor in the industry
makes tripods like we make our award-winning
flowtech. Its unique features are made possible by
complex-shaped woven carbon fibre, and it has
become a huge market-leading success. The
18-month upgrade project invested £1.5 million in
new, state-of-the-art equipment which reduced our
waste by 90%, whilst also increasing production
capacity by 40% to keep up with demand for the
finished product.

Case study
Lowepro
Lowepro works to ensure products are built to last by
using the right materials for longevity and upholding
our sustainable design principles. In 2022, Lowepro
launched a PhotoSport bag made with 75% recycled
fabric and we introduced the Trekker Lite Collection
with up to 81% recycled and solution-dyed fabrics.
Committed to better protecting the natural world
that adventure photographers celebrate, the Trekker
Lite Collection proves Lowepro’s sustainability
mission is moving ahead at pace while staying true to
our brand’s two great passions – the love of travel and
the love of photography. These successes are paving
the way for further PLCA initiatives at Videndum
and Lowepro has plans to produce a full bag product
range made of 100% recycled fabric by 2024.

Responsible business continued
Our people

Our vision
To be the preferred employer for the very best people in our sector by
providing an entrepreneurial environment that offers opportunities for
our people to develop and thrive.

Overview
We recognise that a business can only be as resilient as its people. At
Videndum, we aim to attract, retain and grow a talented and diverse
workforce, providing equal opportunities for all.

Our employees are the best in the sector, our greatest single asset and
critical to our success. Their attitude and abilities, experience and market
knowledge, and talent and commitment create a culture that supports
product excellence, creativity and integrity. Our annual employee survey
monitors important areas to our people and we implement action plans
to address the feedback we receive. We ensure that we have consistent
policies and processes to acquire, engage and retain our best talent.
Initiatives focus on wellbeing, working environment, sustainability, diversity,
employee benefits and training. We have comprehensive benefits packages
to support employees and remain competitive globally. We also aim to
provide our employees with an engaging and stimulating entrepreneurial
environment where they are encouraged to learn and develop.

Read more at: www.videndum.com/responsibility

Our targets

Prioritise health
and safety

Improve diversity,
equality and inclusion

Progress in 2022
We continue to improve our health and
safety management systems. There were
two accidents >three days in 2022.

Progress in 2022
At the end of 2022, 43% of the Group’s
Board of Directors were female
compared to 14% at the end of 2021. 15%
of the Group’s Operations Executive were
female, compared to 8% in 2021. 23% of
the Group’s senior management team
were female, compared to 15% in 2021.
31% of the rest of the Organisation were
female, compared to 29% in 2021.

Strategic ReportVidendum plc Annual Report and Accounts 2022

Case study

Employee engagement
As the Non-Executive Director responsible for
employee engagement, Caroline Thomson hosted our
fifth employee engagement session with employees
in our Media Solutions Division in 2022. Individual
sessions were conducted involving up to a dozen
employees from each main site to hear first-hand
from employees how they felt working for Media
Solutions and to hear any issues of concern.
Feedback was very positive and was subsequently
shared with Divisional management and the Group
Board. For more information, see page 98.

Employee engagement

Understanding how our employees
feel about working for Videndum and
whether they have any issues of
concern is immensely important to us.
In June 2022, we carried out our third
all-employee survey; 76% of employees
participated in the survey that focused
on five questions covering health and
safety and wellbeing, culture and
values, communications, and
satisfaction working for Videndum.
All responses were over 85% positive.
Feedback on the survey was shared
with Divisional management to take
corrective steps to continue to improve
the employee experience.

Employee wellbeing

Employee wellbeing remains a top
priority for the Board. We have
continuously reviewed and improved
processes across the Group to look
after staff and improve colleagues’
wellbeing. Our all-employee
assistance programme provides
free and confidential support to
all employees and their families
on a range of matters, including
counselling for emotional and
psychological support, practical
guidance and support on legal,
financial, family and work matters.

Our Sharesave Scheme is extremely
popular among our employees and
recognised as a valuable benefit,
demonstrating the close alignment
between our employees and
shareholders. Sharesave allows
employees to save a fixed monthly
amount up to £250 with the option

to purchase a fixed number of shares
in the Company at a discount of up
to 20% on the share price at the
time. We have specifically enhanced
communication across the Group
to ensure it is well understood,
and over 1,500 employees now
participate in the scheme.

Across the Divisions a range of
wellness initiatives are ongoing to
improve employees’ physical and
mental health, including childcare
support, family parties, volunteering,
day trips and more. More information
can be found in our 2022 ESG Report.

Learning and development

Our people are our greatest asset
and Videndum aims to offer a
comprehensive training and
development programme linked to
performance reviews. The Board reviews
leadership and succession plans across
each of the Group’s Divisions to ensure
a structured approach to growing
and developing the Company’s future
leaders. All employees receive training
on health and safety procedures
appropriate to their line of work
and environment. The Group has
also invested heavily in mitigating the
growing risk of cyber attacks to our
business by creating a security-aware
business culture. A comprehensive
annual training programme was
designed and launched to all employees
in 2022. The programme includes videos,
a series of online and in-person cyber
awareness training modules, and regular
phishing simulations for all employees
whether they work on site or from home.

Responsible business continued
Our people continued

Diversity and inclusion

Employee turnover by Division

We strive to employ a diverse
workforce and foster an equal
opportunities culture. Our approach
to diversity follows a strict policy
of sourcing the best person for the
role irrespective of race, gender,
age, religion, sexual preference,
or disability. Our Code of Conduct
sets out an express prohibition
on discrimination of any kind.

Our Diversity and Inclusion strategy
sets out clear targets and action
plans tailored to address our industry
and our key area of weakness: a lack
of female employees particularly
in senior management roles. Over
five years, we aim to increase the
number of female employees across
the Group to improve the Group’s
overall gender diversity from 70%
men, 30% women. At a senior
leadership level, we expect the ratio
of women to be at least 30%.

Flexible working policies are in place
across our three Divisions and are
open to all employees. Applications
for employment by disabled persons
are always fully considered, bearing
in mind the respective aptitudes and
abilities of the applicant concerned.
If employees become disabled,
all reasonable effort is made to
ensure that their employment
within the Group continues. The
training, career development and
promotion of disabled persons
should be, as far as possible, identical
to that of all other employees.

The table shows employee turnover in 2022, reflecting employees
who had resigned from their employment within the Group.

Country

Creative Solutions

Production Solutions

Media Solutions

European Services

Group/Head office

Average across the whole Group

Gender diversity

2022

15%

7.7%

14.5%

17%

12.6%

2021

15%

3.9%

6.2%

6.5%

18%

9.9%

2020

2.1%

2.9%

3.6%

The Board continues to monitor progress on equality and the Group’s gender
breakdown at the end of 2022.

2022

2021

2020

F %

Group Board
of Directors

Operations
Executive

Senior
Management

57% 3

43% 6

86% 1

14% 6

86% 1

14%

85% 2

15% 11

92% 1

8% 11

92% 1

64 86% 10 14% 28 85% 5

15% 28 88% 4

12%

Rest of
Organisation 1,175 69% 534 31% 1,259 71% 513 29% 1,041 70% 446 30%

We employ around 1,900 employees in 11 countries who work according
to local employment legislation, policies, and our organisational values.
In 2022, we expanded senior management to include not only Divisional
senior leadership teams, but also the next layer of management
across each Division. The table above also excludes contractors.

I joined Videndum 13 years ago
as France Country Manager
and since then I’ve had a great
career path in this dynamic
Company. Last year I was
promoted to Executive VP
Global Sales for our Media
Solutions Division and I’m also
proud to have been asked to
become a member of the
Group’s Operations Executive.

Sarah Radisson
Executive Vice President Global Sales,
Videndum Media Solutions, France

Strategic ReportCapital Markets Day, London, June 2022.Videndum plc Annual Report and Accounts 2022

The Production Solutions’ sites in
Cartago, Costa Rica and Bury St
Edmunds, UK, and the Media Solutions
sites in Bassano and Feltre, Italy, are
certificated with the standard UNI
EN ISO 45001. Therefore, over 700
employees of the Group are covered by
accreditation on health and safety. We
continued to train all staff members
on safety relevant to their roles.

Our five-year accident record details
the number of accidents resulting in
over three days’ absence, accidents
resulting in less than three days’
absence and near misses across the
Group. Each event is thoroughly
investigated, and remedial action is
taken where necessary. There have
been no work-related fatalities since
the Group began collating health and
safety statistics in 2002.

Five-year accident history

Year

FTE

2022

2021

2020

2019

2018

1,918

1,784

1,569

1,714

1,723

Accidents
resulting in over
three days’
absence.

Accidents
resulting in three
or less days’
absence.

Near misses
(include events
or circumstances
that could have
resulted in an
accident).

150

128

110

112

The increase in accidents and near misses in 2022 compared to 2021 and 2020 is
principally due to the pandemic ending and employees returning to facilities.

Health and safety

The health and safety of our people
is of utmost importance, and we
operate to stringent health and
safety standards at all of our sites.
We have continued to operate to
a high health and safety standard,
ensuring the safety of our people
and have continued to share best
practices across the Group. We have
a health and safety policy available
on our website with more detail
found in our 2022 ESG Report. All
major sites have health and safety
committees that hold regular
meetings to review health and
safety performance. Our structure
for health and safety management
across the Group is as follows:

Videndum plc Board

Group Chief Executive

Group Company Secretary and Group
Risk Assurance Manager

Divisional CEOs and
Divisional H&S Managers

Local Site H&S Representative

Reporting of
incidents and
performance on a
monthly basis

I have enjoyed the opportunity to foster a tailored educational
experience for myself within this organization through Growth
Space. My personal coach encourages me to design each session
to what would most benefit me.

Chloé Hodges
Head of the Community Team, Videndum Creative Solutions, US

Forklift operation training, Cartago 76

Responsible business continued
Giving back

Our vision
To support and integrate with the local communities and
economies where we operate.

Overview
We invest in projects that align with our core values and look for
opportunities to positively impact one disadvantaged person for every
Videndum employee in the communities in which we operate.

We believe in the positive power of images and videos to convey ideas,
and create wealth and positive social and environmental value. As
a leader in our markets, our employees are experts in photography,
videography, engineering and technology, and we aim to share this
knowledge to enable positive social and environmental outcomes. In
2022, we estimate that we positively impacted over 400 people through
a range of projects and initiatives. More information about our giving
back programme can be found in our standalone 2022 ESG Report.

Read more at: www.videndum.com/responsibility

Our targets

Over a four-year
period*, positively
impact the
communities in
which we operate

Progress in 2022
In 2022, the Group positively impacted
443 disadvantaged people.

* Excluding 2020 due to COVID-19 lockdowns.

Image: Felix Belloin

Strategic ReportVidendum plc Annual Report and Accounts 2022

Case study

Videndum’s partnership with
Richmond Theatre Creative Learning
and Richmond Theatre Trust
In 2022, as part of the Group’s ongoing commitment
to supporting the local communities in which we
operate, Videndum supported a Richmond-based
creative learning programme. Over a three-day
period, 20 disadvantaged children aged 12–13 from
Twickenham School worked intensively to make two
short films. The children developed a range of skills
from storyboarding to staging key shots, to acting
for camera. As part of Videndum’s contribution, each
young person was provided with their own mini
film-making kit full of our products so they could
continue making films after the project ended.

The two films were shown in a special premiere at
Richmond Theatre, where friends and family joined
the group to see what they had been working on. The
group also received a backstage tour of the theatre
and a ticket to see “Some Mothers Do ‘Ave ‘Em”.

Investing in future industry talent

Videndum donates and lends
professional photographic, TV,
and cinematic equipment to
educational institutions worldwide
to upskill future image capture
and sharing talent. In 2022, our
Divisions continued to collaborate
with organisations and universities
to share employee know-how with
future industry professionals.

Creative Solutions continued to
run “CS Presents” events, as well
as partnering with ManifestWorks
and Respectability, to empower
disadvantaged people. Production
Solutions employees work with
different technical schools
in the community, as well as
offering a fully-funded ongoing
apprenticeship programme.

Media Solutions’ “Creativity for
Life” project is a social and
environmental education initiative
which has been running since 2014.

The Division worked directly with five
organisations on a range of projects
to empower disadvantaged
individuals, as well as sustainability
programmes and supporting local
communities. A total of 50 people
were positively impacted, with
77 hours of employee volunteering
over 2022.

Charity/employee
volunteering/giving back

Donating to charitable causes
and active participation in local
communities is an essential focus
across the Group. Our employees
give generously with their time and
money, and in 2022, we estimate
that the Group as a whole donated
approximately £44,000 across
the globe. More information about
our giving back projects can be
found in our 2022 ESG Report.

Responsible business continued
Responsible practices

Our vision
To ensure that our employees clearly understand what is expected of them
in conducting business ethically, with a common set of values. We expect
our business partners to act in a manner that aligns with our approach,
values and behaviours, as set out in our Code of Conduct.

Overview
We are committed to acting responsibly and conducting our business
operations with integrity. Our values and purpose drive our business
decisions and Code of Conduct, and all our decisions are made with a
focus on the impact they may have on our five main stakeholder groups.
The Board considers that our people and operations meet the highest
standards of business conduct.

Read more at: www.videndum.com/responsibility

Our targets

Formalise the
integrity of our
supply chain

Progress in 2022
A detailed ESG survey has been
completed with Videndum’s seven most
significant vendors.

Supplier due diligence and supplier audit
programme has been strengthened to
focus on all relevant ESG dimensions.

Our Code of Conduct and independent
whistleblowing service were updated and
re-communicated in 2022.

Image: Felix Belloin

Strategic ReportVidendum plc Annual Report and Accounts 2022

Code of Conduct

Our Code of Conduct is the backbone
of our culture. It provides clear
guidance to our employees on how
they are expected to behave towards
colleagues, suppliers, customers,
shareholders, and our wider
responsibility to the communities
in which we operate.

Our Code sets out our approach to
business integrity and covers our
approach to bribery, kickbacks and
political donations, along with
guidance on gifts and hospitality,
conflicts of interest, books and
records, competition, share dealing,
respect for the UN Universal
Declaration of Human Rights,
compliance with anti-slavery
legislation, respect for the individual
and privacy, diversity, health and
safety, environmental sustainability,
business partners and charitable
donations.

Our Code was re-communicated to all
employees in 2022 and is available on
the Company website translated into
local languages. We require all senior
management to undertake an online
training module covering the Code of
Conduct, including share dealing,
conflicts of interest, legal duties and
other reputational issues.

Breach of the Code of Conduct, upon
investigation, may lead to disciplinary
action being taken against an
individual and, in the worst case,
dismissal. The Group’s HR functions
would conduct any investigation
around the Code of Conduct.

In 2022, two employees were
dismissed from the business
due to a breach of the Code of
Conduct. These breaches consisted
of HR issues and inappropriate
behaviours in the workplace.

Anti-bribery and corruption

We have an internal policy on anti-
bribery and corruption measures
available on our website. It sets out a
zero-tolerance approach and a clear
commitment to doing business the
right way, covering gifts and
hospitality, prohibition on facilitation
payments and kickbacks, and how
employees raise issues of concern.

We regularly train our employees on
anti-bribery and corruption measures
using web-based training modules and
face-to-face training on our Code
of Conduct. To mitigate the risk
around bribery and corruption, we
actively screen all major third parties
we do business with. We use third-
party software that screens business
partners for reputational risk issues,
including bribery and corruption,
sanctions, politically exposed persons
and adverse media reports. The
software covers over 1,000 entities
and continues to be expanded. We
train our people to ensure that third
parties are screened through this
service as part of doing business with
a new partner.

The Board and the Audit Committee
are regularly updated on the Group’s
anti-bribery and corruption measures,
including training initiatives and
screening status of third parties.

Our agents and distributors are party
to agreements that prohibit bribery
and set our expectations on behaviour
and values.

Whistleblowing service

We operate an independent
whistleblowing service in conjunction
with NAVEX, which enables any
employee or third party to
confidentially report on any issues
around alleged wrongdoing or other
Code contraventions. The process is
supported by a policy on how
whistleblowing reports will be
investigated. The Board is expressly
clear that all reports made in good
faith will not result in an employee or
third party being subject to
recriminations or disciplinary action.

All reports are notified to the Group
Chief Executive, the Group Company
Secretary and the Audit Committee
Chair and are investigated
independently by senior management
who are not connected to the report.
The outcome of investigations is
reported to the Audit Committee
Chair and remedial action is taken
where necessary. The Board is notified
of all whistleblowing reports and the
outcome of all investigations.

This includes key control activities
such as patching, multi-factor
authentication and user access
controls. Cyber security is a major risk
on which regular updates are provided
to the Board and Audit Committee.

The Group has moved to standard
certification and accreditation using
the government-backed Cyber
Essentials framework, and will be
working towards the IASME
certification.

We work with a leading cyber security
provider to deliver a programme of
awareness training and
communication to all employees,
which is a vital component of our
IT security framework. This includes
training relating to GDPR.

Responsible business continued
Responsible practices continued

This service was re-communicated
to all employees in 2022 with posters
prominently visible at all sites and a
letter explaining the service to ensure
it remains visible and is understood.
The documents are also available
on the Group intranets, with all
communications translated into
local languages.

In 2022, there were ten whistleblowing
reports that were HR-related in the
UK, US, Italy, China and Australia.
Each matter was thoroughly
investigated, and corrective actions
taken where necessary.

Supply chain

We expect our business partners
to have similar values to our own
to ensure that slavery and human
trafficking is not something they
are associated with.

Through screening our supply chain
using third-party software and
physically inspecting our supply chain,
we are confident that this is not an
issue within our operations. Our
internal audit function also checks the
integrity of the supply chain as part of
its internal audit programme. We train
our employees on this issue through
web-based training modules and
our Code of Conduct.

We have developed a Group-wide
methodology for evaluating our
suppliers on all dimensions of ESG.
This approach is being gradually rolled
out across the entire supply chain.
We have recently formalised our
Responsible Sourcing Policy and
recommunicated this to suppliers.

Labour and human rights

We fully support the principles set
out in the UN Universal Declaration
of Human Rights. Our policies and
procedures reflect the principles
contained within the Declaration.

We support the Modern Slavery Act
2015 and have adopted a slavery and
human trafficking statement, setting
out our processes to ensure that this
issue is not in our operations or supply
chain. Our policy statement on
Modern Slavery is available on
our website.

No instances of discrimination
occurred throughout the Group during
the reporting period.

Information systems and technology

Given the ever-increasing importance
of information technology to the
Company’s operations and
performance, we have an IT policy
available on our website.
Responsibility for IT ultimately rests
with the Group Chief Financial Officer.
The IT policy sets out standards to be
followed across the Group for its
employees, contractors and third
parties to use the Group’s IT systems.
The policy has been implemented to
ensure that the Company’s IT fits
proper business purpose and is a safe
environment for all our users. Breach
of the IT policy may lead to disciplinary
action being taken. Notably, the
IT policy covers the confidentiality
of data, GDPR requirements,
inappropriate content, and security
of data, including cyber security and
reporting processes. The Group Chief
Financial Officer and Group Risk
Assurance Manager oversee the
IT functions from a governance
standpoint. With the use of specialist
providers, they conduct regular
vulnerability assessment and pen
tests, and review the application
of IT controls across the Group.

Strategic ReportNon-Financial Information Statement

Videndum plc Annual Report and Accounts 2022

Videndum complies with the requirements of sections 414CA and 414CB of the Companies Act 2006, the 2018 Non-Financial
Reporting Directive and other key compliance areas by including certain non-financial information within the Strategic
report. The table below, and the information it refers to, is intended to help stakeholders understand our position on key
non-financial matters:

Reporting
requirement

Further information

Environmental
matters

– The Responsible business section outlines our detailed commitment
to operating responsibly in all our dealings with our stakeholders.

– Our ESG targets sets out a roadmap towards becoming a sustainable

business.

– Videndum discloses its climate-related risks in line with TCFD

requirements.

– Videndum has a Code of Conduct which outlines the Group’s expectation
and commitment to maintaining the highest standards of ethical conduct
and behaviour in business practice. The Code is reviewed annually and in
2022 the Code of Conduct was recommunicated to employees.

Related
Principal Risk

Page(s)

70 to 71

Employees

– We are committed to diversity and inclusion at all levels of our business

12 and 72

and we do not discriminate on any basis.

– Videndum has a well-established employee engagement and feedback

programme with Caroline Thomson, the Non-Executive Director charged
with employee engagement.

Social matters

– The Responsible business section and our stakeholders sets Videndum’s

approach to supporting our employees, customers and suppliers.

– Divisional programmes have largely been reinvigorated following the

7, 9 and 10

pandemic.

– Videndum’s Code of Conduct sets out the expectations towards the

highest standards of ethical conduct and behaviour in business practice.

– Videndum has an anti-bribery and corruption policy which is reviewed
by the Board annually and further sets out the responsibilities and
expectations of our employees for the prevention, detection and
reporting of bribery and other forms of corruption.

– Employees receive training on the anti-bribery and corruption policy,
including gifts and hospitality as part of their induction and contract.
– Suppliers are made aware of our zero-tolerance approach to bribery
and we undertake due diligence on all suppliers using the NAVEX Risk
Rate system.

– Videndum’s Code of Conduct outlines our stance on human rights and

modern slavery.

– A separate Slavery and Human Trafficking statement is published on our
website annually and underlines our commitment to ensuring that slavery
and human trafficking does not exist in our business operations or our
supply chain.

– Our Business model sets out how we do what we do, why, where and

for whom.

– Videndum’s principal risks set out the carefully considered business risks

and the mitigating actions that are taken to help reduce the impact of any
of these risks across the Group.

Anti-bribery
and corruption

Human rights
and modern
slavery

Business model

Principal risks

3, 6 and 7

5, 6 and 7

1, 4 , 7 and 12

2 to 13

44 to 49

Chairman’s statement

Videndum has a well-developed and strong
corporate governance framework in place, and
that, together with the professionalism of the
Board, senior management and employees,
ensures that Videndum continues to operate
the highest standards of corporate governance.

Ian McHoul
Chairman

The Group’s corporate governance framework continued
to evolve and develop as the Group grew in 2022. With a
new name, Videndum’s underlying governance framework
continues to help foster the right culture and ensure strong
control mechanisms enabling the business to succeed.

This report on Videndum’s corporate governance
sets out how the Board, its Committees, individual
Directors and senior management have continued
to operate with a strong corporate governance
framework that remains appropriate and measured.

An internal Board evaluation was carried out in 2022
and details are set out in this report. It was pleasing to
see that the Board is evolving to meet new heights and
standards, its individual Directors are performing to a high
standard, and that the Board overall is fully aligned with the
strategy, priorities and corporate governance framework.

We have continued to engage extensively with our key
stakeholders including shareholders, banks, employees,
customers and suppliers to ensure that Videndum remains
focused on the key issues impacting our business. Our
ESG programme has continued to evolve in 2022 and
we will publish a detailed ESG report in March 2023.

I am confident that Videndum has a well-developed
and strong corporate governance framework in
place, and that, together with the professionalism
of the Board, senior management and employees,
ensures that the Company continues to operate
the highest standards of corporate governance.

Ian McHoul
Chairman
27 February 2023

Image: Philip Thurston

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

A snapshot of governance

Compliance statement

During the year ended 31 December 2022, we have
reported against the UK Corporate Governance
Code 2018 (“the Code”) issued by the Financial
Reporting Council. The Code can be found at
www.frc.org.uk.

We applied each principle and complied with provisions
throughout 2022 as required by the Listing Rules, aside
from Provision 38. Provision 38 provides that Executive
Directors’ pension contribution rates (or payments in lieu)
should be in line with those available to the wider
workforce. Stephen Bird’s pension contribution during 2022
was 20% of salary compared to 8% for the wider UK
workforce. With effect from 1 January 2023, Stephen Bird’s
pension contribution was changed to 8%. We are now fully
compliant with all provisions and principles of the Code.

The Board agrees that the Annual Report taken as a whole
is fair, balanced and understandable and gives all
stakeholders the information necessary to assess the
Group’s business model, strategy and performance. The full
report provides the information required for shareholders to
assess the Group’s overall performance against its strategy.

Major Board decisions
The major decisions taken by the Board and its Committees
during 2022 included:

1.
2.
3.

Acquisition of Audix

Developed succession plans for the Board
involving several changes in Directors

Approval of half year and full year results

Read more on page 50X

102

Board roles and the division of responsibilities

There is clear division of responsibilities for the Board between Executive and Non-Executive Director
roles, providing a framework for accountability and oversight. The roles of Group Chief Executive and
Chairman are separate and their responsibilities are well-defined, set out in writing and regularly
reviewed by the Board. The Chairman is responsible for the leadership of the Board and the Group
Chief Executive manages and leads the business and its operations.

Non-Executive

Ian McHoul
Chairman of the Board and Chairman of the Nominations Committee

– Responsible for the effective operation of
the Board and ensuring it is well-balanced
to deliver the Group’s strategic objectives.

– Fosters an ethical culture that promotes
transparency, open debate and challenge.

– Ensures that the Board constructively plays

a part in the development of strategy.

– Ensures effective engagement between the

Board and all stakeholders.

Caroline Thomson
Designated Non-Executive Director for Employee Engagement
and Chair of the Remuneration Committee

– As Chair of the Remuneration Committee,

leads the work of the Committee in
connection with Directors’ remuneration.

– Attends key employee and business events.
– Monitors the effectiveness of employee
engagement programmes and surveys.
– Provides regular updates to the Board on
employee engagement matters and any
employee issues.

Richard Tyson
Senior Independent Director

– Acts as a “sounding board” for the

Chairman in all matters of governance.
– Acts as the Chairman if the Chairman’s

position is in any way conflicted.

– Available to shareholders if they have
concerns that have not been resolved
through normal channels of communication
with the Company.

Erika Schraner
Chair of the Audit Committee

– Acts as an independent point of contact in
the Group’s whistleblowing procedures.

– As Chair of the Audit Committee, leads the
work of the Committee in connection with
the integrity of financial reporting and risk
management.

Independent Non-Executive Directors

– Give constructive challenge and advice
to the Executive Directors, assisting in
development of strategy and
monitoring performance.

– Act with the highest levels of integrity
and governance and help to ensure this
culture is promoted within the Group.

– Oversee and set levels of

– Review integrity of financial

remuneration for key senior
management.

– Oversee development of

succession planning for key
management and executive roles.

reporting.

– Ensure that financial and risk

appetite and mitigating controls
are appropriate and robust.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

103

Executive

Stephen Bird
Group Chief Executive

– Provides clear and visible leadership

– Ensures that the corporate culture is set

across the Group.

from the top.

– Informs the Chairman and Board of

strategic and operational issues facing
the organisation.

– Manages the Group risk profile and ensures
actions are compliant with the Board’s risk
appetite.

– Executes the Group’s strategy and

– Leads investor relations activities –

commercial objectives and implements
decisions of the Board and its Committees.

engaging with shareholders.

– Leads the Group’s ESG programme.

Andrea Rigamonti
Group Chief Financial Officer

– Supports the Group Chief Executive in
developing and implementing strategy.

– Provides financial and risk control leadership

to the Group and guides the Group’s
business and financial strategy.

– Responsible for financial planning and

analysis, financial reporting, and tax and
treasury functions.

– Oversees the capital structure of the Group.
– Engages with key stakeholders alongside

the Group Chief Executive.

Marco Pezzana
Group Chief Operating Officer

– Supports the Group Chief Executive to drive

– Works with the Group Chief Financial

synergies between the Divisions.

– Leads the Group-wide review of operations
and develops recommendations to improve
operating and financial performance.
– Oversees Group operations and financial
performance in line with agreed budgets.

Officer to set and prepare budgets and
strategic plans.

– Oversees the Group’s R&D programme and

launch of new products to market.

Divisional CEOs

– Support the Group Chief Executive in developing and

– Ensure that the policies and procedures developed and

executing strategy.

– Lead the Divisional operational and financial

performance.

set by the Board are communicated and adopted across
the Group.

– Help to foster the Group’s culture throughout the

– Manage, motivate and develop employees.
– Develop business plans in collaboration with the Board.
– Oversee the daily activities throughout the Group.

organisation.

Jon Bolton
Group Company Secretary and HR Director

Jennifer Shaw
Group Communications Director

– Secretary to the Board
and its Committees.

– Ensures compliance with

– Oversees the Company’s
governance framework
and programme.

Board procedures.
– Provides advice on
regulatory and
governance matters to
the Board and senior
management.

– Responsible for Group
HR, employee share
schemes, Group risk
management, insurance
programme and
pensions.

– Helps foster the right
culture and values
throughout the Group.

– Supports the Group
Chief Executive to
develop and articulate
Group strategy.

– Supports the Group

Chief Executive and the
Group Chief Financial
Officer with investor
relations and engages
with key stakeholders.

– Works with the Group

Chief Executive
to develop and execute
external and internal
communications
strategy.

– Provides communications

leadership to the
Divisional teams.

– Helps foster the right
culture and values
throughout the Group.

104

Board roles and the division of responsibilities continued

Role and independence of Non-Executive Directors

All Non-Executive Directors bring their unique experience
and skillset to Videndum’s strategy which in turn
strengthens the stewardship of the Company and overall
performance of the Group. The Board considers that
Ian McHoul, Erika Schraner, Teté Soto, Caroline Thomson
and Richard Tyson are independent in accordance
with the recommendations of the 2018 UK Corporate
Governance Code. Except for Caroline Thomson, each of
these Non-Executive Directors’ tenure on the Board is
less than six years and as outlined on pages 109. Caroline
Thomson has been on the Board since November 2015.

The Chairman annually leads the process of objectively
evaluating the performance of each Director. The 2022
internal Board evaluation as detailed on page 110 covers
the performance assessment of each Director. Upon her
appointment on 1 May 2023, Anna VikstrÖm Persson
will be deemed to be an independent Non-Executive
Director in accordance with the recommendations
of the 2018 UK Corporate Governance Code.

Relationship between the Board and Operations Executive

The following diagram illustrates the dynamic between the
Board and Operations Executive and the responsibilities
they are each tasked with:

Board and the Operations Executive

The Board considers there to be an appropriate
balance between Executive and Non-Executive
Directors required to lead the business and
safeguard the interests of shareholders.

As at 31 December 2022, the Board was comprised
of the Chairman, four independent Non-Executive
Directors and two Executive Directors. This meets the
requirement of the 2018 UK Corporate Governance
Code for at least half the Board, excluding the
Chairman, to be independent Non-Executive Directors.

The Operations Executive, led by the Group Chief
Executive, is responsible for running the business
of the Group. The Operations Executive meets
on a monthly basis and individual members of
the Operations Executive attend Board meetings
on a regular basis to provide updates on their
businesses. The Board delegates all operational
matters to the Group Chief Executive except
for those matters reserved for the Board. The
Group Chief Executive in turn uses the Operations
Executive to help deliver on operational matters.

The Board

Operations Executive

The Board has overall responsibility for setting
the Group’s strategy, taking risk appetite into
consideration and setting objectives for the
business. It delegates overall delivery of the
strategy to the Group Chief Executive who is
supported by the Operations Executive.

The Operations Executive has responsibility for day-to-
day management of the business, including employees
and delivery of the strategy set by the Board. It is
comprised of: Group Chief Executive, Group Chief
Financial Officer, the Group Communications Director,
Group Company Secretary and HR Director, Group
Chief Operating Officer, Group General Counsel,
Divisional CEOs and other senior management across
the business.

Matters reserved for the Board

Operations Executive activities during 2022

The Board has a formal schedule of matters reserved
for its approval which includes:

– Setting of the Group’s strategy, objectives, and

review and approval of annual budgets.

– Review of progress against strategy and budgets.
– Approval of financial results and dividends declared.
– Changes in Board composition including any key

roles on advice from the Nominations Committee.
– Consideration of mergers, acquisitions and disposals.
– Approval of material litigation.
– On advice of the Audit Committee, the operation and
maintenance of the Group’s risk appetite and profile.

– Setting the Group’s purpose, values and culture.

– Collectively responsible for the daily operation

of the Group’s Divisions.

– Developed the Group’s strategy and budget for

approval by the Board.

– Reviewed the financing positions of all key areas

of the business.

– Monitored operational and financial results against

plans and budgets.

– Reviewed regulatory and legal developments.
– Reviewed and approved capital expenditure within

the delegated authority’s framework.

– Developed leadership skills and future talent of

the business, ensuring strong succession planning.

– Monitored and measured the effectiveness of

risk management and various control procedures.

– Rigorous oversight of the Group’s health and

safety performance.

Corporate GovernanceComposition, succession and evaluation

Videndum plc Annual Report and Accounts 2022

105

Board gender diversity

Overview
The Nominations Committee is responsible for
monitoring Videndum’s Board, its Committees
and senior management to ensure that they have
the appropriate breadth and balance of skills,
knowledge and experience to lead the Group
effectively, both now and in the longer term.

Nominations Committee
The Nominations Committee comprises the
following members:

Ian McHoul (Chairman)

Stephen Bird, Caroline Thomson, Richard Tyson,
Erika Schraner and Teté Soto. Upon joining the
Board on 1 May 2023, Anna VikstrÖm Persson will
also become a member of the Nominations Committee.

Male: 4

Female: 3

Board tenure

0-5 years: 5

5-7 years: 0

7 years +: 2

Role of the Nominations Committee

– Ensure the right balance and composition of

the Board, which includes size of the Board, skills,
knowledge, experience and diversity, ensuring that it
remains relevant and appropriate and making any
recommendations to the Board regarding any changes.

– Lead the process with respect to appointments to the

Board, including the role of the Chairman.

– Succession planning for the Board, including Committee
Chairs, and senior management including recruitment,
talent development and identification of potential
candidates internally or externally and making such
recommendations to the Board.

Board skills and experience

– International commercial experience

– Technology and e-commerce

– B2B and B2C markets

– Broadcast and photographic experience

– Marketing/Digital Marketing

– Finance and accounting

– Manufacturing

– Listed company best practice

– ESG

106

Nominations Committee Chairman’s letter

would then meet with, or speak to, the preferred candidate
individually to ensure that a person with the right skills,
diversity and dynamic fit with the Board was appointed.
This same process would occur whether the role was
Executive or Non-Executive in nature. However, if the search
was for the role of Chairman, it would be conducted by the
Senior Independent Director with the support of the Board.
Subject to the outcome of each search, a formal
recommendation on an appointment is made by the
Nominations Committee to the Board for approval.

The Nominations Committee used the services of Hedley
May in 2022 and followed the process above for the
recruitment of Erika Schraner, Teté Soto and Anna VikstrÖm
Persson. Neither the Company nor any individual Director
has any relationship with Hedley May.

In late 2021, the Nominations Committee oversaw the
recruitment of Erika Schraner who joined the Board as an
independent Non-Executive Director on 1 May 2022 and
who was given a thorough induction to the Group. Erika
is highly financially literate, has a strong understanding
of manufacturing and supply chain issues, particularly
in technology companies, brings software and M&A
experience and has a global outlook with much of her
career spent in Silicon Valley, US. Her appointment led
to her succeeding Christopher Humphrey as Chair of the
Audit Committee from 12 August 2022 and Christopher
Humphrey stood down as a Director of the Company on
14 December 2022, having been an independent Non-
Executive Director with Videndum for nine years. On
Christopher Humphrey’s leaving Videndum, the role and
responsibilities of the Senior Independent Director were
assigned to Richard Tyson – a natural successor for the role.

The Committee oversaw the recruitment processes for
Teté Soto, who joined the Company on 24 November
2022 as an independent Non-Executive Director, and
Anna VikstrÖm Persson, who will be joining the Board on
1 May 2023, also as an independent Non-Executive Director.
Teté had recently joined The Access Group as Senior Vice
President of Marketing and her experience at O2, including
Transformation Director, Customer Marketing Director and
General Manager, Online and Multichannel, strengthens the
Board’s skills around e-commerce and digital marketing.

Anna has extensive experience in human resources, latterly
being Chief Human Resources Officer for Pearson plc. After
a period of induction and handover it is intended that Anna
VikstrÖm Persson’s experience and background makes her
suitable to succeed Caroline Thomson as Chair of the
Remuneration Committee in 2024.

Both Teté and Anna join the Audit, Remuneration and
Nominations Committees on joining Videndum and they will
both undergo a full induction to the Group, including site
visits and meeting with our senior management and advisors.

Dear Shareholder
This report aims to highlight the role that the Nominations
Committee plays in monitoring the Board’s balance of skills,
knowledge and experience in order to provide the diversity
of thinking and perspective required to provide effective
leadership.

Succession planning and Director appointment

An important area of work for the Nominations Committee
is succession planning around the Board and senior
management across the Company. The aim is for us to have
a talented management team with the right attitude, skills,
diversity and experience to sustainably grow the business.
In 2022, the Board received regular updates on talent and
succession plans across the senior management teams in
the Group’s three Divisions. The Board and its Committees
have regular exposure to the senior management team to
see and hear first-hand from our Executive talent. Such
exposure occurred during the Board visits to Production
Solutions in Bury St Edmunds in June 2022 and Media
Solutions in Feltre and Cassola in September 2022. The
Board had the opportunity to meet and talk extensively
with the senior management in each Division, including
comprehensive site tours conducted by senior management
and employees.

After three years’ service, Duncan Penny stood down from
the Board at the AGM on 17 May 2022.

Once the Board has identified the need for a new Director,
the Chairman engages the support of an external executive
search consultant to facilitate the search. A clear brief on
the role is drafted with the skills and personal attributes
that the Board is looking for and taking into account Board
diversity. This is followed up with a search process to
identify suitable candidates. Initial candidate interviews are
held with both the Chairman and the Group Chief Executive,
where appropriate. Following this, a shortlist is created,
taking into account the skills of each candidate and
perceived cultural fit with the Board and senior
management. Following further meetings a preferred
candidate would be chosen and each member of the Board

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

107

The Company announced that Martin Green stood down from the Board as Group Finance Director with effect from
13 December 2022 and Andrea Rigamonti was appointed to the Board as Group Chief Financial Officer. Andrea re-joined
Videndum from Senior plc in October 2021 in the role of Deputy Group Finance Director. He has in-depth knowledge of
Videndum and our end-markets, having previously worked with the Company between 2004 and 2015 in the Head Office
finance team, notably as Group Financial Controller between 2010 and 2015. Prior to Videndum, Andrea was with Sony UK,
and he trained as a Financial Analyst with Morgan Stanley. He is a Chartered Management Accountant and has an MEng in
Engineering, Economics and Management from Oxford University.

Diversity and inclusion

The Nominations Committee and the Board considers the issue of diversity for every appointment. The objective is to ensure
that the Board appoints the best person for every role and to optimise the collective Board strength. As part of this, the
Board has adopted the following policy on diversity and inclusion.

Videndum recognises the importance of a fully diverse and inclusive workforce in the successful delivery of its strategy. The
effective use of all the skills and talents of our employees is encouraged and this extends to potential new employees. It is
essential that the best person for the job is selected regardless of race, gender, religion, age, sexual orientation, physical
ability or nationality. Videndum is fully committed to equal opportunity where talent is recognised. The Board keeps under
regular review the issue of diversity including at Board and senior management level and throughout the entire workforce,
taking into account, among other things, Lord Davies’ review, Women on Boards, the Hampton-Alexander review, FTSE
Women Leaders and the Parker and McGregor-Smith reviews on ethnic diversity. We will report upon this issue annually in
our Annual Report. Our Diversity and Inclusion Policy is available on our website: www.videndum.com/responsibility/
our-people/.

The Responsible business section on page 74 contains further information on diversity, including the disclosure of gender
diversity statistics at all levels across the business in accordance with the requirements of the Companies Act 2006.

Under the Listing Rules, there is now a requirement to disclose gender and ethnic diversity at Board and executive
management level for financial years beginning on or after 1 April 2022. The following disclosure is voluntary for the financial
year ended 31 December 2022 for the Company. The following tables set out the gender and ethnic diversity of both the
Board and the Operations Executive as at 31 December 2022. As at 31 December 2022, 42.9% of the Board comprised
women. We have further announced that Anna Vikström Persson will join the Board on 1 May 2023 and this will result in
50% of the Board then comprising women.

Reporting table on sex/gender representation

Number of Board
members

% of the Board

Number of senior positions on the
Board (Chair, CEO, SID, CFO)

Number in Executive
management

% of Executive
management

Men

Women

Not specified/prefer
not to say

57.1%

42.9%

Reporting table on ethnicity representation

86.7%

13.3%

Number of Board
members

% of the Board

Number of senior positions on the
Board (Chair, CEO, SID, CFO)

Number in Executive
management

% of Executive
management

White British or other
White (inc. minority-
white groups)

Mixed/Multiple
ethnic groups

Asian/Asian British

Black/African/
Caribbean/Black British

Other ethnic group,
inc. Arab

Not specified/prefer
not to say

100%

93.3%

6.7%

108

Nominations Committee Chairman’s letter continued

Currently, the roles of Chairman, Group Chief Executive, Senior Independent Director or Group Chief Financial Officer are
occupied by male members of the Board. While the Listing Rules set an expectation for one of these roles to be occupied by
women (or those self-identifying as women), the Board and Nominations Committee has to plan succession over a period of
time and to appoint the best person for the role, irrespective of gender, race or some other characteristic.

It is also noted that the Chairs of both the Remuneration and Audit Committees are occupied by women – Caroline Thomson
and Erika Schraner, respectively. The Board and Nominations Committee will have this issue in mind when planning
succession around roles on the Board going forward. The Board comprises a diverse mix of international backgrounds
including UK, US, Swiss, Italian and Spanish heritage. The Board will become more diverse with the appointment of Anna
VikstrÖm Persson as an independent Non-Executive Director on 1 May 2023, who was born in South Korea and raised in
Sweden.

The information set out in the tables on page 107 was collected by the Group Company Secretary requiring each member of
the Board and Operations Executive to complete forms identifying their gender and ethnicity in accordance with the Listing
Rules as at 31 December 2022.

Engagement with key stakeholders

We engaged with shareholders on our ESG programme, including on diversity at Board level. We used the feedback
received to help shape our succession planning, meeting agendas and discussion points in the Committee meetings.

Committee performance

The performance of the Nominations Committee was considered through the annual Board evaluation process, which in
2022 was the subject of an internal review. From the responses provided, it was found that the Committee was well-
managed and acted well on its objectives. In conclusion, it was found that the Nominations Committee was operating
effectively.

Ian McHoul
Chairman of the Board and
Nominations Committee Chairman
27 February 2023

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

109

Nominations Committee Report

Key activities of the Nominations Committee

Board succession and appointment process of new Non-Executive Directors

Performance of the Nominations Committee

Board composition

Diversity and inclusion

Board and Committee evaluation

Page(s)

106

108

86 to 87

107

110

Board skills, knowledge and experience
Each Director brings a complementary set of skills and diversity to the Board, having served in companies of varying size,
complexity and market sector. When combined, these skills give the Board the comprehensive skillset required to deliver the
strategic objectives of the Group and to ensure its continued success. More insight into the Board’s overall culture and dynamic,
composition, skills, knowledge and performance was drawn from the 2022 internal Board evaluation. The Nominations
Committee continues to monitor Board structure and succession plans, including internal talent development and succession
plans of senior management below Board level. During 2022, Marco Vidali succeeded as CEO of our Creative Solutions
Division. Marco previously had experience of working in the Creative Solutions business and was a clear successor to lead
the Division.

Marco Pezzana, Chief Executive Officer of the Media Solutions Division, was appointed as Group Chief Operating Officer
with effect from 27 February 2023. Marco will continue to report to Stephen Bird, Group Chief Executive and will retain
responsibility for the Media Solutions Division as its Chief Executive Officer. He will take on wider responsibility for the
Group’s operations including working on strategic self-help projects to further streamline the Company’s cost base,
maximise operational efficiencies and deliver cross-Divisional synergies to accelerate Videndum’s growth.

During 2022, the Nominations Committee, led by Ian McHoul, continued to review plans around Board succession for
both Executive and Non-Executive Directors. This culminated in various Board changes as outlined on page 106.
The Nominations Committee continues to assess succession around the Board, Operations Executive and other senior
management with regular updates on talent and also meeting with key talent.

Appointments
Under the Company’s Articles, the Board has the power at any time, and from time to time, to appoint any person to be a
Director, either to fill a casual vacancy or as an addition to the existing Board, subject to a maximum number of 15 Directors.
Any Director so appointed holds office only until the next AGM and shall then put themselves forward to be reappointed by
shareholders. The current Board comprises a Chairman, Group Chief Executive, Group Chief Financial Officer and four
independent Non-Executive Directors. Details of their appointments are set out below:

Chairman or Non-Executive Director

Appointment date

First renewal of term Second renewal of term

Subsequent renewal of term

Ian McHoul (Chairman)

25 February 2019

25 February 2022

25 February 2025

Caroline Thomson

1 November 2015

1 November 2018

1 November 2021

Richard Tyson

Erika Schraner

2 April 2018

2 April 2021

2 April 2024

1 May 2022

1 May 2025

1 May 2028

Teté Soto

24 November 2022

24 November 2025

24 November 2028

Annually from
25 February 2026 onwards

Annually from
1 November 2022 onwards

Annually from
2 April 2025 onwards

Annually from
1 May 2029 onwards

Annually from
24 Nov 2029 onwards

Executive Director

Appointment date

Subsequent renewal of term

Stephen Bird
(Group Chief Executive)

Andrea Rigamonti
(Group Chief Financial Officer)

14 April 2009

13 December 2022

Appointed under
a service contract

110

Nominations Committee Report continued

The Chairman and the other Non-Executive Directors are
appointed for an initial period of three years which, with the
approval of the Nominations Committee and the Board,
would normally be extended for a further three years. If it is
in the interests of the Company to do so, appointments of
the Chairman and Non-Executive Directors may be extended
beyond six years, with the approval of the Nominations
Committee, the Board and the individual Director concerned,
subject to annual election by shareholders.

Under the Company’s Articles, each Director is required to
stand for annual reappointment at every AGM. The annual
renewal of terms for a Non-Executive Director will take into
account ongoing performance, continuing independence
and the needs and balance of the Board as a whole. The
explanatory notes in the AGM Notice state the reasons why
the Board believes that the Directors proposed for re-
election should be reappointed.

Director induction
Upon appointment, each Director is provided with an
extensive, tailored induction to the Group. This includes
meeting with all senior Head Office and Divisional
management, meeting the Company’s main external
advisors including Deloitte, Investec and Jefferies,
and visits to the key operational facilities in the Group.
The Group Company Secretary coordinates this induction
process. Teté Soto is currently undergoing such an induction
and Anna VikstrÖm Persson will also have an induction
to the Group ahead of joining the Board on 1 May 2023.

Board training
Ongoing training for new and existing Directors is available
on request. Directors receive details of relevant training and
development courses from both the Group Company
Secretary and from the Company’s advisors. Any requests
for training are discussed at Board or Committee meetings
and we ensure that each Director has the required skills and
knowledge to enable them to operate efficiently on the
Board. The Group Company Secretary maintains a register
of training undertaken by Directors to facilitate this
discussion. During 2022, the Board collectively received
training sessions on product technology, cyber security,
investor relations, ESG matters and the broadcast and
photographic markets as well as accounting and legal
updates from the Company’s external auditor and legal
advisor. The Board also receives regular written updates on
governance, regulatory and financial matters as they are
published.

Time commitments
All Directors demonstrated strong time commitment to
their roles on our Board and Committees and attended all
applicable scheduled and short notice meetings during
2022, with the exception of Martin Green and Richard
Tyson.

Richard Tyson was unable to attend one Board meeting
called at short notice during 2022 due to a prior
commitment. Despite not being able to attend, Richard
provided feedback to the Chairman in advance of the
meeting on the business to be discussed.

The table on page 95 outlines the Director attendance to
the meetings during 2022. Martin Green’s absence from
several meetings from June to his standing down from the
Board in December 2022 was due to personal reasons.
The Directors have also given careful consideration to their
external time commitments to confirm they are able to
devote an appropriate amount of time to their roles on our
Board and Committees. The Nominations Committee
reviews on an ongoing basis Directors’ time commitments
and confirms that they are fully satisfied with the amount
of time each Director devoted to the business.

Board and Committee evaluation 2022
For 2022, it was agreed that the Board evaluation
would be an internal process. This followed from
the externally facilitated evaluation in 2021 which
was reported on in the 2021 Annual Report.

The internal evaluation comprised several questionnaires
being sent to each Director by the Group Company
Secretary in September, around the themes of:

– Evaluation of the performance of the Board by each

Director.

– Evaluation of the performance of each Board Committee

by each member of that respective Committee.

– Evaluation of the Chairman of the Board led by the Senior
Independent Director, taking into account the views of the
wider Board.

Generally the following points were found by the Board:

Performance and Strategy:

– The Board and management were quick to adapt to

global economic shifts.

– Site visits (Bury St Edmunds, UK in June, and Feltre and
Cassola, Italy in September 2022) have been invaluable
especially for the Board to meet senior and local
management and see the operations in action.

– Blue Sky Strategy session gave the Board valuable insight

into the potential growth scenarios of the Group, and
enabled options to be debated.

– Capital Markets Day held in June 2022 was important
and the Company should look to repeat in due course.
– The Board and its members were performing to a high

standard, with a good team dynamic.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

111

Governance:

– Governance arrangements for the Company were strong.
– The ESG programme was commended and well managed.
– Good progress made on diversity at Board and senior
management level, but more to be done. Potential to
expand on knowledge in more digital areas of the business.

Priorities for 2023:

– The structure of the business and particularly the plans

surrounding Creative Solutions.

– Large scale opportunities for Media Solutions and

Production Solutions.

– Succession planning for the Board.

– The Group’s ongoing response to the global downturn and

strategy sessions for 2023 to cover this.

– Give more focus to risk management across the Group,
including cyber planning and streamlining across the
Divisions.

– Provide more information and training in areas such as

audio, radio, metaverse and virtual or augmented reality.

– The Board will carry out another internal evaluation in

2023 and report on that in the 2023 Annual Report and
Accounts.

Board performance against 2022 Board objectives
The Board annually sets itself objectives against which to measure its own performance and effectiveness and to remain
focused on the key issues facing the Group. The objectives set are shaped by feedback given through Board evaluations.
These objectives are tracked during the year and progress reported on at each scheduled Board meeting. The following table
sets out the agreed Board objectives for 2022 and progress made throughout the year.

2022 Board objective

Creative Solutions

Progress thinking on the future
of Creative Solutions ensuring
maximisation of long-term success
of Videndum.

Progress during 2022

– Throughout 2022, the Board received regular updates on Creative Solutions,

including meetings with its senior management and external advisors.

– The Board also received updates on planned restructuring around people within

Creative Solutions.

– Capital Markets Day in June 2022 noted that the Board believes Creative

Solutions has significant potential in terms of market opportunity, rate of future
growth, and margin under Videndum ownership and was continuing to look at
options to unlock further shareholder value.

CEO and Board succession

– Received regular updates on Board and senior management succession along

Review succession plans for the
Board and potentially be ready
to implement succession around
the Group Chief Executive. Progress
the appointment of new Non-
Executive Director(s) to balance the
need for diversity and to plan
succession around the Chair of the
Audit Committee.

with talent and succession plans throughout the Group.

– Marco Vidali appointed as CEO of Creative Solutions, succeeding Nicol Verheem.
– Erika Schraner appointed as an independent Non-Executive Director with effect

from 1 May 2022 succeeding Christopher Humphrey as Chair of the Audit
Committee from 12 August 2022.

– Duncan Penny stood down from the Board at the close of the 2022 AGM.
– Christopher Humphrey ceased to be an independent Non-Executive Director

of the Company with effect from 14 December 2022.

– Richard Tyson succeeded Christopher Humphrey as Senior Independent Director.
– Teté Soto was appointed as an independent Non-Executive Director with effect

from 24 November 2022.

– The Group Finance Director, Martin Green stood down from the Board with
effect from 13 December 2022 and Andrea Rigamonti was appointed to the
Board as Group Chief Financial Officer from the same date.

– Anna VikstrÖm Persson will be joining the Board as an independent Non-

Executive Director with effect from 1 May 2023 and with the plan for her to
succeed Caroline Thomson during 2024 as Chair of the Remuneration
Committee.

112

Nominations Committee Report continued

2022 Board objective

Group performance

Continue to deliver on the recovery
of the business from COVID-19 and
ensure that long-term sustainable
growth is delivered including a
continuing improvement in margins.

Progress during 2022

– The Board received regular updates from the Executive Directors and senior
management on the financial and operational performance of the Group.

– The Company delivered record financial performance in 2022.

Name change

– The Board received shareholder approval to change the Company’s name to

Ensure that the Group’s name
change from Vitec to Videndum
and rebranding is carried out
effectively during 2022.

Videndum at the 2022 AGM.

– The name change to Videndum took effect from 23 May 2022, with

communications rolled out to all key stakeholders.

– Ancillary matters tied to the name change have been rolled out throughout

2022.

ESG

– The Board approved ESG disclosures to be included in the 2021 Annual Report

Continue the development of the
Group’s ESG programme including
in 2022 a detailed standalone
ESG report to shareholders,
TCFD disclosure and ensuring that
the Group’s ESG ratings improve
materially compared to 2021.

and Accounts including the new disclosure on TCFD.

– Standalone ESG and TCFD reports were published in mid-April 2022.

– The ESG Committee continued to meet regularly throughout the year and

reported on progress to the Board.

– The Group’s Code of Conduct and whistleblowing service were refreshed
with the new branding and name and re-communicated to all employees
in September 2022.

– The Board oversaw the work of Inspired ESG who helped develop the ESG
and TCFD disclosures for year-end reporting and the 2021 Annual Report
and Accounts.

Governance

Ensure Board’s focus is on strategic
key issues.

– Board programme throughout 2022 gave focus on strategy and development

of the business, including site visits to Production Solutions and Media Solutions.

The Board has set itself several objectives for 2023, mainly driven from the output of the internal Board evaluation in 2022.
These will be reported on in the 2023 Annual Report.

Corporate GovernanceAudit, risk and internal control

Videndum plc Annual Report and Accounts 2022

113

Overview
The Audit Committee plays a vital role in the Group’s
governance framework, providing sound independent
oversight of the Group’s financial reporting mechanisms,
system of internal controls to safeguard shareholders’
investments and the Company’s assets and employees.
Furthermore, it manages the relationship with the external
auditor to assess their effectiveness and to annually assess
their independence and objectivity.

Audit Committee
The Audit Committee comprises solely independent
Non-Executive Directors of the Company namely:

Role of the Audit Committee

Financial reporting

– Ensures the financial integrity of the Group through the

regular review of its financial processes and
performance.

– Reviews and approves the financial statements in the
Annual Report and Accounts, and that the Annual
Report, taken as a whole, is fair, balanced and
understandable and complies with all applicable UK
legislation and regulation as necessary.

– Advises the Board on the Group’s viability and going

concern status.

Erika Schraner (Chair – with effect from 12 August 2022).

– Reviews the appropriateness of accounting policies and

Richard Tyson, Caroline Thomson and Teté Soto. Anna
VikstrÖm Persson will join the Audit Committee upon her
appointment to the Board on 1 May 2023.

Other members of the Board, Operations Executive and
other senior management including the Group Risk
Assurance Manager, the Group Head of Tax, the Group
Head of IT and Cyber Security, and the Company’s external
auditor, Deloitte, attend meetings of the Audit Committee
by invitation only.

practices.

– Ensures that the Group has appropriate risk

management and internal controls, through the
oversight of the internal audit function.

– Oversees the preparation of TCFD disclosures.

External audit

– Manages the relationship with the external auditor,

reviewing the scope and terms of its engagement and
monitors its performance through regular effectiveness
reviews.

– Reviews and monitors the objectivity and independence
of the external auditor, including provision of non-audit
services.

– Will lead an external audit tender process in mid-2023.

Financial risks

– Oversees and reviews controls relating to financial risks
and risks relating to finance IT systems (including cyber
security).

– Reviews the operational effectiveness of key controls in

place to manage financial risks.

Governance and best practice

– Keeps up to date with developments regarding control

environment through updates from the external
auditor.

– Keeps in touch with investor and shareholder

sentiments through updates and advice from the
Company’s brokers.

– Ensures that an appropriate whistleblowing service is in

place for employees and third parties.

– Oversees third-party reputational risks and anti-bribery

procedures.

114

Audit Committee Chair letter

Dear Shareholder
I am delighted to present to shareholders my first report on
the work of the Audit Committee following my appointment
as Chair with effect from 12 August 2022. I would particularly
like to thank my predecessor, Christopher Humphrey, for his
excellent chairmanship of the Audit Committee and also for
the thorough handover for the role.

The role that the Audit Committee plays in monitoring
the Company’s financial integrity, control framework and
governance is imperative. The following report is intended
to provide shareholders with an insight into how key topics
are considered during the year and how the Committee
discharged its responsibilities.

During 2022, the Audit Committee focused on several
matters as the business continued its growth trajectory.
In early 2022, the Committee was focused on the financial
reporting and disclosures tied to the 2021 Annual Report to
ensure that they were fair, balanced and understandable.
The Committee, the Board, Operations Executive and the
Company’s external auditor, Deloitte, concluded that the
2021 financial statements were a true and fair reflection
of the state of the Group and had been properly prepared
in accordance with international accounting standards in
conformity with the requirements of the Companies Act
2006 and International Financial Reporting Standards.

The Committee also oversaw the overall risk management
and risk appetite of the Group in 2022. Apart from the
ordinary operational risks subject to the annual risk
management review process, the business was exposed
to increasing risks from supply chain issues, component
shortages and risk surrounding cyber security. The
Committee has reviewed the Operations Executive’s
response to these emerging risks and is satisfied that
appropriate mitigation is being taken.

Review of material issues

The Audit Committee continues to play a key role in
checking that the Group’s narrative reporting provides
a fair, balanced, and understandable assessment of the
Group’s position and prospects and in establishing that
the financial statements offer a fair and true view of
the Group’s financial affairs. As part of this process, we
considered the significant financial judgements made during
the year, along with other key financial reporting issues.

We also considered, on a regular basis, the potential for
fraud in revenue recognition, scope for management
override of controls and compliance with legislation and
regulations. No concerns arose out of this review.

Further details of the main activities and information on
the other significant issues that the Committee considered
during the year can be found on pages 116 to 117.

Formal audit tender process 2023

During the second half of 2022, our external auditor,
Deloitte LLP, informed the Audit Committee that from
2024 it will no longer be able to act as auditor for the
Company. The Audit Committee on behalf of the Board will
conduct a formal audit tender process during the second
quarter of 2023. Deloitte has confirmed that there are no
circumstances tied to their standing down as external
auditor that need to be brought to shareholders’ attention
and that they will conduct the audit for the year ending
31 December 2023, subject to shareholder approval. We will
keep shareholders informed on the progress and outcome of
the audit tender.

Engagement with key stakeholders

I welcome questions from shareholders on the Committee’s
activities. If shareholders wish to discuss any aspect of this
report, they can do so via the Group Company Secretary. I
will be present at the Company’s AGM on Thursday, 11 May
2023 and will be happy to answer any questions from our
shareholders.

ESG, climate change and TCFD

The ESG Committee reviews Videndum’s effectiveness
and controls in matters relating to ESG across the
business. This Committee reports to the Board on a
regular basis and the Audit Committee has oversight
of reporting on TCFD and management of risks tied
into climate change. You can read more on our TCFD
programme and progress made on pages 57 to 69 and
in our standalone ESG and TCFD reports for 2022.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

115

2022 Annual Report

Committee performance and effectiveness

After reviewing the reports from management and
following discussions with the external auditor, the
Committee is satisfied that:

– The external auditor remains independent and objective

in their work.

– The financial statements for the year ended 31 December
2022 have appropriately addressed any key estimates
and judgements.

– That the correct and appropriate accounting policies

for all Divisions had been adopted.

Whistleblowing

As outlined on page 99, any cases of whistleblowing in
the Group are notified to me, as well as the Group Chief
Executive and Group Company Secretary. All cases are
investigated thoroughly and outcomes reported to me
and remedial actions taken as appropriate. The Board
is also kept abreast of any whistleblowing reports
and outcomes of any investigations. There were ten
whistleblowing reports during 2022 that were related to
HR matters. All cases were investigated and corrective
actions taken as required by Divisional management
and with my oversight. Following investigation into two
reports, two employees were dismissed from the Group.

The performance of the Committee was considered through
the annual Board evaluation process, which in 2022 was the
subject of an internal review. From the responses provided,
I am pleased to report that the Audit Committee was found
to be operating effectively with rigorous challenge from the
Committee members. A good deal of time had been given to
debate on risk assurance throughout the Group, especially
surrounding cyber threats and mitigation planning.

The quality of the papers and presentations by management,
the level of challenge by the Audit Committee and Deloitte
and the quality of discussions held, gives the Committee
further comfort and assurance that it is performing its role
effectively. A number of suggestions for areas to focus on
have been incorporated into the Committee’s 2023
objectives, including regular reviews on cyber security, risk
management and business continuity, TCFD reporting and
the external audit tender process in the first half of 2023.
These objectives are set annually, the progress of which is
reviewed at every Committee meeting and will be reported
on in the 2023 Annual Report and Accounts.

I would like to thank the other members of the Committee,
management and our external auditors for their support
during the year.

Erika Schraner
Audit Committee Chair
27 February 2023

116

Audit Committee Report

How the Committee operates
The Audit Committee is composed solely of independent Non-Executive Directors who collectively have a wide range of
skills and experience including finance and accounting, leadership, and technology. Erika Schraner, holds a PhD and has held
a variety of senior management positions including Audit Committee Chair of Aferian plc. She satisfies the requirement
of having appropriate and relevant financial experience. Page 87 sets out her full biographical details.

The schedule of Audit Committee meetings is built around the key dates in the financial reporting and audit cycle. During
2022, the Committee met on four scheduled occasions, in February, June, August and December. The Committee met in
February 2022 to review the 31 December 2021 year end results and Annual Report and Accounts.

Forward planning of agenda items guides the business to be considered at each meeting and is regularly reviewed and
developed. This assists and facilitates the work of the Committee, enabling it to give thorough consideration to matters
of particular importance to the Company.

The Committee received information in advance of its meetings from management and from the external auditor including
the main audit report. The Committee meets privately with the external auditor at least annually and received feedback
from management when considering areas for review.

Erika Schraner also maintains close contact with the Group Chief Financial Officer, Group Chief Executive, Group Risk
Assurance Manager and members of the senior audit team at Deloitte. These meetings inform the work of the Committee
by identifying key areas of focus and emerging issues.

The Committee regularly invites the external audit engagement partner, David Halstead, the Chairman of the Board,
the Group Chief Executive, the Group Chief Financial Officer and the Group Risk Assurance Manager to its meetings.

Meetings of the Committee are held in advance of the main Board meetings to allow the Committee Chair to provide
a report on the key matters discussed to the Board, and for the Board to consider any recommendations made. All of this,
along with ongoing challenge debate and engagement, allows the Committee to discharge its responsibilities effectively.

Key activities of the Audit Committee
Audit Committee meetings held in 2022

21 February 2022

21 June 2022

8 August 2022

12 December 2022

Financial and narrative reporting

– Received the accounting

– Tax and Treasury updates.

– Received the accounting

– Tax and Treasury updates.

presentation and
judgemental issues
report, and the report on
going concern for the half
year ended 30 June 2022.

– Reviewed the letters of
representation issued to
the external auditor for
the half year results prior
to being agreed by the
Board.

presentation and
judgemental issues report,
and the report on going
concern and viability for
the full year ended
31 December 2021.

– Recommended the

approval of the 2021
Annual Report and
Accounts, agreeing when
taken as a whole is fair,
balanced and
understandable.

– Reviewed the letters of
representation issued to
the external auditor for
the full year results prior to
being agreed by the Board.

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117

21 February 2022

External audit

– Received a full year report
from the external auditor
on the 2021 financial
statements and
accounting disclosures.

21 June 2022

8 August 2022

12 December 2022

– Received half year report
from the external auditor
on the 2022 half year
financial statements and
accounting disclosures.

– Discussed and approved
the audit fees for 2022.

– Presented the 2022 half

year audit plan and initial
planning report on the
2022 full year audit.

– Presented update on

TCFD to be reported on in
the 2022 Annual Report
and Accounts.

– Considered an update on
potential audit fees for
2022.

– Received the final

planning report on the
2022 external audit.

– Considered the 2022 year
end process to date by
the external auditor.

– Discussed the external
audit tender process for
the first half of 2023.

– APM application guidance

update.

– Non-audit policy review.

Governance

– Agreed the disclosure of

– Training on governance.

– Auditor effectiveness

– Update on

the 2021 Audit Committee
report.

– UK Sarbanes-Oxley
review on internal
controls by EY.

review.

– R&D update.

whistleblowing, third-
party reputational risk
management and
anti-bribery and
corruption programme.

– TCFD programme update
including preparation of
TCFD disclosures.

– Approved Committee
objectives for 2023.

– Training on governance by

external auditor.

Risk management and internal control

– Conducted a bi-annual

review of the principal and
operational risks identified
across the Group.

– Update on cyber security

and insurance cover.

– Approved the 2022

internal audit programme.

– Risk assurance update
against the 2022 risk
assurance programme.

– Update on cyber security.

– Bi-annual review of the
principal risks identified
across the Group and
progress against agreed
2022 risk assurance
programme.

– Update on cyber security.

– Risk assurance update

against 2022 risk
assurance programme
and agreed the risk
assurance and internal
audit programme for
2023.

– Received full year report

of internal audit activity in
2022, internal audit plans
for 2023 and status of
Videndum’s key controls.

– Update on cyber security
and reviewed business
continuity plans for 2023.

118

Audit Committee Report continued

Risk management and control
The Board delegates responsibility to the Audit Committee
for oversight of the Group’s system of internal controls to
safeguard shareholders’ investments and the Company’s
assets. As part of its responsibility, the Audit Committee
formally reviews the effectiveness of the Group’s internal
controls twice a year. There are systems and procedures in
place for internal controls that are designed to provide
reasonable control over the activities of the Group and to
enable the Board and Audit Committee to fulfil their legal
responsibility for the keeping of proper accounting records,
safeguarding the assets of the Group and detecting fraud
and other irregularities.

This approach provides reasonable assurance against
material misstatement or loss, although it is recognised that
as with any successful company, business and commercial
risks must be taken and enterprise, initiative and the
motivation of employees must not be unduly stifled. It is not
our intention to avoid all commercial risks and judgements
in the course of the management of the business.

The Board has completed a robust assessment of the
Company’s emerging and principal risks and has adopted a
risk-based approach to establishing the system of internal
controls. The application and process followed by the Board
in reviewing the effectiveness of the system of internal
controls during the year were as follows:

– Each business unit is charged with the ongoing

responsibility for identifying the existing and emerging
risks it faces and for putting in place procedures to
monitor and manage those risks. This includes climate
change risks identified at a site level.

– The responsibilities of senior management in each

business unit to manage existing and emerging risks
within their businesses are periodically reinforced by
the Operations Executive.

– Major strategic, operational, financial, regulatory,

compliance and reputational risks are formally assessed
during the annual long-term business planning process
around mid-year. These plans and the attendant risks to
the Group are reviewed and considered by the Board.
– Large financial capital projects, property leases, product
development projects and all acquisitions and disposals
require advance Board approval.

– The process by which the Board reviews the effectiveness
of internal controls has been agreed by the Board and is
documented. This involves regular reviews by the Board of
the major business risks of the Group, including emerging
risks, together with the controls in place to mitigate those
risks. In addition, every business unit conducts a self-
assessment of its internal controls. Every year, the results
of these assessments are reviewed by the Group Risk
Assurance Manager who provides a report on the status
of internal controls and internal controls self-assessment
to the Group Chief Financial Officer and the Chair of the
Audit Committee. The Board is made aware of any
significant matters arising from the self-assessments.
The risk and control identification and certification

process is monitored and periodically reviewed by Group
financial management.

– A register of risks facing the Group, as well as each

individual business, and an evaluation of the impact and
likelihood of those risks is maintained and updated
regularly by the Group Risk Assurance Manager. The
Group’s principal risks and uncertainties and mitigation
for them are set out on pages 44 to 49 of this Annual
Report and this includes consideration of risks relating to
climate change.

The Board has established a control framework within which
the Group operates. This contains the following key elements:

– Strategic planning process identifying key actions,

initiatives and risks to deliver the Group’s long-term
strategy.

– Organisational structure with clearly defined lines of
responsibility, delegation of authority and reporting
requirements.

– Defined expenditure authorisation levels.
– Operational review process covering all aspects of each
business conducted by the Operations Executive on a
regular basis throughout the year.

– Comprehensive system of financial reporting including
weekly flash reports, monthly reporting, quarterly
forecasting and an annual budget process. The Board
approves the Group budget, forecasts and strategic
plans. Monthly actual results are reported against prior
year, budget and latest forecasts, and are circulated to
the Board. These forecasts are revised where necessary
but formally at least once every quarter. Any significant
changes and adverse variances are reviewed by the Group
Chief Executive and Operations Executive and remedial
action is taken where appropriate. Group tax and
treasury functions are coordinated centrally. There is
regular cash and treasury reporting to Group financial
management and monthly reporting to the Board on the
Group’s tax and treasury position.

This system has been in place for the year under review and
to the date of approval of the Annual Report.

The Board carries out a periodic assessment of the Group’s
risk appetite, which includes the identification of the risk
thresholds against each organisational objective. Key
elements of the risk appetite (for example, our commitment
to innovation, compliance and sustainability practices) are
summarised in the overview section of the Principal risks
and uncertainties.

Internal audit
Internal audit is independent of management and has a
reporting line to the Chair of the Committee, providing
independent and objective assurance and advice on the
adequacy and effectiveness of governance and risk
management. An internal audit plan for 2022 was prepared
and agreed with the Audit Committee at its February 2022
meeting and progress against the internal audit plan was
tracked throughout the year.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

119

Non-audit services
As required by the Code, the Audit Committee has a formal
policy governing the engagement of our external auditor,
Deloitte, to supply non-audit services and to assess the
threats of self-review, self-interest, advocacy, familiarity
and management. Written permission must be obtained
from the Chair of the Audit Committee and Group Chief
Financial Officer before the external auditor is engaged
for any non-audit work. There is a cap on permissible
non-audit services of a maximum of 70% of the average
of the fees paid in the last three consecutive financial years
for the external audit services. The policy ensures that any
non-audit work provided by Deloitte does not impair their
independence or objectivity and is divided into two parts:

Excluded services

Appropriate services

Include:
– Internal accounting or other

financial services.

– Design, development or

implementation of financial
information or internal control
systems.

– Internal audit services or their

With approval from the Chair of
the Audit Committee and Group
Chief Financial Officer, these
include:
– Accounting advice in relation to
acquisitions and divestments.
– Corporate governance advice.
– Defined audit-related work and

outsourcing.

– Forensic accounting services.
– Executive or management

roles and functions.

– IT consultancy.
– Litigation support services
and other financial services
such as broker, financial
advisor or investment banking
services.

regulatory reporting.

– Reporting accountant services.
– Compliance services.
– Valuation and actuarial services.
– Transaction work (M&A and

divestments).

– Fairness opinions and
contribution reports.

– Work closely related to the

audit.

During 2022, the non-audit services policy was followed
with no exceptions. During 2022, £0.1 million (2021: £0.1
million) was paid to Deloitte in respect of non-audit work
compared to an audit fee of £1.7 million (2021: £1.3 million).
This non-audit work mainly comprised the review of the half
yearly financial statements.

The Group Risk Assurance Manager conducted several
internal audits and additional assurance reviews during
2022, the details of which were presented to the Audit
Committee. The internal audits included reviews of the
appropriateness and effectiveness of controls within the
Group including, but not limited to purchasing and
payments, sales and cash collection, inventory management,
accounting and reporting, human resources, and IT systems
and processes.

External audit
Deloitte were appointed as the Company’s external auditor
at the Company’s AGM in May 2018, following a formal
tender process. At the 2022 AGM, shareholders reappointed
Deloitte as the external auditor of the Group for the year
ended 31 December 2022 and authorised the Audit
Committee to fix the external auditor’s remuneration. A
resolution to reappoint Deloitte for a further 12 months will
be submitted at the Company’s AGM on 11 May 2023. The
current engagement audit partner, David Halstead, is in the
fifth year of his term and in accordance with the
requirement to rotate the audit partner every five years,
David Halstead will stand down at the conclusion of the
2023 AGM and Alistair Pritchard will be appointed as the
engagement audit partner. As announced, we will conduct
an audit tender process in the first half of 2023 for the
services of an external auditor. Deloitte will continue for the
audit of the financial year ending 31 December 2023 and
subject to the audit tender process, a proposed external
auditor will be recommended to shareholders at the 2024
AGM to carry out the audit for the financial year ending
31 December 2024.

Audit independence and fees
The Committee reviews reports on the audit firm’s own
internal quality control procedures together with the
policies and processes for maintaining independence and
monitoring compliance with relevant requirements. Deloitte
has confirmed its independence as external auditor of the
Company in a letter addressed to the Directors. The fees
payable for 2022 and previous years are as follows:

2022

2021

2020

2019

2018

Fees payable to
Deloitte for the audit
of the Company’s
financial statements £0.9m £0.5m £0.2m £0.1m £0.1m

Fees payable to
Deloitte for audit of
subsidiaries

Fees related to
corporate finance
transactions

£0.8m £0.8m £0.5m £0.5m £0.4m

£nil

£0.2m

120

Audit Committee Report continued

External auditor effectiveness
The effectiveness of the external auditor and the audit
process is assessed by the Committee, meeting the audit
partner and senior audit managers regularly through the
year. Annually, the Committee assesses the qualifications,
expertise, resources and independence of the Group’s
external auditor, as well as the effectiveness of the audit
process through discussion with the Group Chief Financial
Officer. The Chairman of the Committee also meets with
the Deloitte engagement partner.

Every couple of years, a detailed survey is performed of all
employees who have interacted with the external auditors;
the main purpose being to identify opportunities to improve
the audit process. We review the output of the audit
process, as presented to the Audit Committee, to ensure
that there is a clear logical planning and scoping process.
This allows the Audit Committee to ascertain that all areas
of audit risk are being addressed.

The Audit Committee will continue to review the
effectiveness and independence of the external auditor
each year. Videndum complies with the Competition and
Markets Authority Order 2014 relating to audit tendering
and the provision of non-audit services, and it is the Group’s
intention to put the audit out to tender at least every ten
years. The external audit was last tendered in 2017-2018
following which the external auditor changed from KPMG to
Deloitte.

2022 Annual Report and Accounts –
fair, balanced and understandable
The Committee provides assurance to the Board that the
Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Group’s position performance,
business model and strategy. The Committee concentrated
its review of the full year results on the financial statements
only and the process which underpinned the drafting of the
Viability Statement. The contents of the financial
statements and the Viability Statement were reviewed by
the Committee at the 20 February 2023 meeting. The
Board as a whole is responsible for preparing the Annual
Report and Accounts. The Committee reported to the
Board that, based on its review of the evidence, it was
satisfied that the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable, and provides
the information necessary for shareholders to assess the
Group’s performance, business model and strategy.

Significant accounting issues
Significant accounting issues and judgements are identified
by the finance team, or through the external audit process
and are reviewed by the Audit Committee. The significant
issues considered by the Committee in respect of the year
ended 31 December 2022 are set out below:

Significant
accounting issues How was it addressed

Going concern

Working capital
valuation

Provisions and
liabilities

The Committee considered whether it was
appropriate to prepare the financial statements
on the going concern basis. It was noted that
there was significant covenant headroom at
31 December 2022, and, on the basis of stress
testing performed on the Group’s financial
forecasts, covenants were not expected to be
breached through to the end of 2025 which is
the time period over which the viability review
is completed. It was further noted that there
was sufficient headroom over committed lending
facilities, with undrawn amounts left on the RCF
under each scenario each month through to at
least February 2024 (12 months from the date
of signing the financial statements).
Management therefore concluded it was
appropriate to prepare the financial statements
on the going concern basis. The external auditor
also presented their assessment. The Committee
concurred with management’s assessment.

The Committee critically reviewed the carrying
value of the Group’s working capital. This took
into account management’s assessment of
the appropriate level of provisioning including
collectability of receivables and inventory
obsolescence throughout the year and with
special emphasis on the 2022 year-end process.
Management presented to the Committee the
experience of bad debts during 2022, and the
debtor concentration and days outstanding.
With regard to inventory, the gross levels held by
inventory type, the provisions recorded against
obsolescence, and inventory days analysis were
also presented to the Committee. In addition, the
external auditor presented their findings with
regard to the key audit testing over working
capital covering all the major locations. The
Committee concurred with management’s
assessment of the Group’s working capital
position.

The Committee considered the judgemental
issues relating to the level of provisions and other
liabilities. The more significant items include
restructuring, tax-related, and grant repayment
provisions, and taxation. For each area
management presented to the Committee the
key underlying assumptions and key judgements
and, where relevant, the range of possible
outcomes. The external auditor also presented on
each of these areas and their assessment of
these judgements. The Committee has used this
information to review the position adopted in
terms of the amounts charged and recorded as
provisions, acknowledging the level of
subjectivity that needs to be applied.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

121

Significant
accounting issues How was it addressed

Adjusting items

Capitalisation
of development
costs

The Committee considered the validity of
adjusting items that were reported in 2022.
Adjusting items included within profit before tax
were £29.3 million which relate to the
amortisation of intangibles assets that are
acquired in a business combination (£10.9
million), acquisition related charges (£9.3 million),
integration and restructuring costs (£8.3 million),
and amortisation of loan fees on borrowings for
acquisitions (£0.8 million). The external auditor
presented their findings with regards to key audit
testing over adjusting items. The Committee
agreed with management’s accounting and
disclosures.

The Committee considered whether the
development costs capitalised during the year
complied with IAS 38. Management presented a
list of the key projects that had been capitalised,
along with an assessment of future profitability
to support the value on the Balance Sheet. The
external auditor also presented their findings.
The Committee agreed with management’s
accounting treatment and related disclosures.

Acquired
intangibles

Deferred tax

The Committee critically reviewed management’s
assessment of acquired intangible assets tested
for impairment and the recognition of acquired
intangible assets from the acquisition of Audix
completed in 2022. The external auditor also
presented their assessment. The Committee
concurred with management’s assessment.

The committee critically reviewed management’s
recognition of deferred tax assets. During 2022,
the Group’s deferred tax asset increased by £17.6
million to £51.2 million (2021: £33.6 million)
primarily as a result of recognising US tax losses,
which were previously unrecognised, arising from
an increase in forecasted sustainable profits
following the acquisitions of Savage and Audix.
Management has also considered the FRC
Thematic review published in September 2022 in
relation to IAS12 and has increased disclosures
surrounding the deferred tax asset recognition
and sensitivities. The external auditor also
presented their assessment. The committee
concurred with management’s assessment.

Audit Committee objectives
The following table sets out the agreed Audit Committee objectives for 2022 and an assessment of progress against each.

2022 Audit Committee objective

Progress during 2022

Cyber security
Track progress on the Group’s cyber security initiatives at each
meeting in the year.

The Committee received regular updates on key cyber security initiatives
during 2022 and was tasked with implementing various solutions in all
Divisions to streamline cyber security.

Business continuity
Continue to review the key risks affecting the Group post-
pandemic, such as global economy, supply chain and inflation risks.

Business continuity updates were received regularly through the year from
the Group Risk Assurance Manager. Internal audits raised some areas for
improvements such as in the recently acquired entities of Savage and Audix.

TCFD
The Committee was to receive regular updates on ESG and TCFD
initiatives in the Group.

Regular updates were provided to the Committee throughout 2022 by the
Group Risk Assurance Manager and in preparation for the year end
reporting for 2022.

UK Sarbanes-Oxley
The UK version of the US Sarbanes-Oxley – a measure to enhance
the quality of corporate governance, corporate reporting and
internal controls.

Oversight of Group R&D programme
Review of any major projects to ensure specification, cost and
timing of delivery were being tracked.

The Group Risk Assurance Manager and the Deputy Group Finance
Director provided updates as appropriate, with EY carrying out an internal
controls “health check” in early 2022 over a number of functions, and a
suggestions list of what the Group could do to prepare for the proposed
implementation of UK SOx.

Updates on R&D projects were given to the Committee in August 2022.

Audit Committee Chair succession
The Committee was to keep under review (in conjunction with
the Nominations Committee) the potential appointment of
a successor as Audit Committee Chair.

Erika Schraner was appointed to the Board as an independent Non-
Executive Director on 1 May 2022. After a period of induction and
handover, she succeeded Christopher Humphrey as Chair of the Audit
Committee from 12 August 2022.

122

Remuneration report
Annual statement

Dear Shareholder
Videndum’s Directors’ Remuneration report for 2022
comprises three separate sections:

– Section 1 – my annual statement setting out the work of
the Remuneration Committee in 2022 and priorities for
2023.

– Section 2 – the proposed Directors’ Remuneration Policy

(“the Policy”) that sets out the Company’s policy on
Directors’ remuneration. The last Policy was put to
shareholders at the 2020 AGM and expires in May 2023.
In accordance with the regulations we will be submitting
this new Policy to shareholders for approval at the 2023
AGM. The detail of the new Policy is set out on pages 128
to 137 and if approved by shareholders at the 2023 AGM
will apply through to May 2026.

– Section 3 – the 2022 Annual Report on Remuneration sets
out the remuneration paid to Directors in 2022 as well as
details of how the Committee intends to implement our
Policy for 2023. Shareholders will have the opportunity
for an advisory vote on the Directors’ Remuneration
Report at the 2023 AGM.

The Committee in 2022 focused on ensuring that the
implementation of the Policy supported the continuing
recovery of the business from the full impact of COVID-19
and growth towards our longer-term strategic ambition.

This included setting challenging targets for the 2022
Bonus Plan and for awards under the Long Term Incentive
Plan (“LTIP”) to drive management to recover and
grow the business quickly and in a sustainable manner.
Financial targets for the bonus plan were set early in 2022
before several factors made the year increasingly more
challenging, notably the war in Ukraine and continuation of
lockdowns in China adding to inflationary pressure, which in
turn damaged consumer demand and business confidence.
Executive management worked diligently and effectively
to deliver an out-turn for 2022 in line with expectations
and moving towards our medium-term ambitions.

During 2022, the Remuneration Committee undertook
a review of the current Directors’ Remuneration Policy
and considered what changes may be required for the
new Policy being put forward to shareholders in 2023.
In doing so, the Remuneration Committee has taken
the UK Corporate Governance Code provisions into
account to ensure the new Policy and its operation are
in line with best practice and investors’ expectations.
We are not proposing any material changes to the Policy
itself, which has operated with simplicity of structure
in mind and continues to ensure that remuneration
outcomes are predictable, aligned with the experience
of stakeholders in the Company and also drive the
right behaviours and culture in the Company.

2022 performance – business context

Under the Group Chief Executive’s leadership, Videndum is
now uniquely positioned right at the heart of the content
creation market, with market-leading, premium brands
in defensible niches. The content creation market is now
larger and growing faster than pre-pandemic with the
Group being exposed to strong market growth drivers.
The Group’s Total Addressable Market (“TAM”) has
increased from c.£2 billion pre-pandemic (2019) to c.£3
billion and, as previously stated, it is expected to grow
high single digit in the medium term, compared to low
single digit pre-pandemic, although with a slower growth
rate in 2022-23 due to macroeconomic headwinds.

Videndum continues to execute well on its long-term
strategy to deliver organic growth, improve margins and
grow through strategic acquisitions. We have recovered
strongly following the impact of the pandemic and
delivered a record H1 2022 financial performance. As
the second half of 2022 unfolded we were faced with
increasing pressure from several headwinds not within
management’s control. These included the impact of
the Ukraine conflict, continuation of stringent lockdown
measures in China, significant rise in inflation, continuation
of component shortages, suppressed consumer demand
due to recessionary factors and lower business confidence.
Despite these headwinds, the Group has delivered an
outcome for 2022 in line with market expectations
and the Group is well-positioned for the future.

We are seeing revenue growth from three routes: from our
core business; from new areas of content creation, including
vloggers/influencers and audio; and from new verticals
enabled by video transmission and live streaming,
particularly in the medical segment and, going forward,
with ART. We remain committed to our previously stated
organic strategic ambition of c.£600 million revenue and
greater than £100 million adjusted operating profit*
however, the timing is likely to be delayed due to the
macroeconomic environment. The content creation market
is a great place to be and Videndum is well positioned to
deliver growth and value for shareholders.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

123

The Group Chief Executive and his senior leadership team
have performed well during 2022 and delivered exceptional
financial results in very challenging markets as well as
making good progress against our longer-term strategic
ambition. This has resulted in the Committee awarding
bonus payments to the Group Chief Executive and senior
leadership team that are entirely merited given the superior
performance of the team. Our Policy and its operation in
2022 has delivered an outcome that is fully aligned with our
stakeholders’ interests and our shareholders’ experience of
investing in the Company.

Remuneration outcomes for 2022 performance

At the start of 2022, the Committee awarded
salary increases to the Executive Directors of 3%,
reflecting the same level of increase given to the
wider employee population and also recognising that
neither of the Executive Directors received a salary
increase in 2021 due to the impact of COVID-19.

The Committee set financial targets for the 2022 Annual
Bonus Plan at its February 2022 meeting and with the
right balance between being challenging and realistic.
However, as the year unfolded it became clear that
2022 was exposed to increasing headwinds beyond
the control of management as highlighted earlier.

Despite these headwinds, the Group Chief Executive and
senior leadership team have driven the performance of the
Company with an out-turn in line with market consensus
and delivered a record adjusted Group Profit Before
Tax (“PBT”) of £54.0 million. The 2022 Bonus Plan was
based 50% on Group adjusted PBT, 25% on Group cash
conversion and 25% on personal objectives, and full details
of the targets and outcomes are set out on page 141.

The Committee reviewed performance against the Group
adjusted PBT element of the bonus and in line with the
policy, awarded the Group Chief Executive an outcome for
this element representing 21.4% based on budgeted FX
rates being applied. 58.8% of the cash conversion measure
was achieved. After careful consideration the Committee
further determined that Stephen Bird’s performance in
2022 was so exceptional that it merited an unusual award
of 100% of his personal objectives. This reflected his role
in delivering a record despite the significant headwinds
outlined above. But also that this was achieved despite the
Group Finance Director being absent for the second half of
the year. Overall, this resulted in a bonus outcome of 50.4%
of the maximum for 2022 for the Group Chief Executive.

To ensure that bonus payments are aligned with
shareholders’ long-term interests, the Executive Directors
will be required to defer 50% of their 2022 bonus after tax
into shares held for three years in the Deferred Bonus Plan.

LTIP awards made in 2019 to Executive Directors did
not achieve threshold performance conditions based on
EPS growth and TSR performance, and the 2019 LTIP
award lapsed on 8 March 2022. This was the second
consecutive year where the LTIP has not vested and
reflects the experience of our shareholders during the
respective performance periods. The 2020 LTIP award
was made on 21 September 2020 with the delay in the
award being due to the impact of the pandemic. The
2020 LTIP has a performance condition running through
to 28 February 2023 and subject to achievement of
performance conditions will vest on 21 September 2023.

The estimated vesting outcome based on an interim
measurement to 31 December 2022 is 46.8% of the
maximum. We will disclose the final outcome to the market
in due course.

In 2022, the Remuneration Committee made LTIP awards
in March to the Executive Directors and several other senior
managers. The 2022 LTIP award was structured so that
33% was tied to TSR performance over a three-year period
commencing 1 January 2022 compared to a comparator
group comprising the constituents of the FTSE 250 Index
(excluding financial services companies and investment
trusts). 67% of the 2022 LTIP award is tied to a challenging
adjusted basic EPS* performance corridor over the same
three-year period with threshold set at 100 pence and
stretch set at 130 pence for the financial year 2024 and
with a straight-line progression between each point. The
Committee considered that this was an appropriately
challenging hurdle. Any shares vesting under the 2022 LTIP
to the Executive Directors will be subject to a further two-
year holding period aligning with shareholders’ long-term
interests. When determining the vesting level of this award,
the Remuneration Committee will also take into account the
Return on Capital Employed (ROCE) performance for the
Company. The Committee retains full discretion to reduce
the vesting outcome taking into account underlying business
performance. The 2022 LTIP award to the Executive
Directors was set at a value representing 125% of salary.

The Committee is satisfied that the performance
condition for the 2022 LTIP is sufficiently stretching,
and at the 2022 AGM over 99% of shareholders
voted in favour of the 2021 Remuneration Report
demonstrating overwhelming support from shareholders
to the operation of the Remuneration Policy.

Outside of the Executive Directors and several senior
executives, the Committee approved Restricted
Share Plan (“RSP”) awards in 2022 for key talent
in the Group. The RSP delivers shares over a three-
year period vesting in March 2024 subject to the
participant remaining employed with Videndum.

124

Remuneration report continued

Executive Directors – changes of personnel

An important consideration for the Committee in 2022
was to determine the leaving arrangements for Martin
Green, who stood down as Group Finance Director on
13 December 2022 and the new remuneration package
for Andrea Rigamonti as Group Chief Financial Officer
appointed on the same date to the Board. The detail of
Martin Green’s leaving arrangements is set out on page
145. The Committee, when considering this, took into
account Martin Green’s 20 years’ service, his contribution
to the Company’s growth, our contractual obligations
and the Policy. The Committee is satisfied that the terms
agreed are fair, reasonable, in shareholders’ best interests
and in line with the Policy. The remuneration package for
Andrea Rigamonti has been set in line with our Policy. His
base salary on appointment is £310,000 per annum and
will next be reviewed in January 2024. This positioning
is around 15% below his predecessor’s salary and has
been set at a level that reflects Andrea’s experience. The
Committee will look over time, in accordance with the
recruitment policy, to increase this as Andrea’s experience,
contribution and importance to the Group increases.

2023 Directors’ Remuneration Policy

The Remuneration Committee has reviewed Executive
Directors’ remuneration taking advice from our
remuneration consultant, FIT Remuneration Consultants,
and during the year consulted with Videndum’s largest
shareholders, the majority of whom have been supportive
of our approach. I am grateful to those shareholders who
have given us their views. The Committee is satisfied
that the Company’s Policy has continued to operate
as intended, in terms of the Company’s performance
and the quantum of remuneration paid to the Directors
in 2022. This view is supported by the overwhelming
level of support given by shareholders at the 2022 AGM
to the 2021 Remuneration Report. We also took into
account the high level of support for the Policy when it
was last approved by shareholders in 2020 and 88.79%
of votes cast were then in favour of the Policy.

As a result there is no change to the structure of the Policy
itself or to the overall maximum variable pay individuals
limits contained in the Policy, although we are seeking to
change the way we implement the Policy – see below. The
only formal change to the Policy is to ensure that notice
periods due from any new Executive Directors will be
symmetrical, requiring up to 12 months’ notice from either
the Company or the Director. The Policy in respect of the
notice periods for the serving Executive Directors is already
12 months. As previously disclosed, pension contributions
for the Group Chief Executive have been reduced from 20%
to 8% of salary from 1 January 2023 to align with the rest
of employees in the UK business, and our Policy includes
other good practice features as recommended by the UK
Corporate Governance Code and institutional investors.

Governance and performance of the Remuneration
Committee in 2022

The Remuneration Committee during 2022 comprised
the following:

Caroline Thomson – Chair

Richard Tyson, Erika Schraner (from 1 May 2022), Teté Soto
(from 24 November 2022), Christopher Humphrey (until
14 December 2022) and Duncan Penny (until 17 May 2022)

All members of the Remuneration Committee are
independent Non-Executive Directors of the Company. We
have further announced that Anna Vikström Persson will be
appointed a new independent Non Executive Director of the
Company with effect from 1 May 2023. Upon her
appointment she will become a member of the Remuneration
Committee and after a period of induction to the Company,
is planned to succeed myself as Chair of the Remuneration
Committee on a date to be confirmed in 2024.

The Remuneration Committee has been delegated by the
Board responsibility to set the remuneration framework for
the Group Chief Executive, other Executive Directors and
members of the Operations Executive. As Chair of the
Committee, I lead this process with the support of the other
Committee members. During 2022, we invited the Chairman
of the Board, Ian McHoul, Group Chief Executive, Stephen Bird,
former Group Finance Director, Martin Green, Group Chief
Financial Officer, Andrea Rigamonti and Group Company
Secretary, Jon Bolton to attend meetings and to give input
unless they were conflicted in a particular matter. To further
support the Committee in its duties, the Committee uses
the support and services of FIT Remuneration Consultants,
who provide independent advisory services on executive
remuneration and wider market remuneration issues.

In my role as Chair of the Remuneration Committee, I am
available to shareholders to discuss matters relating to
Directors, and senior executive remuneration. During 2022 I
engaged with several shareholders in the run-up to the 2022
AGM and vote on the 2021 Directors’ Remuneration report.
I also undertook a consultation with our major shareholders
on our proposed new Policy, to be put to shareholders for
approval at the 2023 AGM.

The Remuneration Committee held five scheduled meetings
in 2022 and one short notice meeting. All members of the
Committee attended all meetings in 2022. Apart from normal
business such as Directors’ duties and conflicts of interest,
minutes of previous meetings, matters arising and tracking
progress against agreed Committee objectives for 2022, the
following specific business was covered at each meeting:

February 2022 – approved the 2021 Annual Remuneration
report submitted to the 2022 AGM; approved the outcome
of the 2021 Annual Bonus Plan; determined the outcome
of 2019 LTIP awards against performance measures;
considered the structure of 2022 LTIP awards and
associated performance conditions; approved the final
structure of the 2022 Annual Bonus Plan; and approved
personal objectives for the Executive Directors for 2022.

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125

March 2022 – short-notice meeting – approved the final
detail of 2022 LTIP awards.

June 2022 – considered the proposed structure for a new
Remuneration Policy on Directors’ remuneration with the
objective to submit to shareholders for approval at the
2023 AGM.

August 2022 – considered the proposed structure for a new
Remuneration Policy on Directors’ remuneration ahead of a
consultation letter being issued to the Company’s major
shareholders.

September 2022 – update on executive remuneration
trends provided by FIT Remuneration Consultants; update
on progress with shareholder consultation in relation to a
new Remuneration Policy; and an update on 2022 Annual
Bonus Plan.

December 2022 – considered feedback from the shareholder
consultation regarding the new Remuneration Policy; 2022
Annual Bonus Plan update; proposed 2023 pay rises for
Executive Directors and Operations Executive members;
considered Martin Green’s severance terms and Andrea
Rigamonti’s remuneration package and service contract;
outlined 2023 LTIP awards and proposed structure; and
2023 Annual Bonus Plan and proposed structure.

Minutes of each meeting are prepared by the Group
Company Secretary and circulated to Committee members
following each meeting.

The Remuneration Committee annually sets itself
objectives and in 2022, it set the following ones and has
measured progress against each.

2022 Remuneration Committee objectives

Progress during 2022

1. Preparation of a new Directors’ Remuneration Policy including

new LTIP rules and involving consultation with major shareholders
ahead of the final Policy being approved by the Committee in
February 2023 and submitted for approval at the 2023 AGM.

2. Ensure that 2022 LTIP awards are set at an appropriate level with
suitably stretching performance conditions that balance interests
of shareholders and also incentivise management to deliver
stretching performance.

The Committee reviewed the operation of the existing Policy
approved at the 2020 AGM and determined that it remains fit for
purpose in rewarding Executive Directors for growing the business
and is aligned to the best interests of shareholders subject to
increasing the annual level of LTIP award to the Group CEO to 150%
of salary (from 125% of salary). Major shareholders have been
consulted and the Committee approved for submission to the 2023
AGM the final content of the new Directors’ Remuneration Policy at
its February 2023 Committee meeting.

LTIP award made on 11 March 2022 with performance conditions
based 1/3rd on TSR performance compared to the constituents of the
FTSE 250 Index (excluding financial service companies and
investment trusts) and 2/3rds on adjusted EPS growth with threshold
vesting set at 100 pence and stretch at 130 pence. Shareholder
support at the 2022 AGM to the advisory vote on the 2021 Annual
Remuneration report was over 99% demonstrating overwhelming
support for this approach.

3. Prepare and publish a Remuneration report for 2021 setting out
clear disclosures and narrative to support remuneration paid
(including 2021 bonus) and that ensures sufficient shareholder
support at the 2022 AGM.

Remuneration Report for 2021 received over 99% support from
shareholders at the 2022 AGM demonstrating overwhelming support
to the operation of Directors’ remuneration and the associated
disclosures.

4. Oversee and implement suitably stretching remuneration
arrangements that retains and drives Creative Solutions’
management to grow that business.

RSP awards to Creative Solutions senior leadership made in 2021 and
2022 has ensured that talent within Creative Solutions has been
retained and is focused on growing that business.

5. Set an appropriately stretching bonus plan for 2022 including an
increased level tied to delivery on quantifiable ESG targets that
supports the Group’s ESG programme.

6. Ensure that remuneration payouts to Executive Directors and

senior leadership are merited and in line with shareholders’ and
other stakeholders’ experience of investing in Videndum.

2022 Bonus Plan set containing both stretching financial (profit and
cash conversion) and personal objectives including progress on the
Company's ESG programme. Financial targets have proven to be
challenging given how events have unfolded in 2022 with headwinds
including the war in Ukraine, impact of foreign exchange, continuing
component shortages, rising inflation, continuing suppressed travel
and recession in several of the Group's key markets. The outcome for
the 2022 annual bonus plan is set out on pages 141 of this report.

Remuneration payouts to the Executive Directors for 2022 are set out
on page 138 of this report and demonstrate that remuneration is
aligned to shareholders’ and other stakeholders’ experience.
Videndum has delivered a record Group adjusted PBT for 2022 of
£54.0 million and remuneration to the Executive Directors has been
aligned to that financial performance.

126

Remuneration report continued

Apart from the process of setting itself objectives and
measuring progress against each, the Remuneration
Committee was also subject in 2022 to an internal
evaluation led by the Chairman and Group Company
Secretary. The internal evaluation involved a questionnaire
to each Committee member. The output from the 2022
Remuneration Committee evaluation included:

– The performance of the Remuneration Committee and

its members was rated highly.

– Remuneration Committee meetings are well run with a

rigorous cycle of business followed.

– Information provided to the Remuneration Committee

was to a high standard.

– The Remuneration Committee is mindful of the need to
keep informed of changes in market sentiment and to
keep informed around the expectations of shareholders.
The Committee’s adviser provides a good level of
information to keep the Committee informed.

– The Directors’ Remuneration Policy is well aligned with
the Group’s strategic priorities and strikes the right
balance between short-term and long-term performance
and provides appropriate levels of retention and reward.

– The Committee engages well with shareholders on

remuneration issues.

An externally facilitated evaluation was conducted in
2021 and reported on in the 2021 Annual Report. A further
externally facilitated evaluation will be conducted in 2024.

Implementation of the new Policy in 2023

Given the experience and performance of the Group
Chief Executive, the Committee has agreed that in line
with previous practice the base salary for Stephen Bird
will increase at the same level as the general increase
for the wider workforce by 5%, and this increase will be
implemented from 1 April 2023. The Committee took the
view that an increase aligned to that for all of Videndum’s
employees was right because of the outstanding
performance for the year and in light of the deferral of
this increase to 1 April 2023. Since Andrea Rigamonti was
appointed on 13 December 2022, his salary will not be
reviewed again until January 2024. As previously notified,
Stephen’s employer pension contribution has been reduced
from 20% to 8% with effect from 1 January 2023 and is
in line with the wider UK employee pension contribution.

Having reviewed fees paid by the market for FTSE
250 companies and also the time commitment
required by the Chairman and Non-Executive
Directors, it has been agreed that the fees paid to
the Chairman and Non-Executive Directors will also
be increased by 5% with effect from 1 April 2023.

The 2023 Annual Bonus Plan has been designed to ensure
that it motivates Executive Directors to deliver against
challenging targets for 2023. Its structure retains the
same combination of financial targets (Group adjusted
PBT* and adjusted operating cash flow* generation) and
personal objectives as used in 2022 and is tied to delivery
of the 2023 budget. The 2023 Annual Bonus Plan is
structured as before so that Profit and Cash Conversion
measures are independently assessed. Financial targets
and personal objectives for the 2023 Annual Bonus Plan,
against which actual performance will be measured,
will be disclosed in the 2023 Remuneration report.

The Committee intends that the LTIP award for 2023 will
continue to be based on the Company’s adjusted EPS and
TSR performance ranked against a comparator group.
The adjusted EPS performance condition will represent
67% of the award. 33% of the award will be measured
using the Company’s TSR performance compared to the
constituents of the FTSE 250 index (excluding financial
services companies and investment trusts). As before
we will also operate a ROCE underpin on the 2023 LTIP
award. The detail of the 2023 LTIP award including
the EPS performance targets will be announced to the
market once finalised. The Committee believes that this
combination of performance measures will challenge
and incentivise management to deliver sustainable
growth for shareholders and only deliver value should
that growth be achieved. Following consultation with our
largest shareholders, the LTIP grant level for the Group
Chief Executive will be increased by 25% of salary to
align with the current 150% of salary already permitted
within the Policy to ensure that share awards continue
to support the successful delivery of our strategy as
well as being market competitive. The Committee
believes this is appropriate for the following reasons:

– Stephen Bird is a proven and high-performing CEO and
has served in the role of CEO at Videndum since April
2009. His leadership is important in delivering our
ambitious strategy.

– The increase in LTIP grant level for Stephen will be

accompanied by stretching EPS targets that are aligned
with Videndum’s medium-term goals.

– The Committee has never been over-reliant on

benchmarking, and market data has not been a driver of
the proposed increase in incentive opportunity. We have
taken comfort from the market data which shows that
the median LTIP grant level for a CEO of a UK listed
company of Videndum’s size is equal to the proposed
grant level of 150% of salary. Given Stephen’s service and
performance, this seems fair and reasonable.

– The proposed LTIP grant level for 2023 is equal to the

policy limit that has been in place since 2014.

We will also award to the new Group Chief Financial Officer
an LTIP award with a value of 125% of salary.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

127

Committee priorities for 2023

Annual General Meeting

The Committee in 2023 will focus on the following matters:

– Securing shareholder approval at the 2023 AGM for the
2022 Annual Remuneration report and a new Directors’
Remuneration Policy to cover the period from the 2023
AGM through to the 2026 AGM.

– Securing shareholder approval at the 2023 AGM for new

LTIP rules.

– Ensuring that the 2023 Annual Bonus Plan drives

performance and rewards sustainable growth in the
Company and is set against appropriate financial targets
especially given challenging market conditions.

– Granting LTIP awards in 2023 with suitably stretching

EPS and TSR performance conditions.
– Succession planning for the Committee.

We will be putting several resolutions on remuneration
to shareholders at the 2023 AGM. Firstly, we will seek
shareholders approval to a new Remuneration Policy
that will set out the remit of remuneration to be paid
to Directors from the 2023 AGM through to the 2026
AGM. Secondly, the Annual Remuneration report covering
Directors’ remuneration paid in 2022 will be put to the
Company’s shareholders for an advisory vote. Thirdly, we
will be submitting for shareholders approval a resolution
seeking to renew the rules of the Company’s LTIP that
was last approved by shareholders in 2014 and requires
renewal after ten years. I encourage all shareholders to
vote in favour of these resolutions. I will attend the AGM
and be open to answering questions on remuneration issues
either at the meeting itself or ahead of the AGM should any
shareholder wish to contact me at info@videndum.com.

Caroline Thomson
Remuneration Committee Chair
27 February 2023

This report provides alternative performance measures (“APMs”) which are not defined or specified under the requirements of International Financial Reporting Standards (“IFRS”). The
Group uses these APMs to aid the comparability of information between reporting periods and Divisions, by adjusting for certain items which impact upon IFRS measures, to aid the user in
understanding the activity taking place across the Group’s businesses. APMs are used by the Directors and management for performance analysis, planning, reporting and incentive
purposes. A summary of APMs used and their closest equivalent statutory measures is given in the Glossary on pages 224 to 228.

128

Directors’ Remuneration Policy

2023 Directors’ Remuneration Policy (“the Policy”)
The 2023 Policy will cover Directors’ remuneration for the three-year period commencing from the Company’s AGM to be
held on 11 May 2023. The key terms for the 2023 Policy are set out below and shareholders will be asked to approve the 2023
Policy at the 2023 AGM.

The current Policy approved by shareholders at the 2020 AGM and covering Directors’ remuneration up until the May 2023
AGM is available on our website or in the 2019 Annual Report. The 2023 Policy does not have any material changes to it from
the Policy approved at the 2020 AGM.

Should there be a need to change the Company’s 2023 Policy ahead of the 2026 AGM, shareholders will be asked to approve
a revised Policy.

This report contains further information required under the Listing Rules and the 2018 UK Corporate Governance Code.

2023 Remuneration Policy table for Executive Directors

Base salary
Base salary is set at a level to secure the services of talented Executive Directors with the ability to develop and deliver a growth strategy.

Operation

Maximum opportunity

Performance measures

Not applicable

Fixed contractual cash amount usually
paid monthly in arrears.

Normally reviewed annually, with any
increases taking effect from 1 January
each year, although the Committee may
award increases at other times of the year
if it considers it appropriate.

This review is dependent on continued
satisfactory performance in the role of
an Executive Director. It also includes a
number of other factors, including
experience, development and delivery
of Group strategy and Group profitability,
as well as external market conditions
and pay awards across the Company.

The Committee has not set a maximum level
of salary and the Committee will usually
award salary increases in line with average
salary increases awarded across the
Company.

Larger increases may, in certain
circumstances, be awarded where the
Committee considers that there is a genuine
commercial reason to do so, for example:

– Where there is a significant increase in the

Executive Director’s role and duties.

– Where an Executive Director’s salary falls
significantly below market positioning.
– Where there is significant change in the

profitability and/or size of the Company or
material change in market conditions.

– Where an Executive Director was recruited
on a lower than market salary and is being
transitioned to a more market standard
package as he or she gains experience.

Benefits
To provide Executive Directors with ancillary benefits to assist them in carrying out their duties effectively.

Operation

Maximum opportunity

Performance measures

Not applicable

Executive Directors are entitled to a range
of benefits including car allowance, private
health insurance and life assurance.

Other ancillary benefits may also be
provided where relevant, such as income
protection, expatriate travel or
accommodation allowances.

Executive Directors are entitled to
participate on the same terms as all
employees in the Sharesave Plan or any
other relevant all-employee share plan.

There is no maximum level of benefits set,
given that the cost of certain benefits
will depend on the individual’s particular
circumstances. However, benefits are set
at an amount which the Committee considers
to be appropriate, based on individual
circumstances and local market practice.

Executive Directors’ participation in the
UK all-employee Sharesave Plan is capped
by the rules of the Sharesave Plan
(currently £500 per month maximum).
An International Sharesave Plan also
operates for non-UK employees.

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129

Annual bonus
To provide a material incentive to drive Executive Directors to deliver stretching strategic and financial performance and to grow long-term
sustainable shareholder value.

Half of any earned annual bonus (after tax) is deferred into the Deferred Bonus Plan held in the form of shares and focuses the Executive
Director on long-term value delivery and growth.

Operation

Maximum opportunity

Performance measures

An absolute maximum of 125% of base salary
to be paid in each year.

Measures and targets for the annual bonus
are set annually by the Committee.

Annual bonus measures may be based on
the achievement of annual targets set
against the Group’s adjusted profit before
tax*, cash conversion and/or strategic or
personal objectives.

The Committee reserves the right to change
measures or introduce new metrics for each
financial year to ensure alignment with the
short-term priorities of the business. The
Committee reviews targets and objectives
annually to ensure the annual bonus remains
appropriate and challenging.

Targets are typically measured over a period
of up to one-year period. Payments range
between 0% for threshold and 125% of base
salary for maximum performance.

Awards granted under the Deferred Bonus
Plan are not subject to any further
performance conditions.

Paid annually based on performance in
the relevant financial year. The amount is
determined based on published full year
results after the financial year end.

Award levels and performance measures are
reviewed annually. The Committee ensures
that performance measures remain aligned
to the Company’s business objectives and
strategic priorities for the year.

Up to half of the annual bonus paid (after tax)
is deferred into awards under the Deferred
Bonus Plan for a period of three years on a
mandatory basis unless the Committee
determines an alternative deferral period is
appropriate. Awards may be granted in the
form of conditional awards, nil-cost options,
forfeitable shares or similar rights. After a
period of three years, the awards vest in
the form of shares in the Company.

The Committee retains full discretion to
amend the bonus payout (upwards or
downwards), if in its opinion any calculation
of payout does not produce a fair result for
either the individual or the Company, taking
into account the overall business performance
of the Company. Any such use of discretion
will be clearly reported in the next published
Remuneration report.

Participants may also receive the value of
any dividends which would have been paid on
shares in respect of which the award vests,
which may be calculated assuming
reinvestment of the dividends in the
Company’s shares on a cumulative basis.
Such dividends are paid out in the form of
additional shares in the Company.

In the event of any material misstatement
of the Company’s financial results, serious
reputational damage to the Company
caused by a breach of the Company’s Code
of Conduct or otherwise, a miscalculation or
an assessment of any performance conditions
that was based on incorrect information, or
the occurrence of an insolvency or
administration event, malus and clawback
provisions may apply for three years from the
date of payment of any bonus or the grant of
any deferred bonus share award permitting
the Committee to reduce, cancel or impose
further conditions on awards.

130

Directors’ Remuneration Policy continued

Long Term Incentive Plan (“LTIP”)
To provide a long-term performance and retention incentive for the Executive Directors involving the Company’s shares.

To link long-term rewards to the creation of long-term sustainable shareholder value by way of delivering on the Group’s agreed strategic
objectives.

Operation

Maximum opportunity

Performance measures

The maximum value of shares over which
awards may be granted in respect of each
year is 150% of base salary. 200% is
permitted in exceptional circumstances
determined by the Committee.

LTIP awards may be based on financial,
non-financial and/or share price-based
performance conditions as determined
from time to time by the Committee.
The Committee will determine the choice of
measures and their weighting prior to each
grant and reserves the right to change the
balance of the measures as it deems
appropriate, such that no measure accounts
for less than 25% of the total award.

Currently, 33% of the award is subject to
the Company’s Total Shareholder Return
(“TSR”) compared to a comparator group
measured over a three-year performance
period. 67% of the award is subject to targets
set against growth (adjusted by the
Committee as it considers appropriate) in the
Company’s adjusted basic Earnings Per
Share* over the same three-year performance
period. The Remuneration Committee
additionally adopts a discretionary underpin
on vesting of the LTIP, whereby the
Committee will assess the Group’s underlying
performance in finalising vesting outcomes. In
particular, the Committee will assess the
Group’s ROCE performance when approving
outcomes under the EPS element of awards.

At threshold, up to 25% of the award will vest,
increasing on a straight-line basis up to 100%
for performance in line with maximum. Below
threshold none of the award will vest.

There is no retesting of any performance
measure.

Under the LTIP, awards are made over a fixed
number of shares, which will vest based on
the achievement of performance conditions
over a performance period of, typically, at
least three years. The performance conditions
are set by the Committee at the start of the
performance period. Awards can take the
form of a conditional award of shares, a
nil-cost option or similar rights.

Awards may be settled in cash (for
participants in territories that prohibit
settlement in shares).

Participants may also receive the value of
any dividends which would have been paid
on shares in respect of which the award vests,
which may be calculated assuming
reinvestment of the dividends in the
Company’s shares on a cumulative basis.

The Committee retains full discretion to
amend the vesting outcome upwards or
downwards if, in its opinion, any calculation
or payout does not produce a fair result for
either the individual or the Company, taking
into account the overall business performance
of the Company. Any such use of discretion
will be clearly reported in the next published
Remuneration report.

For Executive Directors, awards are normally
subject to a mandatory two-year holding
period for any shares that vest.

In the event of any material misstatement
of the Company’s financial results or serious
reputational damage to the Company caused
by a breach of the Company’s Code of
Conduct or otherwise, a miscalculation of an
assessment of any performance conditions
that was based on incorrect information, or
the occurrence of an insolvency or
administration event, malus and clawback
provisions may apply for up to three years
from the vesting of an award permitting the
Committee to reduce or impose further
conditions on awards.

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131

Pension contribution
To provide a benefit comparable with market rates, helping with the recruitment and retention of talented Executive Directors able to deliver
a long-term growth strategy.

Operation

Maximum opportunity

Performance measures

Usually paid monthly in arrears.

Executive Directors may receive
a contribution into the Company’s
Defined Contribution Plan, a personal
pension arrangement and/or a payment
as a cash allowance.

All Executive Directors receive a pension
contribution of 8% of base salary which is
in line with pension contributions provided
to the wider UK employee workforce.
Salary is the only pensionable element
of Executive Director remuneration.

Not applicable.

Notes to the Directors’ Remuneration Policy table for Executive Directors

Under the Company’s share plans the Committee may: (1) in the event of any variation of the Company’s share capital,
demerger, delisting, special dividend or other event which may affect the price of shares, adjust or amend awards in
accordance with the terms of the plan; and (2) amend a performance condition if an event occurs which causes it to consider
an amended condition would be more appropriate and not materially less difficult to satisfy. Any such amendment would be
reported in a subsequent Remuneration report.

When determining Executive Director remuneration policy and practices, the Remuneration Committee takes into account a
range of factors as follows:

Clarity – remuneration arrangements are transparent, as set out in the policy table above. The Committee has taken into
account the views of shareholders consulting on the content of the policy and further considered remuneration
arrangements amongst the wider Videndum workforce. An example of this includes aligning the Executive Directors pension
contribution with that of the wider UK employee workforce.

Simplicity – the remuneration structure for the Executive Directors is simple and clearly explained, comprising a mix of
short-term and long-term incentives aligned to the Company’s strategic objectives. As detailed in the illustrative
remuneration performance scenarios on page 134, a significant proportion of Executive Directors remuneration is tied to the
achievement of annual and long-term financial performance for the Company.

Risk – remuneration arrangements are structured to avoid excessive risk taking – both reputational and other risks. Malus
and clawback provisions operate on the Annual Bonus Plan and LTIP and Executive Directors are required to defer a
significant proportion of their annual bonuses for three-years and to hold shares vesting under the LTIP for a further
two-year holding period, thereby aligning their interests with the long-term interests of shareholders.

Predictability – Videndum’s Policy sets out a range of outcomes for Executive Directors, only rewarding for significant
growth in the Company. The illustrative remuneration performance scenarios in the table on page 134 sets this out and when
determining remuneration outcomes, the Committee ensures to consider that they are aligned to the Company’s
performance and the experience of shareholders and other stakeholders.

Proportionality – Videndum’s Policy and outcomes for Executive Directors remuneration are proportionate and do not
reward poor performance. Notably, bonus deferral and the requirement to hold shares vesting under the LTIP for a further
two-year holding period from vesting, as well as building up share interests in the Company representing at least 200% of
base salary ensure that Executive Directors are focused on the long-term performance of the Company.

Alignment to culture – the Company’s incentive schemes are structured to be aligned with the Company’s culture, driving
the right behaviours. Malus and clawback provisions operate over both the Annual Bonus Plan and LTIP. Performance
conditions tied to both also reflect long-term performance being delivered. A proportion of the Executive Directors annual
bonus is tied to delivery of ESG targets.

132

Directors’ Remuneration Policy continued

Legacy plans

The Committee reserves the right to make any remuneration payments and payments for loss of office notwithstanding
that they are not in line with the Policy set out above where the terms of the payment were agreed: (1) before the Policy
came into effect; or (2) at a time when the relevant individual was not a Director of the Company and, in the opinion of the
Committee, the payment was not in consideration for the individual becoming a Director of the Company. For these
purposes payments include the Committee satisfying awards of variable remuneration and, in relation to an award over
shares, the terms of the payment are agreed at the time the award is granted. Andrea Rigamonti, who was appointed an
Executive Director on 13 December 2022, has an RSP award given to him on 16 November 2021 before he became a Director
of the Company. Details of this legacy award for Andrea Rigamonti are set out on page 149.

Shareholding requirements (including after-employment ceases)

Executive Directors during their tenure are expected to build a shareholding in the Company representing 200% or more of
their base salary. All net of tax vested LTIP awards, DBP awards and exercised Sharesave options should be retained by the
Executive Director until this requirement has been met. This level of shareholding aligns Executive Directors with the
interests of shareholders and ensures that Executive Directors are focused on long-term shareholder value.

Post-employment, Executive Directors are expected to maintain a material level of shareholding in the Company for at least
two years from the date of departure made up of the following elements:

– Awards held under the DBP will only vest on their normal vesting dates and will not be accelerated to the date of

departure. Upon vesting, such shares are to be retained until at least the second anniversary of the departure date.
– For an Executive Director who is a good leaver, LTIP awards will vest on their normal vesting date and be subject to

performance testing, pro rata treatment to the date of leaving and be subject to a two-year holding period (subject to
that two-year holding period not being beyond two years from when the individual ceased to be an Executive Director).
– Awards that have already vested under the LTIP are normally subject to a two-year holding period following vesting (but

not longer than two years from the date of departure).

– For the avoidance of doubt, any shares purchased by an Executive Director using their own personal funds will not be

subject to this post-employment shareholding policy.

The Chairman and Non-Executive Directors are not subject to any such shareholding requirement. However, they are
encouraged to hold shares in the Company. Details of shares held by the Directors are set out on page 147.

Performance measures

The Annual Bonus Plan is based on both personal and financial measures. Typically, the majority of the bonus will be based
on financial measures such as Group adjusted profit before tax. The measures have been chosen to provide a balance
between incentivising the delivery of the Group’s key financial priorities in any particular year and important individual
strategic objectives. The Committee may vary the specific measures and targets year-on-year to ensure that they reflect
the key financial and strategic priorities for the Company in any given year. The selection of measures and the setting of
targets takes into account the Company’s business priorities and risk appetite.

LTIP awards traditionally are based on adjusted basic Earnings Per Share growth and on TSR performance against a specific
comparator group. The Committee considers these to be important measures of performance for the Company over the
longer term. While TSR links a portion of the LTIP to the creation of value for shareholders, adjusted basic Earnings Per
Share growth is a Key Performance Indicator for the Group with the combination providing an appropriate balance between
growth and returns. The Committee has also adopted a discretionary underpin on vesting of the LTIP, whereby the
Committee will assess the Group’s underlying performance in finalising vesting outcomes. In particular, the Committee will
assess the Group’s ROCE performance when approving outcomes under the EPS element of awards. While the Committee
does not disclose a formulaic target in advance, the Committee will ensure that it provides full retrospective disclosure
around its decision-making process, including a summary of the ROCE trajectory over the performance period. Any changes
to these measures will be aligned with the long-term strategy of the Group.

Provisions for the withholding and recovery of sums from the Directors (malus and clawback) are as set out on page 156.

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133

Remuneration Policy for the Chairman and Non-Executive Directors

The table below sets out a description of the Chairman and Non-Executive Directors’ remuneration.

Neither the Chairman nor the Non-Executive Directors participate in any Annual Bonus Plan or the Company’s share plans.

Role

Chairman

Purpose

Operation

To recruit and retain an independent Non-Executive
Chairman reflecting the responsibilities and time
commitment for the role. To lead an effective Board
enabling delivery on the Group’s growth strategy and
creation of long-term sustainable shareholder value.

While the Board has not set a maximum level of fee
payable to the Chairman, the Board will review the level
of fee paid usually on an annual basis and determine
whether that is sufficient in terms of market conditions
and also the time commitment for the role.

Non-Executive
Directors

To recruit and retain independent Non-Executive
Directors reflecting the responsibilities and time
commitment for the role to contribute to an effective
Board and to deliver on the Group’s growth strategy and
creation of long-term sustainable shareholder value.

The Chairman’s fee is an all-inclusive consolidated
amount. It is paid in cash, not shares, usually on a monthly
basis in arrears.

Fees are benchmarked against FTSE-listed companies
of a similar size and complexity to Videndum. Any future
increases will take into account the need to ensure that
the fee remains competitive and reflects the time
commitment for the role.

The Chairman’s remuneration also covers his
chairmanship of the Nominations Committee.

Fees paid to Non-Executive Directors of the Company
consist of the following:

– A base fee.
– An additional fee for the role of the Senior Independent

Director.

– An additional fee for chairing the Audit and

Remuneration Committee or for the designated
Non-Executive Director tasked with oversight
of employee engagement.

Fees are usually reviewed annually and are benchmarked
against FTSE-listed companies of a similar size and
complexity to Videndum. All fees are paid in cash,
not shares, usually on a monthly basis in arrears.

Benefits

To reimburse the Chairman and Non-Executive Directors
for reasonable expenses incurred and bear any costs
associated with tax, where relevant.

Expenses are reimbursed as and when incurred relating to
the Company’s business (including travel and hotel
accommodation).

134

Directors’ Remuneration Policy continued

Illustrative remuneration performance scenarios

The following charts set out scenarios for the remuneration of Stephen Bird and Andrea Rigamonti for 2023 in line with the
Policy. This includes scenarios for full vesting of LTIP awards based on an award at 150% of salary for Stephen Bird and
125% for Andrea Rigamonti , with one chart showing no share price appreciation and one chart showing a 50% share price
appreciation. The charts also reflect Stephen Bird’s salary for 2023 (increased with effect from 1 April 2023) and Andrea
Rigamonti’s salary for 2023 following his appointment as an Executive Director on 13 December 2022.

Stephen Bird
Basic remuneration

Minimum base salary
(with eﬀect from 1 April 2023)
Beneﬁts
Pension (8% of salary)
Total ﬁxed pay (minimum)

£513,310 (88%)

£31,292 (5%)
£41,065 (7%)
£585,667

Andrea Rigamonti
Basic remuneration

Minimum base salary
Beneﬁts
Pension (8% of salary)
Total ﬁxed pay (minimum)

£310,000 (86%)

£25,176 (7%)

£24,800 (7%)
£359,976

On-target performance:

Fixed pay
Annual bonus
LTIP
Total on target pay

Maximum pay:

Fixed pay
Annual bonus
LTIP
Total maximum pay

£585,667 (53%)

£320,819 (29%)

£192,491 (18%)
£1,098,977

£585,667 (29%)

£641,638 (32%)

£769,965 (39%)

£1,997,270

Fixed pay
Annual bonus
LTIP
Total on target pay

Maximum pay:

Fixed pay
Annual bonus
LTIP
Total maximum pay

£359,976 (55%)

£193,750 (30%)

£96,875 (15%)
£650,601

£359,976 (32%)
£387,500 (34%)
£387,500 (34%)

£1,134,976

Maximum pay (including 50% share price
appreciation for LTIP award):

Fixed pay
Annual bonus
LTIP
Total maximum pay

£585,667 (25%)
£641,638 (27%)

£1,154,948 (48%)

£2,382,253

Fixed pay
Annual bonus
LTIP
Total maximum pay

£359,976 (27%)
£387,500 (29%)

£581,250 (44%)

£1,328,726

– Fixed pay – base salary as at 1 April 2023 for Stephen Bird and at 1 January 2023 for Andrea Rigamonti.
– The total value of benefits received in the year ended 31 December 2022 which included car allowance, private healthcare,

income protection and any Sharesave options granted during 2022.

– Andrea Rigamonti’s benefits figure has been estimated due to his appointment as an Executive Director on

13 December 2022.

– Pension contribution of 8% for Stephen Bird and Andrea Rigamonti which is in line with the contribution given to the wider

UK workforce.
– Annual bonus

– At minimum – nil.
– On target – 50% of maximum payout (representing 62.5% of base salary).
– At maximum – 100% of the maximum payout (representing 125% of base salary).

– LTIP

– At minimum – nil.
– On target – 25% vesting under the LTIP (representing 37.5% of base salary for Stephen Bird and 31.25% of base salary

for Andrea Rigamonti) and set out at face value, with no share price growth.

– At maximum – 100% of the maximum payout (representing 150% of base salary for Stephen Bird and 125% of base

salary for Andrea Rigamonti) and set out at face value, with no share price growth or dividend assumptions.

– At maximum with share price appreciation – 100% of the maximum payout (representing 150% of base salary for

Stephen Bird and 125% of base salary for Andrea Rigamonti) and showing a 50% appreciation in the share price over the
LTIP vesting period.

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135

Consideration of employment conditions elsewhere
in the Company

The Committee, when determining Executive Directors’
remuneration, takes into account remuneration and
employment terms and conditions, including levels of pay
for all employees of the Company. The Committee is kept
informed of:

– Salary increases for the general employee population.
– Company-wide benefits including pensions, share

incentives, bonus arrangements and other ancillary
benefits.

– Overall spend on annual bonus.
– Participation levels and outcomes in the Annual Bonus

Plan and the LTIP.

When setting the remuneration of the Executive Directors,
the Committee has regard to general employment terms
and conditions within the Company as set out above.
However, it is recognised that the roles and responsibilities
of Executive Directors are such that different levels
of remuneration apply, with a greater proportion of
remuneration tied to the financial performance of the
Company. The Committee did not consult with the
Company’s employees when drawing up the Directors’
Remuneration Policy set out in this report. Caroline
Thomson is the Non-Executive Director with responsibility
for employee engagement, and as part of that role holds
regular staff engagement sessions through which she
is informed on remuneration issues for the wider Group
workforce and keeps the Board fully updated. The detail
of this role is given on pages 98 of this Annual Report.

Policy on outside appointments

The Committee believes it is beneficial both for the
individual and the Company for an Executive Director
to take up one external non-executive appointment.
Remuneration received by an Executive Director in respect
of such an external appointment would be retained
by the Director. Stephen Bird is an independent non-
executive director and senior independent director of
Headlam plc and in this role he receives an annual fee
of £50,000 as an independent non-executive director
and an annual fee of £10,000 as senior independent
director. Under the terms of his service contract, Andrea
Rigamonti, with the agreement of the Chairman and
Group Chief Executive, may take up one external non-
executive appointment of a listed company. As of the
date of this report Andrea Rigamonti had not taken
up any such external non-executive appointment.

Remuneration Policy for senior managers and other
employees of the Group

The Remuneration Policy for senior managers in the
Company is similar to that of the Executive Directors
although the incentive potential is lower as are salary levels
in accordance with levels of responsibility and complexity.
They participate in the Annual Bonus Plan with the same
structure as the Executive Directors, as well as the LTIP
or participation in a RSP, and therefore a significant

element of their remuneration is also dependent upon the
financial performance of the Company and the Company’s
share price in addition to individual performance.

Remuneration for all other employees is set taking into
account local market conditions to ensure that pay
and benefits attract and retain employees in those
local markets and help deliver the Group’s agreed
strategy. A large proportion of employees are able to
participate in bonus plans that are tied to Company,
Divisional and business unit financial performance
as well as individual performance against personal
objectives. The structure of bonus plans varies across the
employee workforce to achieve different objectives.

Full-time employees of the Company in the UK, US, Italy,
France, Germany, Israel, Australia, New Zealand, Japan,
Singapore and Costa Rica are able to participate in an
all-employee Sharesave Plan granting employees an option
to save and purchase a limited number of shares in the
Company at a discount to the market price at the time
an offer of the Plan is made. Further information on this
Plan is given on page 73. Senior managers participate in
a RSP (excluding Executive Directors). The RSP awards
shares to key employees over a vesting period of up to
three years and helps retain and motivate key talent to
deliver on the Group’s strategic growth objectives.

All full-time employees are also offered membership
of a pension scheme upon joining the Company which
is compliant with local legal requirements. In the UK,
employees are able to join a defined contribution pension
plan with the employer making an 8% fixed contribution
and the employee required to make a minimum contribution
of 4%. The pension contribution is based on base salary only.

The Remuneration Committee is kept informed on
Remuneration Policy and arrangements for the wider
employee population with regular updates to enable it to
stay informed and to assist in setting Executive Directors’
remuneration.

Approach to recruitment remuneration

The Committee’s Policy is to seek to recruit Directors
with the requisite skill and experience to lead the business
and grow the value of the Company over the long-term.
Generally, pay on recruitment will be consistent with
the Policy for Executive Directors as set out in the Policy
table and set at a level to reflect overall responsibilities.

The Committee has the flexibility to set the salary of a new
Executive Director at a lower level initially, with a series of
planned increases implemented over the following years
to bring the salary to the desired level. Consistent with the
regulations, any cap on base salary does not apply. Benefits
will be consistent with the Remuneration Policy. Certain
additional benefits may be provided such as relocation
expenses or allowances. The pension contribution for an
Executive Director will be in line with the UK workforce
contribution rate (currently 8% of base salary).

136

Directors’ Remuneration Policy continued

However, the Committee may, in its absolute discretion,
include remuneration components or awards which
are not specified in the Policy table, subject to the
maximum level of variable pay set out in the following
paragraph, where this facilitates the hiring of candidates
of an appropriate calibre and skillset to deliver on the
Group’s strategy. The Committee will ensure this is only
done where there is a genuine commercial need, and
where this is in the best interests of the Company and
its shareholders. The Committee does not intend to
use this discretion to make a non-performance related
payment (for example a “golden hello” payment).

The absolute maximum level of variable pay will be
325% of base salary (excluding any buy-out awards)
which is in line with the Remuneration Policy set out
on the previous page. This comprises up to 125% of
base salary under the Annual Bonus Plan and up to
200% of base salary under the Company’s LTIP.

In certain circumstances, the Committee may need to
make payments or awards to an executive in respect of
buying-out remuneration arrangements relinquished on
leaving a previous employer. When doing so, the Committee
will aim to do so broadly on a like-for-like basis with a
fair value no higher than the awards foregone. It will take
a number of relevant factors into account which may
include any performance conditions attached to these
awards and the time at which they would have normally
vested. These payments or awards are excluded from the
maximum level of variable remuneration referred to above.

In the event of any such treatment, the Committee
will explain in the next Annual Remuneration report
the rationale for the relevant arrangements.

Executive Directors’ service contracts

The Executive Directors’ service contracts are as follows:

Notice period
from the
Company to the
Executive

Notice period
from the
Executive to
the Company

12 months

6 months

Date of
contract

28 January
2009

13 December
2022

12 months

6 months

Role

Stephen Bird,
Group Chief
Executive
– appointed on
14 April 2009

Andrea
Rigamonti,
Group Chief
Financial
Officer
– appointed on
13 December
2022

The terms of the service contracts for Executive Directors
do not provide for predetermined amounts of compensation
in the event of early termination by the Company. The
Remuneration Committee’s policy in the event of early
termination of employment is set out below.

For future appointments of Executive Directors,
appointments following the approval of the new Policy,
notice periods due from any new Executive Directors will
be symmetrical with the notice period from the Company.

Policy on payment for loss of office

Executive Directors’ notice periods under service contracts
are summarised in the table above. The Committee
believes that the Company’s policy on payment for loss of
office and the structure of notice periods is sufficient to
ensure that the Executive Director has security of tenure
and also that the Company has sufficient retention and
notice periods to enable an orderly process for succession
planning. In the Committee’s opinion, any shorter notice
period would not be in the Company’s best interests
and would risk the stable running of its operations. The
Committee, however, will not give any Executive Director
a service contract of greater than 12 months’ notice.

In the event of termination of office, the Committee
will consider the circumstances including notice period
contained within the service contract, the circumstances
surrounding the termination notably including the
individual’s performance and what is considered to be in the
Company’s best interests. The terms of service contracts
do not provide for predetermined amounts of compensation
in the event of early termination of employment. The
Committee maintains full discretion as how to treat each
such termination upon its merits when trying to mitigate
the cost of termination but ultimately honouring contracted
terms. Dealing with each specific element of remuneration
for an Executive Director this would mean the following:

– Base salary, pension and other benefits (including legal
fees and outplacement costs) – these will be paid for
the notice period, subject to being mitigated if the
Executive Director finds other suitable employment.
This means that each element will continue to be paid
on a monthly basis in arrears during the notice period
either to the end of the notice period or if earlier to the
point at which the Executive Director finds other suitable
employment or a mutually agreed date within the notice
period. Although not covered by the service contract,
the Company will pay reasonable legal expenses and any
recruitment outplacement costs to assist the Executive
Director in their exit. The Committee will determine
the reasonableness of such costs keeping in mind
shareholders’ best interests.

– Annual Bonus Plan – as a general rule, Executive Directors

have no entitlement to a bonus payment in the event
that they cease to be employed. However, they may be
considered for a bonus payment in certain good leaver
circumstances. In such cases the Committee will generally
prorate an annual bonus to the date of termination
and the payment of the annual bonus will usually be
dependent upon the satisfaction of financial performance
conditions and an assessment of the achievement
of personal objectives up to the point of leaving the
Company. The Committee reserves an absolute discretion
in circumstances which it considers appropriate to enable

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

137

a full year’s annual bonus to be paid in full to an Executive
Director in accordance with the limits and rules of the
Annual Bonus Plan applying to the Executive Director.
– Long Term Incentive Plan – awards granted under the
Company’s LTIP are generally treated as follows: if a
participant ceases office or employment with the Group
his/her award will lapse unless he/she is deemed to be
a good leaver or dies in service. An individual is a good
leaver if he/she ceases employment because of ill-health,
injury, disability, the sale of the employing company or
business out of the Group or for any other reason at the
Committee’s discretion, for example early retirement,
but expressly not for where a participant is summarily
dismissed. Except in the case of death (where awards
vest following death, unless the Committee determines
otherwise), awards will normally vest on the normal
vesting date, unless the Committee determines that
awards should vest at the time the individual ceases
employment. The Committee, when determining the level
of an award to vest, will take into account satisfaction of
relevant performance conditions tied to the award and
the period of time that has elapsed since the award was
granted until the date of cessation of employment.
– Deferred Bonus Plan – awards under the DBP will vest
on their normal vesting date (unless the Committee
determines that awards should vest on the individual’s
cessation of employment) except in the case of: (1) death
– when awards will vest following an individual’s death;
and (2) gross misconduct – when awards will lapse.

When negotiating the exit package of an Executive Director,
the Committee will ultimately aim to mitigate the cost of
any termination payment while also fairly treating the
Executive Director, honouring the terms of a service
contract and acting in the Company’s best long-term
interests. The Committee will, upon reaching an agreement
with an Executive Director on the terms of termination,
publish details both with an announcement and with details
published in the subsequent Remuneration report and this
will include an explanation of any use of discretion. Martin
Green ceased to be a Director of the Company on
13 December 2022 and details of his exit package are set
out on page 145 of this report.

Change of control

In the event of a change of control of the Company, LTIP
and DBP awards will vest with the Committee taking into
account, in the case of LTIP awards, the extent to which the
relevant performance conditions have been satisfied and,
unless the Committee determines otherwise, the period of
time that has elapsed since grant. In the event of a winding-
up of the Company, demerger, delisting, special dividend or
other event that may affect the share price, the Committee
may also allow awards to vest on the same basis.

Chairman and Non-Executive Directors

The Chairman and Non-Executive Directors do not have
service contracts but serve under letters of appointment.

The initial period of their appointments is three years but
their appointments may, by mutual consent and with the
approval of the Nominations Committee and the Board, be
extended for a further three years. Appointments may be
extended beyond six years by mutual consent and with the
approval of the Nominations Committee and the Board, if it
is in the interest of the Company to do so. Under the letters
of appointment, notice can be given by either party upon
one month’s written notice. Apart from the disclosure under
the Policy table for the Chairman and Non-Executive
Directors there are no further obligations which could give
rise to a remuneration or loss of office payment under the
letters of appointment. All the Non-Executive Directors and
Chairman (as well as the Executive Directors) are subject to
annual reappointment by the shareholders at the AGM.

Copies of the Executive Directors’ service contracts, the
Chairman’s and each Non-Executive Director’s letters
of appointment are available on our website at
www.videndum.com.

Consideration of shareholder views

The Committee has continued to take into account the
views of its shareholders concerning the proposed 2023
Policy for the remuneration of Directors and embarked on a
consultation process in the autumn of 2022. The
Remuneration Committee has been reassured by the
feedback received, albeit there have been differing views on
certain policy matters and in particular on performance
measures. The Remuneration Committee is acutely aware
of the need to balance, on the one hand, the range of views
from investors and the needs of the business as the Board
assesses them.

The Company received over 99% support for the 2021
Annual Report on Remuneration at the 2022 AGM,
indicating a strong level of support for the structure of
Directors’ remuneration. The 2020 AGM gave over 89%
support for the Directors’ Remuneration Policy report. If an
against vote of 20% or more was received on a vote on
Directors’ remuneration the Committee would consider
that a material level of dissatisfaction from shareholders
and would look to engage with shareholders to determine
the basis for that dissatisfaction.

The Committee would engage with shareholders ahead of
any material change to the Policy for the Company relating
to its Directors and in accordance with the UK Corporate
Governance Code engages with shareholders should there
be a material level of dissatisfaction from shareholders with
Directors’ remuneration. A material level of dissatisfaction
from shareholders would be more than 20% of shareholders
voting against, or abstaining on, a vote related to Directors’
remuneration.

Caroline Thomson, Remuneration Committee Chair, remains
available to discuss the Company’s Remuneration Policy
and implementation of it with shareholders.

This Annual Report on Remuneration, the Annual Statement
and the proposed new Remuneration Policy will be put to
votes at the AGM to be held on 11 May 2023.

138

Annual Report on Remuneration

Directors’ single figure of total remuneration (audited)

The following table sets out the single figure of total remuneration for Directors for the financial years ended 31 December
2022 and 2021.

Stephen Bird

2022

2021

Martin Green
(left 13 December 2022)

2022

2021

Andrea Rigamonti
(Appointed 13 December
2022)(5)

2022

2021

Ian McHoul

2022

2021

Caroline Thomson

2022

2021

Richard Tyson

2022

2021

Erika Schraner
(appointed 1 May 2022)

2022

2021

Teté Soto
(appointed 24 Nov 2022)

2022

2021

Christopher Humphrey
(until 14 December 2022)

2022

2021

Duncan Penny
(until 17 May 2022)

2022

2021

Total

2022

2021

Salary/
fees
£

Benefits(1)
£

Pension(2)
£

Annual
bonus(3)
£

LTIP(4)
£

Total
fixed
remuneration

Total
variable
remuneration

Total
£

488,868

31,292

97,774

307,987

635,988

1,561,909

617,934

943,975

474,629

30,053

94,926

566,588

1,166,196

599,608

566,588

347,617

23,069

27,809

175,512

475,689

1,049,696

398,495

355,000

23,487

28,400

423,781

830,668

406,887

651,201

423,781

16,439

1,336

1,315

8,564

175,000

170,000

67,750

66,250

53,144

51,250

39,007

5,395

63,918

69,250

19,981

51,250

27,654

19,090

8,564

175,000

170,000

67,750

66,250

53,144

51,250

67,750

66,250

53,144

51,250

39,007

5,395

63,918

69,250

63,918

69,250

19,981

51,250

19,981

51,250

1,277,119

55,697

126,898

492,063

1,111,677

3,063,454

1,459,714

1,603,740

1,237,629

53,540

123,326

990,369

2,404,864

1,414,495

990,369

Notes:
(1) Taxable benefits include car allowance, healthcare cover and income protection.
(2) Stephen Bird received a pension contribution of 20% of base salary which is taken in the form of a cash payment. Stephen Bird’s pension contribution was reduced to 8% of salary with

effect from 1 January 2023. Both Martin Green and Andrea Rigamonti receive a pension contribution of 8% of salary.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

139

(3) For the 2022 Annual Bonus Plan, Stephen Bird’s and Martin Green’s bonus potential was 125% of base salary. 50% of the annual bonus is deferred into the Deferred Bonus Plan. Further

details are set out in the “Further notes” section on the following page. Andrea Rigamonti’s bonus figure reflects his appointment date of 13 December 2022 as a Director of the Company.
His bonus structure for 2022 was not the same as that applying to Stephen Bird or Martin Green.

(4) Long-term incentives comprise LTIP awards. Awards made in 2019 failed to achieve their performance conditions based on EPS growth and TSR performance. The 2019 lapsed on its third
anniversary of 8 March 2022. The 2020 LTIP award has a performance period running to 28 February 2023 and subject to satisfaction of performance conditions will vest on 21 September
2023. We have provided an estimated value for the 2020 LTIP award with indicative vesting levels based on performance conditions being assessed at 31 December 2022. This indicated a
vesting level of 46.8% and the value shown in the table has used a closing mid-market share price of £10.78 based on 31 December 2022. The final vesting outcome and actual value
delivered to participants will be shown in full in the 2023 Remuneration report. Full details of the 2020 LTIP award are set out on page 142.

(5) Andrea Rigamonti was appointed a Director on 13 December 2022 under a service contract of the same date. Remuneration disclosed reflects the term of the appointment as a Director

in 2022.

(6) The Remuneration Committee has not used discretion in the award of Directors’ remuneration in 2022.

Each Director has confirmed in writing to the Company that the information in the single figure remuneration table is
correct and that they have not received from the Company any other items of remuneration other than disclosed.

Further notes to the Directors’ single figure of total remuneration table (audited)

(1) Base salary

The table below shows base salaries paid for each Executive Director in 2022. The non bracketed figures for Martin Green
and Andrea Rigamonti show the annual salary for 2022 in their respective roles as Directors. The bracketed figures show the
pro rata amount for their tenure as Directors of the Company.

Executive Director

Stephen Bird

Martin Green (Until 13 December 2022)

Andrea Rigamonti (From 13 December 2022)

(2) Benefits

2022 salary

£488,868

£365,650
(£347,617)

£310,000
(£16,439)

The single figure of total remuneration table sets out the total value of benefits received by each Executive Director in 2022.
Details are as follows:

Executive Director

Stephen Bird

Martin Green (until 13 December 2022)

Andrea Rigamonti (from 13 December 2022)

(3) Pension allowance

Car
allowance

Healthcare
cover

Income
protection

Other
(Sharesave)

£24,439

£17,369

£972

£2,053

£1,150

£107

£4,800

£4,550

£257

£0

Total

£31,292

£23,069

£1,336

The table below sets out the value of the cash payment in lieu of pension for each Executive Director in 2022.

Executive Director

Stephen Bird (representing 20% of base salary)

Martin Green (until 13 December 2022) (representing 8% of base salary)

Andrea Rigamonti (from 13 December 2022) (representing 8% of base salary)

Pension
allowance

£97,774

£27,809

£1,315

Stephen Bird’s pension contribution was agreed at a rate of 20% of base salary at the point he was recruited in April 2009.
The Remuneration Committee has agreed with Stephen Bird that his pension contribution be reduced to 8% of base salary
with effect from 1 January 2023. The level of 8% of base salary is in line with pension contributions to the wider UK
employee workforce in the Group.

(4) Annual bonus

In 2022, each Executive Director was eligible to receive, subject to performance, a maximum bonus of up to 125% of base
salary, half of which is deferred into the DBP.

The financial elements of the Annual Bonus Plan for each Executive Director were based upon actual financial results achieved
for Group adjusted profit before tax* and Group conversion of adjusted operating profit* into adjusted operating cash flow*
(over a half year and full year average target) measured against financial targets set by the Board. The Group adjusted

140

Annual Report on Remuneration continued

profit before tax* financial element represented 50% of the maximum bonus that could be earned and the Group conversion
of adjusted operating profit* into adjusted operating cash flow* represented 25% of the maximum bonus that could be
earned (with one third-based on half year 2022 performance and two-thirds based on the full year 2022 performance).

Under the rules of the 2022 Annual Bonus Plan, each of the above financial performance metrics are assessed independently
of one another so that should threshold not be achieved for one performance condition, that bonus could still be earned for
the other financial performance condition.

The Remuneration Committee considered that these two financial performance conditions are key financial measures for
the Group driving the right behaviour in terms of achieving adjusted operating profit* and adjusted operating cash flow*
generation and had the most direct impact upon shareholder value for the year ended 31 December 2022. The financial
targets were set by the Board and Remuneration Committee at the beginning of 2022.

The personal objective element of the 2022 Annual Bonus Plan for each Executive Director, representing 25% of the
maximum bonus that could be earned, was based upon individual performance measured against stretching personal
objectives set by the Board and Remuneration Committee, as set out in summary below.

Stephen Bird – 2022 personal objectives – 100% achieved

Objective

Assessment

Continue to build a world-class organisation including: develop
succession around the Group Chief Executive; continue to develop
and stretch divisional CEOs; and continue to develop the Group’s HR
function. (20%)

Develop the Group’s strategy including: develop growth strategy
around Creative Solutions; develop strategy around Production
Solutions and Media Solutions including audio business, acquisition
opportunities, organisation structure and Capital Markets Day with
clear articulation of strategy to stakeholders. (65%)

ESG: Continue the development of a well-rounded Group ESG
programme with publication of ESG and TCFD report in line with
GRI standards; clear roadmap to carbon net zero by 2035;
improvement in rating of ESG programme with ratings agencies;
and ensure that the Group is seen by stakeholders as having strong
ESG credentials. (15%)

Development of the senior leadership team in 2022 included the
promotion of Marco Vidali as Divisional CEO for Creative Solutions
and Andrea Rigamonti as Group Chief Financial Officer. The
Operations Executive was expanded to include other senior
management to build the pipeline of talent and diversity.
Succession around the Group Chief Executive progressed with the
development of potential internal candidates.

Developed options for the Group around Creative Solutions in
conjunction with advisors and outlined to the Capital Markets Day
in June 2022. Commenced restructuring initiatives to right size
Creative Solutions for these options. Developed growth strategies
for Media Solutions and Production Solutions including audio and
automation.

Significant progress made on ESG with a Group-wide mobilised
team focused on ESG initiatives. Published first standalone ESG
and TCFD reports in April 2022 clearly setting out targets and
progress to date. 2022 showed clear traction on environmental
initiatives and pathway to net zero with notable successes
including installation of solar panels at Bury St Edmunds and
Cartago sites.

Martin Green – 2022 personal objectives – 52% achieved

Objective

Assessment

Build a world-class finance organisation: develop Deputy Group
Finance Director and other senior finance managers; work with
Divisional management on development of succession for senior
finance roles; and develop high performance plans within the Head
Office finance function. (20%)

Execute on key initiatives to drive growth and momentum: focus on key
growth drivers for 2022 including 4k execution, growth for JOBY,
delivery of 2022 Beijing Olympics, development of audio business
towards £100m revenue, integration of Savage, Audix and Lightstream,
and grow Amimon and ART technology in other vertical markets. (25%)

Deliver Group strategy including options to unlock value of Creative
Solutions and strategy for the remaining group (Production
Solutions and Media Solutions) and communicate to shareholders at
a Capital Markets Day. (45%)

Group-wide finance function performing strongly with several
star-performers. Andrea Rigamonti’s development has successfully
led to his succession as Group Chief Financial Officer.

4k execution largely achieved along with a successful Beijing
Olympics. Audio growth achieved with successful integration of
Audix. Amimon and ART technology growing into other vertical
markets.

Growth strategy outlined at the June 2022 Capital Markets Day.
Strategy and options around Creative Solutions developed in
conjunction with advisors. Development of growth plans for Media
Solutions including audio and Production Solutions including
automation.

Corporate governance and auditing standards: evaluate changes in
corporate governance in 2022 and regular updates to Audit and
Board around audit and wider Board governance. (10%)

Update given to May 2022 Audit Committee in conjunction with
external advisors on emerging corporate governance matters
impacting Board and Audit Committees.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

141

The personal objectives on page 140 are a summary and are underpinned by more detailed objectives which are considered
to be commercially sensitive. The 2022 personal objectives were set by the Board and Remuneration Committee at the start
of 2022. The Remuneration Committee at its meeting on 20 February 2023 assessed final performance.

The Committee strongly considered that a pay-out on the personal objectives element of the 2022 Annual Bonus Plan was
fully merited given progress against each personal objective and the financial performance of the business. Notably, Stephen
Bird’s personal objectives assessment at 100% was given by the Committee due to his exceptional strong performance
during 2022, leading the business to a record Group adjusted PBT despite strong headwinds and with the Group Finance
Director being absent for several months during the year. Martin Green’s personal objectives assessment is reflective of the
objectives achieved during the period of the year he was not absent due to personal reasons.

2022 annual bonus outcome

The table below sets out the annual bonus awards made to Executive Directors in respect of the year ended 31 December
2022 including the financial trigger points used in determining whether a bonus was payable.

Name

Stephen Bird

Bonus
potential

125% of
annual salary

Elements
of bonus
potential

50% Group
adjusted PBT*

25% Group
Conversion of adjusted
operating profit* into
adjusted operating
cash flow*

25% personal objectives

Payout due to Executive
Director at each level

Threshold

Target

Maximum

Actual Group
performance/
assessment
of personal
objective
performance

Payout and
% of
maximum

£50.4m

£56.0m

£61.6m

£52.8m

£65,386

Total

21.4%

H1: 49.5%
FY: 76.5%

55.0%
85.0%

60.5%
93.5%

H1: 90.4%
FY: 83.0%

£89,829

58.8%

£152,771

£305,543

£611,085

100%

£152,771

Total

£307,987

50.4%

Martin Green

125% of
annual salary

50% Group
adjusted PBT

£50.4m

£56.0m

£61.6m

£52.8m

£48,906

21.4%

25% Group
Conversion of adjusted
operating profit* into
adjusted operating
cash flow*

25% personal objectives

Payout due to Executive
Director at each level

H1: 49.5%
FY: 76.5%

55.0%
85.0%

60.5%
93.5%

H1: 90.4%
FY: 83.0%

£67,188

58.8%

£114,266

£228,531

£457,063

52%

£59,418

Total

£175,512

38.4%

A straight-line sliding scale operates between each of the above trigger points for both financial targets. The Board and
Remuneration Committee considered and approved the above financial metric trigger points at its meeting in February
2022 and at that point in time considered that they were appropriate and sufficiently stretching for 2022. However, it
became evident as 2022 progressed that the Group adjusted PBT performance metric became increasingly challenging
as the year progressed due to several headwinds entirely beyond the control of Executive management including the
Ukrainian conflict, continuation of stringent lockdown measures in China, significant rise in inflation, continuation of
component shortages, suppressed consumer demand due to recessionary factors, and lower business confidence.

Despite these significant and unforeseen headwinds, the Group delivered a record adjusted PBT of £54.0 million for
2022. The calculation of the financial results for 2022 Annual Bonus Plan uses budgeted FX rates. As a consequence,
this resulted in a payout at the rate of 21.4% for the Group adjusted PBT element of the 2022 Annual Bonus Plan.

The cash conversion measure, using the same budgeted FX rates, has been met at 100% of the maximum of the
half year and 38.2% of the maximum of the full year, and personal objectives were achieved at the rate of 100% for
Stephen Bird and 52% for Martin Green. Accordingly, the Committee has determined that a bonus of £307,987 and
£175,512 is deemed appropriate for the Group Chief Executive and former Group Finance Director respectively.

142

Annual Report on Remuneration continued

Half of the 2022 annual bonus (after tax) will be deferred
into the DBP. The 2022 deferred bonus will be used to
purchase award shares to be held in trust for a three-
year period. No matching award shares can be earned
under the DBP. After three years, the award shares are
released from the trust to the Executive Directors.

Since Andrea Rigamonti was appointed on 13 December
2022 as an Executive Director, we have not included the
details of his Annual Bonus Plan structure since the majority
of the year was before the date of his appointment. The
structure and financial targets of Andrea Rigamonti’s
Bonus Plan was the same as that disclosed for Stephen Bird
above, but the potential quantum was lower. Based on the
same financial outcome as disclosed above and assessment
of Andrea Rigamonti’s personal objectives for 2022, Andrea
Rigamonti was awarded a pro rata bonus for the period he
served as an Executive Director of the Company of £8,564.

(5) Long-term incentives – Long Term Incentive Plan
(“LTIP”) and Deferred Bonus Plan (“DBP”)

The long-term incentive awards value shown in the single
figure of total remuneration table relate to the following
awards:

Awards made in 2020 and vesting in respect of
performance to 28 February 2023

In 2020, due to the impact of COVID-19 upon the business,
the award of LTIPs to Executive Directors and senior
management was delayed. This was due to difficulties in
setting appropriate performance conditions tied to awards
given the impact of the pandemic upon the business
and its financial performance. Given this challenge, the
Committee consulted with its major shareholders to
consider how to structure LTIP awards for 2020 with
the objective to drive management in the recovery of
the business following the impact of COVID-19.

On the basis of this feedback, the 2020 LTIP awards
were granted on 21 September 2020 and will only
vest if very stretching absolute targets around share
price are met and if Videndum’s relative TSR is also in
the top half of the FTSE 250 constituents (excluding
financial services companies and investment trusts).

For the awards to vest in full, Videndum’s share
price must be £18 or higher on 28 February 2023 and
Videndum’s relative TSR must be at least in the upper
quartile of the FTSE 250. Given the stretching nature
of the targets and the exceptional circumstances the
Remuneration Committee made awards to the Executive
Directors of 200% of salary which is the maximum
permitted under the Directors’ Remuneration Policy.

The Remuneration Committee believes the structure
of the 2020 LTIP aligns our Executive Directors and
PDMRs with the achievement of a strong recovery
over the performance period. The structure will help
reward for significant growth in shareholder value and
will drive management towards that goal. It is only the
2020 LTIP award that has this unique structure.

The Remuneration Committee has discretion to reduce
vesting if it feels appropriate to do so.

The following provides details of the 2020 LTIP awards
made on 21 September 2020 to the Executive Directors
including performance conditions.

(1) Absolute share price target

– The first performance condition is based on the
achievement of absolute share price targets by
28 February 2023, whereby 25% of the total award will
vest should Videndum’s absolute share price reach £9.00
and full vesting of the total award be achieved if
Videndum’s absolute share price reaches £18. Vesting
between these prices will operate on a straight-line basis
in accordance with the Directors’ Remuneration Policy
and in line with the table below.

– No shares will vest if the absolute share price does not

reach £9.00.

– The share price at the start and end of the performance

period will be averaged over three months.

Videndum absolute share price

% of total
award to vest

£9.00

£10.00

£11.00

£12.00

£13.00

£14.00

£15.00

£16.00

£17.00

£18.00

25%

33.33%

41.67%

50%

58.33%

66.67%

75.00%

83.33%

91.67%

100%

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

143

(2) Relative TSR target

– The second performance condition is that the award
will also be subject to a relative TSR condition, with
vesting at points shown below (which remain unchanged
from arrangements for existing LTIP awards and in line
with existing policy). For the award to vest in full,
Videndum will need to have met the absolute share price
target and be in the upper quartile of the FTSE 250 Index
(excluding financial services companies and investments
trusts).
The relative TSR ranking will effectively work as a
downward modifier and none of the shares will vest if
Videndum’s performance is below the median at the end
of the performance period. This performance condition
will be measured from 1 July 2020 through to 28 February
2023 with the same averaging of share price over three
months.

– A straight-line sliding scale will operate at points between

this and vesting will not occur below the median.

Videndum’s TSR ranking compared to FTSE 250
constituents (excluding financial services
companies and investment trusts)

% of total
award to vest

Below median

Median

Upper quartile

ROCE

25%

100%

– The Remuneration Committee will also continue to

use a ROCE underpin to ensure the underlying financial
performance of the business as part of the vesting
outcome. The Committee will also retain a discretion
to scale back the vesting of an award should it result
in an unfair outcome for shareholders.

Dividends that would have been paid on shares vesting
under the LTIP during the performance period are
reinvested in additional shares for each of the above
awards. The two-year holding period post-vesting will
apply in the normal way.

There is no retesting of any performance condition under
any of the above awards.

TSR is calculated on the basis of growth in the Company’s
share price over the performance period from 1 July 2020
through to 28 February 2023 plus dividends paid during
that period and is expressed as a percentage of average
compound annual growth. Share price performance is
averaged over three months at the start and end of
a performance period to eliminate volatility that may
result in anomalous outcomes. The TSR performance is
independently verified by FIT Remuneration Consultants
on behalf of the Committee to determine the outcome.

Based on the closing mid-market share price on
31 December 2022 of £10.78 and including dividends over
the performance period totalling 54.5 pence per ordinary
share, an indicative vesting level for the 2020 LTIP award

of 46.8% is achieved and is shown in the remuneration
table on page 151. It is noted that the Company’s
ROCE for the year ended 31 December 2022 was 18.8%
(2021: 18%, 2020: 4.2%). The end of the performance
period runs to 28 February 2023 and the actual vesting
achievement and value delivered to the Executive
Directors will be disclosed in the 2023 Remuneration
report. Subject to satisfaction of performance
conditions, the awards will vest on 21 September 2023.

LTIP awards made in 2021 and vesting
in respect of performance to 31 December 2023

For awards made in 2021, 33% of an award is subject to
TSR with the Company’s TSR performance ranked against
the constituents of the FTSE 250 Index (excluding financial
services companies and investment trusts) over a three-
year performance period. Threshold performance for the
TSR performance condition will be at the median point of
the comparator group and will result in 25% of an award
vesting. Full vesting for the TSR element will be at the upper
quartile point of the comparator group. A straight-line
sliding scale will operate between each of the above points.
Below threshold performance none of the award will vest.

67% of the award is subject to adjusted EPS growth over
a three-year performance period ending 31 December
2023. The threshold for adjusted basic Earnings Per Share*
vesting was set at 60 pence per share and full vesting
for adjusted basic Earnings Per Share* was set at 100
pence per share with a straight-line progression between
each point. Below threshold performance, none of the
adjusted basic Earnings Per Share element will vest.

Vesting will be underpinned by Remuneration
Committee discretion that will take into account, in
particular, ROCE performance over the performance
period for the EPS element of the award.

LTIP award made in 2022 and vesting in respect of
performance to 31 December 2024

The following table provides details of the awards made
under the LTIP on 11 March 2022 to Stephen Bird, Martin
Green and Andrea Rigamonti. The Remuneration
Committee reverted to an award to Executive Directors at
a level representing 125% of salary. Andrea Rigamonti’s
award was at a lower multiple reflecting that he was not a
Director of the Company at that time. The Remuneration
Committee set challenging performance conditions as set
out below.

Performance for the 2022 Award is to be measured over the
three financial years from 1 January 2022 to 31 December
2024. Awards are split in performance conditions so that
33% is based on the Company’s TSR performance and 67%
is based on EPS performance. Vesting of the 2022 LTIP
award will be as follows:

For the TSR element, the Company’s TSR performance will
be compared against the constituents of the FTSE 250
Index (excluding financial services companies and
investment trusts) over the three-year performance period.

144

Annual Report on Remuneration continued

Threshold performance for the TSR element will be at the median point of the comparator group and will result in 25% of an
award vesting. Full vesting of the TSR element will be at the upper quartile of the comparator group. A straight-line sliding
scale will operate between each of the above points. Below threshold performance, none of the TSR element will vest. 67%
of the award will be subject to adjusted basic EPS* growth over the same three-year period. Threshold for adjusted basic
Earnings Per Share* vesting was set at 100 pence per share and full vesting for adjusted basic Earnings Per Share* was set
at 130 pence per share with a straight-line progression between each point. Below threshold performance, none of the
adjusted basic Earnings Per Share element will vest.

Vesting of the 2022 award will be underpinned by Remuneration Committee discretion that will take into account, in
particular, ROCE performance over the three-year performance period for the EPS element of the award.

Dividends that would have been paid on shares vesting under the LTIP during the performance period are reinvested in
additional shares for each of the awards on the previous page.

There is no retesting of any performance condition under any of the above awards.

TSR is calculated on the basis of growth in the Company’s share price over a three-year performance period plus dividends
paid during that period and expressed as a percentage of average compound annual growth. Share price performance is
averaged over three months at the start and end of the performance period to eliminate volatility that may result in an
anomalous outcome. The TSR performance is independently verified by FIT Remuneration Consultants on behalf of the
Committee and is ranked against the comparator group companies’ TSR performance to determine the outcome.

LTIP awards granted to Executive Directors in 2022:

Type of award

Award
date

Number of
shares
awarded

Face
value(1)

Face value
(% of
salary)

Threshold
vesting (% of
face value)

Maximum
vesting (% of
face value)

End of
performance
period

Director

Stephen Bird

Performance
shares

11 March
2022

55,722

£611,085

125%

Martin Green
(until 13 December 2022)

Performance
shares

11 March
2022

Andrea Rigamonti
(appointed 13 December
2022)

Performance
shares

11 March
2022

41,677

£457,063

125%

13,299

N/A

25%

100%

31 December
2024

(1) The face value has been calculated using the three-day average share price from 7 to 9 March 2022 prior to the award being made on 11 March 2022. This was £10.97.

Awards made in 2019 and vesting in respect of performance to 31 December 2021

These relate to awards made in 2019 under the LTIP. The performance conditions for these awards are the
same as those made in 2021 split 33% based on TSR and 67% based on EPS growth, both over a three-year
performance period. The adjusted basic Earnings Per Share* growth targets were 6% growth per annum
(Compound Average Annual Growth Rate) for 25% of that element of an award to vest and 14% or more growth
per annum for full vesting, respectively. The Remuneration Committee also considered the underlying financial
performance of the Company, notably the Company’s ROCE performance before it confirmed vesting.

As disclosed in the 2021 Annual Report on Remuneration, neither the TSR performance condition or EPS performance
condition achieved threshold performance and so the 2019 award did not vest and lapsed in full on 8 March 2022.

Deferred Bonus Plan 2022 awards

The following table provides details of the awards made under the DBP on 4 April 2022 in respect of the 2021 annual bonus.
There are no performance conditions or matching shares associated with these awards. The shares are held in an Employee
Benefit Trust on behalf of the Directors. The deferral represents 50% of the after tax bonus paid for the 2021 annual bonus.
Normally Executive Directors are required to defer 50% of any after tax annual bonus into the DBP. The 2022 DBP award will
be released on the third anniversary of the award – 4 April 2025.

Director

Stephen Bird

Martin Green(2)

Type of award

Shares awarded using
deferred Annual Cash Bonus

Number of
shares
awarded

11,115

8,313

Face value(1)
(£)

End of holding period

£150,145

100% of award on 4 April 2025

£112,301

100% of award on 4 April 2025

(1) Face value has been calculated using the Company’s share price at the date of the award of £13.51.
(2) Martin Green ceased to be a Director on 13 December 2022. His 2022 DBP award will remain in the Employee Benefit Trust and only vest at the end of the deferral period on 4 April 2025.

Andrea Rigamonti was not required to defer any bonus in respect of 2021, but will be required to defer 50% of any after tax annual bonus into the DBP from his appointment as Group Chief
Financial Officer with effect from 13 December 2022.

Corporate Governance
Videndum plc Annual Report and Accounts 2022

145

Payments to past Directors for loss of office (audited)

On 13 December 2022, Martin Green ceased to be Group Finance Director of the Company. As part of his negotiated
settlement agreement the following payments were agreed:

Salary and benefits – Martin Green will receive his salary and benefits during the 12 months’ notice period expiring on
13 December 2023. Martin will go on garden leave from 31 March 2023 and if he obtains an alternative remunerated position
during the notice period then the monthly instalments will be reduced in mitigation. The Company will maintain his car
allowance, healthcare insurance and income protection during the 12 months’ notice period.

Pension – Martin Green will continue to receive during the 12 months’ notice period a pension contribution at the rate of 8%
of salary. If he obtains an alternative remunerated position during the notice period then the monthly pension contribution
will cease.

Annual bonus – Martin Green will remain eligible for a bonus in respect of the 2022 financial year, subject to satisfaction of
performance conditions. Any bonus payable in respect of the 2022 financial year will likely be paid in March 2023 following
publication of the Company’s financial results for the year ending 31 December 2022. 50% of the after-tax bonus payment
will be subject to deferral into an award under the DBP. Details of the 2022 bonus payment to Martin Green are set out on
pages 139 and 140.

Martin Green will remain eligible for a bonus in respect of the 2023 financial year, prorated for time to reflect the portion of
the year during which he remains actively working and not on garden leave and subject to satisfaction of performance
conditions. Any bonus payable in respect of the 2023 financial year will likely be paid in March 2024 following publication of
the Company’s financial results for the year ending 31 December 2023. Payment of any bonus in relation to the 2023 financial
year (during which Martin Green will not be a Director of the Company) is not strictly subject to the Company’s shareholder-
approved Remuneration Policy or to any relevant disclosure requirements but has been included for completeness.

Long Term Incentive Plan – Martin Green’s outstanding LTIP awards will, subject to satisfaction of the applicable
performance targets (and in respect of the 2021 and 2022 LTIP awards be subject to prorating for time), vest on their
normal vesting dates as detailed in the table below and shall be subject to an additional holding period in accordance with
the Company’s shareholder-approved Remuneration Policy. The treatment of the 2021 and 2022 LTIP awards, is in
accordance with the Company’s shareholder-approved Remuneration Policy.

Year of award

2020

2021

2022

Grant date

Normal
vesting date

Number of
shares
granted

Pro-rated
number of
shares

21 September 2020

21 September 2023

3 March 2021

3 March 2024

11 March 2022

11 March 2025

94,289

72,008

41, 677

94,289

66,681

24,397

Deferred Bonus Plan – Martin Green’s outstanding DBP awards (and any 2023 DBP award, as described in the Annual Bonus
section above) will vest on their normal vesting dates as detailed in the table below and shall be subject to an additional
holding period in accordance with the Company’s shareholder-approved Remuneration Policy. The Company’s Remuneration
Committee has exercised its discretion to permit this outcome in relation to the 2021, 2022 and 2023 awards, which is as
contemplated by the Company’s shareholder-approved Remuneration Policy.

Year of award

2020

2021

2022

Expected 2023

Grant date

Normal
vesting date

Number of
shares granted

1 April 2020

1 April 2023

13 May 2021

13 May 2024

4 April 2022

4 April 2025

3,701

1,897

8,313

Expected April 2023 Expected April 2026

Dependent on 2022
bonus outcome

146

Annual Report on Remuneration continued

Outplacement and legal fees – Martin Green will be entitled to receive a contribution of up to £30,000 (excluding VAT)
towards outplacement support and a contribution of up to £13,000 (excluding VAT) towards legal fees incurred in
connection with his departure.

Sharesave – Martin Green’s options held under the Sharesave Plan will become exercisable on 1 November 2023: Option over
2,282 Videndum Ordinary Shares at an option price of £5.52 per share.

Apart from the above payments, there were no other payments to past Directors of the Company for loss of office in 2022.

It is noted that Martin Green will continue to hold shares in the Company in adherence with the post-employment
shareholding requirement set out on page 132.

Chairman and Non-Executive Directors

The Chairman and Non-Executive Directors were paid the following fees in 2022:

Role

Chairman

Non-Executive Director

Chair of Audit Committee

Chair of Remuneration Committee

Senior Independent Director

Employee Engagement Non-Executive Director

2022 annual fee

£175,000

£52,750

£10,000

£8,000

£5,000

Comment

Fee increased to £175,000 with effect from
1 January 2022 reflecting a 3% increase given
to the wider UK workforce in 2022 and also the
first increase given to the Chairman since his
appointment in May 2019

Base fee increased to £52,750 with effect from
1 January 2022 from £51,250 reflecting a
3% increase given to the wider UK workforce

Fee was last increased on 1 January 2014

Fee was increased on 1 January 2019

Fee introduced with effect from 1 January 2019
to reflect new role under 2018 UK Corporate
Governance Code

The above fees are reviewed annually by the Board with the support of FIT Remuneration Consultants providing market data
to ensure that fees remain appropriate given the size of the Company, time commitment and the need to attract the right
experience for the role. The Chairman and Non-Executive Directors do not receive any other benefits from the Company.

Directors’ shareholding requirements and share interests (audited)

The Board has determined that Executive Directors of the Company are required to build up, over a reasonable period of
time, a substantial shareholding in the Company. This shareholding requirement is to represent at least two times base
salary. Stephen Bird satisfied this requirement throughout 2022 with his holding representing 458% as at 31 December
2022. Martin Green up until his departure with effect from 13 December 2022 also satisfied this requirement with his holding
representing 245% of salary. Andrea Rigamonti’s current shareholding represents 8% of salary given his recent appointment
on 13 December 2022 and he will work towards this shareholding requirement over the next few years. Other members of
the Operations Executive are encouraged to do the same up to a level of 50% of base salary.

The Chairman and Non-Executive Directors of the Company have no such requirement and have discretion as to whether to
hold shares in the Company or not. The tables on page 147 set out the interests in the ordinary shares of the Company held
by each Director (or connected persons) of the Company during the year ended 31 December 2022.

Under the 2018 UK Corporate Governance Code there is a requirement for the Company to develop a post-employment
shareholding policy, encompassing vested and unvested shares. The detail of this post-employment shareholding policy is as
follows and applies from the 2020 AGM:

Upon the departure of an Executive Director, the post-employment shareholding policy will operate as follows:

– Shares held in the Employee Benefit Trust under the DBP will continue to be held in trust and will be released to the former
Executive Director in accordance with their normal vesting dates. The former Executive Director will be expected to hold
any vested DBP shares at least until the second anniversary of their departure date.

– Shares that have vested to an Executive Director under the LTIP and are subject to the two-year post vesting holding

period will continue to be required to be held by the former Executive Director until the expiry of the two-year post vesting
holding period.

– In the event that an Executive Director is treated as a “good leaver” under the LTIP, then any outstanding LTIP awards

that have not vested will be prorated to the date of leaving and remain subject to satisfaction of performance conditions.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

147

Subject to those conditions being achieved at the normal vesting date, shares will typically be released at the earlier of the
expiry of the normal two-year post vesting holding period and the second anniversary of their departure date.

– Shares purchased by an Executive Director using their own personal funds shall not be subject to this post-employment

shareholding policy.

– Martin Green, who ceased to be a Director of the Company on 13 December 2022, will comply with the above post-

employment shareholding policy.

Executive Directors’ shareholdings as at 31 December 2022 (audited)

Number of
shares
owned
outright
(including
connected
persons)

Share
ownership
requirement
(% of
salary)

Number of
shares
beneficially
owned (DBP
award
shares)

Number of
shares
unvested and
subject to
performance
(LTIP shares)

Number of
shares
under
option
(Sharesave)

200%

188,315

2,389

19,328

278,058

13,299

200%

69,023

13,911

185,367

2,282

984

2,282

Number of
shares
under
Restricted
Share Plan
(RSP)

Ownership
requirements
met (based on
shares owned
outright and
DBP award
shares)

8,622

458%

245%

Executive Director

Stephen Bird

Andrea Rigamonti
(appointed 13 December 2022)

Martin Green
(until 13 December 2022)

Chairman and Non-Executive Directors’ shareholdings as at 31 December 2022 (audited)

Director

Ian McHoul (Chairman)

Erika Schraner (appointed 1 May 2022)

Teté Soto (appointed 24 November 2022)

Caroline Thomson

Richard Tyson

1 January 2022 or date of
appointment if later

31 December
2022

20,000

231

8,407

2,654

3,805

231

8,407

2,654

–

The closing mid-market share price on 31 December 2022 was £10.78 and the calculation of the percentage shareholding requirement achieved for the Executive Directors is based on this
closing mid-market share price.
The shares shown in the beneficial holdings table above were acquired by the Directors using their own funds and not through any share incentive scheme (or similar) with the exception of
the disclosures below.

– Stephen Bird’s share interests include 19,328 shares (at 31 December 2022) purchased in the market using deferred Annual Cash Bonus and held by the Employee Benefit Trust; the trust

used to hold shares in respect of awards made under the DBP. These shares will vest out of the DBP in 2023, 2024 and 2025, respectively. Neither these shares nor any of the other shares
held by Stephen Bird have any performance conditions attached to them. During the year ended 31 December 2022 Stephen Bird had the following share dealings:
– On 4 April 2022 exercised and retained award shares under the DBP for 2019 over 8,715 ordinary shares and 341 dividend shares.
– On 4 April 2022 acquired 11,115 ordinary shares through the DBP that are held in the Employee Benefit Trust.
–

2,000 shares of Stephen Bird’s holding are held by his spouse.

– Andrea Rigamonti’s share interests were held upon his appointment as a Director of the Company on 13 December 2022.
– Martin Green’s share interests include 13,911 shares (as at 31 December 2022) purchased in the market using deferred annual cash bonus and held by the Employee Benefit Trust. The trust is
used to hold shares in respect of awards made under the DBP. These shares will vest in 2023, 2024 and 2025 respectively. Neither these shares nor any of the other shares held by Martin
Green have any performance conditions attached to them. During the year ended 31 December 2022 and up to his resignation date of 13 December 2022, Martin Green had the following
share dealings:
4 April 2022 exercised and retained award shares under the DBP for 2019 over 5,141 ordinary shares and 201 dividend shares.
–
–
4 April 2022 acquired 8,313 ordinary shares through the DBP that are held in the Employee Benefit Trust.
Teté Soto’s share interests were held upon her appointment as a Director of the Company on 24 November 2022.

–
– Erika Schraner purchased 3,805 ordinary shares in the Company on 26 August 2022 at a price of £14.534 per ordinary share.
–

There has been no change to the Directors’ shareholdings described in the table above in the period from 31 December 2022 to 27 February 2023, the date of signing of this report.

148

Annual Report on Remuneration continued

Sharesave

The Group operates an all-employee savings-related share option scheme in the UK (“Sharesave”) and a similar international
plan in respect of overseas employees in certain countries (US, Italy, Costa Rica, Japan, France, Singapore, Israel, Australia,
New Zealand and Germany). The Scheme and Plan are open to all the Group’s employees in those countries, including the
Executive Directors, and approximately 1,500 of the Group’s employees participate in this valuable benefit. As at
31 December 2022 Stephen Bird and Andrea Rigamonti participate in the UK Scheme and the details are shown below.

At 1 January
2022
(shares)

Options
exercised
during the
year

Options
lapsed
during the
year

Options
granted
during the
year

At 31
December
2022
(shares)

Exercise
price
(pence)

Market
price at
date of
grant
(pence)

2,282

984

2,282

552

690(1)

984

1280

1600(2)

Date from
which
exercisable

1 November
2023

1 November
2024

Expiry date

30 April 2024

30 April 2025

Director

Date of grant

24 September
2020

27 September
2021

Stephen Bird

Andrea
Rigamonti
(appointed
13 December
2022)

(1) The market price for the grant of shares under option was calculated on the basis of the three-day average of the closing mid-market share price from 26 August 2020 to 28 August 2020

inclusive. A 20% discount was applied to this price under this HMRC approved Sharesave Plan.

(2) The market price for the grant of shares under option was calculated on the basis of the three-day average of the closing mid-market share price from 25 August 2021 to 27 August 2021

inclusive. A 20% discount was applied to this price under this HMRC approved Sharesave Plan.

(3) There is no performance condition attached to the exercise of the Sharesave Plan which is an all-employee plan.

Long Term Incentive Plan

Each year the Executive Directors are made a conditional award of shares in the Company. Awards to Executive Directors
for 2019 represented 125% of salary. For 2020 and 2021, and to encourage the Executive Directors to recover the business
as quickly as possible from the impact of the COVID-19, it was agreed that LTIP awards for the Executive Directors would
represent 200% of salary. LTIP awards are subject to satisfaction of performance conditions over a three-year performance
period as summarised above. The LTIP awards for 2022 reverted to a pre-pandemic level representing 125% of salary. LTIP
awards for 2023 will be made in the 42-day period following the announcement of the 2022 financial results on 28 February
2023. The following table sets out the outstanding awards under the LTIP as at 31 December 2022 for the Executive Directors.

Awards
at 1
January
2022

Awards
exercised
during
the year

Date of
award

Director

Associated
dividend
shares
with the
exercised
award

Awards
lapsed
during
the
year

Awards
made
during
the
year

Market
price on
which
award
made
(pence)

Market
price at
exercise
date
(pence)

Percentage
of interest
that vests if
threshold
performance
achieved

Face
value of
award

At 31
December
2022

End of
performance
period

Stephen Bird 8 March
2019(1)

48,355

21 Sept
2020 (2)

126,023

3 March
2021

96,273

11 March
2022

–

270,651

11 March
2022

–

Total

Andrea
Rigamonti
(appointed)
13 December
2022)

Total

–

48,355

–

1197

126,063

753

96,273

986

–

125% of
salary

– 200% of
annual
salary

25% 31 December
2021

25% 28 February
2023

25% 31 December
2023

–

55,722

1097

48,355

55,722

278,058

–

13,299

1097

125% of
salary

25% 31 December
2024

N/A

25% 31 December
2024

–

13,299

(1) The LTIP award made on 8 March 2019 did not achieve any of its performance conditions based on TSR and EPS growth for the Company. As a consequence 0% of the award vested and the

award lapsed in full on 8 March 2022. Details are shown in the remuneration table for the year ended 31 December 2022 on page 144.

(2) The LTIP award made on 21 September 2020 has a performance period running to 28 February 2023 and therefore its vesting level will not be known until that date which is after the date
of this report. An indicative vesting level as at 31 December 2022 is 46.8% and is shown in the remuneration table on page 151 for the year ended 31 December 2022. A final outcome and
value for this award will be shown in the 2023 Annual Report.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

149

Deferred Bonus Plan

Each year, Executive Directors are required to defer a proportion of their annual bonus into the DBP representing 50% of
any after tax bonus. For any bonus earned in respect of 2022, bonus deferral will be 50%. The following table sets out the
outstanding awards under the DBP as at 31 December 2022 for the Executive Directors.

Awards
at 1
January
2022
(shares)

Awards
exercised
during
the year

Associated
dividend
shares
with the
exercised
awards

Awards
lapsed
during
the
year

Awards
made
during
the
year

Market
price on
which
award
made
(pence)

Market
price at
exercise
date
(pence)

At 31
December
2022

8,715

341

–

1149

1360

Director

Date of
award

Stephen Bird 3 April
2019(1)

Percentage
of interest
that vests if
threshold
performance
achieved

Not
applicable

Face
value of
award

50% of
annual
bonus

1 April
2020(2)

5,676

13 May
2021(3)

2,537

4 April
2022(4)

–

5,676

581

–

2,537

1394

–

11,115

1351

–

50% of
annual
salary

Not
applicable

50% of
annual
bonus

Not
applicable

50% of
annual
bonus

Not
applicable

End of
performance
period

Shares held
in Employee
Trust to 3rd
anniversary
of award
date

Shares held
in Employee
Trust to vest
on 3rd
anniversary
of the award

Shares held
in Employee
Trust to 3rd
anniversary
of award
date

Total

16,928

8,715

341

–

11,115

19,328

(1) The DBP award made on 3 April 2019 vested on its third anniversary of 3 April 2022. The award plus associated dividend shares were paid out to participants on 4 April 2022.
(2) The DBP award made to Stephen Bird on 1 April 2020 will vest on the third anniversary of the award on 1 April 2023.
(3) The DBP award made on 13 April 2021 covered 50% of the bonus earned in respect of the financial year ended 31 December 2020. The award will vest on its third anniversary in April 2024.
(4) The DBP award made on 4 April 2022 to Stephen Bird covered 50% of the bonus earned in respect of the financial year ended 31 December 2021. The award will vest on its third anniversary

on 4 April 2025.

(5) Andrea Rigamonti who was appointed a Director on 13 December 2022 currently holds no interests in the DBP. He will participate in the DBP at the rate of 50% of after tax annual bonus

for 2022 to be paid in March 2023 and at the same rate in future years.

Restricted Share Plan (“RSP”)

Before being appointed a Director on 13 December 2022, Andrea Rigamonti had been given a RSP award of shares in the
Company that vest on the basis of remaining in employment with Videndum at a fixed date. The RSP award was put in place
when he joined Videndum in October 2021 as part of the measures to compensate for other share incentives held with a
previous employer. The details of the RSP award are set out in the table below. Dividend award shares will also be given on
the vesting ordinary shares based on dividends paid during the period of the award. No individual will be given an RSP award
once they become a Director of the Company.

Andrea Rigamonti -
Award Date

16 November 2021

Vesting date

1 March 2024

Number of
ordinary shares

Performance condition

8,622

Remaining employed at
vesting date with Videndum

Share price
for award

£14.65

150

Annual Report on Remuneration continued

Ten-year performance graph of the Company’s ordinary shares compared to comparator group

The Company is required to include a line graph showing the Company’s ordinary share performance compared to an
appropriate index over a ten-year performance period ending 31 December 2022. The graph below illustrates the Company’s
annual TSR (share price growth plus dividends that have been declared, paid and reinvested in the Company’s shares)
relative to the FTSE 250 for the preceding ten-year period ending 31 December 2022, assuming an initial investment of
£100. This index has been chosen since it is the comparator group (excluding financial services companies and investment
trusts) for one of the performance conditions tied to awards under the LTIP. The Committee notes that the FTSE 250 Index
is a recognised broad market equity index, relatively complex and international in nature and is comparable to the
Company’s business operations where approximately 90% of revenues are generated outside the UK. TSR data is taken
from Datastream.

£300

£250

£200

£150

£100

£50

£225

£197

Dec 12

Dec 13

Dec 14

Dec 15

Dec 16

Dec 17

Dec 18

Dec 19

Dec 20

Dec 21

Dec 22

Source: Thomson Reuters Datastream

Videndum ordinary share

FTSE 250 Index

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

151

Performance table setting out the total remuneration of the Group Chief Executive

The following table sets out the single figure of total remuneration paid and the amount vesting under short-term and
long-term incentives (as a percentage of the maximum that could have been achieved) to the Group Chief Executive for each
of the ten years ended 31 December 2022.

Year (ended 31
December)

2022

2021

Group Chief Executive

Stephen Bird

2020

Stephen Bird

2019

2018

2017

2016

2015

2014

2013

Stephen Bird

CEO single figure of total
remuneration

Annual bonus payout
against maximum
opportunity % (including
actual amount paid)

Long-term incentive
vesting rates against
maximum opportunity %

£1,561,909

£1,166,196

£701,744

£1,151,858

£2,280,723

£1,596,214

£962,299

£636,374

£745,388

£1,057,407

50.4%

£307,987

95.5%

(£566,588)

22.5%

(£133,489)

21.5%

(£124,445)

66.9%

(£377,925)

88.4%

(£486,771)

77.9%

(£418,450)

20%

(£104,876)

44.25%

(£226,378)

71%

(£355,616)

46.8%(1)

72.06%

100%

67.5%

28.55%

(1) The vesting level for the Long Term Incentive of 46.8% is indicative of the vesting level for the LTIP award made on 21 September 2020. This award performance period runs to 28 February

2023 but an indicative vesting level is shown above reflecting performance to 31 December 2022 and the closing mid-market share price of £10.78 on that date. The actual vesting
achievement and value delivered to Stephen Bird will be disclosed in the 2023 Remuneration report.

152

Annual Report on Remuneration continued

Percentage change in remuneration of the Directors and employees

The table below shows the year-on-year percentage change in salary, benefits and annual bonus earned between the year
ended 31 December 2022 and the years ended 31 December 2021 and 31 December 2020 for the Directors, compared to the
average of earnings of the parent Company employees. The Remuneration Committee has selected this comparator group
on the basis that each of the Directors is UK based and this provides a local market reference, is a sizeable population and a
fair representation of the Group’s employee base.

Stephen Bird, Group Chief
Executive

Martin Green,
Group Finance Director
(until 13 December 2022)

Andrea Rigamonti,
Group Chief Financial Officer
(from 13 December 2022)

Ian McHoul, Chairman

Caroline Thomson,
Non-Executive Director

Richard Tyson,
Non-Executive Director

Erika Schraner,
Non-Executive Director
(appointed 1 May 2022)

Teté Soto
(appointed 24 November 2022)

Parent Company employees

2019/20
Annual
salary

2019/20
Taxable
benefits

2019/20
Annual
bonus

2020/21
Annual
salary

2020/21
Taxable
benefits

2020/21
Annual
bonus

2021/22
Annual
salary

2021/22
Taxable
benefits

2021/22
Annual
bonus

2.5%

-7%

324%

-45%

2.5%

-23%

324%

-59%

n/a

2.5%

n/a

2.5%

n/a

2.5%

n/a

-36%

n/a

2.2%

n/a

2.2%

n/a

292%

n/a

-42%

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

153

Group Chief Executive’s pay ratio disclosure

In accordance with Option C as set out in the Companies (Miscellaneous Reporting) Regulations 2018, the following table
sets out Stephen Bird’s (Group Chief Executive) total remuneration for the year ended 31 December 2022 compared with
all UK employees of the Group at the 25th percentile, 50th percentile and 75th percentile. The data has been compiled from
available data as at 31 December 2022 for all UK-based employees and no element of remuneration has been excluded from
the calculation. This table will build up over a ten-year period. We have chosen Option C as it reflects all our UK workforce
and is more complete in showing the Group Chief Executive’s remuneration compared to the entire UK workforce. It uses
bonus information for 2021 and was paid in March 2022 as bonus information for 2022 is not calculated until March 2023
for many UK employees. It is therefore not possible to use 2022 bonus data since the 2022 Annual Report was approved on
27 February 2023. The same principle applies for prior years disclosed. The Company believes the median ratio is consistent
with the Company’s wider policies on employee pay, reward and progression. We seek to pay all employees including the
Chief Executive fairly for the roles they perform and taking into account a range of factors including the relevant role,
their performance and internal and external measures including pay rates and pay gaps.

Year

2019

Method

Option C

2020

Option C

2021

Option C

2022

Option C

25th
percentile

50th
percentile

75th
percentile

82:1

57:1

35:1

£27,833

£40,002

£64,086

44:1

31:1

19:1

£25,866

£36,965

£61,245

28:1

19:1

12:1

£26,361

£37,726

£58,866

52:1

37:1

22:1

£29,804

£42,020

£69,610

The actual salaries paid for each UK employee at the respective quartiles for 2022 were: 25th percentile – £26,935; 50th
percentile – £38,000; and 75th percentile – £57,741. The change in the pay ratios from 2019 to 2022 has been greatly
impacted by COVID-19. In 2020, the Company implemented short-time working and other measures such as salary waivers
in response to the pandemic. In 2021, Executive Directors did not receive any pay increase in contrast to the wider UK
employee population and long-term incentives for the Executive Directors did not vest due to performance conditions not
being achieved. As the Company has recovered from the impact of the pandemic in 2022 and that the Group had delivered a
record profit in 2022 leading to a higher proportion of variable remuneration being delivered to the Group Chief Executive,
the pay ratio gap has widened as annual bonuses and long-term incentives become payable. We consider that the use of
Option C and the percentiles shown for UK employees are reasonably representative.

154

Annual Report on Remuneration continued

Relative importance of spend on pay

The following table sets out for the year ended 31 December 2022 compared to the year ended 31 December 2021 the actual
expenditure of the Company in terms of remuneration paid to or receivable by all employees of the Group and distributions
to shareholders by way of dividends. There have been no other significant distributions and payments required to be
disclosed that would assist in understanding the relative importance of spend on pay.

Total remuneration paid to all Videndum employees

Total dividends paid to shareholders

Year ended
31 December
2022

Year ended
31 December
2021

% change

£114.4m

£101.0m

13.2%

£18.0m

£7.1m

253.5%

Statement of implementation of Remuneration Policy in the year ending 31 December 2023

This section provides an overview of how the Committee is proposing to implement the Remuneration Policy in 2023.

(1) Base salary
The table below sets out the 2023 base salary for each Executive Director, together with the percentage increase from 2022.
Salary increases in 2023 are to be implemented with effect from 1 April 2023 and the figure in brackets shows the base
salary for the period from 1 January 2023 to 31 March 2023.

Executive Director

Stephen Bird

Andrea Rigamonti

2023 salary

Increase

£513,310
(£488,868)

£310,000

See note
below

The Committee decided that in line with normal practice, a 5% increase for Stephen Bird’s salary was merited for 2023 and
with effect from 1 April 2023. This was based on several factors including: (i) that the wider employee population across the
Group received a 5% increase for 2023; (ii) the continuing recovery of the business from the impact of COVID-19; (iii) in
recognition of the skills, experience and high performance of the individual and their importance to the Group; (iv) the need
to provide a remuneration package to the Executive Directors that is competitive and retains and incentivises the individuals;
and (v) in recognition of a period of sustained high inflation in the wider labour market.

Andrea Rigamonti’s salary of £310,000 was determined at the time of his appointment as a Director and Group Chief
Financial Officer on 13 December 2022. This salary took into account market data for compatible roles with other FTSE 250
companies and with the input of the Committee’s remuneration consultants. Andrea Rigamonti’s salary will next be
reviewed on 1 January 2024.

(2) Benefits
Benefits, including car allowance, private healthcare and income protection will be paid at the same rate as in 2022.

(3) Pension allowance
Pension allowances paid to Executive Directors are set out in the table below. Stephen Bird’s allowance reduced to 8% of his
base salary with effect from 1 January 2023 (reduced from 20%) and is now aligned with the wider UK workforce. All
Executive Directors therefore receive a pension contribution of 8% of base salary which is in line with pension contributions
provided to the wider UK employee workforce. Stephen Bird’s pension contribution in the table below reflects that his salary
from 1 January 2023 to 31 March 2023 was £488,868 and from 1 April 2023 to 31 December 2023 is £513,310.

Executive Director

Stephen Bird (8% of salary)

Andrea Rigamonti (8% of salary)

Pension
allowance

£40,576

£24,800

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

155

(4) Annual bonus
The maximum opportunity remains unchanged at 125% of base salary. Half of any net after tax annual bonus earned for the
year ended 31 December 2023 will be deferred into the DBP for a period of three years and held in the form of shares in the
Company. There will be no matching award that can be earned on this deferred bonus. The table below provides information
on the performance measures against which performance for the 2023 Annual Bonus Plan will be measured.

Core measures for 2023 Annual Bonus Plan

Adjusted Group profit before tax*

Group percentage of adjusted operating profit* converted to operating cash flow*

Role-specific personal objectives set by the Board and Remuneration Committee for the Executive Director

Weighting
(% of overall opportunity)

50%

25%

The performance measures selected reflect the strategic and operational objectives of the Group. The Profit and Cash
Conversion measures are independently assessed. The Group percentage of operating profit converted to operating cash
metric for 2023 will be measured against targets set for H1 2023 performance and full year 2023 performance, with
one-third for half year and two-thirds for the full year. The Committee considers that the specific targets and personal
objectives for 2023 are commercially sensitive and therefore has not disclosed them. The Committee will disclose these
targets and objectives once a bonus has been paid and subject to the Committee considering that they are no longer
commercially sensitive.

(5) Long Term Incentive Plan
Stephen Bird and Andrea Rigamonti will each receive an award of shares under the LTIP. These awards will be made in
the 42-day period following the announcement of the full year results for the year ended 31 December 2022 that will be
announced on 28 February 2023. The performance conditions for the 2023 LTIP awards will be as follows: 67% of the award
will be subject to adjusted basic EPS* growth over a three-year performance period. The Remuneration Committee will
determine the precise adjusted EPS targets for threshold and maximum vesting in the 42-day period following the
announcement of the full year results for the year ended 31 December 2022, to be announced on 28 February 2023. The
remaining 33% of the award will be subject to TSR with the Company’s TSR performance ranked against the constituents of
the FTSE 250 Index (excluding financial services companies and investment trusts) over a three-year performance period.
Threshold performance for the TSR element will be at the medium point of the comparator group and will result in 25% of an
award vesting. Full vesting of the TSR element will be at the upper quartile of the comparator group. A straight-line sliding
scale will operate between each of the above points. Below threshold, none of the TSR element will vest. Vesting will be
underpinned by Committee discretion that will take into account, in particular, ROCE performance over the performance
period for the EPS element of the award. Once the LTIP award is made, details will be announced to the market, including
the specific performance conditions. Any awards vesting under the LTIP 2023, after deduction of taxes, will be subject to a
further two-year holding period, thereby more closely aligning the participants’ interests with the long-term interests of
shareholders. The Group Chief Executive’s 2023 LTIP award will be increased from 125% to 150% of salary. This increase is
proposed for several reasons including: (i) Stephen Bird is a proven and high-performing CEO and has served in the role of
CEO at Videndum since April 2009. His leadership is essential in delivering our ambitious strategy; (ii) The increase in LTIP
grant level for the Group Chief Executive will be accompanied by more stretching EPS targets, that are aligned with our
medium-term goals; (iii) The Committee has never been over-reliant on benchmarking and market data has not been a
driver of the proposed increase in incentive opportunity. The market data which shows that the median LTIP grant level for a
CEO of a UK-listed company of Videndum’s size is equal to the proposed grant level of 150% of salary and that change will
increase the Group Chief Executive’s total maximum pay to be in line with the market median for equivalent roles. Given
Stephen Bird’s service and performance we think this is both fair and reasonable. For the Group Chief Financial Officer the
2023 LTIP award on grant will represent 125% of salary.

156

Annual Report on Remuneration continued

(6) Chairman and Non-Executive Directors’ remuneration
The fee structure for the Chairman and Non-Executive Directors for 2023 is set out in the following table. It has been agreed
that fees for 2023 will be increased with effect from 1 April 2023 (with the fee in brackets the fee payable from 1 January
2023 to 31 March 2023).

Role

Chairman

Non-Executive Directors’ base fee

Chair of Audit Committee

Chair of Remuneration Committee

Senior Independent Director

Employee Engagement Non-Executive Director

2023 fee

2022 fee

£184,000
(£175,000)(1)

£55,400
(£52,750)(2)

£175,000

£52,750

£10,000(3)

£10,000

£10,000(3)

£10,000

£8,000(3)

£5,000(4)

£8,000

£5,000

(1)

Ian McHoul became Chairman on 21 May 2019 when the Chairman’s fee was £170,000 per annum. The fee was increased to £175,000 from 1 January 2022 and will increase on 1 April 2023
to £184,000 per annum. This increase in 2022 and 2023 reflects a similar level given to the wider employee workforce of 3% and 5% respectively in 2022 and 2023, is in line with market
data provided by FIT Remuneration Consultants for the role and reflects the time commitment for the role.

(2) Following a review of Non-Executive Directors’ fees with the support of FIT Remuneration Consultants, it was concluded that a 5% increase to the base fee would be applied for 2023 with
effect from 1 April 2023. This aligned the Non-Executive Directors increase with the Executive Directors and wider employee workforce, also took into account market data provided by FIT
Remuneration Consultants for the role and reflects the time commitment for the role.

(3) The Chair of the Remuneration Committee and Senior Independent Director were last increased to their current level in 2019 to take account of the nature of each role, the time

commitment, performance of the respective individuals, market rates for the complexity of the roles and the calibre of individuals. The Audit Committee Chair’s fee upon review was
considered to be in line with market rates and appropriate for the demands of the role and complexity of the Company.

(4) In 2019, the Company appointed Caroline Thomson as the Non-Executive Director with responsibility for employee engagement in accordance with the 2018 UK Corporate Governance

Code. Given the responsibility of this role and additional work associated with it, the Board approved that a fee of £5,000 per annum be payable to Caroline Thomson for that role. This fee
will be paid to any other successor Non-Executive Director in future years. A full description of the activity involved with this role is given on pages 98 of the Annual Report.

The Board has agreed that fees will typically be reviewed annually to ensure that they remain appropriate.

Malus and clawback

Under the rules of the Annual Bonus Plan, LTIP and DBP, awards are subject to a malus rule whereby the Remuneration
Committee has the power to reduce, cancel or impose further conditions upon a bonus or award in circumstances that the
Committee determines such action is appropriate, including circumstances where a material misstatement of the
Company’s audited financial results has occurred, or serious reputational damage to the Company has occurred as a result
of a participant having breached the Company’s Code of Conduct, a miscalculation or an assessment of any performance
conditions that was based on incorrect information, or the occurrence of an insolvency or administration event. In addition,
under the above plans, a clawback provision exists where in the same circumstances as for malus, any future award that
is paid out can be clawed back from a participant for a period of up to three years from it vesting or being paid out.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

157

Voting at Annual General Meeting

At the Company’s last AGM held on 17 May 2022, shareholders were asked to vote for an advisory vote on the Directors’
Annual Remuneration report for the year ended 31 December 2021. The resolution was approved by shareholders on a poll
at the 2022 AGM and the table below sets out the proxy votes voted for, against and withheld for the resolution.

Resolution

Advisory vote on the Annual Report on Remuneration for the year ended 31 December 2021

For proxy
votes and %
of votes
cast

Against
proxy votes
and % of
votes cast

38,653,371

99.79%

79,663

0.21%

Withheld
proxy votes

The Remuneration Policy was voted on by shareholders at the Company’s AGM held on 27 May 2020. The details of that vote
are set out below.

Resolution

Remuneration Policy – to cover Directors’ remuneration for the period
from the 2020 AGM through to the 2023 AGM

For proxy
votes and %
of votes
cast

Against
proxy votes
and % of
votes cast

Withheld
proxy votes

30,806,064

3,888,644

1,641,632

88.79%

11.21%

As at the date of the Company’s AGM on 17 May 2022 the Company had 46,387,062 ordinary shares in issue including
133,600 shares held in treasury. The Remuneration Committee, in line with guidance, considers that an against vote of 20% or
more of the votes cast is deemed to be significant in connection with a resolution on Directors’ remuneration. In the event
that a significant level of concern is raised at future AGMs, both the Chairman of the Board and the Chair of the
Remuneration Committee will contact the Company’s major shareholders following an AGM to understand the precise detail
of the concern being raised. Subject to that, the Committee and the Board as a whole will consider how best to address the
concern being raised. This may involve a revision to the Company’s Policy on Directors’ remuneration at a subsequent AGM
or some other change which can be implemented without further shareholder consultation. The Committee and the Board
are committed to an open and transparent dialogue with shareholders on material matters of concern.

158

Annual Report on Remuneration continued

The Remuneration Committee

External advisors

The Remuneration Committee comprised the following
members during 2022: Caroline Thomson – Chairman,
Christopher Humphrey (until 14 December 2022),
Richard Tyson, Erika Schraner (from 1 May 2022), Teté Soto
(from 24 November 2022) and Duncan Penny (until 17 May
2022). As announced on 14 December 2022, Anna Vikström
Persson will join the Remuneration Committee as a member
upon her appointment as a Director on 1 May 2023.

All of the Committee members are independent Non-
Executive Directors.

The Committee, on behalf of the Board, determines the
Policy, base salaries, annual cash bonus arrangements,
participation in incentive schemes, pension arrangements
and all other benefits received by the Executive Directors
including any exit packages.

The Committee also oversees the framework of remuneration
for the Operations Executive, including terms of service, pay
structure, annual cash bonus, pensions, share incentive
arrangements and all other benefits and also has regard to
wider employee remuneration within the Group.

The Committee invites individuals to attend meetings,
as it deems necessary, to assist with consideration of
remuneration matters. During 2022 the following
individuals attended meetings of the Committee:
Ian McHoul (Board Chairman), Stephen Bird (Group Chief
Executive), Martin Green (former Group Finance Director),
Andrea Rigamonti (Group Chief Financial Officer) and
Jon Bolton (Group Company Secretary and HR Director).
Representatives of the Committee’s remuneration advisor,
FIT Remuneration Consultants, also attended meetings
in 2022.

The Executive Directors or members of the Operations
Executive are not present when their own remuneration
is being considered.

The remuneration of the Chairman and the Non-Executive
Directors is determined by the Board as a whole, with the
Chairman or the relevant Non-Executive Director abstaining
when his or her remuneration is considered.

For further information regarding governance for the
Remuneration Committee see pages 92 and 122 to 127 of
this Annual Report.

The Committee appointed FIT Remuneration Consultants
as its external remuneration advisor in 2019. Their
appointment involved the Committee Chairman reviewing
several potential advisors including written proposals
and interviews. Following this process, the Remuneration
Committee selected FIT Remuneration Consultants.
FIT Remuneration Consultants charge for their time given
in providing a service to the Company and during 2022
the level of fees paid to remuneration advisors totalled
£44,759 (2021: £30,825) and was charged on a time
basis. This fee covered advice relating to disclosures in
the 2021 Directors’ Remuneration report, measurement
of performance conditions associated with long-term
incentive arrangements, preparation around a new
Remuneration Policy including consultation with major
shareholders and general remuneration advice including
recruitment and exit packages. FIT Remuneration
Consultants do not provide any other services to the
Company. FIT Remuneration Consultants are a member
of the Remuneration Consultants Group and operates
under that Group’s voluntary code of practice for
remuneration consultants in the UK. The Committee is
satisfied that the advice it received from FIT Remuneration
Consultants during 2022 was objective and independent.
The Company or any of its individual Directors has no
other connection with FIT Remuneration Consultants
other than as acting as the Committee’s external
remuneration advisor. The Committee also received
advice and administrative support during 2022 from the
Group Company Secretary and HR Director, Jon Bolton.

This Annual Remuneration report has been approved by the
Remuneration Committee and signed on its behalf by:

Caroline Thomson
Remuneration Committee Chair
27 February 2023

This report provides alternative performance measures (“APMs”) which are not defined or specified under the requirements of International Financial Reporting Standards (“IFRS”).
The Group uses these APMs to aid the comparability of information between reporting periods and Divisions, by adjusting for certain items which impact upon IFRS measures, to aid the
user in understanding the activity taking place across the Group’s businesses. APMs are used by the Directors and management for performance analysis, planning, reporting and incentive
purposes. A summary of APMs used and their closest equivalent statutory measures is given in the Glossary on pages 224 to 228.

Corporate GovernanceDirectors’ report

Videndum plc Annual Report and Accounts 2022

159

Directors

Company name change

The Directors who held office at 31 December 2022 and up
to the date of this report are set out on pages 86 and 87
along with their biographies and photographs.

The Company changed its name on 23 May 2022 to
“Videndum plc” after approval given by shareholders
at the Company’s AGM on 17 May 2022.

Erika Schraner joined the Board as an independent Non-
Executive Director on 1 May 2022 and became a member
of the Audit, Remuneration and Nominations Committees.
Erika succeeded Christopher Humphrey as the Chair of
the Audit Committee from 12 August 2022. Christopher
Humphrey stood down from the Board and as Senior
Independent Director of Videndum on 14 December 2022,
having been with the Company for nine years.

With effect from 14 December 2022, Richard Tyson was
appointed Senior Independent Director.

Duncan Penny stood down from the Board as an
independent Non-Executive Director at the close of the
AGM on 17 May 2022.

Teté Soto was appointed as an independent Non-Executive
Director with effect from 24 November 2022 and became
a member of the Audit, Nominations and Remuneration
Committees.

Martin Green resigned as Group Finance Director with effect
from 13 December 2022. Andrea Rigamonti was appointed
to the Board as the Group Chief Financial Officer with effect
from 13 December 2022.

It was further announced on 14 December 2022 that Anna
VikstrÖm Persson would join the Board as an independent
Non-Executive Director with effect from 1 May 2023.
Anna will become a member of the Audit, Remuneration
and Nominations Committees and after a period of
induction and handover, will succeed Caroline Thomson
as Chair of the Remuneration Committee during 2024.

All Directors of the Company will stand for re-appointment
as Directors at the Company’s AGM to be held on 11 May
2023 and further details can be found in the AGM Notice.

The remuneration of the Directors including their respective
shareholdings in the Company is set out in the Remuneration
report on pages 122 to 158.

Directors’ and Officers’ liability insurance and
indemnification of Directors

The Company maintains Directors’ and Officers’ liability
insurance which gives appropriate cover for any legal action
brought against its Directors. The Company has also granted
indemnities to each of its Directors to the extent permitted
by law. Qualifying third-party indemnity provisions (as
defined in Section 324 of the Companies Act 2006) have been
adopted for each Director and indemnify in relation to certain
losses and liabilities which the Directors may incur to third
parties in the course of acting as Directors of the Company.

Shareholder rights

The Company’s shareholders have a series of rights in
connection with the governance of the Company. These
are contained in statute, principally the Companies Act
2006, regulations such as the UKLA’s Listing Rules and
in the Company’s Articles of Association. A shareholder,
or shareholders acting together, can use procedures set
out in the Companies Act 2006, to requisition a general
meeting of the Company. The Directors are required to call
such a general meeting once the Company has received
requests to do so from shareholders representing at least
5% of the paid-up capital of the Company as carries
the right of voting at general meetings of the Company
(excluding any paid-up capital held as treasury shares).

Under the Companies Act 2006, either (i) a member or
members representing at least 5% of the total voting rights
of all the members having a right to vote on the resolution
at the AGM (excluding voting rights attached to any
treasury shares); or (ii) at least 100 members with the right
to vote on the resolution at the AGM and each holding, on
average, at least £100 of paid-up share capital, may require
the Company to give members of the Company entitled to
receive notice of the next AGM, notice of a resolution which
may properly be moved at that meeting. Such a resolution
may be properly moved unless it is defamatory, frivolous
or vexatious or if it would be ineffective for any reason.

Such a request may be in hard copy or electronic form
and must identify the resolution of which notice is to be
given or the matter to be included in the business, must
be authorised by the person or persons making it and
must be received by the Company not less than six weeks
before the meeting. A request for a matter to be included
in the business of the meeting must also be accompanied
by a statement setting out the grounds for the request.

Shareholders have an express right to vote annually on the
Directors’ Remuneration report and at least every three years
they have the right to vote on the policy governing Directors’
remuneration. Under the Company’s Articles of Association,
shareholders have the right to vote on the re-election of all
Directors of the Company annually at the AGM.

It is also confirmed that under the Company’s governance
arrangements, including the Articles of Association, there are
no anti-takeover devices or provisions to prevent a takeover
of the ownership of the Company through the normal ways
permitted under UK law and regulation. There are no
limitations on share ownership and the issuance of new
capital, subject to shareholder approval, would be to address
funding needs and is not a tool for an anti-takeover measure.

160

Directors’ report continued

Share capital

Companies Act 2006 disclosures

Authority for the Company to purchase its own shares
was given by shareholders at the 2022 AGM, however
the Company did not make any such purchases during
2022. The Company has only ordinary shares of 20 pence
nominal value in issue and does not have any shares held in
treasury. Note 4.3 to the consolidated financial statements
on page 204 summarises the rights of the ordinary shares
as well as the number issued during 2022. An analysis
of shareholdings is shown on page 230. The closing mid-
market price of a share of the Company on 31 December
2022, together with the range during the year, is also shown
on page 230. For details of own shares held by the Company
see note 4.3 to the consolidated financial statements.

Dividends

The Board has recommended a final dividend of 25.0 pence
per share amounting to £11.6 million (2021: 24.0 pence per
share, amounting to £11.1 million). On 28 October 2022,
the Company paid an interim dividend of 15.0 pence per
share amounting to £6.9 million. The final dividend, subject
to shareholder approval at the 2023 AGM, will be paid on
Friday, 19 May 2023 to shareholders on the register at the
close of business on Friday, 21 April 2023. This will bring
the total dividend for the year to 40.0 pence per share.
A dividend reinvestment alternative is available with
details available from our registrars, Equiniti Limited.

Substantial shareholdings

The Company had been advised under the Disclosure
Guidance and Transparency Rules, or had ascertained from
its own analysis, that the following held notifiable interests
in the voting rights in the Company’s issued share capital:

Shareholder

Alantra Asset Management

Aberforth Partners

Number of
voting rights

% of voting
rights

9,139,733

3,227,934

Schroder Investment Management

2,809,045

Brown Capital Management

Franklin Templeton Investments

Royal London Asset Management

Gidema SPA

Chelverton Asset Management

Invesco

2,165,030

1,880,910

1,736,582

1,700,645

1,477,181

1,427,366

19.62%

6.93%

6.03%

4.65%

4.04%

3.73%

3.65%

3.17%

3.06%

There had been no substantial changes in shareholdings
since 31 December 2022 and the date of this report.

Committees of the Board

The Board has established Audit, Nominations and
Remuneration Committees. Details of these Committees,
including membership, governance and their activities
during 2022, are contained in the Governance section
of this Annual Report and in the Remuneration report.

In accordance with Section 992 of the Companies Act 2006
the Directors disclose the following information:

– The Company’s capital structure and voting rights are
summarised in note 4.3, and there are no restrictions
on voting rights nor any agreement between holders
of securities that result in restrictions on the transfer
of securities or on voting rights.

– The Company holds no ordinary shares in treasury.
– There exist no securities carrying special rights with

regard to the control of the Company.

– Details of the substantial shareholders holding over 3%
of the issued share capital and their shareholdings in the
Company are listed above.

– Shares awarded under the Company’s DBP are held in a
nominee capacity by the Employee Benefit Trust (“EBT”).
The Trustees of the EBT do not seek to exercise voting
rights on shares held in the EBT. No voting rights are
exercised in relation to shares unallocated to individual
beneficiaries.

– The rules concerning the appointment and replacement
of Directors, amendment to the Articles of Association
and powers to issue or buy back the Company’s shares
are contained in the Articles of Association of the
Company and the Companies Act 2006.

– There exist no agreements to which the Company is party

that may affect its control following a takeover bid.
– There exist no agreements between the Company and

its Directors providing for compensation for loss of office
that may occur because of a takeover bid.

Articles of Association

The Company’s Articles of Association set out the rights
of shareholders including voting rights, distribution rights,
attendance at general meetings, powers of Directors,
proceedings of Directors as well as borrowing limits and
other governance controls. A copy of the Articles of
Association can be requested from the Group Company
Secretary.

At the 2023 AGM, the Directors propose a special resolution
to change the Company’s Articles of Association and to
bring them into line with market best practice. Details of
the proposed changes are summarised in the 2023 AGM
Notice of Meeting and a copy of the proposed new Articles
of Association can be requested from the Group Company
Secretary.

Conflicts of interest

During the year no Director held any beneficial interest in
any contract significant to the Company’s business, other
than a contract of employment. The Company has
procedures set out in the Articles of Association for
managing conflicts of interest. Should a Director become
aware that they, or their connected parties, have an
interest in an existing or proposed transaction with the
Group, they are required to notify the Board as soon as
reasonably practicable.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

161

Political donations

Further to shareholder approval at the 2022 AGM empowering the Directors to make political donations, it is confirmed that
no such donations were made in the year ended 31 December 2022. The Company’s policy is not to make political donations.
The 2025 AGM will be asked to renew this existing authority that expires in May 2025.

Reporting requirements

The following sets out the location of additional information which forms part of the Directors’ report:

Reporting requirement

Comprising

Location

Strategic report

– An indication of the Group’s likely future business

Pages 02 to 81

developments.

– An indication of the Group’s research and development

activities.

– Information on the Group’s policies for the employment of

disabled persons and employee involvement.

– The Group’s disclosures regarding greenhouse gas

emissions.

Non-financial information statement

– Environmental matters, employees, social matters, respect
for human rights, anti-corruption and anti-bribery matters.

Page 81

– Business model.
– Policies.
– Principal risks.
– Non-financial KPIs.

Statement on corporate governance

– Review of the Board’s governance arrangements during the

Pages 84 and 90 to 92

year.

– Review of the Board’s Committee’s arrangements during

the year.

Financial instruments

– Financial risk management objectives and policies of the

Group.

– The exposure of the Group to foreign currency risk, interest

rate risk, and liquidity risk.

Financial risk management objectives
and policies of the Group

Responsible business

– Explanation of our approach to business ethics, employees,

community and the environment.

The exposure of the Group to foreign
currency risk, interest rate risk, and
liquidity risk

Employee engagement statement

– Explanation of how the Directors have engaged with
employees and taken them into account when making
principal decisions.

Employee engagement section on
pages 98. Stakeholder engagement
on pages 12 and 13.

Statement regarding fostering
relationships with suppliers,
customers and others

– Explanation of how the Directors have fostered the
Company’s business relationships with suppliers,
customers, employees and others, and taken each group
into account when making principal decisions.

Section 172 statement on page 96

Going concern

The Directors have made appropriate enquiries and consider that the Group has adequate resources to continue in
operational existence for the foreseeable future, which comprises the period of at least 12 months from the date of approval
of the financial statements, being 27 February 2023. There are no material uncertainties that would prevent the Directors
from being unable to make this statement. Accordingly, the Directors continue to adopt the going concern basis in preparing
the financial statements.

Statement of Directors’ responsibilities in respect of the Annual Report and the financial statements

The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial statements
in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors
have elected to prepare the Group financial statements in accordance with United Kingdom adopted international
accounting standards. The financial statements also comply with International Financial Reporting Standards (IFRSs) as
issued by the IASB. The Directors have chosen to prepare the parent company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law),

162

Directors’ report continued

including FRS 101 “Reduced Disclosure Framework”. Under
company law the Directors must not approve the financial
statements unless they are satisfied that they give a true
and fair view of the state of affairs of the company and of
the profit or loss of the company for that period. 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 Parent
Company and of their profit or loss for that period. In
preparing each of the Group and Parent Company financial
statements, the Directors are required to:

– Select suitable accounting policies and apply them

consistently.

– Make judgements and estimates that are reasonable

Post Balance Sheet events

There were no events between the balance sheet date
and the date of this report that require disclosing.

Disclosure of information to the auditor

The Directors who held office at the date of approval
of this Directors’ report confirm that, so far as they
are each aware, there is no relevant audit information
(as defined in Section 418(2) of the Companies Act 2006)
of which the Company’s auditor is unaware; and each
Director has taken all the steps that they ought to have
taken as a Director to make themselves aware of any
relevant audit information and to establish that the
Company’s auditor is aware of that information.

and prudent.

Annual General Meeting (AGM)

– For the Group financial statements, state whether they
have been prepared in accordance with IFRS as adopted
by the EU.

– For the Parent Company financial statements, state

whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the Parent Company financial statements.
– Prepare the financial statements on the going concern

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

The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Parent Company’s transactions and disclose with
reasonable accuracy, at any time, the financial position
of the Parent Company and enable them to ensure that its
financial statements comply with the Companies Act 2006.
They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of
the Group and to prevent and detect fraud and other
irregularities.

Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’
Report, Directors’ Remuneration report and Corporate
Governance statement that complies with that law and
those regulations.

The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website.

The 2023 AGM will be held at 11.00am on Thursday, 11 May
2023 at 41 Portland Place, London W1B 1QH. Should it be
necessary to rearrange the venue and timing for the AGM,
we will communicate this to shareholders by way of a stock
exchange announcement.

The Company will be making use of the electronic voting
facility provided by its registrars, Equiniti Limited. The
facility includes CREST voting for members holding their
shares in uncertificated form. For further information,
please refer to the section on online services and electronic
voting set out in the notes to the Notice of Meeting.

The notice of the AGM and an explanation of the resolutions
to be put to the meeting are set out in the Notice of
Meeting accompanying this Annual Report. The Board fully
supports all the resolutions set out in the Notice and
encourages shareholders to vote in favour of each of them
as they intend to in respect of their own shareholdings.

Auditor

Deloitte LLP will continue in office as auditor to undertake
the 2023 year-end audit and separate resolutions will be
proposed at the AGM to be held on 11 May 2023 concerning
their reappointment and to authorise the Board to agree
their remuneration. As outlined on page 114, the Company
will be undertaking an external audit tender process in the
first half of 2023 to secure a new auditor for the 2024
financial year end.

By order of the Board

Legislation in the UK governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.

Jon Bolton
Group Company Secretary and HR Director
27 February 2023

In addition, each of the Directors considers that the
Annual Report, taken as a whole, is fair, balanced and
understandable and that it provides all the information
necessary for shareholders to assess the Company’s
position and performance, business model and strategy.

Corporate GovernanceVidendum plc Annual Report and Accounts 2022

163

Independent auditor’s report to the members
of Videndum plc

Report on the audit of the financial statements

1. Opinion

In our opinion:

– the financial statements of Videndum plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) give a true and fair view of the state

of the Group’s and of the Parent Company’s affairs as at 31 December 2022 and of the Group’s profit for the year then ended;

– the Group financial statements have been properly prepared in accordance with United Kingdom adopted international accounting

standards;

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

Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and

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

We have audited the financial statements which comprise:

– the consolidated income statement;
– the consolidated statement of comprehensive income;
– the consolidated and Parent Company balance sheets;
– the consolidated and Parent Company statements of changes in equity;
– the consolidated statement of cash flows;
– the related Group notes 1 to 5 and Parent Company notes a to q

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and United
Kingdom adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the parent
company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”
(United Kingdom Generally Accepted Accounting Practice).

2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report.

We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services provided to the
Group and Parent Company for the year are disclosed in note 2.1 to the financial statements. We confirm that we have not provided any non-audit
services prohibited by the FRC’s Ethical Standard to the group or the parent company.

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

3. Summary of our audit approach

Key audit matter

The key audit matters that we identified in the current year were:

– Valuation of inventory obsolescence provision

– Deferred tax

Within this report, key audit matters are identified as follows:

Newly identified

Increased level of risk

Similar level of risk

Decreased level of risk

Materiality

Scoping

The materiality that we used for the Group financial statements was £2.6 million (2021: £2.3 million) which
was determined on the basis of 5% of adjusted profit before tax.

We focused our scope on the three trading divisions: Media Solutions, Production Solutions and Creative
Solutions. These were subject either to full scope audits, audit of specified account balances or specified
audit procedures which account for 80% of Group revenue and 75% of net assets.

Significant changes
in our approach

We have identified deferred tax as a key audit matter in the current year as a result of the significant
judgement involved.

164

Independent auditor’s report to the members
of Videndum plc continued

4. 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’s and Parent Company’s ability to continue to adopt the going concern basis
of accounting included:

– Assessing the risk associated with going concern considering the Group’s business model, operations and financing, as well as indicators

of possible management bias;

– Evaluating the mathematical integrity of and the relevance and reliability of the underlying data used in management’s assessment;
– Challenging management’s method to assess going concern, specifically by comparing changes in assumptions from prior year to changes

in principal risks, checking the consistency of forecasts and assumptions with each other and those used in other areas, obtaining supporting
evidence for management’s assumptions including the rate of revenue recovery and operating leverage, and evaluating contradictory evidence
including historical forecasting inaccuracy and market research;

– Challenging the reasonableness and robustness of management base case forecasts by performing independent sensitivity analysis;
– Assessing management’s plans for future actions and considered additional facts or information available subsequent to management’s

assessment; and

– Assessing the adequacy and appropriateness of disclosures.

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

In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw attention
to in relation to the directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the going
concern basis of accounting.

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

5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified.
These matters included those 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.

5.1. Valuation of inventory obsolescence provision

Key audit matter description

At 31 December 2022, the gross inventory balance was £130.5 million (2021: £106.8 million), against which
there was £23.2 million (2021: £18.3 million) provision.

How the scope of our audit
responded to the key audit
matter

Significant management judgement is involved in determining the adequacy of the inventory obsolescence
provision across a wide range of products, within different geographical regions, set against a backdrop of
ever-changing technology in the image capture and sharing market. Given the high level of management
judgement involved, particularly in respect of forecast future usage, we deemed this a potential fraud risk
for our audit.

Management has highlighted inventory provisioning as a key accounting estimate in note 1. The Audit
Committee report on pages 116–121 also refers to inventory provisioning as one of the significant issues
and judgements. Further information is included in note 3.3 to the financial statements.

In order to address this key audit matter, we have completed audit procedures including:

– Obtaining an understanding of the controls relating to inventory provisioning;
– Evaluating the appropriateness of the methodology used to calculate the inventory provision;
– Challenging the reasonableness of management’s judgements and the assumptions used, specifically
by assessing the provision percentages in relation to sales demand with comparison to prior years;

– Assessing the integrity of the underlying calculation by checking the accuracy of the ageing of

discontinued and slow-moving inventory items;

– Assessing the level of inventory write-offs in the year compared to the overall inventory provision at

31 December 2021; and

– Assessing the exposure of inventory relating to slow-moving ranges but for which no provision is included,

together with testing the appropriateness of a sample of manual adjustments.

Key observations

Based on the audit procedures performed we are satisfied the overall inventory provision is appropriate.

Financial StatementsVidendum plc Annual Report and Accounts 2022

165

5.2. Deferred Tax

Key audit matter description

At 31 December 2022, the deferred tax asset (net after deferred tax liabilities) has increased to £43.7 million
(2021: £28.8 million).

The Group recognises deferred tax assets relating to carried forward losses and similar attributes in
accordance with IAS 12 Income Taxes. Deferred tax assets are recognised to the extent it is probable that
future taxable profit will be available against which the unused tax losses, unused tax credits and deductible
temporary differences can be utilised. Deferred tax assets are assessed for realisability as of each reporting
date.

As a result of various factors, including a number of acquisitions, management forecast an increase in the
future taxable profits arising in the US. Based on the facts and circumstances and forecasts at the Balance
Sheet date, management concluded that a significant additional amount of US tax losses will be utilised and
have recognised deferred tax assets in this respect. Given the high level of management judgement involved,
we deemed this a higher risk and a key audit matter.

Given the magnitude of the change, management is including narrative disclosures in the financial
statements so that users can understand the change in judgement. Further information is included
in note 2.4 to the financial statements.

In order to address this key audit matter, we have completed audit procedures including:

– With the involvement of our tax specialists, we considered whether the sources of forecast taxable income

were of the appropriate character to utilise the related deferred tax assets.

– Evaluating the forecasts of future taxable profit and considered whether they are consistent with

evidence obtained in other areas of the audit.

– Assessing the positive and negative evidence to assess whether it is probable that the affected entities

will be able to use all available deferred tax assets.

– Assessing the historical accuracy of forecasts by comparing the current period actual trading

performance against the Board approved forecasts.

– Evaluating the disclosures made in the financial statements.

How the scope of our audit
responded to the key audit
matter

Key observations

Based on the audit procedures performed we are satisfied the overall deferred tax asset balance
is appropriate.

6. Our application of materiality

6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions
of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work
and in evaluating the results of our work.

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

Materiality

£2.6 million (2021: £2.3 million)

£2.5 million (2021: £2.1 million)

Group financial statements

Parent Company financial statements

Basis for determining materiality

Rationale for the benchmark
applied

The materiality that we used for the Group financial
statements was £2.6 million which was determined
on the basis of 5% of adjusted profit before tax.
In the prior year a blended benchmark using revenue
and net assets was used given the impact of
COVID-19 on the results of the business.

The basis on which we have determined materiality
reflects the metrics that are most relevant for the
users of the financial statements. Earnings based
metrics tend to be of more interest to the analyst
and investor-based communities. Adjusted profit
before tax is a suitable measurement for profit
orientated entities.

Materiality of £2.6 million represents 0.6% of
revenue (2021: 0.6%) and 1.2% of net assets
(2021: 1.3%).

Parent company materiality equates to 1% of net
assets, which is capped at 95% of Group materiality,
this is consistent with the prior year.

Net assets benchmark has been used as this is a
non-trading holding company and we consider this
to be the most appropriate basis.

166

Independent auditor’s report to the members
of Videndum plc continued

Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected
misstatements exceed the materiality for the financial statements as a whole.

Group financial statements

Parent Company financial statements

Performance materiality

70 % (2021: 70%) of Group materiality

70% (2021: 70%) of Parent Company materiality

Basis and rationale for
determining performance
materiality

In determining performance materiality, we considered the following factors:
– the overall quality of the control environment;
– the low turnover of management and key accounting personnel; and
– the low number of corrected and uncorrected misstatements identified in previous audits.

6.2. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £0.13 million (2021: £0.11 million),
as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee
on disclosure matters that we identified when assessing the overall presentation of the financial statements.

7. An overview of the scope of our audit

7.1. Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing
the risks of material misstatement at the Group level.

Based on that assessment we focused our scope on the three trading divisions: Media Solutions, Production Solutions and Creative Solutions.
These were subject to either full scope audits, audit of specified account balances, and analytical reviews which account for 80% (2021: 94%)
of Group revenue and 75% (2021: 86%) of net assets. These audit procedures were performed to materiality levels applicable to each entity,
which was lower than the Group materiality level and ranged from £0.7 million to £2.5 million (2021: £0.9 million to £2.1 million).

At the parent entity level, we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there were
no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to a full audit.

Revenue

Net assets

46%

Full audit scope
Audit of speciﬁed
34%
account balances
Review at Group level 20%

46%

Full audit scope
Audit of speciﬁed
account balances
29%
Review at Group level 25%

7.2. Our consideration of the control environment
The Group operates a range of IT systems which underpin the financial reporting processes. This can vary by geography and/or reporting entity.
For certain components subject to full scope audits, we identified relevant IT systems for the purpose of our audit work. Our approach was
principally designed to inform our risk assessment and, as such, we obtained an understanding of and evaluated the design effectiveness of the
general IT controls for some operating entities involving our IT specialists.

We also obtained an understanding of the processes and relevant controls within certain key business cycles including the inventory and revenue
business processes. We evaluated the design effectiveness of the relevant controls within those business cycles. For one of the significant
divisions, we planned to rely on the relevant controls within the revenue process and thus tested the operating effectiveness of those controls. We
were able to rely on those controls. For the other divisions, we did not adopt a controls reliance approach.

Financial Statements

Videndum plc Annual Report and Accounts 2022

167

7.3. Our consideration of climate-related risks
The Group continues to develop its assessment of the potential impacts of climate change, as explained in the Chief Executive Officer’s
review within the Strategic Report on page 16. Climate change and the transition to a low carbon economy were considered in the Group’s key
judgements and estimates in the financial statements as disclosed in note 1. These incorporate actions and strategies, to the extent they have
been approved and can be reliably estimated in accordance with the Group’s accounting policies. We evaluated the Group’s assessment of the
impact of climate risks where they have the potential to impact the key judgements and estimates within the financial statements, including the
assessment of the carrying value of non-current assets and environmental provisions and evaluating whether appropriate disclosures have been
made in the financial statements. We also considered whether information included in the climate-related disclosures in the Annual Report were
materially consistent with our knowledge obtained in the audit and the financial statements.

7.4. Working with other auditors
The Group audit was conducted exclusively by a global network of Deloitte member firms under the direction and supervision of the UK Group
audit team. Component auditors were assigned to perform audit procedures in line with the scoping of the respective components within their
jurisdiction. For the Group audit, the component auditors focused on components classified for full scope and audit of specified account balances.
Further work was performed at a Group level over the consolidation and components not in scope. Dedicated members of the Group audit team
were assigned to each component to facilitate an effective and consistent approach to component oversight.

The planned programme which we designed as part of our involvement in the component auditor’s work was delivered over the course of the
Group audit. The extent of our involvement which commenced from the planning phase included:

– Setting the scope of the component auditor and assessment of the component auditor’s independence.
– Designing the audit procedures for all significant risks to be addressed by the component auditors and issuing Group audit instructions detailing

the nature and form of the reporting required by the Group engagement team.

Frequent calls and meetings (including in person meetings) were held between the Group and component teams and our procedures included,
where appropriate, providing direction on enquiries made by the component auditors through online and telephone conversations, a review of
each component auditor’s engagement file by a senior member of the Group audit team and Group team virtual or in-person attendance at
local component audit close meetings. Component visits were performed at the Italian and US sites. The Group engagement partner acted
as the component audit partner for the Production Solutions division and directly supervised the audit work for that component.

8. Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in 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.

9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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

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

168

Independent auditor’s report to the members
of Videndum plc continued

11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable
of detecting irregularities, including fraud is detailed below.

11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and
regulations, we considered the following:

– the nature of the industry and sector, control environment and business performance including the design of the Group’s remuneration policies,

key drivers for directors’ remuneration, bonus levels and performance targets;

– results of our enquiries of management, internal audit, the Group’s in-house and external legal counsel and the Audit Committee about their

own identification and assessment of the risks of irregularities including those that are specific to the group’s sector;

– any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:

– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

– the matters discussed among the audit engagement team including significant component audit teams and relevant internal specialists,

including tax, pensions, IT, valuation, financial instrument specialists regarding how and where fraud might occur in the financial statements
and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified
the greatest potential for fraud in the valuation of inventory obsolescence provision. In common with all audits under ISAs (UK), we are also
required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on provisions of those laws
and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws
and regulations we considered in this context included the UK Companies Act, Listing Rules, pension legislation and tax legislation. .

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance
with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included the Group’s regulatory solvency
requirements and covenants requirements.

11.2. Audit response to risks identified
As a result of performing the above, we identified the valuation of inventory obsolescence provision as a key audit matter related to the potential
risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we
performed in response to that key audit matter:

In addition to the above, our procedures to respond to risks identified included the following:

– reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws

and regulations described as having a direct effect on the financial statements;

– enquiring of management, the Audit Committee, in-house and external legal counsel concerning actual and potential litigation and claims;
– performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due

to fraud;

– reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with HMRC; and
– in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments;

assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal
specialists and significant component audit teams, and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.

Report on other legal and regulatory requirements

12. Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies
Act 2006.

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

– the information given in the strategic report and the directors’ report for the financial year for which the financial statements are

prepared is consistent with the financial statements; and

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

In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course
of the audit, we have not identified any material misstatements in the strategic report or the directors’ report.

Financial StatementsVidendum plc Annual Report and Accounts 2022

169

13. Corporate Governance Statement
The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements and our knowledge obtained during the audit:

– the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material

uncertainties identified set out on page 161;

– the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is

appropriate set out from page 34;

– the directors’ statement on fair, balanced and understandable set out on page 84;
– the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 44 – 49;
– the section of the annual report that describes the review of the effectiveness of risk management and internal control systems set out

on page 117; and

– the section describing the work of the Audit Committee set out on pages 113 – 121.

14. Matters on which we are required to report by exception

14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:

– we have not received all the information and explanations we require for our audit; or
– 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

We have nothing to report in respect of these matters.

14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have not been made
or the part of the directors’ remuneration report to be audited is not in agreement with the accounting records and returns.

We have nothing to report in respect of these matters.

15. Other matters which we are required to address

15.1. Auditor tenure
Following the recommendation of the Audit Committee, we were appointed by the members at the Company’s Annual General Meeting on
15 May 2018 to audit the financial statements for the year ending 31 December 2018 and subsequent financial periods. The period of total
uninterrupted engagement including previous renewals and reappointments of the firm is 5 years, covering the years ending 31 December 2018
to 31 December 2022.

15.2. Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance with ISAs (UK).

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

As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these financial statements form
part of the European Single Electronic Format (ESEF) prepared Annual Financial Report filed on the National Storage Mechanism of the UK FCA
in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report provides no assurance over whether the annual
financial report has been prepared using the single electronic format specified in the ESEF RTS.

David Halstead FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
St Albans, United Kingdom

27 February 2023

170

Introduction and table of contents

Primary Statements

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Section 1 – Basis of Preparation

Section 2 – Results for the Year

2.1 Profit before tax (including segmental information)

2.2 Adjusting items

2.3 Net finance expense

2.4 Tax

2.5 Earnings per share

Section 3 – Operating Assets and Liabilities

3.1 Intangible assets

3.2 Property, plant and equipment

3.3 Working capital

3.4 Acquisitions

3.5 Provisions

3.6 Leases

Section 4 – Capital Structure

4.1 Net debt

4.2 Financial instruments

4.3 Share capital and reserves

Section 5 – Other Supporting Notes

5.1 Employees

5.2 Pensions

5.3 Share-based payments

5.4 Contingent liabilities

5.5 Related party transactions

5.6 Group investments

5.7 Subsequent events

Videndum plc Company Financial Statements

Company Balance Sheet

Company Statement of Changes in Equity

Notes to the Company Financial Statements

Glossary of Alternative Performance Measures

Five Year Financial Summary

Shareholder Information and Financial Calendar

171

172

173

174

175

178

180

182

186

187

189

191

193

194

195

197

198

204

206

210

212

213

215

216

217

218

224

229

230

Each section sets out the accounting policies applied in producing these financial statements
together with any key judgements and estimates used. Text boxes provide an introduction to each
section.

Financial StatementsVidendum plc Annual Report and Accounts 2022

171

Consolidated Income Statement
For the year ended 31 December 2022

Revenue
Cost of sales

Gross profit
Operating expenses

Operating profit

Comprising:
– Adjusted operating profit
– Adjusting items in operating profit

Net finance expense

Profit before tax

Comprising:
– Adjusted profit before tax
– Adjusting items in profit before tax

Taxation

Comprising taxation on:
– Taxation on adjusted profit
– Adjusting items in taxation

Profit for the year attributable to owners of the parent

Earnings per share
Basic earnings per share
Diluted earnings per share

Average exchange rates
Euro
US$

Notes

2.1
2.1

2.1/2.2

2022
£m

451.2
(255.7)

195.5
(164.0)

2021
£m

394.3
(221.2)

173.1
(139.6)

2.1

31.5

33.5

2.2

2.3

2.2

2.4

2.5
2.5

60.0
(28.5)

(6.8)

24.7

54.0
(29.3)

8.2

(12.5)
20.7

32.9

71.4p
68.7p

1.17
1.24

46.2
(12.7)

(3.9)

29.6

42.4
(12.8)

(3.7)

(10.3)
6.6

25.9

56.4p
54.5p

1.16
1.38

172

Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022

Profit for the year

Other comprehensive income/(expense):
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit obligation
Related tax
Items that are or may be reclassified subsequently to profit or loss:
Currency translation differences on foreign currency subsidiaries
Net investment hedges – net (loss)/gain
Cash flow hedges – reclassified to the Income Statement, net of tax
Cash flow hedges – effective portion of changes in fair value, net of tax

Other comprehensive income, net of tax

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

2022
£m

32.9

9.1
(2.1)

22.6
(5.8)
1.6
2.4

27.8

60.7

2021
£m

25.9

6.9
(0.7)

(3.9)
0.2
(0.1)
(0.1)

2.3

28.2

Financial StatementsVidendum plc Annual Report and Accounts 2022

173

Consolidated Balance Sheet
As at 31 December 2022

Assets
Non-current assets
Intangible assets
Property, plant and equipment
Employee benefit asset
Trade and other receivables
Derivative financial instruments
Non-current tax assets
Deferred tax assets

Current assets
Inventories
Trade and other receivables
Derivative financial instruments
Current tax assets
Cash and cash equivalents

Total assets

Liabilities
Current liabilities
Bank overdrafts
Interest-bearing loans and borrowings
Lease liabilities
Trade and other payables
Derivative financial instruments
Current tax liabilities
Provisions

Non-current liabilities
Interest-bearing loans and borrowings
Lease liabilities
Other payables
Employee benefit liabilities
Provisions
Deferred tax liabilities

Total liabilities

Net assets

Equity
Share capital
Share premium
Translation reserve
Capital redemption reserve
Cash flow hedging reserve
Retained earnings

Total equity

Balance Sheet exchange rates
Euro
US$

Approved and authorised for issue by the Board of Directors on 27 February 2023 and signed on its behalf by:

Andrea Rigamonti
Group Chief Financial Officer

Notes

2022
£m

2021
£m

3.1
3.2
5.2
3.3
4.2
2.4
2.4

3.3
3.3
4.2
2.4
4.1

4.1
4.1
4.1
3.3
4.2
2.4
3.5

4.1
4.1
3.3
5.2
3.5
2.4

4.3

217.9
66.6
3.9
7.4
3.8
3.0
51.2

353.8

107.3
68.9
2.3
4.1
15.8

198.4

552.2

–
36.0
6.0
81.3
0.9
16.7
5.5

173.7
60.7
–
5.8
0.1
3.0
33.6

276.9

88.5
60.0
–
4.7
11.0

164.2

441.1

3.1
13.2
5.7
76.7
0.3
16.0
1.5

146.4

116.5

138.5
28.8
1.8
3.1
2.4
7.5

182.1

328.5

223.7

9.4
24.3
(0.8)
1.6
3.9
185.3

223.7

1.13
1.21

109.6
24.6
0.4
8.4
2.9
4.8

150.7

267.2

173.9

9.3
23.1
(17.6)
1.6
(0.1)
157.6

173.9

1.19
1.35

174

Consolidated Statement of Changes in Equity
For the year ended 31 December 2022

Share
capital
£m

Share
premium
£m

Translation
reserve
£m

Capital
redemption
reserve
£m

Cash flow
hedging
reserve
£m

Retained
earnings
£m

Balance at 1 January 2021
Profit for the year
Other comprehensive (expense)/income for the year

Total comprehensive (expense)/income for the year
Contributions by and distributions to owners
Dividends paid
Own shares purchased
Share–based payment charge, net of tax
New shares issued

Balance at 31 December 2021 and 1 January 2022

Profit for the year
Other comprehensive income for the year

Total comprehensive income for the year
Contributions by and distributions to owners
Dividends paid
Own shares purchased
Own shares sold
New shares issued
Share–based payment charge, net of tax

Balance at 31 December 2022

9.2
–
–

–

–
–
–
0.1

9.3

–
–

–

–
–
–
0.1
–

9.4

Total
equity
£m

145.4
25.9
2.3

28.2

(7.1)
(5.8)
8.2
5.0

21.7
–
–

–

–
–
–
1.4

(13.9)
–
(3.7)

(3.7)

–
–
–
–

1.6
–
–

–

–
–
–
–

0.1
–
(0.2)

(0.2)

–
–
–
–

126.7
25.9
6.2

32.1

(7.1)
(5.8)
8.2
3.5

23.1

(17.6)

1.6

(0.1)

157.6

173.9

–
–

–

–
–
–
1.2
–

–
16.8

16.8

–
–
–
–
–

–
–

–

–
–
–
–
–

–
4.0

4.0

–
–
–
–
–

32.9
7.0

39.9

(18.0)
(5.8)
3.1
–
8.5

32.9
27.8

60.7

(18.0)
(5.8)
3.1
1.3
8.5

24.3

(0.8)

1.6

3.9

185.3

223.7

Financial StatementsVidendum plc Annual Report and Accounts 2022

175

Consolidated Statement of Cash Flows
For the year ended 31 December 2022

Cash flows from operating activities
Profit for the year
Adjustments for:

Taxation
Depreciation
Impairment losses on property, plant and equipment
Impairment losses on capitalised development costs
Amortisation of intangible assets
Fair value losses on derivative financial instruments
Foreign exchange losses
Share-based payment charge
Earnout charges and retention bonuses
Net finance expense

Cash generated from operating activities before changes in working capital, including provisions
Increase in inventories
Increase in receivables
(Decrease)/increase in payables
Increase/(decrease) in provisions

Cash generated from operating activities
Interest paid
Tax paid

Net cash from operating activities

Cash flows from investing activities
Proceeds from sale of property, plant and equipment and software
Purchase of property, plant and equipment
Capitalisation of software and development costs
Acquisition of businesses, net of cash acquired

Net cash used in investing activities

Cash flows from financing activities
Proceeds from the issue of shares
Proceeds from the sale of own shares
Own shares purchased
Principal lease repayments
Repayment of interest-bearing loans and borrowings
Borrowings from interest-bearing loans and borrowings
Dividends paid

Net cash from financing activities

Increase/(decrease) in cash and cash equivalents and overdrafts
Cash and cash equivalents at 1 January
Effect of exchange rate fluctuations on cash held

Cash and cash equivalents and overdrafts at 31 December

Notes

4.1

2022
£m

32.9

(8.2)
15.3
–
1.9
18.3
0.1
0.6
8.9
4.5
6.8

81.1
(8.0)
(5.0)
(5.6)
2.8

65.3
(9.4)
(7.2)

48.7

–
(7.1)
(13.1)
(33.2)

(53.4)

1.3
3.1
(5.8)
(6.4)
(93.8)
130.3
(18.0)

10.7

6.0
7.9
1.9

15.8

2021
£m

25.9

3.7
12.9
0.2
–
13.0
–
–
7.9
0.8
3.9

68.3
(21.9)
(5.8)
27.8
(2.7)

65.7
(4.5)
(6.5)

54.7

0.1
(10.8)
(10.9)
(56.1)

(77.7)

1.5
–
(5.8)
(5.7)
(128.2)
160.8
(7.1)

15.5

(7.5)
16.8
(1.4)

7.9

176

Section 1
Basis of Preparation

This section sets out the Group’s accounting policies that relate to the financial statements as a whole. Where an accounting policy is specific
to one note, the policy is described in the note to which it relates.

Videndum plc (the “Company”, previously The Vitec Group plc) is a public company limited by shares incorporated in the United Kingdom under the
Companies Act. The Company is registered in England and Wales and its registered address is Bridge House, Heron Square, Richmond, TW9 1EN,
United Kingdom. The consolidated financial statements of the Company as at and for the year ended 31 December 2022 comprise the Company
and its subsidiaries (together referred to as the “Group”).

The Group’s financial statements have been prepared in accordance with UK-adopted International Accounting Standards, and have been
approved by the Directors.

The financial statements are principally prepared on the basis of historical cost. Areas where other bases are applied are identified in the
accounting policy outlined in the relevant note.

Climate change risks and opportunities, as detailed in TCFD on pages 57 to 66, were considered together with the Board approved budget, the
strategy, and Management cash flow projections. The budget and cash flow projections have been utilised in the assessment of the carrying value
of assets, impairment of CGUs and goodwill, and the going concern and viability assessment.

In reporting financial information, the Group presents Alternative Performance Measures (“APMs”) which are not defined or specified under
the requirements of International Financial Reporting Standards (“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 and enable an alternative comparison
of performance over time. A glossary on pages 224 to 228 provides a comprehensive list of APMs that the Group uses, including an explanation
of how they are calculated, why they are used and how they can be reconciled to a statutory measure where relevant.

The Company has elected to prepare its Parent Company financial statements in accordance with Financial Reporting Standard 101 Reduced
Disclosure Framework (“FRS 101”).

Going concern
The Group’s business activities, together with its principal risks and uncertainties and other factors likely to affect its future development,
performance and position are set out in the Strategic Report.

The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Financial Review. In addition,
note 4.2 “Financial instruments” includes the Group’s financial risk management objectives, details of its financial instruments and hedging
activities, and its exposure to foreign currency risk, interest rate risk and liquidity risk.

As part of the Directors’ consideration of the appropriateness of adopting the going concern basis and long-term viability in preparing the
financial statements, a range of scenarios have been modelled through to the end of 2025. The Directors have applied a robust process to assess
the forecast scenarios which included applying severe but plausible downside risks and mitigating activities as set out in the Viability Statement
on page 37. Neither the Group’s latest forecast nor the downside scenarios modelled result in a breach of the covenants under the terms of its
multicurrency Revolving Credit Facility (“RCF”) and all scenarios show sufficient cash headroom to continue in operational existence for the
foreseeable future, being a period of at least 12 months from the date of approval of these Financial Statements.

The Directors have also considered the Group’s capacity to remain a going concern after consideration of future cash flows, expected debt service
requirements, undrawn facilities and access to capital markets.

As such, the Directors are satisfied that it is appropriate for the Group to continue to adopt the going concern basis for preparing these financial
statements.

Basis of consolidation
Subsidiaries are entities that are controlled by the Group. Control exists when the Group has the rights to variable returns from its involvement
with an entity and has the ability to affect those returns through its power over the entity. The results of subsidiaries sold or acquired during the
year are included in the accounts up to, or from, the date that control exists.

Foreign currencies

The consolidated financial statements are presented in Sterling with the reporting currency of the Group’s subsidiaries generally being that of the
local country.

Transactions in foreign currencies are translated at the exchange rate on that day.

Foreign currency monetary assets and liabilities are translated at the year-end exchange rate. Where there is a movement in the exchange rate
between the date of the transaction and the year end, a currency translation gain or loss may arise. Any such differences are recognised in the
Income Statement.

Non-monetary assets and liabilities measured at historical cost are translated at the exchange rate on the day of the transaction, unless they
are stated at fair value in which case they are translated at the exchange rate on the day the fair value was determined.

The assets and liabilities of overseas subsidiaries, including goodwill and fair value adjustments arising on consolidation, are translated at the
year-end exchange rate. The revenues and expenses of these subsidiaries are translated at the weighted average exchange rate for the year.
Where differences arise between these rates, they are recognised in the translation reserve within equity and other comprehensive income (“OCI”).

The cash flows of these companies are typically translated at the weighted average exchange rate for the year.

In the consolidated financial statements, currency translation gains and losses on external loans and borrowings which are designated as net
investment hedges and on long-term inter-company loans that form part of the net investment in the subsidiaries are recognised directly in the
translation reserve within equity and OCI.

In respect of all overseas companies, only those translation differences arising since 1 January 2004, the date of transition to IFRS, are presented
as a separate component of equity. On disposal of such a company, the related translation reserve is released to the Income Statement as part
of the gain or loss on disposal.

Financial StatementsVidendum plc Annual Report and Accounts 2022

177

Significant judgements, key assumptions and estimates
The following provides information on those policies that the Directors consider critical because of the level of judgement and estimation
required which often involves assumptions regarding future events which can vary from what is anticipated. The Directors review the judgements
and estimates on an ongoing basis with revisions to accounting estimates recognised in the period in which the estimates are revised and in any
future periods affected. The Directors believe that the consolidated financial statements reflect appropriate judgements and estimates and
provide a true and fair view of the Group’s performance and financial position.

Critical accounting estimates and assumptions
The following are the critical estimates and assumptions that the Directors have made in the process of applying the Group’s accounting policies
and that have a significant risk of resulting in material adjustments to the carrying amounts of assets and liabilities within the next financial year.

Inventory

Provisions are required to write down slow-moving, excess and obsolete inventory to its net realisable value. The estimation of inventory
impairment is based on anticipated future sales of products over particular time periods. The anticipated level of future sales is determined
primarily based on actual sales over a specified historic reference period of between six and twelve months, which is determined by Management
and is deemed appropriate to the type of inventory. See note 3.3 “Working capital”.

Pension benefits

The actuarial valuations associated with the pension schemes involve making assumptions about discount rates, future salary increases, future
pension increases and mortality rates. All assumptions are reviewed at each reporting date. Further details about the assumptions used and
sensitivities are set out in note 5.2 “Pensions”.

Acquisitions

Acquisitions are accounted for under the acquisition method, based on the fair values of the consideration paid. Assets and liabilities, with
limited exceptions, are measured at their fair value at the acquisition date. The Group estimates the provisional fair values and useful lives of
acquired assets and liabilities at the date of acquisition. The valuation of acquired intangibles is subject to estimation of future cash flows and
the discount rate applied to them. Determination of the useful economic lives of technology-related intangible assets requires assumptions about
future market trends and future risk of replacement or obsolescence of those assets. The useful economic lives of intangible assets are disclosed
in note 3.1 “Intangible assets”.

Tax

The Group is subject to income taxes in a number of jurisdictions. Management is required to make estimates in determining the provisions for
income taxes and deferred tax assets and liabilities recognised in the consolidated financial statements. Tax benefits are recognised to the
extent that it is probable that sufficient taxable income will be available in the future against which temporary differences and unused tax losses
can be utilised. The most significant estimates made are in relation to the recognition of deferred tax assets arising from carried forward tax
losses. The recovery of those losses is dependent on the future profitability of Group entities based in the jurisdictions with those carried forward
tax losses, most significantly in the United States. The assumptions used in the measurement of the deferred tax assets are consistent with those
as disclosed in note 3.1 “Intangible assets” in relation to the impairment tests of cash-generating units (“CGUs”) containing goodwill. See note 2.4
“Tax” for further details of the carrying amounts of deferred tax assets.

Critical judgements in applying the Group’s accounting policies
The following are critical judgements that the Group makes, apart from those involving estimations (which are dealt with above), that the
Directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts
recognised in the financial statements.

Development costs

The Group capitalises development costs which meet the criteria under IAS 38 “Intangible Assets” and discloses the amount capitalised in note 3.1
“Intangible assets”. The Group makes significant judgements in the application of IAS 38, particularly in relation to its requirements regarding
the technical feasibility of completing the asset and the Group’s ability to sell and generate future economic benefits from the intangible asset.

Tax

In relation to tax, these include the interpretation and application of existing legislation. The Group’s key judgement relates to the application
of tax law in relation to the EU State Aid Investigation. Details in relation to this judgement are set out in note 2.4 “Tax”.

Impact of adoption of new accounting standards or amendments
The Group has considered the following amendments to standards that are effective from 1 January 2022. These do not have a significant impact
on the consolidated financial statements of the Group.

– Amendments to IFRS 3 “Business Combinations” with reference to the Conceptual Framework.
– Amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” on cost of fulfilling a contract.
– Amendments to IAS 16 “Property, Plant and Equipment” on proceeds before intended use.

New standards and interpretations effective for future periods and not yet adopted
Amended standards and interpretations not yet effective are not expected to have a significant impact on the Group’s consolidated financial
statements.

178

Section 2
Results for the Year

This section focuses on the profitability of the Group. On the following pages you will find disclosures relating to the following:

2.1 Profit before tax (including segmental information)
2.2 Adjusting items
2.3 Net finance expense
2.4 Tax
2.5 Earnings per share

2.1 Profit before tax (including segmental information)

This shows the analysis of the Group’s profit before tax by reference to its three Divisions. Further segmental information and an analysis of
key operating expenses are also shown here.

Accounting policies

Government grants
For government assistance which meets the definition of a government grant under IAS 20, the Group applies the income approach to account
for the grants received. As such, the grant is recognised in the Income Statement as a reduction of the related costs incurred.

Revenue recognition

Sale of goods

Revenue from the sale of goods is recognised when the Group sells a product to a customer and control has passed. This is either once the
product has been shipped or delivered to the customer, depending on the terms and conditions of the sale. Payment terms vary by Division and
customer but where credit terms are given, payments are due generally 30 days after control of the goods has passed to the customer. Revenue
is recognised at the transaction price exclusive of sales tax, adjusted for the expected level of returns, trade discounts and volume rebates. For the
products expected to be returned, both a refund liability and a right to the returned goods are recognised using an expected value method based
on past history.

Some contracts include multiple deliverables, such as the sale of the product and its installation. If material, distinct goods and services are
accounted for as separate performance obligations. The transaction price is allocated to each performance obligation based on their standalone
selling prices.

Service contracts

Revenue from rental service contracts which are fulfilled using the Group’s equipment and operators is recognised in the accounting period in
which the services are rendered. Payment terms vary and there can be small advance payments but generally payments are due as services are
rendered.

Generally, contracts with customers are for periods of one year or less. As a result, the transaction price allocated to any unsatisfied contracts
is not disclosed, as permitted by IFRS 15.

Licences

Software licences are sold by the Group on a standalone basis and together with a tangible product. If the licence is considered distinct, the
revenue recognition pattern is based on whether the licence is a right-to-use intellectual property (revenue recognised at a point in time) or a
right-to-access intellectual property (revenue recognised over time). The majority of the licences granted by the Group represent a right-to-use
intellectual property for which payments are generally in advance. From a right-to-access intellectual property, payments are normally on a
monthly basis with a credit period of 30 days.

Financing components

The Group generally does not have contracts where the period between the transfer of the promised goods or services to the customer and
payment by the customer exceeds one year.

Financial StatementsVidendum plc Annual Report and Accounts 2022

179

Segment reporting

The Group has three reportable segments which are reported in a manner that is consistent with the internal reporting provided to the Chief
Operating Decision Maker on a regular basis to assist in making decisions on capital allocated to each segment and to assess performance.
Further details on the nature of these segments and the products and services they provide are contained in the Strategic Report.

Media Solutions(1)

Production Solutions

Creative Solutions

Corporate and
unallocated

Consolidated

2022
£m

2021
£m

2022
£m

2021
£m

2022
£m

2021
£m

2022
£m

2021
£m

2022
£m

2021
£m

Analysis of revenue from external
customers, by location of customer

United Kingdom
The rest of Europe
North America
Asia Pacific
The rest of the World

Total revenue from external customers
Inter–segment revenue(2)

Total revenue

Adjusted operating profit/(loss)
Amortisation of intangible assets that
are acquired in a business combination
Acquisition related charges
Integration and restructuring costs

Operating profit/(loss)
Net finance expense
Taxation

Profit for the year

Segment assets
Unallocated assets

Cash and cash equivalents
Non–current tax assets
Current tax assets
Deferred tax assets

Total assets

Segment liabilities
Interest–bearing loans and borrowings
Unallocated liabilities
Bank overdrafts
Current tax liabilities
Deferred tax liabilities

Total liabilities

17.7
75.2
74.4
42.8
7.7

217.8
0.1

217.9

33.1

17.4
72.6
62.1
37.8
4.8

194.7
0.2

194.9

26.6

15.3
32.7
63.3
16.3
10.2

137.8
0.4

138.2

31.4

(4.4)
(4.4)
(0.9)

(1.2)
(1.2)
(0.4)

(0.2)
(0.1)
(1.0)

23.4

23.8

30.1

13.4
36.2
53.8
14.4
4.0

121.8
0.5

122.3

28.0

(0.3)
(0.2)
(0.4)

27.1

5.5
10.0
67.0
11.3
1.8

95.6
0.1

95.7

12.5

(6.3)
(4.8)
(4.7)

(3.3)

6.3
8.7
52.0
9.4
1.4

77.8
0.2

78.0

8.3

(5.7)
(3.2)
–

(0.6)

–
–
–
–
–

–
(0.6)

(0.6)

–
–
–
–
–

–
(0.9)

(0.9)

38.5
117.9
204.7
70.4
19.7

451.2
–

451.2

(17.0)

(16.7)

60.0

–
–
(1.7)

–
–
(0.1)

(18.7)

(16.8)

(10.9)
(9.3)
(8.3)

31.5
(6.8)
8.2

32.9

37.1
117.5
167.9
61.6
10.2

394.3
–

394.3

46.2

(7.2)
(4.6)
(0.9)

33.5
(3.9)
(3.7)

25.9

242.5

186.2

119.7

101.7

107.4

98.2

8.5

2.7

478.1

388.8

15.8
3.0
4.1
51.2

11.0
3.0
4.7
33.6

62.8
0.6

57.2
0.6

38.9
–

37.9
–

20.6
–

18.8
0.4

7.5
173.9

6.6
121.8

–
16.7
7.5

3.1
16.0
4.8

15.8
3.0
4.1
51.2

552.2

129.8
174.5

–
16.7
7.5

11.0
3.0
4.7
33.6

441.1

120.5
122.8

3.1
16.0
4.8

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities

25.2
(40.0)
(3.0)

32.2
(49.7)
(2.5)

Capital expenditure

Property, plant and equipment
Software and development costs

3.6
3.2

6.8
2.9

30.6
(5.3)
(2.1)

3.0
2.4

30.4
(5.4)
(2.0)

3.4
1.1

9.9
(8.1)
(1.7)

0.5
7.5

328.5

267.2

8.8
(22.6)
(1.1)

(17.0)
–
17.5

(16.7)
–
21.1

48.7
(53.4)
10.7

54.7
(77.7)
15.5

0.6
6.9

–
–

7.1
13.1

10.8
10.9

(1) The Imaging Solutions segment has been renamed the Media Solutions segment following the change of the Company name from The Vitec Group plc to Videndum plc with effect from

23 May 2022.

(2) Inter-segment pricing is determined on an arm’s length basis. These are eliminated in the Corporate column.

The Group’s operations are located in several geographical locations, and sell products and services on to external customers in all parts of the world.

One customer (2021: one) accounted for more than 10% of external revenue. In 2022, the total revenue from this customer, which was recognised
in all three segments, was £60.8 million (2021: £50.4 million).

180

Section 2 continued
Results for the Year continued

Operating expenses

Analysis of operating expenses
– Adjusting items in operating profit(1)
– Other administrative expenses

Administrative expenses
Marketing, selling and distribution costs
Research, development and engineering costs

Operating expenses

2022
£m

25.9
61.9

87.8
53.7
22.5

2021
£m

12.6
57.6

70.2
49.5
19.9

164.0

139.6

(1) Adjusting items in operating profit are £28.5 million (2021: £12.7 million) of which £25.9 million (2021: £12.6 million) are recognised in operating expenses and £2.6 million (2021: £0.1 million)

in cost of sales. See note 2.2 “Adjusting items”.

Operating profit

The following items are included in operating profit
Fees payable to Deloitte for the audit of the Company’s financial statements(2)
Fees payable to Deloitte for:
– The audit of the subsidiaries(2)
– Audit-related assurance services

2022
£m

0.9

0.8
0.1

2021
£m

0.5

0.8
0.1

(2) These amounts are corrected from the disclosure in the Annual Report and Accounts 2021. The fees payable to Deloitte have been reduced by £0.1 million for the audit of the Company’s
financial statements (previously reported as £0.6 million), and increased by £0.1 million for the audit of the subsidiaries (previously reported as £0.7 million). This is to be consistent with
the split in the current year.

2.2 Adjusting items

The Group presents APMs in addition to its statutory results. These are presented in accordance with the Guidelines on APMs issued by the
European Securities and Markets Authority (“ESMA”).

APMs used by the Group and, where relevant, a reconciliation to statutory measures are set out in the glossary to these financial statements
on pages 225 to 229. Adjusting items are described below along with more detail of the specific adjustment and the Group’s rationale for the
adjustment.

The Group’s key performance measures, such as adjusted operating profit, exclude adjusting items.

The following are the Group’s principal adjusting items when determining adjusted operating profit:

Amortisation of intangible assets that are acquired in a business combination:
Acquired intangibles are measured at fair value, which takes into account the future cash flows expected to be generated by the asset rather than
past costs of development. Additionally, acquired intangibles include assets such as brands, know-how and relationships which the Group would
not normally recognise as assets outside of a business combination. The amortisation of the fair value of acquired intangibles is not considered to
be representative of the normal costs incurred by the business within the Group on an ongoing basis. On an ongoing basis, the Group capitalises
development costs of intangible assets and the costs of purchasing software. These intangible assets are recognised at cost and the amortisation
of these costs are included in adjusted operating profit.

Acquisition related charges:
Earnout charges and retention bonuses agreed as part of the acquisition:

Under IFRS 3, most of the Group’s earnout charges and retention bonuses are treated as post combination remuneration, although the levels of
remuneration generally do not reflect market rates and do not get renewed as a salary (or other remuneration) might. The Group considers this
to be inconsistent with the economics reflected in the deals because other consideration for the acquisition is effectively included in goodwill
rather than in the Income Statement. Retention agreements are generally entered into with key management at the point of acquisition to help
ensure an efficient integration.

Transaction costs:

Transaction costs related to the acquisition of a business do not reflect its trading performance and so are adjusted to ensure consistency
between periods.

Effect of fair valuation of acquired inventory:

As part of the accounting for business combinations, the Group measures acquired inventory at fair value as required under IFRS 3. This results
in the carrying value of acquired inventory being higher than its original cost-based measure. The impact of the uplift in value has the effect of
increasing cost of sales thereby reducing the Group’s gross profit margin which is not representative of ongoing performance.

Financial StatementsVidendum plc Annual Report and Accounts 2022

181

Effect of fair valuation of property, plant and equipment:

Under IFRS 3, acquired fixed assets are measured at fair value. This measure does not reflect the undepreciated cost of the acquired asset from
the perspective of the acquiree and as such alters the depreciation cost from the Group’s perspective after the acquisition. This does not reflect
the ongoing profitability of the acquired business.

Grant payments in excess of the liability recognised on acquisition:

These are costs relating to pre-acquisition funding activity. As they are not relevant to understanding the in-year performance of the business,
they are adjusted to ensure consistency between periods.

Integration and restructuring costs:
For an acquired business, the costs of integration, such as termination of third-party distributor agreements, severance and other costs included
in the business’s defined integration plan, do not reflect the business’s trading performance and so are adjusted to ensure consistency between
periods.

Restructuring and other associated costs arising from significant strategy changes that are not considered by the Group to be part of the normal
operating costs of the business.

Finance expense – amortisation of loan fees on borrowings for acquisitions:
Upfront borrowing fees related to funding for acquisitions do not reflect the ongoing funding cost of the investment and so are adjusted to ensure
consistency between periods.

Other adjusting items:
– profit/(loss) on disposal of businesses;
– impairment charges that are considered to be significant in nature and/or value to the performance of the business;
– past service charges associated with defined benefit pensions, such as gender equalisation of guaranteed minimum pension (“GMP”) for

occupational schemes; and

– other significant initiatives not related to trading.

No such items arose in the current or prior year.

In addition to the above, the current and deferred tax effects of adjusting items are taken into account in calculating post-tax APMs. In addition,
the following are treated as adjusting items when considering post-tax APMs:

– significant adjustments to current or deferred tax which have arisen in previous periods but are accounted for in the current period; and
– the net effect of significant new tax legislation changes.

The APMs reflect how the business is measured and managed on a day-to-day basis including when setting and determining the variable element
of remuneration of senior management throughout the Group (notably cash bonus and the Long Term Incentive Plan (“LTIP”)) as disclosed in the
Remuneration report and described in more detail in note 5.3 Share-based payments.

Adjusted operating profit, adjusted profit before tax and adjusted profit after tax are not defined terms under IFRS and may not be comparable
with similarly titled profit measures reported by other companies. They are not intended to be a substitute for IFRS measures. All APMs relate to
the current year results and comparative periods where provided.

Amortisation of intangible assets that are acquired in a business combination(1)
Acquisition related charges(1) (2)
Integration and restructuring costs(1) (3)

Adjusting items in operating profit
Finance expense – amortisation of loan fees on borrowings for acquisitions(1) (4)

Adjusting items in profit before tax

2022
£m

(10.9)
(9.3)
(8.3)

(28.5)
(0.8)

(29.3)

2021
£m

(7.2)
(4.6)
(0.9)

(12.7)
(0.1)

(12.8)

See note 2.5 “Earnings per share” for tax relating to this.

(1)
(2) Acquisition related charges comprise retention payment charge of £5.9 million (2021: £2.8 million) relating to continued employment, grant payments in excess of liability recognised at
acquisition of £1.8 million (2021: £nil), transaction costs relating to the acquisition of businesses of £1.0 million (2021: £1.7 million), the effect of fair valuation of acquired inventory and
property of £0.5 million (2021: £0.1 million), and the effect of fair valuation of acquired property, plant and equipment of £0.1 million (2021: £nil).
The retention payment charge of £5.9 million relates to Quasar: £0.1 million, Lightstream: £2.5 million, Savage: £0.7 million and Audix: £2.6 million. The charge incurred in 2021 was
£2.8 million relating to Quasar: £0.1 million, Lightstream: £2.6 million and Savage: £0.1 million.
Transaction costs of £1.0 million relate to Audix: £0.4 million and other: £0.6 million. The charge incurred in 2021 was £1.7 million relating to Quasar: £0.1 million, Lightstream: £0.5 million,
Savage: £0.7 million and Audix: £0.4 million.

(3) Restructuring costs were incurred across all divisions, with the majority in the Creative Solutions Division.

Creative Solutions began a project to reorganise the sales and marketing teams into specialist vertical segments to maximise the Division’s growth potential, and to focus on high end, high
margin, mission-critical products incorporating patented Amimon technology, exiting the low margin, low end of the wireless video streaming market where our products do not
incorporate the Amimon technology. The costs incurred were £0.6 million of employee costs, and impairment of £1.7 million of inventory and £1.9 million of capitalised development costs
in relation to the low end of the wireless video streaming market (2021: £nil).
Media Solutions incurred £0.7 million of employee costs in relation to organisational changes (2021: £0.5 million of recruitment and professional fees).
Production Solutions began a project to consolidate operations on the West coast of the US, the cost of which was £0.6 million of employee costs (2021: £0.4 million of integration costs
in relation to the acquisition of Quasar). £1.9 million was incurred in relation to the exits of senior management positions (2021: £nil).
£0.9 million was incurred for rebranding from Vitec to Videndum, and in respect of a one-off legal case (2021: £nil). All restructuring and integration costs in 2022 have been recognised
in operating expenses aside from £2.1 million which is in cost of sales (2021: £nil).
An amount of £2.6 million (2021: £0.1 million) was adjusted from cost of sales. This related to the fair value uplift of £0.5 million (2021: £0.1 million) relating to acquired inventory sold by
the Group since the business combination, and restructuring costs of £2.1 million (2021: £nil) of which inventory impairment was £1.7 million (2021: £nil), and redundancy costs £0.4 million
(2021: £nil).

(4) Amortisation of loan fees of £0.8 million (2021: £0.1 million) relating to borrowings for acquisitions was adjusted from net finance expense.

182

Section 2 continued
Results for the Year continued

2.3 Net finance expense

This note details the finance income and expense generated from the Group’s financial assets and liabilities.

Accounting policies
Net finance expense comprises:

– foreign exchange gains and losses on cash and inter-company loans that are not net investment hedges;
– unwind of discount on liabilities;
– interest expense on lease liabilities;
– interest expense on borrowings and interest receivable on funds invested;
– fair value gain/loss on interest rate swaps designated as cash flow hedges; and
– net interest expense on net defined benefit pension scheme.

Net finance expense

Finance income

Fair value gain on interest rate swaps designated as cash flow hedges
Net currency translation gains

Finance expense
Interest expense on lease liabilities
Interest expense on interest-bearing loans and borrowings(1)
Interest expense on net defined benefit pension scheme(2)

Net finance expense

2022
£m

0.7
2.4

3.1

(1.5)
(8.3)
(0.1)

(9.9)

(6.8)

2021
£m

–
0.5

0.5

(1.0)
(3.3)
(0.1)

(4.4)

(3.9)

(1)

Interest expense on interest-bearing loans and borrowings of £8.3 million (2021: £3.3 million) includes an adjusting amount of £0.8 million (2021: £0.1 million) relating to amortisation
of loan fees on borrowings for acquisitions. See note 2.2 “Adjusting items”.

(2) See note 5.2 “Pensions”.

2.4 Tax

This note sets out the tax accounting policies, the total tax charge or credit in the Income Statement, and tax assets and tax liabilities in the
Balance Sheet. This includes amounts relating to deferred tax.

Accounting policies

Income tax

The tax expense in the Income Statement represents the sum of current and deferred tax.

Current tax is the expected tax payable on the taxable income for the year, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the Balance Sheet liability method, providing for temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates substantively enacted at the Balance
Sheet date.

Deferred tax assets are recognised for all deductible temporary differences and carried forward unused tax credits and unused tax losses, to
the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward
of unused tax credits and unused tax losses, can be utilised.

The carrying amount of deferred income tax assets is reviewed at each Balance Sheet date and increased or reduced to the extent of the probable
level of taxable profit that would be available to allow all or part of the deferred income tax asset to be utilised.

Deferred tax liabilities are not recognised for the following temporary differences:

– goodwill not deductible for tax purposes or the initial recognition of an asset or liability in a transaction that is not a business combination and,

at the time of the transaction, affects neither the accounting profit nor the taxable profit or loss; and

– differences relating to investments in subsidiaries to the extent that the timing of the reversal is controlled by the Company and they will

probably not reverse in the foreseeable future.

Financial StatementsVidendum plc Annual Report and Accounts 2022

183

Tax – Income Statement

The total taxation charge/(credit) in the Income Statement is analysed as follows:

Summarised in the Income Statement as follows
Current tax
Deferred tax

Adjusting items
Current tax(1)
Deferred tax(2)

Before adjusting items
Current tax
Deferred tax

2022
£m

2021
£m

8.5
(16.7)

(8.2)

(1.7)
(19.0)

(20.7)

10.2
2.3

12.5

11.4
(7.7)

3.7

(0.2)
(6.4)

(6.6)

11.6
(1.3)

10.3

(1)

Current tax credit of £1.7 million (2021: £0.2 million credit) was recognised in the year of which £0.7 million credit (2021: £0.2 million credit) related to integration and restructuring costs,
£0.2 million credit (2021: £nil) related to financial expense, and £0.8 million credit relates to non-taxable foreign exchange.

(2) Deferred tax credit of £19.0 million (2021: £6.4 million credit) was recognised in the year of which £0.7 million credit (2021: £nil) relates to integration and restructuring costs, £1.7 million

credit (2021: £1.5 million credit) to acquisitions, £2.3 million credit (2021: £1.8 million credit) to amortisation of intangible assets, £nil (2021: £2.6 million credit) relates to the impact of the
2021 intercompany debt restructure, £nil (2021: £0.9 million credit) relates to the impact of the step-up in the tax base of certain plant and equipment in Italy, £nil (2021: £0.4 million
charge) relates to the UK rate change from 19% to 25%, and £14.3 million credit relates to a deferred tax asset recognition. Further details on deferred tax asset are below.

Current tax expense/(credit)
Charge for the year
Adjustments in respect of prior years

Total current tax expense

2022
£m

8.9
(0.4)

8.5

The Group current tax charge of £8.5 million (2021: £11.4 million) represents UK current tax charge £3.2 million (2021: £4.0 million) with the
remaining £5.3 million (2021 : £7.4 million) charge relating to overseas tax.

Deferred tax expense/(credit)
Origination and reversal of temporary differences
Adjustments in respect of prior years

Total deferred tax credit

2022
£m

(16.4)
(0.3)

(16.7)

2021
£m

8.5
2.9

11.4

2021
£m

(7.5)
(0.2)

(7.7)

The Group deferred tax credit of £16.7 million (2021: £7.7 million credit) represents US deferred tax credit of £15.0 million (2021 £4.8 million credit),
UK deferred tax charge £0.1 million (2021: £0.3 million charge), with £1.8 million credit (2021 : £3.2 million) relating to overseas tax.

Tax (credit)/charge recognised in Statement of Changes in Equity (“SOCIE”)
Current tax recognised in SOCIE(3)
Deferred tax recognised in SOCIE(4)

2022
£m

–
0.4

0.4

2021
£m

–
(0.3)

(0.3)

(3) No current tax deductions have been reflected in the SOCIE in both the current and prior year.
(4) A deferred tax charge of £0.4 million (2021: £0.3 million credit) relating to the impact of share-based payments on outstanding options, has been reflected in the SOCIE.

184

Section 2 continued
Results for the Year continued

Reconciliation of Group tax charge

Profit before tax

Income tax using the domestic corporation tax rate at 19% (2021: 19%)
Effect of tax rates in foreign jurisdictions
Non-deductible expenses
Non-taxable income
Beneficial tax rates and incentives(5)
Movement on unrecognised deferred tax
Other – including movement on assessment of tax risks
UK rate change
Intercompany debt restructure
Italy fixed asset revaluation
Deferred tax asset increase relating to recognition of US tax losses(6)
Adjustments in respect of prior years

Total income tax expense in Income Statement

2022
£m

24.7

4.7
1.1
1.3
(1.0)
(0.6)
2.1
(0.3)
0.1
–
–
(14.3)
(1.3)

(8.2)

2021
£m

29.6

5.6
1.1
0.6
(1.4)
(0.5)
(0.7)
(0.6)
0.4
(2.6)
(0.9)
–
2.7

3.7

(5) The beneficial tax rates and incentives of £0.6 million credit (2021: £0.5 million credit) relates to the beneficial tax rate in Costa Rica.
(6) The Deferred tax asset increase relating to the recognition of the US tax losses arises from an increase in forecasted sustainable profits, see note “Deferred tax assets and liabilities”

below.

Tax – Balance Sheet

Current tax

The current tax liability of £16.7 million (2021: £16.0 million) represents the amount of income taxes payable in respect of current and prior periods,
including a provision in relation to uncertain tax positions. The current tax asset of £4.1 million (2021: £4.7 million) relates to income tax receivable
in the UK, the US and Italy, and includes a provision in relation to uncertain tax positions.

The international tax environment has received increased attention and seen rapid change over recent years, both at a US and European level,
and by international bodies such as the Organisation for Economic Co-operation and Development (“OECD”). In light of this, the Group has been
monitoring developments and continues to engage transparently with the tax authorities in countries where the Group operates, to ensure that
the Group manages its tax arrangements on a sustainable basis.

As for most multinationals, the current tax environment is creating increased levels of uncertainty and the Group is potentially subject to tax
audits in many jurisdictions. By their nature these are often complex and could take a significant period of time to be agreed with the tax
authorities. The Group estimates and accrues taxes that will ultimately be payable when reviews or audits by tax authorities of tax returns are
completed. These estimates include Management judgements about the position expected to be taken by each tax authority, primarily in respect
of transfer pricing as well as in respect of financing arrangements and tax credits and incentives.

Management estimates of the level of risk arising from tax audit may change in the next year as a result of changes in legislation or tax authority
practice or correspondence with tax authorities during a specific tax audit. It is not possible to quantify the impact that such future developments
may have on the Group’s tax positions. Actual outcomes and settlements may differ significantly from the estimates recorded in these
consolidated financial statements.

Non-current tax

The non-current tax asset of £3.0 million relates to the payment made on account to HMRC in 2021 which is considered to be recoverable in more
than one year. Further details are below.

EU State Aid investigation

The Group continues to recognise a £3.0 million non-current tax asset (31 December 2021: £3.0 million) following the payment to HMRC of a
Charging Notice received on 8 March 2021 under “The Taxation (Post-transition Period) Act 2020”. The Group considers that its appeal against
the Charging Notice will be successful. Additionally, HMRC has appealed against the European Commission state aid investigation and if the
HMRC appeal is successful then the amount will ultimately be repaid to the Group. However, there exists a contingent liability as at 31 December
2022 of up to £3.0 million in relation to this matter.

Financial StatementsVidendum plc Annual Report and Accounts 2022

185

Recognised
in income
£m

2022
£m

Recognised
in goodwill
and reserves
£m

Exchange
movements
£m

Transfer
between
categories
£m

2.8
1.1
34.7
12.6

51.2

(3.2)
(4.3)

(7.5)

43.7

2021
£m

2.6
1.1
21.5
8.4

33.6

(0.3)
(4.5)

(4.8)

28.8

0.2
–
10.8
5.6

16.6

(0.6)
0.7

0.1

16.7

–
(0.2)
–
(1.1)

(1.3)

(3.5)
–

(3.5)

(4.8)

–
0.2
2.8
0.5

3.5

–
(0.5)

(0.5)

3.0

–
–
(0.4)
(0.8)

(1.2)

1.2
–

1.2

–

Recognised
in income
£m

Recognised in
goodwill and
reserves
£m

Exchange
movements
£m

Transfer
between
categories
£m

0.6
0.5
2.6
3.6

7.3

(0.2)
0.6

0.4

7.7

–
0.6
2.0
(0.1)

2.5

–
–

–

2.5

Gross
2022
£m

165.9
9.0

174.9

–
–
0.1
(0.1)

–

–
–

–

Tax
2022
£m

34.7
1.9

36.7

–
(0.8)
1.8
(1.8)

(0.8)

–
0.8

0.8

–

Gross
2021
£m

106.8
79.7

186.4

2021
£m

2.6
1.1
21.5
8.4

33.6

(0.3)
(4.5)

(4.8)

28.8

2020
£m

2.0
0.8
15.0
6.8

24.6

(0.1)
(5.9)

(6.0)

18.6

Tax
2021
£m

21.5
17.9

39.4

Deferred tax assets and liabilities

Assets
Inventories
Intangible assets
Tax losses
Property, plant, equipment and other

Liabilities
Property, plant, equipment and other
Intangible assets

Net

Assets
Inventories
Intangible assets
Tax losses
Property, plant, equipment and other

Liabilities
Property, plant, equipment and other
Intangible assets

Net

Tax losses

Assets
Inventories

Total

Sensitivity analysis on tax losses

The majority (99%) of tax losses are forecast to be utilised within 11 years and all losses used within 17 years. A +5% increase in forecasted profits
results in the majority of losses being utilised within 10 years and all losses used within 17 years. A -5% decrease in forecasted profits results in the
majority of losses being utilised within 11 years and all losses used within 17 years.

Deferred tax assets are recognised to the extent it is probable that future taxable profit will be available against which the unused tax losses,
unused tax credits and deductible temporary differences can be utilised in the relevant jurisdictions. As of 31 December 2022, Videndum has
recognised deferred tax assets of £51.2 million (£33.6 million 31 December 2021).

Videndum continually evaluates the probability of utilising its deferred tax assets and at 31 December 2021, concluded based on its assessment
that it was not probable that it would have been able to utilise the all unused tax losses, unused tax credits and deductible temporary differences
in the US.

In late 2021 and early 2022 Videndum acquired two US businesses: Savage for US$57.0 million; and Audix for US$46.0 million which following a
successful integration are forecast to provide additional accounting and taxable profits in the US compared to preceding periods. This additional
taxable profit is expected to be sustained in the upcoming years, as well as over the longer term.

186

Videndum has determined that the forecasts of future taxable profit in the US provide positive evidence about its ability to utilise the unused
tax losses and deductible temporary differences in the US. At 31 December 2022, Videndum concluded based on its assessment that it is probable
that it will be able to utilise the unused tax losses and deductible temporary differences and recognised deferred tax assets of £51.2 million in the
Consolidated Statement of Financial Position.

The deferred tax asset decrease of £4.8 million (2021: £2.5 million increase) recognised in goodwill and reserves relates to the following:
£2.1 million decrease recognised in SOCIE in relation to defined benefit obligations; £0.4 million decrease reflected in the SOCIE in relation to
share options; £1.4 million decrease relating to financial instruments; and £0.9 million decrease recognised in SOCIE in relation to US acquisitions.

No taxes have been provided for liabilities which may arise on the distribution of unremitted earnings of subsidiaries on the basis of control, except
where distributions of such profits are planned. Cumulative unremitted earnings of overseas subsidiaries totalled approximately £171.8 million at
31 December 2022 (2021: £154.6 million). As dividends remitted from overseas subsidiaries to the UK should be exempt from additional UK tax,
no significant tax charges would be expected.

2.5 Earnings per share

Earnings per share (“EPS”) is the amount of post-tax profit attributable to each share.

Basic EPS is calculated on the profit for the year divided by the weighted average number of ordinary shares in issue during the year.

Diluted EPS is calculated on the profit for the year divided by the weighted average number of ordinary shares in issue during the year, but
adjusted for the effects of dilutive share options. The key features of share option contracts are described in note 5.3 “Share-based
payments”.

The adjusted EPS measure is calculated based on adjusted profit and is used by Management to set performance targets for employee
incentives and to assess performance of the businesses.

The calculation of basic, diluted and adjusted EPS is set out below:

Profit for the financial year

Add back adjusting items, all net of tax:
Amortisation of intangible assets that are acquired in a business combination, net of tax
Acquisition related charges, net of tax
Integration and restructuring costs, net of tax
Finance expense – amortisation of loan fees on borrowings for acquisitions, net of tax
Current tax credit(1)
Deferred tax credit(2)

Adjusted profit after tax

A current tax credit of £0.8 million (2021: £nil) relates to non taxable foreign exchange gains.

(1)
(2) A deferred tax credit of £14.3 million (2021: £3.1 million) relates to the recognition of deferred tax assets.

2022
£m

32.9

8.6
7.7
6.8
0.6
(0.8)
(14.3)

8.6

41.5

2021
£m

25.9

5.4
3.1
0.7
0.1
–
(3.1)

6.2

32.1

Basic
Dilutive potential ordinary shares

Diluted

Weighted average number of
shares ‘000

Adjusted earnings per share

Earnings per share

2022
Number

46,064
1,850

47,914

2021
Number

45,904
1,619

47,523

2022
pence

90.1
(3.5)

86.6

2021
pence

69.9
(2.4)

67.5

2022
pence

71.4
(2.7)

68.7

2021
pence

56.4
(1.9)

54.5

Financial StatementsVidendum plc Annual Report and Accounts 2022

187

Section 3
Operating Assets and Liabilities

This section shows the assets and liabilities used to generate the Group’s trading performance. Liabilities relating to the Group’s financing
activities are addressed in Section 4. Current tax and deferred tax assets and liabilities are shown in note 2.4 “Tax”.

Intangible assets

On the following pages, there are disclosures covering the following:
3.1
3.2 Property, plant and equipment
3.3 Working capital
3.4 Acquisitions
3.5 Provisions
3.6 Leases

3.1 Intangible assets

This shows the non-physical assets used by the Group to generate revenues and profits. These assets include the following:

– Goodwill
– Acquired intangible assets
– Software
– Capitalised development costs

Accounting policies

Goodwill

The goodwill recognised by the Group has all arisen as a result of acquisitions and is stated at cost less any accumulated impairment losses. Goodwill
is allocated on acquisition to CGUs, or groups of CGUs, assessed to be the three segments of the Group, that are anticipated to benefit from the
combination. It is not subject to amortisation but is tested annually for impairment. Impairment is determined by assessing the recoverable amount
of the segment to which the goodwill relates. This estimate of recoverable amount is determined at each Balance Sheet date.

The estimate of recoverable amount requires significant assumptions to be made and is based on a number of factors such as the near-term
business outlook for the segment, including both its operating profit and operating cash flow performance. Where the recoverable amount
of the segment is less than the carrying amount, an impairment loss is recognised. Impairment losses on goodwill are not reversed.

All acquisitions that have occurred since 1 January 2010 are accounted for by applying the acquisition method. Goodwill on these acquisitions
represents the excess of the fair value of the acquisition consideration over the fair value of the identifiable net assets acquired, all measured
at the acquisition date. Subsequent adjustments to the fair values of net assets acquired can be made within 12 months of the acquisition date
where original fair values were determined provisionally. These adjustments are accounted for from the date of acquisition.

Other intangible assets

Acquired intangible assets

Other intangible assets acquired as part of a business combination are shown at fair value at the date of acquisition less accumulated
amortisation at the rates indicated below:

Order backlog
Brand
Customer relationships
Technology

Software

up to 2 years
3 to 20 years
3 to 10 years
3 to 20 years

The cost of acquiring software (including associated implementation and development costs where applicable) is classified as an intangible asset.
Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that are
assessed as likely to generate economic benefits exceeding costs beyond one year, are also capitalised and recognised as intangible assets. Costs
associated with maintaining computer software programs are recognised as an expense as incurred. Software expenditure is amortised over its
estimated useful life of between three to five years, and is stated at cost less accumulated amortisation and impairment losses.

Capitalised development costs

Research and development costs are charged to the Income Statement in the year in which they are incurred unless development expenditure
meets the criteria for capitalisation. Once detailed and strict criteria have been met that confirm that the product or process is both technically
and commercially feasible and the Group has sufficient resources to complete the product, any further expenditure incurred on the project is
capitalised. The capitalised expenditure includes the cost of materials, direct labour and an appropriate portion of overheads. Capitalised
expenditure is amortised over the life of the product, and is stated at cost less accumulated amortisation and impairment losses.

188

Section 3 continued
Operating Assets and Liabilities continued

Impairment tests for CGUs or groups of CGUs containing goodwill
In accordance with the requirements of IAS 36 “Impairment of Assets”, goodwill is allocated to the CGU groups, assessed to be the three segments
of the Group, which are expected to benefit from the combination and are identified by the way goodwill is monitored for impairment. The Group’s
total consolidated goodwill of £125.7 million at 31 December 2022 (£99.0 million at 31 December 2021) is allocated to: Media Solutions: £55.4 million
(2021: £34.4 million); Production Solutions: £31.9 million (2021: £30.2 million); and Creative Solutions: £38.4 million (2021: £34.4 million). Goodwill
allocated to each segment is assessed for impairment annually and whenever there is a specific indicator of impairment.

As part of the annual impairment test review, the carrying value of goodwill has been assessed with reference to value in use over a projected
period of five years together with a terminal value. This reflects the projected cash flows of each segment based on the actual operating results,
the most recent Board approved budget, the strategy, and Management projections.

As part of determining the value in use of each CGU group and carrying value of long-term assets, Management has considered the potential impact
of climate change on the business performance over the next five years, and the terminal growth rates. While there is considerable uncertainty
relating to the longer term and quantifying the impact on a range of outcomes, Management considers that environmental related incremental costs
are expected to have a moderate impact; the Group has already implemented strategies to mitigate this impact.

Recognising that there are extreme but unlikely scenarios, the Group considers that while exposed to physical risks associated with climate change
(such as flooding, heat waves, sea level rises and increased precipitation) the estimated impact of these on the Group is not deemed material when
determining the value in use of each CGU group and carrying value of associated long-term assets. In addition, the Group is exposed to transitional
risks which might arise, for example, from government policy, customer expectations, material costs and increased stakeholder concern. The
transitional risks could result in financial impacts such as higher environmentally focused levies (e.g. carbon pricing) and increased material costs.
While the Group is exposed to the potential financial impacts associated with transitional risks after expected mitigating actions these are not
deemed to have a significant impact on the value in use of each CGU group, determination of available headroom, and carrying value of associated
long-term assets.

The key assumptions on which the value in use calculations are based relate to (i) business performance over the next five years, (ii) long-term
growth rates beyond 2027 and (iii) discount rates applied.

(i) Business performance over the next five years – Forecast sales growth rates are based on past experience and take into account current and
future market conditions and opportunities, and strategic decisions made in respect of each CGU group. Operating profits are forecast based
on historical experience of operating margins adjusted for the impact of changes in product costs, cost-saving initiatives and new product
launches. Cash conversion is the ratio of operating cash flow to operating profit. Management forecasts the cash conversion rate based on
historical experience.

(ii) Long-term growth rates beyond 2027 – These are based on Management’s assessment of the outlook for overall market growth with both
Media Solutions and Production Solutions broadly similar to long-term world GDP growth, whereas for Creative Solutions, we believe the
end-markets and geographies in which the division operates indicate higher growth potential.

(iii) Discount rates applied – The pre-tax discount rates were measured based on the interest rate of 30-year government bonds issued in the

relevant market, adjusted for a risk premium to reflect both the increased risk of investing in equities generally and the systematic risk of the
CGU group.

Growth rates for the period beyond 2027 were assumed to be 2.0% for Media Solutions and Production Solutions, and 4.0% for Creative Solutions
(2021: 2.0% for Media Solutions and Production Solutions, and 4.0% for Creative Solutions). The pre-tax discount rates applied to discount the
pre-tax cash flows were 15% (2021: 13%) for Media Solutions; 14% (2021: 11%) for Production Solutions; and 14% (2021: 12%) for Creative
Solutions.

No reasonably possible change of key estimate would result in a material impairment to the goodwill of any CGU group. The following scenarios
would be required to result in an impairment of goodwill: the pre-tax WACC would need to increase by c.17% points for Media Solutions; c.22%
points for Production Solutions; and c.23% points for Creative Solutions.

Financial StatementsVidendum plc Annual Report and Accounts 2022

189

Total
£m

Goodwill
£m

Acquired
intangible
assets
£m

Capitalised
development
costs
£m

Software
£m

219.0
(1.1)
10.9
(0.2)
52.7

281.3
28.6
13.1
31.5

354.5

95.5
(0.7)
13.0
(0.2)

107.6
8.8
18.3
1.9

136.6

123.5
173.7

217.9

76.2
(0.3)
–
–
23.5

99.4
10.4
–
16.4

126.2

0.4
–
–
–

0.4
0.1
–
–

0.5

75.8
99.0

125.7

84.4
0.4
–
–
29.2

114.0
13.2
–
15.1

142.3

60.5
0.3
7.2
–

68.0
6.2
10.9
–

85.1

23.9
46.0

57.2

18.3
(0.8)
0.8
(0.1)
–

18.2
1.0
1.0
–

20.2

15.5
(0.7)
1.0
(0.1)

15.7
0.8
1.0
–

17.5

2.8
2.5

2.7

40.1
(0.4)
10.1
(0.1)
–

49.7
4.0
12.1
–

65.8

19.1
(0.3)
4.8
(0.1)

23.5
1.7
6.4
1.9

33.5

21.0
26.2

32.3

Intangible assets

Cost
At 1 January 2021
Currency translation adjustments
Additions
Disposals
Business combinations

At 31 December 2021 and 1 January 2022
Currency translation adjustments
Additions
Business combinations

At 31 December 2022

Amortisation and impairment losses
At 1 January 2021
Currency translation adjustments
Amortisation in the year
Disposals

At 31 December 2021 and 1 January 2022
Currency translation adjustments
Amortisation in the year
Impairment losses in the year

At 31 December 2022

Carrying amounts
At 1 January 2021
At 31 December 2021 and 1 January 2022

At 31 December 2022

The carrying value of individually material acquired intangible assets is £2.6 million (2021: £5.2 million) for software and algorithms, £13.1 million
(2021: £8.9 million) for trademarks, £3.2 million (2021: £3.3 million) for patents, £19.7 million (2021: £16.0 million) for customer relationships
and £13.8 million (2021: £7.8 million) for technology. The remaining amortisation period of these intangible assets is one year for software and
algorithms, between ten and twenty years for trademarks, six years for patents, nine years for customer relationships and between 11 and 20
years for technology.

The carrying value of individually material capitalised development costs is £3.0 million (2021: £2.0 million) with a remaining amortisation period
of five years.

Amortisation of intangible assets of £18.3 million and impairment losses of £1.9 million are included within operating expenses.

3.2 Property, plant and equipment

This shows the physical assets used by the Group to generate revenues and profits. These assets include the following:

– Land and buildings
– Plant, machinery and vehicles
– Equipment, fixtures and fittings

Accounting policies

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Rental assets are recorded as plant and
machinery. Right-of-use assets under lease contracts are included within property, plant and equipment. See note 3.6 “Leases”.

190

Section 3 continued
Operating Assets and Liabilities continued

Depreciation

Depreciation is provided to write off the cost of property, plant and equipment, less estimated residual value, on a straight-line basis over their
estimated useful lives. The annual depreciation charge is sensitive to the estimated useful life of each asset and expected residual value at the end
of its life. The major categories of property, plant and equipment are depreciated as follows:

Freehold land

Freehold buildings

Leasehold improvements

Plant and machinery

Motor vehicles

Equipment, fixtures and fittings

Rental assets

Impairment of assets

not depreciated

up to 50 years

shorter of estimated useful life or remaining period of the lease

4 to 10 years

3 to 4 years

3 to 10 years

3 to 6 years

Property, plant and equipment that is subject to depreciation is reviewed for impairment when events or changes in circumstances indicate that
the carrying amount may not be recoverable. Indicators of impairment may include changes in technology and market conditions.

The impact of climate change on the useful economic lives of property, plant and equipment is not deemed to be significant.

Property, plant and equipment

Cost
At 1 January 2021
Currency translation adjustments
Transfers between asset categories
Additions
Disposals
Acquisitions

At 31 December 2021 and 1 January 2022
Currency translation adjustments
Additions
Disposals
Business combinations

At 31 December 2022

Depreciation
At 1 January 2021
Currency translation adjustment
Transfers between asset categories
Depreciation charge in the year
Impairment losses in the year
Disposals

At 31 December 2021 and 1 January 2022
Currency translation adjustment
Depreciation charge in the year
Disposals

At 31 December 2022

Carrying amounts
At 1 January 2021
At 31 December 2021 and 1 January 2022

At 31 December 2022

Land and
buildings
£m

Plant,
machinery
and vehicles
£m

Equipment,
fixtures and
fittings
£m

56.9
(1.2)
0.1
15.4
(1.2)
4.6

74.6
5.2
4.9
(3.2)
4.4

85.9

33.4
(1.1)
0.1
5.6
0.2
(1.1)

37.1
2.3
7.1
(2.7)

43.8

23.5
37.5

42.1

82.0
(3.1)
0.1
9.6
(1.5)
1.6

88.7
5.6
5.4
(1.2)
1.0

99.5

65.8
(2.6)
0.1
6.2
–
(1.4)

68.1
4.3
7.2
(1.1)

78.5

16.2
20.6

21.0

9.8
(0.4)
(0.2)
1.5
(0.7)
–

10.0
0.5
1.6
(0.5)
0.1

11.7

7.3
(0.1)
(0.2)
1.1
–
(0.7)

7.4
0.3
1.0
(0.5)

8.2

2.5
2.6

3.5

Total
£m

148.7
(4.7)
–
26.5
(3.4)
6.2

173.3
11.3
11.9
(4.9)
5.5

197.1

106.5
(3.8)
–
12.9
0.2
(3.2)

112.6
6.9
15.3
(4.3)

130.5

42.2
60.7

66.6

Plant, machinery and vehicles include equipment rental assets with an original cost of £11.7 million (2021: £11.8 million) and accumulated
depreciation of £8.8 million (2021: £8.3 million).

Capital commitments at 31 December 2022 for which no provision has been made in the accounts amount to £nil (2021: £nil).

Financial StatementsVidendum plc Annual Report and Accounts 2022

191

3.3 Working capital

Working capital represents the assets and liabilities the Group generates through its trading activities. These include inventories, trade and
other receivables, and trade and other payables.

Careful management of working capital is vital as it ensures that the Group can meet its trading and financing obligations within its ordinary
operating cycle.

Accounting policies

Inventories

Inventories and work in progress are carried at the lower of cost and net realisable value. Inventory acquired as part of business combinations
is initially measured at fair value. Cost represents direct costs incurred and, where appropriate, production or conversion costs and other costs to
bring the inventory to its existing location and condition. In the case of manufacturing inventory and work in progress, cost includes an appropriate
share of production overheads based on normal operating capacity. Inventory is accounted for on an average cost method. Net realisable value
is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Provisions for
inventories are recognised when the book value exceeds their net realisable value.

In the ordinary course of business, judgement is applied to assess the level of provisions required to write down slow-moving, excess and obsolete
inventory to its net realisable value.

Trade and other receivables

Trade receivables and contract assets are recognised initially at fair value, and subsequently at amortised cost using the effective interest rate
method, less provision for impairment.

A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the
passage of time is required before the payment is due.

The Group applies the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for all trade
receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets have been grouped based on
shared credit risk characteristics and the number of days past due. The expected loss rates are based on payment profiles of sales over a preceding
36-month period and the corresponding historical credit losses experienced within this period. When appropriate, 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
where a trend exists.

Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation
of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual
payments for an extended period.

When customer payments are received in advance and the amount of consideration exceeds the revenue recognised, a contract liability
is recognised in the Balance Sheet.

Trade and other payables

Trade payables are generally recognised at the value of the invoice received from a supplier.

Inventories

Raw materials and components
Work in progress
Finished goods

Inventories, net of impairment provisions

2022
£m

35.7
8.9
62.7

107.3

2021
£m

26.0
7.4
55.1

88.5

Inventory of £107.3 million (2021: £88.5 million) is stated net of impairment provisions of £23.2 million (2021: £18.3 million). During the year
£5.1 million (2021: £2.0 million) was recognised as an expense resulting from the impairment and write-down of inventory. A reversal of £1.6 million
(2021: £1.6 million) was recognised as a reduction of the amount of inventory recognised as an expense.

192

Section 3 continued
Operating Assets and Liabilities continued

Trade and other receivables

Current receivables
Trade receivables, net of impairment provisions
Other receivables
Right to returned goods
Contract assets
Prepayments

Non-current receivables
Other receivables

Total receivables

Gross trade receivables – ageing(1)
Current
1-30 days
31-60 days
61-90 days
Over 90 days

Gross trade receivables

(1) Days overdue are measured from the date an invoice was due to be paid.

Impairment provisions against trade receivables
Balance at 1 January 2022
Net increase during the year
Utilised during the year
Currency translation adjustments

Balance at 31 December 2022

Trade and other payables

Current trade and other payables
Trade payables
Other tax and social security costs
Contract liabilities
Expected refunds to customers
Accruals
Other creditors

Non-current payables
Other non-trade payables

Total payables

2022
£m

54.7
7.9
0.4
1.8
4.1

68.9

7.4

76.3

2022
£m

46.4
6.9
1.7
0.9
2.9

58.8

2021
£m

43.9
7.5
0.2
2.9
5.5

60.0

5.8

65.8

2021
£m

38.5
4.6
1.4
0.7
3.7

48.9

Overdue
debts
£m

Discounts
£m

3.0
(0.5)
(0.4)
0.2

2.3

2022
£m

42.3
5.9
2.5
0.5
14.0
16.1

81.3

1.8

83.1

2.0
0.8
(1.1)
0.1

1.8

2021
£m

38.1
4.3
2.6
0.3
13.7
17.6

76.6

0.4

77.0

Total
£m

5.0
0.3
(1.5)
0.3

4.1

Financial StatementsVidendum plc Annual Report and Accounts 2022

193

3.4 Acquisitions

This note outlines how the Group has accounted for businesses that it has acquired.

Acquisitions are accounted for under the acquisition method of accounting. With limited exceptions, identifiable assets acquired and
liabilities and contingent liabilities assumed are measured at their fair values at the acquisition date. A detailed exercise is undertaken
to assess the fair value of assets acquired and liabilities assumed, with the use of third-party experts where appropriate.

The valuation of intangible assets requires the use of assumptions and estimates, including future growth rates, expected inflation rates,
discount rates used and useful economic lives. This process continues as information is finalised, and accordingly the fair values presented
in the tables below are provisional amounts. In accordance with IFRS 3, until the assessment is complete the measurement period will remain
open up to a maximum of 12 months from the acquisition date so long as information remains outstanding.

The excess of the consideration transferred, any non-controlling interest recognised and the fair value of any previous equity interest in the
acquired entity over the fair value of net identifiable assets acquired is recorded as goodwill. Acquisition-related costs are recognised in the
Income Statement as incurred in accordance with IFRS 3.

Acquisitions provide opportunities for further development of the Group’s activities and create enhanced returns. Such opportunities and
the workforces inherent in each of the acquired businesses represent much of the assessed value of goodwill.

Acquisition of Savage
During the period ended 31 December 2022, the process to measure the fair values of the assets acquired and liabilities assumed was completed
in respect of the Savage acquisition. The Balance Sheet as at 31 December 2021 has been adjusted to reflect a decrease in goodwill of £0.7 million
as a result of adjustments increasing deferred tax assets by £0.5 million, increasing acquired intangible assets by £0.3 million, and increasing
other creditors by £0.1 million. An amount of £0.3 million was received in the period in relation to the final working capital adjustment for Savage.

Acquisition of Audix
On 11 January 2022, the Group acquired 100% of the issued share capital of Audix LLC (“Audix”), a US company, for consideration of US$45.8 million
(£33.7 million). Under the terms of the acquisition, there is deferred consideration payable in 2023 of US$2.0 million, the fair value of which is
US$1.9 million (£1.4 million). The consideration for the acquisition is set out in the table below.

Audix has been integrated into the Media Solutions Division and it designs, engineers and manufactures high performing, innovative microphones
for the professional audio industry. Audix products are highly complementary to the JOBY and Rycote brands and this acquisition will help to
enhance the Group’s leading position in the growing audio market. This acquisition is in line with the Group’s strategy to drive growth by
increasing its addressable markets and expanding its higher technology capabilities.

Based on the provisional view, the fair value of the net assets acquired in the business at acquisition date was £18.7 million, resulting in goodwill
of £16.4 million. The whole amount of goodwill is tax deductible over 15 years and represents the expected synergies from the acquisition and
the assembled workforce.

In connection with the acquisition, a retention agreement is entered into with key employees. The retention agreement is for a total of
US$3.1 million (£2.3 million) conditional on continued employment and payable in 2023. This is accounted for as an employee expense in
accordance with IAS 19.

A summary of the acquisitions is detailed below:

Fair value of net assets acquired
Intangible assets
Property, plant and equipment
Inventories
Trade and other receivables
Cash
Lease liabilities
Trade and other payables
Deferred tax

Goodwill

Total purchase consideration
Present value of deferred consideration

Cash consideration
Cash acquired

Total outflow of cash for Audix
Working capital adjustment received for Savage

Total outflow of cash

Total
£m

15.1
5.5
3.1
1.1
0.2
(4.4)
(1.1)
(0.8)

18.7
16.4

35.1
(1.4)

33.7
(0.2)

33.5
(0.3)

33.2

Acquisition related charges include: transaction costs of £0.4 million relating to the acquisition of Audix; and retention payment charges of £5.9
million (Quasar: £0.1 million; Lightstream: £2.5 million; Savage: £0.7 million; and Audix: £2.6 million).

194

Section 3 continued
Operating Assets and Liabilities continued

The trade receivables acquired had a fair value and a gross contractual value of £0.7 million. All contractual cash flows at acquisition date are
expected to be collected.

The results of the acquisition included in the Group’s consolidated results are revenue of £12.9 million and operating profit of £1.3 million. The level
of profitability is stated after adjusting items.

Had the acquisition been made at the beginning of the year (i.e. 1 January 2022), it would have contributed £13.1 million to revenue and £1.3 million
profit to the operating profit of the Group. The level of profitability is stated after adjusting items.

3.5 Provisions

A provision is recognised by the Group where an obligation exists, relating to events in the past, and it is probable that an outflow of
economic benefits will be required to settle it.

Accounting policies

Provisions

Provisions are recognised in the Balance Sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required to settle it. If the effect is material, provisions are determined by discounting the
expected future cash flows at an appropriate discount rate.

Provisions for warranties, based on historical warranty data, are recognised when the underlying products or services are sold.

Obligations arising from restructuring plans are recognised when detailed formal plans have been established and the restructuring has either
commenced or has been announced.

At 1 January 2022
Provisions made during the year
Provisions utilised during the year
Provisions reversed during the year
Currency translation adjustments

At 31 December 2022

Current
Non-current

Warranty provisions

Total
£m

Warranty
£m

Restructuring
£m

Earnout
payments
£m

Tax-related
provisions
£m

Grant
repayment
£m

4.4
6.1
(2.5)
(0.6)
0.5

7.9

5.5
2.4

7.9

1.4
0.4
(0.4)
(0.1)
0.1

1.4

1.1
0.3

1.4

0.2
3.8
(2.0)
–
0.1

2.1

2.0
0.1

2.1

0.1
–
–
(0.1)
–

–

–
–

–

1.9
0.1
–
(0.2)
0.2

2.0

2.0
–

2.0

–
1.8
(0.1)
–
0.1

1.8

0.4
1.4

1.8

Other
£m

0.8
–
–
(0.2)
–

0.6

–
0.6

0.6

Warranties over the Group’s products typically cover periods of between one and five years. The provision represents Management’s best
estimate of the Group’s liability based on past experience.

Restructuring

The restructuring provision is expected to be utilised during 2023.

Earnout and deferred payment

The fair value of contingent consideration for Quasar of US$0.1 million (£0.1 million) was reversed during the year.

Tax-related provisions

On acquisition of Savage, the Group recognised a provision of £1.9 million for a tax-related contingent liability which is not in the scope of IAS 12
“Income Taxes”. As part of the acquisition agreement, the Group obtained indemnities from the sellers and an amount of the potential consideration
was transferred to an escrow account. An amount of £0.2 million was reversed during the year, and a provision of £0.1 million for interest was made
during the period . The amount of any payment would be recoverable by the Group under the escrow and indemnity arrangements, and as such, the
Group has also recognised a corresponding receivable of £2.0 million included in trade and other receivables.

Grant repayment

A provision of £1.8 million was created during the year for grant payments to the Israeli Innovation Authority (“IIA”) in excess of the liability
recognised on acquisition of Amimon.

Other

Other provisions include an amount of £0.6 million relating to potential dilapidation costs on the termination of leases on occupied property that
the Group has entered into.

Financial StatementsVidendum plc Annual Report and Accounts 2022

195

3.6 Leases

This note provides information in relation to leases when the Group is a lessee. The Group does not have any material leases where it acts
as a lessor.

Accounting policies

Leases

Each lease is recognised as a right-of-use asset with a corresponding liability at the date at which the leased asset is available for use by the
Group. Assets and liabilities arising from a lease are initially measured on a present value basis. Interest expense is charged to the Consolidated
Income Statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability. The
right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.

For the Group, lease payments generally comprise the following:

– fixed payments, less any lease incentives receivable;
– variable payments that are based on an index or rate; and
– payments to be made under extension options which are reasonably certain to be exercised.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental
borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in
a similar economic environment with similar terms and conditions. Generally, the interest rate implicit in the lease is not readily determinable,
as such the incremental borrowing rate is used to discount future lease payments.

Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease liability, and lease payments made
at or before the commencement date less any lease incentives received, any initial direct costs, and restoration costs.

When an adjustment to lease payments based on an index takes effect, the liability is remeasured with a corresponding adjustment to the
right-of-use asset.

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in the
Consolidated Income Statement.

The Group’s leasing activities

The Group enters into leases of land and buildings in relation to offices, warehouses and factory premises around the world. In addition, the Group
leases plant, machinery and vehicles, as well as other equipment.

Contracts entered into by the Group have a wide range of terms and conditions but generally do not impose any additional covenants. Several of
the Group’s contracts include indexation adjustments to lease payments in future periods which are not reflected in the measurement of the lease
liabilities at 31 December 2022.

Many of the contracts entered into by the Group include extension or termination options which provide the Group with additional operational
flexibility. If the Group considers it reasonably certain that an extension option will be exercised or a termination option not exercised, the
additional period is included in the lease term. Generally, extension options are not included in the lease term for plant, machinery and vehicles,
and equipment, fixtures and fittings. Most options in respect of land and buildings are not included in the calculation of the lease term.

During 2022, the financial effect of revising lease terms arising from the effect of exercising extension and termination options was a decrease
of £0.2 million in the recognised lease liabilities.

As at 31 December 2022, potential future cash outflows of £11.6 million (undiscounted) have not been included in the lease liability because it is
not reasonably certain that the leases will be extended (or not terminated).

A maturity analysis of lease liabilities is included in note 4.2 “Financial instruments”.

196

Section 3 continued
Operating Assets and Liabilities continued

Right-of-use assets

Cost
At 1 January 2021
Currency translation adjustments
Additions
Termination of leases
Transfers between asset categories
Business combinations

At 31 December 2021

At 1 January 2022
Currency translation adjustments
Additions
Termination of leases
Transfers between asset categories
Business combinations

At 31 December 2022

Depreciation
At 1 January 2021
Currency translation adjustment
Depreciation charge in the year
Depreciation on termination of lease
Transfers between asset categories

At 31 December 2021

At 1 January 2022
Currency translation adjustments
Depreciation charge in the year
Depreciation on termination of lease
Transfers between asset categories

At 31 December 2022

Carrying amounts
At 1 January 2021
At 31 December 2021 and 1 January 2022

At 31 December 2022

Leasehold
land and
buildings
£m

Plant,
machinery
and vehicles
£m

Equipment,
fixtures and
fittings
£m

Total
£m

33.4
(0.6)
15.7
(2.0)
–
4.5

51.0

51.0
3.6
4.8
(4.0)
–
4.4

59.8

19.5
(0.5)
5.4
(1.9)
–

22.5

22.5
1.2
6.7
(3.4)
–

27.0

13.9
28.5

32.8

30.7
(0.5)
14.8
(1.1)
0.1
4.5

48.5

48.5
3.4
4.2
(3.2)
–
4.4

57.3

17.9
(0.3)
4.6
(1.1)
0.1

21.2

21.2
1.1
6.0
(2.6)
–

25.7

12.8
27.3

31.6

2.0
(0.1)
0.9
(0.8)
(0.1)
–

1.9

1.9
0.2
0.3
(0.4)
–
–

2.0

1.2
(0.2)
0.6
(0.7)
(0.1)

0.8

0.8
0.1
0.6
(0.4)
–

1.1

0.8
1.1

0.9

0.7
–
–
(0.1)
–
–

0.6

0.6
–
0.3
(0.4)
–
–

0.5

0.4
–
0.2
(0.1)
–

0.5

0.5
–
0.1
(0.4)
–

0.2

0.3
0.1

0.3

Total cash outflow for leases is £7.9 million (2021: £6.7 million) of which £1.5 million (2021: £1.0 million) relates to interest and £6.4 million
(2021: £5.7 million) to principal lease repayments.

Financial StatementsVidendum plc Annual Report and Accounts 2022

197

Section 4
Capital Structure

This section outlines the Group’s capital structure. The Group defines its capital structure as its equity and non-current interest-bearing loans
and borrowings, and aims to manage this to safeguard its ability to continue as a going concern, so that it can continue to provide returns to
shareholders and benefits for other stakeholders. The Group manages its capital 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 its capital structure, it may return capital to
shareholders, through dividends and share buybacks, issue new shares or sell assets to reduce debt. The Group considers its dividend policy
at least twice a year ahead of announcing results in the context of its ability to continue as a going concern and deliver its business plan.
The Group focuses on leverage, credit ratings and interest cost, particularly when considering investment.

On the following pages there are disclosures concerning the following:
4.1 Net debt
4.2 Financial instruments
4.3 Share capital and reserves

4.1 Net debt

The Group’s net debt comprises the following:

– Cash and cash equivalents (cash on hand and demand deposits at banks)
– Bank overdrafts that are payable on demand
– Interest-bearing loans and borrowings
– Lease liabilities

Accounting policies

Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet represents cash on hand and at banks.

Cash and cash equivalents in the Statement of Cash Flows includes bank overdrafts that are repayable on demand and form an integral part
of the Group’s cash management.

Interest-bearing loans and borrowings

Interest-bearing borrowings are recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition,
these transaction costs are recognised in the Income Statement over the term of the related borrowings.

Lease liabilities

See note 3.6 “Leases”.

Analysis of net debt

The table below analyses the Group’s components of net debt and their movements in the period:

Opening at 1 January 2021
Other cash flows
Business combinations
Repayments
Borrowings
Leases entered into during the year
Leases – early termination
Fees incurred
Amortisation of fees
Foreign currency

Closing at 31 December 2021 and opening at 1 January 2022
Other cash flows
Business combinations
Repayments
Borrowings
Leases entered into during the year
Leases – early termination
Fees incurred
Amortisation of fees
Foreign currency

Closing at 31 December 2022

Interest-
bearing
loans and
borrowings(1)
£m

(91.4)
–
–
128.2
(160.8)
–
–
1.3
(0.7)
0.6

(122.8)
–
–
93.8
(130.3)
–
–
1.0
(1.3)
(14.9)

(174.5)

Liabilities
from
financing
Sub-total
£m

(107.6)
–
(4.5)
133.9
(160.8)
(15.7)
0.1
1.3
(0.7)
0.9

(153.1)
–
(4.4)
100.2
(130.3)
(4.8)
0.6
1.0
(1.3)
(17.2)

Leases
£m

(16.2)
–
(4.5)
5.7
–
(15.7)
0.1
–
–
0.3

(30.3)
–
(4.4)
6.4
–
(4.8)
0.6
–
–
(2.3)

(34.8)

(209.3)

Other cash
and cash
equivalents(2)

£m

16.8
(37.0)
2.6
(133.9)
160.8
–
–
–
–
(1.4)

7.9
(24.3)
0.2
(100.2)
130.3
–
–
–
–
1.9

15.8

Total
£m

(90.8)
(37.0)
(1.9)
–
–
(15.7)
0.1
1.3
(0.7)
(0.5)

(145.2)
(24.3)
(4.2)
–
–
(4.8)
0.6
1.0
(1.3)
(15.3)

(193.5)

Interest bearing loans and borrowings include unamortised fees and transaction costs of £1.7 million (2021: £2.1 million).

(1)
(2) Other cash and cash equivalents include bank overdrafts of £nil (2021: £3.1 million).

198

Section 4 continued
Capital Structure continued

On 14 February 2020, the Group signed a new £165.0 million five-year (with one optional one-year extension) multicurrency RCF with a syndicate
of five banks. On 12 November 2021, the Group signed an amendment and restatement agreement to change the underlying benchmark from
LIBOR to the relevant risk-free rates (SONIA, SOFR, TONA), due to the cessation of LIBOR on 31 December 2021. In January 2022, a one-year
extension was agreed with four syndicate banks and in December 2022, a £35.0 million accordion was agreed with the same four syndicate banks
resulting in the total commitments increasing to £200 million, with £35.0 million expiring on 14 February 2025 and £165.0 million expiring on
14 February 2026. The Group was utilising 57% of the RCF as at 31 December 2022.

Under the terms of the RCF the Group expects to and has the discretion to roll over the obligation for at least 12 months from the Balance Sheet
date, and as a result, these amounts are reported as non-current liabilities in the Balance Sheet.

On 14 November 2021, the Group signed a new US$53.0 million (£43.8 million) three-year amortising Term Loan with a syndicate of four banks to
facilitate the acquisition of Savage. This facility will expire on 14 November 2024. Following the payment of 25% of the original amount during
2022, the outstanding balance of this Term Loan was US$39.8 million (£32.8 million) as at 31 December 2022.

On 7 January 2022, the Group signed a new US$47.0 million (£38.8 million) three-year amortising Term Loan with a syndicate of four banks to
facilitate the acquisition of Audix. This facility will expire on 7 January 2025. Following the payment of 25% of the original amount during 2022,
the outstanding balance of this Term Loan was US$35.2 million (£29.1 million) as at 31 December 2022.

4.2 Financial instruments

This note provides details on:

– Financial risk management
– Derivative financial instruments
– Fair value hierarchy
– Interest rate profile
– Maturity profile of financial liabilities

Financial risk management

The Group’s multinational operations and debt financing expose it to a variety of financial risks. In the course of its business, the Group is
exposed to foreign currency risk, interest rate risk, liquidity risk and credit risk.

Financial risk management is an integral part of the way the Group is managed. Financial risk management policies are set by the Board of
Directors. These policies are implemented by a central treasury department that has formal procedures to manage foreign currency risk,
interest rate risk and liquidity risk, including, where appropriate, the use of derivative financial instruments. The Group has clearly defined
authority and approval limits built into these procedures.

Foreign currency risk

Foreign currency risk arises both where sale or purchase transactions are undertaken in currencies other than the respective functional currencies
of Group companies (transactional exposures) and where the results of overseas companies are consolidated into the Group’s reporting currency
of Sterling (translational exposures).

Transactions and balances

The Group has businesses that operate around the world and accordingly record their results in a number of different functional currencies.
Some of these operations also have some customers or suppliers that transact in a foreign currency. Foreign currency transactions are translated
into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end
exchange rates, are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying net investment hedges or are
attributable to part of the net investment in a foreign operation.

The Group manages its transactional exposures to foreign currency risks through the use of forward exchange contracts including the US Dollar,
Euro and Japanese Yen. Forward exchange contracts are used to hedge the Group’s forecasted foreign currency exposure in respect of forecast
cash transactions for the following 12 months. Forward exchange contracts may also be used to hedge a proportion of the forecast cash
transactions for the following 13 to 24 months. The forward exchange contracts currently have maturities of less than one year at the Balance
Sheet date.

The Group ensures that its net exposure to foreign denominated cash balances is kept to an acceptable level by buying or selling foreign currencies
at spot rates when necessary to address short-term imbalances. In addition, the Group manages the denomination of surplus cash balances
across the overseas subsidiaries to allow natural hedging where effective in any particular country.

Translation to presentation currency

The Group’s results, which are reported in Sterling, are exposed to changes in foreign currency exchange rates across a number of different
currencies with the most significant exposures relating to the US Dollar (USD) and Euro (EUR). The Group is exposed to the underlying
translational movements which remain outside the control of the Group.

The Group’s translational exposures to foreign currency risks relate to both the translation of income and expenses and net assets of overseas
subsidiaries which are converted into Sterling on consolidation. The Group does not seek to hedge the translational exposure that arises primarily
from changes in the exchange rates of the US Dollar, Euro and Japanese Yen against Sterling. However, the Group does finance overseas
investments partly through the use of foreign currency borrowings in order to provide a net investment hedge over the foreign currency risk
that arises on translation of its foreign currency subsidiaries.

Financial StatementsVidendum plc Annual Report and Accounts 2022

199

Sensitivities

It is estimated that the Group’s adjusted operating profit for the year ended 31 December 2022 would have increased/decreased by approximately
£2.3 million (2021: £3.0 million) from a ten cent stronger/weaker US Dollar against Sterling and by approximately £2.4 million (2021: £1.8 million)
from a ten cent stronger/weaker Euro against Sterling. This reflects the impact of the sensitivities to the translational exposures and to the
proportion of the transactional exposures that are not hedged.

It is estimated that the statutory operating profit for the year ended 31 December 2022 would have increased/decreased by £0.3 million
(2021: £2.2 million) from a ten cent stronger/weaker US Dollar against Sterling and by approximately £2.4 million (2021: £1.7 million) from
a ten cent stronger/weaker Euro against Sterling.

Interest rate risk

Interest rate risk comprises the interest cash flow risk that results from borrowing at variable rates.

The Group is exposed to cash flow interest rate risk arising from long-term borrowings bearing variable interest rates. The Group policy is to
maintain up to 80% (2021: 50%) of its borrowings at fixed rate. At 31 December 2022, the Group’s variable interest rate borrowings were mainly
denominated in Sterling and US Dollars, with 79% of the Group’s floating rate debt fixed using floating-to-fixed interest rate swaps.

The borrowings are periodically contractually repriced which exposes the Group to the risk of future changes in market interest rates.

For the year ended 31 December 2022, it is estimated that a general increase of 1% in interest rates would decrease the Group’s profit before
tax by approximately £0.7 million (2021: £0.9 million) and a general decrease of 1% in interest rates would increase the Group’s profit before tax
by approximately £0.7 million (2021: £0.1 million).

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group was utilising 57% (2021: 53%) of the £200.0 million (2021: £165.0 million) multicurrency RCF as at 31 December 2022.

The Group was utilising 100% of the US$39.8 million (£32.9 million) amortising Term Loan as at 31 December 2022, which was drawn to finance
the acquisition of Savage. The loan amortises bi-annually from 30 June 2022 through to maturity on 14 November 2024. Repayments are set
as a percentage of the original amount of the Term Loan of US$53.0 million and the amount repayable at each respective repayment date from
30 June 2022 is as follows: 10%, 15%; 20%, 25%; 15% and 15%.

The Group was also utilising 100% of the US$35.2 million (£29.2 million) amortising Term Loan as at 31 December 2022, which was drawn to
finance the acquisition of Audix. The loan amortises bi-annually from 30 June 2022 through to maturity on 7 January 2025. Repayments are
set as a percentage of the original amount of the Term Loan of US$47.0 million and the amount repayable at each respective repayment date
from 30 June 2022 is as follows: 10%, 15%; 20%, 25%; 15% and 15%.

Credit risk

Credit risk arises because a counterparty may fail to meet its obligations. The Group is exposed to credit risk on financial assets such as trade
receivables, cash balances and derivative financial instruments. The Group’s maximum exposure to credit risk is represented by the carrying
amount of each financial asset, including derivative financial instruments, in the Group Balance Sheet.

a) Trade receivables

The Group’s credit risk is primarily attributable to its trade receivables. Trade receivables are subject to credit limits, and control and approval
procedures in the operating companies. At the Balance Sheet date, one of the Group’s largest customers, which has a high credit rating, accounts
for 10% of the gross outstanding trade receivables (2021: 18%) which represents a concentration of credit risk.

b) Cash balances and derivative financial instruments

Credit risk associated with cash balances is managed by transacting with a number of major financial institutions worldwide and periodically
reviewing their creditworthiness. Transactions involving derivative financial instruments are managed centrally. These are only with banks that
are part of the Group’s multicurrency RCF and which have strong credit ratings. Accordingly, the Group’s associated credit risk is limited. The
Group has no significant concentration of credit risk.

Derivative financial instruments

This is a summary of the derivative financial instruments that the Group holds and uses to manage transactional exposure. The value of these
derivatives changes over time in response to underlying variables such as interest and exchange rates. They are carried in the Balance Sheet
at fair value.

The fair value of forward exchange contracts is determined by estimating the market value of that contract at the reporting date.
Derivatives with a positive fair value are recorded as assets and negative fair values as liabilities, and presented as current or non-current
based on their contracted maturity dates.

The fair value of interest rate swaps are determined by estimating the market value of that swap at the reporting date. Derivatives with
a positive fair value are recorded as assets and negative fair values as liabilities, and presented as current or non-current based on their
contracted maturity dates.

Contracts with derivative counterparties are based on ISDA Master Agreements. Under the terms of these arrangements, only in certain
situations will the net amounts owing/receivable to a single counterparty be considered outstanding. The Group does not have the present
legal ability to set-off these amounts and so they are not offset in the Balance Sheet. Of the derivative assets and derivative liabilities
recognised in the Balance Sheet, an amount of £0.6 million (2021: £0.1 million) would be set-off under enforceable master netting agreements.

200

Section 4 continued
Capital Structure continued

Accounting policies

Financial assets classification and measurement

The Group classifies its financial instruments depending on the business model for managing the financial assets and their contractual cash flows.
Trade receivables and contract assets are measured at amortised cost while derivatives are measured at fair value through profit or loss unless
designated in a qualifying hedging relationship.

Derivative financial instruments

In accordance with Board-approved policies, the Group uses derivative financial instruments such as forward foreign exchange contracts
and interest rate swaps to hedge its exposure to fluctuations in foreign exchange rates and interest rates arising from operational activities.
The Group does not hold or use derivative financial instruments for trading or speculative purposes.

Cash flow hedge accounting

Cash flow hedges are used to hedge the variability in cash flows of highly probable forecast transactions caused by changes in foreign currency
exchange rates and interest rates.

Where a derivative financial instrument is designated in a cash flow hedge relationship with a highly probable forecast transaction, the effective
part of any change in fair value arising is deferred in the cash flow hedging reserve within equity, via the Statement of Comprehensive Income.
The gain or loss relating to the ineffective part is recognised in the Income Statement within net finance expense. Amounts deferred in the cash
flow hedging reserve are reclassified to the Income Statement in the periods when the hedged item is recognised in the Income Statement.

If a hedging instrument expires or is sold but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point
remains in equity and is recognised in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer
expected to take place, the cumulative unrealised gain or loss recognised in equity is recognised immediately in the Income Statement.

If a derivative financial instrument is not formally designated in a cash flow hedge relationship, any change in fair value is recognised in the Income
Statement.

Forward exchange contracts
For hedges of foreign currency sales, the Group enters into hedge relationships where the critical terms of the hedging instrument match exactly
with the terms of the hedged item and the Group designates the forward exchange rate as the hedged risk. The Group therefore performs a
qualitative assessment of effectiveness. In hedges of foreign currency sales, ineffectiveness may arise if the timing of the forecast transaction
changes from what was originally estimated, or if there are changes in the credit risk of the Group or the derivative counterparty.

The following table shows the forward exchange contracts in place at the Balance Sheet date. These contracts mature in the next 24 months,
therefore the cash flows and resulting effect on profit and loss are expected to occur within the next 24 months.

Cash flow hedging contracts
GBP/USD forward exchange contracts
EUR/USD forward exchange contracts
GBP/EUR forward exchange contracts
GBP/JPY forward exchange contracts
EUR/JPY forward exchange contracts

As at
31 December
2022
(millions)

Average
exchange rate of
contracts

As at
31 December
2021
(millions)

Average
exchange rate
of contracts

27.8
58.6
15.3
288.0
656.0

1.21
1.05
1.15
155.6
138.4

12.1
16.2
3.8
93.0
204.0

1.35
1.17
1.18
156.7
133.4

Currency

USD
USD
EUR
JPY
JPY

A net loss of £2.9 million (2021: £0.1 million gain) relating to forward exchange contracts was reclassified to the Income Statement, to match the
crystallisation of the hedged forecast cash flows which affect the Income Statement.

The table below provides further information on the Group’s forward contracts.

2022
£m

2021
£m

Net forward exchange contracts (liability)/asset
Recognised in OCI
Reclassified from OCI to the Income Statement
Maturity dates
Hedge ratio
Change in value of hedging instruments since 1 January
Change in value of the hedged item used to determine hedge effectiveness

1.2
(1.4)
2.9
January 2023 to December 2023
1:1
(1.4)
1.4

(0.3)
(0.3)
(0.1)
January 2022 to December 2022
1:1
(0.3)
0.3

Financial StatementsVidendum plc Annual Report and Accounts 2022

201

Interest rate swaps

The Group enters into interest rate swaps that have the same critical terms as the hedged item, such as reference rate, reset dates, payment
dates, maturities and notional amount. As all critical terms matched during the year, there is an economic relationship.

The following table shows the interest rate swap contracts in place at the Balance Sheet date. The interest is payable quarterly on 31 March,
30 June, 30 September and 31 December.

Interest rate swap contracts
USD Interest rate swaps float (SOFR) to fix(2)
USD Interest rate swaps float (SOFR) to fix
GBP Interest rate swaps float (SONIA) to fix

Nominal
amounts as at
31 December
2022

Weighted
average fixed
rate(1)

75.0
35.0
47.0

1.01%
4.89%
1.74%

Currency

USD
USD
GBP

Nominal
amounts as at
31 December
2021

26.5
0.0
37.0

Maturity

Sep 23
Sep 23
Jan 25

In addition to these fixed rates, the margin relating to the interest swapped of the underlying RCF or term loans continues to apply.

(1)
(2) The notional amounts of the USD interest rate swaps linked to the term loans, amortise bi-annually in line with the amortisation of the term loans.

The Group entered into six additional floating-to-fixed interest rate swaps in 2022 totalling £99.7 million (2021: £56.6 million). As at 31 December
2022, a total of £137.9 million remain in place following £20.7 million of amortisation during the year. Swaps currently in place cover 79% of the
variable loan principle outstanding. The fixed interest rates of the swaps range between 0.6% to 4.89% (USD) and 1.0% to 4.5% (GBP).

Hedge ineffectiveness for interest rate swaps is assessed using the same principles as for hedges of foreign currency sales. It may occur due to:

– changes in credit risk on the interest rate swaps which is not matched by the loan; and
– differences in critical terms between the interest rate swaps and loans.

There was no recognised ineffectiveness during 2021 in relation to the interest rate swaps.

The gain or loss relating to the effective portion of the interest rate swaps that are hedging variable rate borrowings is recognised in the Income
Statement within net finance expense at the same time as the interest expense on the hedged borrowings.

For interest rate swaps hedging interest rate risk on term loans, the notional amount of interest rate swaps decreases in line with the repayments
of the hedged borrowings.

For interest rate swaps on other borrowings, the notional amounts are consistent over the term of the hedging relationship.

The balances and movements into and out of the cash flow hedging reserve are shown in the Consolidated Statement of Comprehensive Income
and the Consolidated Statement of Changes in Equity respectively. Amounts reclassified from the cash flow hedging reserve to the Consolidated
Statement of Comprehensive Income are included in revenue for foreign currency forward exchange contracts and net finance cost for interest
rate swaps.

The table below provides further information on the Group’s interest rate swaps:

Interest rate swaps asset
Recognised in OCI
Reclassified from OCI to the Income Statement

During the period ended 31 December 2022 a net gain of £0.7m (2021: £nil) relating to interest rate
swaps was reclassified to the Income Statement, to match the crystallisation of the hedged forecast
cash flows which affects the Income Statement.

Some of the Group’s swaps amortise in proportion to the loans they provide hedges against.
As a result, the following disclosure shows the notional amounts over time.

2022
£m

4.0
4.6
(0.7)

2021
£m

0.1
0.1
–

Notional amount
Notional amount at the end of year 1
Notional amount at the end of year 2
Notional amount at the end of year 4

Maturity dates
Hedge ratio
Change in value of hedging instruments since 1 January
Change in value of the hedged item used to determine hedge effectiveness
Interest rate swap average hedged rate for the year

75.9
75.9
–
January 2023
to January 2025
1:1
4.6
(4.6)
(1.9%)

51.7
37.0
–
January 2023
to January 2025
1:1
0.1
(0.1)
0.0

202

Section 4 continued
Capital Structure continued

Fair value hierarchy

The following summarises financial instruments carried at fair values and the major methods and assumptions used in estimating these
fair values.

The different levels of fair value hierarchy have been defined as follows:

Level 1

Fair value measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2

Fair values measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).

Level 3

Fair values measured using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The carrying values of the Group’s financial instruments approximate their fair value. The fair value of floating rate borrowings approximates
to the carrying value because interest rates are at floating rates where payments are reset to market rates at intervals of less than one year.
The Group’s derivative financial instruments are Level 2. The fair value of forward foreign currency exchange derivative financial instruments is
determined based on the present value of future cash flows using forward exchange rates at the Balance Sheet date. The fair value of interest
rate swap derivative financial instruments is estimated as the present value of the future cash flows based on observable yield curves at the
Balance Sheet date.

Accounting policies

Net investment hedge accounting

The Group uses its US Dollar, Euro and Japanese Yen denominated borrowings as a hedge against the translation exposure on the Group’s net
investment in overseas companies. The Group designates the spot rate of the loans as the hedging instrument. There was no ineffectiveness
to be recognised on hedges of net investments in foreign operations.

Where the hedge is fully effective at hedging the variability in the net assets of such companies caused by changes in exchange rates, the changes
in value of the borrowings are recognised in the translation reserve within equity, via the Statement of Comprehensive Income. The ineffective
part of any change in value caused by changes in exchange rates is recognised in the Income Statement.

The effective portion will be recycled into the Income Statement on the sale of the foreign operation.

The table below provides further information on the Group’s net investment hedging relationships:

Hedge ratio
Change in value of hedging instruments due to foreign currency movements since 1 January
Change in value of the hedged item used to determine hedge effectiveness

2022
£m

1:1
5.8
(5.8)

2021
£m

1:1
(0.2)
0.2

The balances and movements into and out of the foreign currency translation reserve are shown in the Consolidated Statement of Comprehensive
Income and the Consolidated Statement of Changes in Equity respectively.

The amount in the foreign currency translation reserve in relation to hedge accounting is a loss of 40.7 million (2021: £35.1 million loss) and is split
as follows:

– continuing net investment hedges loss of £11.8 million (2021: £6.0 million); and
– hedging relationships for which hedge accounting is no longer applied, a loss of £28.9 million (2021: £29.1 million loss).

Financial StatementsVidendum plc Annual Report and Accounts 2022

203

Interest-bearing loans and borrowings
The table below analyses the Group’s interest-bearing loans and borrowings, including bank overdrafts, by currency:

Currency

US Dollar
Sterling
Euro
Japanese Yen
Unamortised fees and transaction costs

At 31 December 2022

US Dollar
Sterling
Euro
Japanese Yen
Unamortised fees and transaction costs

At 31 December 2021

Total
£m

106.4
58.5
9.4
1.9
(1.7)

174.5

65.0
54.1
6.5
2.4
(2.1)

125.9

Fixed rate
borrowings
£m

Floating rate
borrowings
£m

90.9
47.0
0.6
–
–

138.5

–
–
0.6
–
–

0.6

15.5
11.5
8.9
1.9
(1.7)

36.1

65.0
54.1
5.9
2.4
(2.1)

125.3

The floating rate borrowings comprise borrowings bearing interest at rates based on SONIA, SOFR, EURIBOR and TONA for Sterling, US Dollar,
Euro and Japanese Yen borrowings respectively.

The floating rate borrowings are repriced between one and three months.

Maturity profile of financial liabilities

The table below analyses the Group’s financial liabilities and derivative financial liabilities into relevant maturity groupings based on the
period remaining until the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows
(including interest), so will not always reconcile with the carrying amounts disclosed on the Balance Sheet.

The following are the contractual maturities of financial liabilities, including undiscounted future interest payments:

2022
Unsecured interest-bearing loans and borrowings including bank overdrafts(1)
Lease liabilities
Trade payables
Forward exchange contracts outflow

Total outflows
Forward exchange contracts inflow

Net outflows

2021
Unsecured interest-bearing loans and borrowings including bank overdrafts(1)
Lease liabilities
Trade payables
Forward exchange contracts outflow

Total outflows
Forward exchange contracts inflow

Net outflows

Carrying
amount
£m

Total
contractual
cash flows
£m

Within
one year
£m

From
two to
five years
£m

Greater
than
five years
£m

(174.5)
(34.9)
(42.3)
(0.9)

(252.6)
–

(252.6)

(125.5)
(30.3)
(38.1)
(0.3)

(194.2)
–

(194.2)

(200.0)
(34.9)
(38.1)
(42.2)

(315.2)
41.3

(273.9)

(133.5)
(34.9)
(38.1)
(17.8)

(224.3)
17.4

(206.9)

(46.6)
(6.7)
(38.1)
(42.2)

(133.6)
41.3

(153.4)
(18.5)
–
–

(171.9)
–

(92.3)

(171.9)

(15.1)
(6.7)
(38.1)
(17.8)

(77.7)
17.4

(60.3)

(118.4)
(18.5)
–
–

(136.9)
–

(136.9)

–
(9.7)
–
–

(9.7)
–

(9.7)

–
(9.7)
–
–

(9.7)
–

(9.7)

(1) This excludes an amount of £nil (2021: £0.4 million) of an interest-bearing liability in relation to a government grant which does not meet the definition of a financial liability.

204

Section 4 continued
Capital Structure continued

The Group had the following undrawn borrowing facilities at the end of the year:

Expiring in:

Less than one year
– Uncommitted facilities
More than one year but not more than five years
– Committed facilities

Total

4.3 Share capital and reserves

2022
£m

3.5

86.3

89.8

2021
£m

3.4

77.1

80.5

This note explains the movements in share capital, and the nature and purpose of other reserves forming part of equity. The movements in
reserves are set out in the Consolidated Statement of Changes in Equity.

The Group utilises share award schemes as part of its employee remuneration packages. Options that have been granted and remain
outstanding at 31 December 2021 are set out below. The various share-based payment schemes are explained in note 5.3 “Share-based
payments”.

Share capital

Issued and fully paid
At 1 January 2021
Exercise of share options

At 31 December 2022

Number of
shares
(thousands)

Nominal
value
£m

46,378
207

46,585

9.3
0.1

9.4

Each ordinary share carries one vote, participates equally with the other ordinary shares in distribution of dividends and capital (including on a
winding up) and is not redeemable.

The consideration received in relation to Sharesave Scheme exercises was £1.3 million.

At 31 December 2022, the following options had been granted and remained outstanding under the Company’s share option schemes:

UK Sharesave Schemes
International Sharesave Schemes

Number of
shares
(thousands)

335
970

1,305

Exercise prices

Dates normally
exercisable

552p-1280p
552p-1360p

2023-2028
2023-2026

Other reserves
The nature and purpose of other reserves forming part of equity are as follows:

Translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign
subsidiaries, including gains or losses arising on net investment hedges.

Capital redemption reserve

The capital redemption reserve of £1.6 million was created on the repurchase and subsequent cancellation of 885,000 ordinary shares by the
Company in 1999.

Cash flow hedging reserve

This reserve records the cumulative net change in the fair value of forward exchange contracts where they are designated as effective cash flow
hedge relationships.

Retained earnings

Retained earnings are the cumulative gains and losses recognised by the Group, not recorded in any other reserves. On 12 April 2021, the Company
issued 309,753 ordinary shares as part of the consideration for the acquisition of Lightstream. The excess of the fair value of the shares issued
over their nominal value was recorded in retained earnings.

Financial StatementsVidendum plc Annual Report and Accounts 2022

205

Own shares held

Own shares held by the Company’s Employee Benefit Trust are recognised as a deduction from retained earnings. As at 31 December 2022, the
Employee Benefit Trust held 291,044 (2021: 314,202) ordinary shares at 20 pence nominal value. The Company holds no shares in treasury (2021:
133,600 ordinary shares at 20p nominal value).

The Employee Benefit Trust purchased 199,204 own shares on 17 August 2022 (average price of 1491.04p per share) to be used to satisfy future
LTIP, Restricted Share Plan (“RSP”) and Share Scheme maturities under the UK and International Schemes.

Dividends

Dividends are recognised through equity on the earlier of their approval by the Company’s shareholders or their payment.

Amounts arising in respect of the year
Interim dividend for the year ended 31 December 2022 of 15.0p (2021: 11.0p) per ordinary share
Proposed final dividend for the year ended 31 December 2022 of 25.0p (2021: 24.0p) per ordinary share

The aggregate amount of dividends paid in the year
Final dividend for the year ended 31 December 2021 of 24.0p (2020: 4.5p) per ordinary share
Interim dividend for the year ended 31 December 2022 of 15.0p (2021: 11.0p) per ordinary share

2022
£m

6.9
11.6

18.4

11.1
6.9

18.0

2021
£m

5.0
11.1

16.1

2.1
5.0

7.1

206

Section 5
Other Supporting Notes

This section explains items that are not explained elsewhere in the financial statements.

On the following pages, there are disclosures covering the following:

– 5.1 Employees
– 5.2 Pensions
– 5.3 Share-based payments
– 5.4 Contingent liabilities
– 5.5 Related party transactions
– 5.6 Group investments
– 5.7 Subsequent events

5.1 Employees

Employee costs, including Directors’ remuneration, comprise:
Government grants repaid voluntarily towards employee costs(1)
Wages and salaries
Redundancy costs
Employers' social security costs
Employers' pension costs – defined benefit schemes
Employers' pension costs – defined contribution schemes
Other employment benefits
Share-based payment charge

2022
£m

–
96.5
1.5
12.9
0.1
4.0
3.6
8.9

2021
£m

1.2
86.6
0.3
13.3
0.1
3.4
2.7
7.9

127.5

115.5

(1) This excludes amounts paid directly to employees by governments. There are no unfulfilled conditions or other contingencies attached to this government assistance.

Details of Directors’ remuneration and share incentives are disclosed in the Remuneration report.

Monthly average number of employees during the year
Media Solutions
Production Solutions
Creative Solutions
Head Office

5.2 Pensions

2022
Total

930
569
382
27

2021
Total

866
539
354
25

1,908

1,784

This note explains the accounting policies governing the Group’s treatment of the pension schemes, followed by an analysis of these schemes.

Accounting policies

Defined contribution schemes

The assets are held separately from those of the Group in independently administered funds. The costs of providing pensions for employees
under defined contribution schemes are expensed as incurred.

Defined benefit schemes

The Group operates pension schemes providing benefits based on final pensionable pay. The assets of the schemes are held separately from
those of the Group. The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating
the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted
to determine its present value, and the fair value of any plan assets is deducted. The discount rate is determined by reference to market yields
at the Balance Sheet date on high quality corporate bonds.

The calculation is performed by a qualified actuary using the projected unit credit method. Actuarial gains and losses are recognised in full in the
period in which they arise in the Statement of Comprehensive Income.

The Group recognises the ongoing service cost, past service costs and any cost or income relating to the curtailment or settlement of a pension
scheme in operating expenses in the Income Statement. The unwinding of the discount (above) is recognised as part of net financial expense.

Pension schemes
The Group has defined benefit pension schemes in the UK, Italy, Germany, Japan and France. The UK defined benefit scheme was closed to future
benefit accrual with effect from 31 July 2010. All UK employees of the Group are now offered membership of the defined contribution pension
scheme. Other overseas subsidiaries have their own defined contribution schemes.

Financial StatementsVidendum plc Annual Report and Accounts 2022

207

Defined contribution schemes
The total Income Statement charge of the defined contribution schemes for the year ended 31 December 2022 was £4.0 million (2021: £3.4 million).
There were no outstanding or prepaid contributions to these plans as at 31 December 2022 (or at 31 December 2021).

Defined benefit schemes
The Group’s defined benefit schemes are disclosed below:

Amounts recognised on the Group Balance Sheet
Plan assets
– Equities
– Bonds
– Other

Total fair value of plan assets
Present value of defined benefit obligation

Net asset/(deficit) recognised on the Group Balance Sheet

Analysis of net recognised deficit
Total funded plan (UK pension scheme)
Total unfunded plans (non-UK pension schemes)

Net asset/(deficit) recognised on the Group Balance Sheet

Amounts recognised in the Group Income Statement
– Administration costs incurred during the period
– Past service gains
Included in operating expenses
Net interest expense on net defined benefit pension scheme liabilities

Total amounts charged to the Group Income Statement

UK pension scheme

The UK defined benefit pension scheme, being significant, is disclosed below.

2022
£m

2021
£m

12.6
19.5
17.6

49.7
(48.9)

0.8

2022
£m

3.9
(3.1)

0.8

2022
£m

0.2
(0.1)
0.1
0.1

0.2

22.4
39.1
8.7

70.2
(78.6)

(8.4)

2021
£m

(4.6)
(3.8)

(8.4)

2021
£m

0.2
(0.1)
0.1
0.1

0.2

As a result of actuarial movements during the period, including an increase in the discount rate from 1.9% at 31 December 2021 to 4.8% at
31 December 2022 and the removal of future discretionary pension increases (31 December 2021: 3.2%), the UK defined benefit scheme is in an
actuarial surplus position at 31 December 2022 (measured on an IAS 19 “Employee Benefits” basis) of £3.9 million (31 December 2021: liability of
£4.6 million). The surplus has been recognised on the basis that the Group has an unconditional right to a refund, assuming the gradual settlement
of Scheme liabilities over time until all members have left the Scheme.

The nature of the UK scheme is a funded final salary scheme closed to future benefit accrual with effect from 31 July 2010. As a result, since that
date, no contributions are payable in respect of future accrual of benefits. As the 23 April 2020 funding valuation of the scheme disclosed a funding
surplus, no recovery plan is required under the Pensions Act 2004. As such, member and employer contributions to the scheme over the year to
31 December 2023 are expected to be £nil. The scheme is subject to all legislation and regulations that apply to UK occupational pension schemes.

The main risk to which the Group is exposed by the scheme is that the cost of the benefits provided by the scheme is greater than expected, for
example due to lower than expected investment returns or members of the scheme living longer than expected, which may result in additional
contributions being required from the Group.

In accordance with UK trust and pensions law, the pension scheme has a corporate trustee. Although the Group bears the financial cost of the
scheme, the responsibility for the management and governance of the scheme lies with the trustee, which has a duty to act in the best interest
of members at all times. The assets of the scheme are held in trust by the trustee who consults with the Group on investment strategy decisions.

208

Section 5 continued
Other Supporting Notes continued

Impact on defined benefit obligation (“DBO”) of changes in the three key individual assumptions

Discount rate increased by 0.1% points
Inflation increased by 0.1% points
Life expectancy increased by one year

2022

-1%
+1%
+3%

2021

-2%
+1%
+4%

A decrease in the assumptions noted above results in an equal and opposite movement to those disclosed.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation
of the sensitivity of the assumptions shown.

Assumptions used by the actuary to value the liability of the defined benefit plan, on 31 December, were:
Price inflation (RPI)
Price inflation (CPI)

Life expectancy of male/female aged 65 at Balance Sheet date
Life expectancy of male/female aged 65 in 2037
Pension increase rate (% pa)
– Discretionary (pre-6 April 1997 accrual in excess of GMP)
– Guaranteed LPI 5% (6 April 1997–30 June 2008)
– Guaranteed LPI 5%, with 3% floor
– Guaranteed LPI 2.5% (accrual from 1 July 2008)
Discount rate (% pa)

Change in DBO for the year to 31 December
Present value of DBO at start of year
Interest cost
Actuarial loss/(gain) on experience
Actuarial (gain)/loss on demographic assumptions
Actuarial (gain)/loss on financial assumptions
Actual benefit payments
Past service gains

Present value of DBO at end of year

2022
% pa

2021
% pa

3.3
RPI less 1%
pa to 2030,
and RPI
less 0.1%
pa from
2030
22.2/24.7
22.8/25.5

3.3
RPI less 1%
pa to 2030,
and RPI
less 0.1%
pa from
2030
22.2/24.6
22.8/25.5

nil
3.1
3.5
2.1
4.8

2022
£m

74.8
1.4
0.8
–
(28.9)
(2.2)
(0.1)

45.8

3.2
3.2
3.4
2.2
1.9

2021
£m

80.3
1.0
1.0
(0.6)
(4.7)
(2.1)
(0.1)

74.8

At 31 December 2022, the weighted average duration of the scheme’s DBO was 13 years (2021: 17 years). The proportion of DBO in respect
of pensions in payment is approximately 57% and that in respect of deferred pensioners is approximately 43%.

Scheme assets and proportion which have quoted market price, at 31 December
Bonds
Equities
Infrastructure
Cash/non-cash assets
Insurance policies

Total value of assets

Note: The asset values shown are, where relevant, estimated bid values of market securities.

Fair value
2022
£m

Quoted
split
%

Unquoted
split
%

Fair value
2021
£m

19.5
12.6
9.0
8.5
0.1

49.7

100
99
–
–
–

–
1
100
100
100

39.1
22.4
8.2
0.3
0.2

70.2

Financial StatementsVidendum plc Annual Report and Accounts 2022

209

Change in fair value of assets for the year to 31 December
Fair value of assets at start of year
Interest income on scheme assets
Return on scheme assets (less)/greater than discount rate
Contributions by the employer
Actual benefit payments

Fair value of assets at end of year

Development of net Balance Sheet position at 31 December
Present value of defined benefit obligation
Assets at fair value

Net defined benefit scheme asset/(liability)

Reconciliation of net Balance Sheet position
Net defined benefit scheme liability at start of year
Contributions by the employer
Total amounts charged to the Income Statement
Remeasurement effects recognised in OCI

Defined benefit scheme asset/(liability) at end of year

Amounts recognised in the Income Statement
Past service gains included in operating expenses
Net interest expense on net defined benefit pension scheme asset/(liability)

Total amounts credited to the Income Statement

Amounts recognised in OCI
Actuarial loss due to liability experience
Actuarial gain due to liability assumption changes

Actuarial gain arising during the period
Return on scheme assets (greater)/less than discount rate

Remeasurement effects recognised in OCI

Defined benefit pension scheme cost
Past service gains
Net interest expense on net defined benefit pension scheme asset/(liability)
Remeasurement effects recognised in OCI

Total defined benefit pension scheme credit

2022
£m

70.2
1.3
(19.7)
0.1
(2.2)

49.7

2022
£m

(45.8)
49.7

3.9

2022
£m

(4.6)
0.1
–
8.4

3.9

2022
£m

(0.1)
0.1

–

2022
£m

0.8
(28.9)

(28.1)
19.7

(8.4)

2022
£m

(0.1)
0.1
(8.4)

(8.4)

2021
£m

68.7
0.8
2.8
–
(2.1)

70.2

2021
£m

(74.8)
70.2

(4.6)

2021
£m

(11.6)
–
–
7.0

(4.6)

2021
£m

(0.1)
0.1

–

2021
£m

1.0
(5.2)

(4.2)
(2.8)

(7.0)

2021
£m

(0.1)
0.1
(7.0)

(7.0)

210

Section 5 continued
Other Supporting Notes continued

5.3 Share-based payments

Group employees participate in a number of employee incentive schemes including a Sharesave Scheme, an LTIP, a Deferred Bonus Plan and
a Restricted Share Plan.

This note explains the accounting policy governing share-based payments and the impact of various share schemes operated by the Group.

Accounting policies

Share-based payments

The Group operates a number of share-based incentive schemes, which are treated as equity-settled awards. The fair value of equity-settled
awards is determined at grant date and charged to the Income Statement over the vesting period of the award, with a corresponding adjustment
to equity.

Any potential employer’s Social Security liability on share awards is calculated based on the intrinsic value of the awards at the Balance Sheet
date and recognised over the vesting period of the related award.

Exercises of share options granted to employees can be satisfied by a market purchase or an issue of new shares. Shares purchased in the market
are held by the Company’s Employee Benefit Trust.

Further details of the accounting for the schemes provided by the Group are set out below.

Long Term Incentive Plan

A description of the LTIP including its general terms and conditions, such as performance conditions and vesting requirements, is set out in the
Remuneration report. Awards prior to, and after 2020 included a portion linked to a non-market condition (adjusted EPS) as well as a portion
linked to a market condition (Total Shareholder Return, “TSR”). LTIPs awarded in 2020 vest subject to both a TSR and a share price condition
and do not contain a portion linked to a non-market condition.

The fair value of the awards linked to the EPS condition is the Company’s share price at grant date, while the fair value of awards containing
market conditions is determined using Monte Carlo simulation models. The number of awards which are expected to vest is estimated by
Management based on levels of expected forfeitures and the expected outcome of the EPS condition. For awards subject to market conditions,
no adjustment is made to reflect the likelihood of the market condition being met nor the actual number of awards which lapse as a result of the
condition not being met.

Sharesave Scheme

Options granted under the Sharesave Scheme vest subject to continued employment and a saving condition in some countries. The options
entitle employees to purchase shares in the Company at a fixed price. Further details of the Group’s Sharesave arrangement are included in the
Strategic Report.

The fair value of options granted under the Sharesave Scheme is determined using a Black-Scholes model with the key inputs to the model set out
below. The number of awards which are expected to vest is estimated by Management based on levels of expected forfeitures. At an employee’s
discretion they can choose to withdraw from a particular scheme and stop saving. This action is accounted for as a cancellation and results in an
acceleration of the Income Statement charge related to the cancelled options.

Restricted Share Plan (RSP)

RSP was introduced in 2019 to support retention plans for key employees (excluding Directors and Executive Management Board members).
The fair value of awards under the RSP is the Company’s share price at grant date. Under the RSP, shares which are awarded, generally vest over
three years and are subject to a continued employment condition. The number of awards which are expected to vest is estimated by Management
based on levels of expected forfeitures.

Share-based payment expense
The amount recognised in the Income Statement for share-based payment transactions with employees for the year ended 31 December 2022
was £8.9 million (2021: £7.9 million). This includes an amount of £1.4 million (2021: £2.0 million) relating to a share award for retention agreements
entered into with key employees of Lightstream which was acquired in 2021.

Share options outstanding at the end of the period
Options outstanding under the 2011 UK Sharesave Scheme and 2011 International Sharesave Scheme as at 31 December 2022, together with their
exercise prices and vesting periods, are as follows:

Range of exercise prices

£5.51–£6.50
£8.51–£9.50
£9.51–£11.50
£11.51–£14.00

Total

Number
outstanding
(thousands)

Weighted
average
exercise price
(£)

Weighted
average
remaining
contractual life
(years)

889
30
123
263

1,305

5.52
8.87
11.30
12.69

7.59

1.49
0.36
3.37
2.01

1.75

Financial StatementsVidendum plc Annual Report and Accounts 2022

211

Movements in these share option plans were as follows:

Awards at 31 December 2020
Exercised during 2021
Cancelled during 2021
Forfeited during 2021
Lapsed during 2021
Granted during 2021

Awards at 31 December 2021
Exercised during 2022
Cancelled during 2022
Forfeited during 2022
Lapsed during 2022
Granted during 2022

Awards at 31 December 2022

Awards exercisable at 31 December 2022

Weighted
average
exercise
price
(£)

Sharesave
(thousands)

1,747
(228)
(24)
(101)
(19)
190

1,565
(378)
(32)
(73)
(4)
227

1,305

6.45
8.55
8.04
6.95
7.60
13.15

6.89
7.35
6.73
8.52
6.40
11.62

7.59

12.93

The weighted average share price at the date of exercise for share options exercised during the year was £11.88 (2021: £13.68).

Arrangement

Nature of arrangement

Date of grant

Number of instruments granted (thousands)

Exercise price

Share price at date of grant

Contractual life (years)

Expected option life (years)

Restricted
Share Plan

2011
International
Sharesave
Scheme 2 Year

2011 UK and
International
Sharesave
Scheme 3 Year

2011 UK and
International
Sharesave
Scheme 5 Year

2014 Long Term
Incentive Plan

Share award
plan

Save as you
earn scheme

Share award
plan

Various

23 Sep 2022

11 Mar 2022

238

n/a

Various

Up to 3 years

Up to 3-year
service period

103

£12.00

£13.24

2.50

2.25

121

£11.30

£13.24

3.60

3.25

£11.30

£13.24

5.60

5.25

2-year service
period and
savings
requirement

3-year service
period and
savings
requirement

5-year service
period and
savings
requirement

Vesting conditions

Settlement

Expected volatility(1)

Risk-free interest rate

Expected dividend yield

Expected departures (per annum from grant date)

Expected outcome of non-market based related
performance condition

Expected outcome of non-vesting condition(2)

n/a

Fair value per granted instrument determined at the
grant date

£11.50–£14.10

33.5%

3.99%

2.60%

n/a

85%

£2.69

33.5%

4.01%

2.60%

n/a

85%

£3.31

33.5%

3.95%

2.60%

n/a

85%

£3.76

£4.83/£11.50(3)

Valuation model

n/a

Black Scholes

Monte Carlo(4)

(1) The expected volatility of the 2011 Sharesave Plan is based on historical volatility determined by the analysis of daily share prices over a period commensurate with the expected lifetime
of the award and ending on the date of grant of the award. Due to significant fluctuations in Videndum’s share price during the year a uniform rate has been used for all the Sharesave
options as a reasonable estimate of volatility going forward.

(2) Non-vesting condition relates to the monthly contributions that employees need to make under the SAYE scheme to receive the options at vesting. Based on historical cancellation rates,

a 15% rate has been used.

(3) The first figure (£4.83) represents the fair value of awards subject to TSR criteria and the second figure (£11.50) represents the fair value of awards subject to adjusted EPS growth

criteria.

305

n/a

£11.50

n/a

Relative TSR
performance
against
comparator
group and
adjusted EPS
growth

37.7%

1.33%

n/a

93%

n/a

212

Section 5 continued
Other Supporting Notes continued

(4) For the 2014 LTIP, a Monte Carlo simulation has been used. Under this valuation method, the share price for Videndum is projected at the end of the performance period as well as the TSR
for Videndum and the companies in the comparator group. Thousands of simulations are run and the payoff for each iteration is calculated as the number of shares that vest multiplied by
the projected share price. The fair value of the award is calculated as the average payoff of all iterations.

5.4 Contingent liabilities
Tax-related contingent liabilities are disclosed in note 2.4 “Tax”.

There are no other contingent liabilities at 31 December 2022.

5.5 Related party transactions

A related party relationship is based on the ability of one party to control or significantly influence the other.

The Group has identified the Directors, the Vitec Group Pension Scheme and members of the Operations Executive as related parties to
the Group under IAS 24 “Related Party Disclosures”.

Transactions with key management personnel

Details of Directors’ remuneration along with their pension, share incentive, bonus arrangements and holdings of the Company’s shares are shown
in detail in the Remuneration report. This also shows the highest paid Director.

The compensation of the 14 (2021: 14) key management personnel during the year, including the Executive Directors, is shown in the table below:

Salaries
Employers’ social security costs
Performance-related bonuses
Share-based payment charge(1)
Other short-term employee benefits
Employers’ pension costs – defined contribution schemes

(1)

IFRS 2 charge recognised in the Income Statement for share-based payment transactions with key management personnel.

2022
£m

3.5
0.9
1.7
1.8
0.4
0.5

2021
£m

3.2
0.9
3.4
1.5
0.4
0.4

Financial StatementsVidendum plc Annual Report and Accounts 2022

213

5.6 Group investments
The Group’s subsidiaries at 31 December 2022 are listed below. All subsidiaries are 100% owned within the Group.

Company

Country of incorporation

Issued securities

Videndum Media Distribution Australia Pty Ltd

Australia(25)

Ordinary shares of AUD1 each

Videndum Media Distribution Shanghai Limited

Lowepro Huizhou Trading Co Ltd

JOBY Technology (Shenzhen) Co. Limited

Videndum Production Solutions Limitada

Autocue Limited*

Autoscript Limited

Camera Corps Ltd

Colorama Photodisplay Holdings Limited

Gitzo Limited*

Kata UK Limited*

Lastolite Limited*

Litepanels Ltd

Manfrotto Distribution Limited*

Palmer Dollar Finance

Palmer Finance

Palmer Yen Finance

Petrol Bags Limited*

Radamec Broadcast Systems Limited

Rycote Microphone Windshields Ltd

Sachtler Limited*

The Camera Store Limited

Vinten Broadcast Limited*

Videndum Creative Solutions UK Limited

Videndum Holdings Limited*

Videndum Pensions Trust Company (UK) Limited*

Videndum Media Solutions UK Limited

Videndum Investments Limited

Videndum Production Solutions Limited*

Vizua Limited

VTC International Limited*

Camera Dynamics sarl

Gitzo S.A.

Videndum Media Distribution SAS

Videndum Media Distribution GmbH

LCB Beteiligungs GmbH

Videndum Production Solutions GmbH

Videndum Media Distribution HK Limited

Videndum Media Solutions HK Limited

Palmer Dollar Finance Ireland Investment DAC*

Palmer Euro Finance Ireland Investment DAC*

Petrol Bags Limited

China(16)

China(30)

China(31)

Costa Rica(26)

England & Wales(1)

France(4)

France(6)

Germany(12)

Germany(9)

Hong Kong(13)

Hong Kong(29)

Ireland(18)

Israel(21)

Ordinary shares of US$1 each

Ordinary shares of HK$3,000,000 each

Ordinary shares of RMB1,814,855 each

Shares of CRC50 each

Ordinary shares of £1 each

Ordinary shares of US$1 each

Ordinary shares of £1 each

Ordinary shares of US$1 each

Ordinary shares of €1 each

Ordinary shares of JP¥100 each

Ordinary shares of £1 each

Ordinary shares of £1 each and
Deferred shares of £1 each

Ordinary shares of £1 each

Ordinary shares of NPV

Ordinary shares of €16 each

Shares of €25,000 each

Ordinary shares of €25,000

Ordinary shares of DEM50,000 each

Shares of HK$1 each

Ordinary shares of US$1 each

Ordinary shares of €1 each

Ordinary shares of ILS1 each

214

Section 5 continued
Other Supporting Notes continued

Company

Amimon Ltd

Manfrotto Bags Ltd

Videndum Italia spa

Videndum Holdings Italia Srl

Videndum Media Solutions Spa

Videndum Media Distribution KK*

Videndum Production Solutions KK*

Amimon Japan Co. Ltd

Palmer Dollar Finance Luxembourg Investment Sarl*

Palmer Euro Finance Luxembourg Investment Sarl*

Videndum Media Distribution Benelux B.V.

Palmer Euro Finance Netherlands B.V.*

BRCT Holdings Limited

Syrp Limited

Videndum Production Solutions Pte. Limited*

Teradek Ukraine LLC

Audix LLC

Creative Solutions Division Inc.

Videndum Media Distribution Inc.

Videndum Production Solutions Inc

Mount Olive 2016, LLC

Offhollywood, LLC

SmallHD LLC

Teradek, LLC

Autocue LLC

Wooden Camera, Inc

Camera Corps, Inc.

Amimon Inc

WHDI LLC

Savage Paper Specialties, LLC

Savage Universal LLC

Superior Paper Specialties, LLC

Chalfont Investments Inc.

Videndum US Holdings, Inc.

Syrp, Inc

Quasar Science LLC

Infiniscene Inc.

Country of incorporation

Issued securities

Israel(35)

Israel(8)

Italy(10)

Japan(15)

Japan(34)

Luxembourg(19)

Netherlands(11)

Netherlands(20)

New Zealand(2)

Singapore(27)

Ukraine(23)

United States(14)

United States(39)

United States(5)

United States(17)

United States(18)

United States(22)

United States(24)

United States(3)

United States(28)

United States(32)

United States(33)

United States(36)

United States(40)

United States(5)

United States(7)

United States(37)

United States(38)

Ordinary shares of ILS 0.01 each

Ordinary shares of ILS1 each

Ordinary shares of €1,000 each

Ordinary shares of €10,000 each

Ordinary shares of €5.556 each

Shares of JP¥1 each

Ordinary shares of JP¥1,000 each

Ordinary shares of JP¥10,000 each

Ordinary shares of US$1,000 each

Ordinary shares of €1,000 each

Ordinary shares of €454 each

Ordinary shares of €1 each

Ordinary shares of NZD1.00

Ordinary shares of SGD1 each

Membership interests of NPV

Ordinary shares of US$0.001 each

Ordinary shares of NPV

Ordinary shares of US$0.01 each

Membership units of NPV

Ordinary shares of NPV

Ordinary shares of US$0.01 each

Ordinary shares of NPV

Membership unit of NPV

Membership units of NPV

Ordinary shares of US$0.01 each

Common stock of US$0.10 each

Membership units of NPV

Ordinary shares of US$0.001 each

Investment held directly by Videndum plc.

The registered addresses are as follows:

124 West 30th Street, Suite 312, New York, NY 10001, United States
171 avenue des Grésillons, 92635 Gennevilliers cedex, France

(1) Bridge House, Heron Square, Richmond, TW9 1EN, United Kingdom
(2) 32 Crummer Road, Grey Lynn, Auckland, 1021, New Zealand
(3)
(4)
(5) Corporation Service Company, 2711 Centerville Road – Suite 400, Wilmington, DE 19808, United States
(6) Parc Tertiaire Silic, 44 Rue De La Couture, 94150 Rungis, France
(7) Princeton South Corporate Center, Suite 160, 100 Charles Ewing Boulevard, Ewing, NJ 08628, United States
(8) Abraham & Bachar cp., Keren HaYesod 36, Jerusalem, Israel
(9) Parkring 29, 85748 Garching, Germany
(10) Via Valsugana 100, 36022 Cassola VI, Italy

Financial StatementsVidendum plc Annual Report and Accounts 2022

215

(11) J.P. Poelstraat 5, 1483 GC De Rijp, Netherlands
(12) Ferdinand-Porsche-Strasse 19, 41149 Cologne, Germany
(13) Unit No.03, 3/F, Tower 3, Phase 1, Enterprise Square, No.9 Sheung Yuet Road, Kowloon Bay, Hong Kong
(14) 9400 SW Barber St, Wilsonville, Oregon, 97070, United States
(15) Shibakoen 3-chome Bldg, 1F, 3-1-38 Shibakoen, Minato-ku, Tokyo 105-0011, Japan
(16) Room 2704-05, Shanghai Mart Tower, No.2299, Yan’an Road (West), Shanghai, 200336, China
(17) Corporation Service Company, 2595 Interstate Drive – Suite 103, Harrisburg, PA 17110, United States
(18) 6th Floor, Riverpoint, Lower Mallow Street, Co. Limerick, Ireland
(19) 9B Boulevard du Prince Henri, L-1724, Grand Duchy of Luxembourg, Luxembourg
(20) Kerkrade, Netherlands
(21) 3 HaSolelim Street, 67897, Tel Aviv, Israel
(22) Corporation Service Company, 327 Hillsborough Street, Raleigh, NC 27603, United States
(23) Per.Nechipurenko 4, Suite 15, Odessa, 65045, Ukraine
(24) CSC-Lawyers Incorporating Service, 2710 Gateway Oaks Drive – Suite 150N, Sacramento, CA 95833-3505, United States
(25) 2 Baldwin Road, Altona North VIC 2025, Australia
(26) Parque Industrial de Cartago, Edificio Numero 68, Cartago, Costa Rica
(27) 601 Macpherson Road, #15-16, 368242, Singapore
(28) 1826 West Commerce Street, Dallas TX 75208, United States
(29) Unit 901-2, 9/F, Metroplaza Tower 2, No. 223 Hing Fong Road, Kwai Fong, N.T. Hong Kong
(30) No. 1101, Office Building, Block B, Zhixing Commercial Building, Banshi Village, Changping Town, Dongguan City, Guangdong Province, China
(31) Unit 3301, 3302, 3316, Office Tower, Shun Hing Square, Di Wang Commercial Centre, 5002 Shen Nan Dong Road, Shenzhen, 518008, China
(32) Corporate Service Company, 251 Little Falls Drive, Wilmington, County of New Castle, DE, 19808, United States
(33) 8 Mason Drive, Irvine, CA 92618, United States
(34) 701 A105 Gotanda Building, 1-10-7 Higashi Gotanda, Shinagawa-Ku, Tokyo, Japan
(35) Zarhin 26, POB 2308, Ra’anana 4366250, Israel
(36) 2050 South Stearman Drive, Chandler, AZ, 85286, United States
(37) 909 Third Avenue, 27th Floor, New York, NY, 10022, United States
(38) 25 West Hubbard Street, 5th Floor, Chicago,IL, 60654, United States
(39) 14 Progress Drive, Shelton, CT, 06484, United States
(40) 251 Little Falls Drive, Wilmington, Delaware, 19808, United States

5.7 Subsequent events
For proposed final dividend see note 4.3 “Share capital and reserves”.

In connection with the acquisition of Audix, a retention agreement for a total of US$3.1 million (£2.3 million) was paid on 18 January 2023. The
retention agreement was entered into with key employees and was conditional on continued employment. This is accounted for as an employee
expense in accordance with IAS 19.

There were no other events after the Balance Sheet date that require disclosure.

216

Company Balance Sheet
As at 31 December 2022

Fixed assets
Intangible assets
Property, plant and equipment
Investments in subsidiary undertakings
Other receivables

Current assets
Debtors
Cash at bank and in hand

Liabilities falling due within one year
Creditors
Provisions

Net current (liabilities)/assets

Total assets less current liabilities

Liabilities falling due after one year
Creditors
Provisions

Net assets

Capital and reserves
Called up share capital
Share premium account
Cash flow hedge reserve
Other reserves
Profit and Loss Account

Shareholders' funds

The Company’s profit after tax for the year ended 31 December 2022 was £0.2 million (2021: loss £5.3 million).

Approved and authorised for issue by the Board of Directors on 27 February 2023 and signed on its behalf by:

Andrea Rigamonti
Group Chief Financial Officer

Videndum plc
Registered in England and Wales no. 227691

Notes

f)
g)
h)
i)

j)
l)

p)
n)

2022
£m

0.1
1.6
603.5
6.8

612.0

85.6
2.2

87.8

(111.4)
(0.6)

(112.0)

(24.2)

587.8

2021
£m

0.1
1.8
484.0
3.1

489.0

96.2
–

96.2

(92.7)
–

(92.7)

3.5

492.5

(232.2)
(0.1)

(129.6)
(0.1)

(232.3)

(129.7)

355.5

362.8

9.4
24.4
3.0
58.8
259.9

355.5

9.3
23.2
0.1
58.8
271.4

362.8

Financial StatementsCompany Statement of Changes in Equity

Videndum plc Annual Report and Accounts 2022

217

Balance at 1 January 2021
Total comprehensive income for the year
Loss for the year
Fair value gain – interest rate swap
Contributions by and distributions to owners
Dividends paid
Own shares purchased
Share-based payment charge, net of tax
New shares issued

Balance at 31 December 2021 and 1 January 2022

Total comprehensive income for the year
Profit for the year
Fair value gain – interest rate swap
Contributions by and distributions to owners
Dividends paid
Own shares purchased
Own shares sold
Share-based payment charge, net of tax
New shares issued

Balance at 31 December 2022

Share
capital
£m

9.2

–
–

–
–
–
0.1

9.3

–
–

–
–
–
–
0.1

9.4

Share
premium
£m

21.7

–
–

–
–
–
1.5

23.2

–
–

–
–
–
–
1.2

Cash flow
hedging
reserve
£m

Other
reserves
£m

Profit and
Loss
Account
£m

Total
equity
£m

367.6

(5.3)
0.1

(7.1)
(5.8)
8.2
5.1

55.3

281.4

–
–

–
–
–
3.5

(5.3)
–

(7.1)
(5.8)
8.2
–

58.8

271.4

362.8

–
–

–
–
–
–
–

0.2
–

(18.0)
(5.8)
3.1
9.0
–

259.9

0.2
2.9

(18.0)
(5.8)
3.1
9.0
1.3

355.5

–

–
0.1

–
–
–
–

0.1

–
2.9

–
–
–
–
–

24.4

3.0

58.8

218

Notes to the Company Financial Statements

a) Basis of preparation
These financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”).

These financial statements have been prepared in accordance with International Accounting Standards in conformity with the requirements of
the Companies Act 2006 and International Financial Reporting Standards as issued by the IASB but makes amendments where necessary in order
to comply with the Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions have been taken.

The financial statements have been prepared under the historical cost convention, and in accordance with the Companies Act 2006.

Under Section 408(3) of the Companies Act 2006, the Company is exempt from the requirement to present its own Profit and Loss Account.

Significant judgements, key assumptions and estimates
The following provides information on those policies that the Directors consider critical because of the level of judgement and estimation required
which often involves assumptions regarding future events which can vary from what is anticipated. The Directors review the judgements and
estimates on an ongoing basis with revisions to accounting estimates recognised in the period in which the estimates are revised and in any future
periods affected. The Directors believe that the Company’s financial statements reflect appropriate judgements and estimates and provide a true
and fair view of the Company’s performance and financial position.

Critical accounting estimates and assumptions
The following are the critical estimates and assumptions that the Directors have made in the process of applying the Company’s accounting
policies and that have a significant risk of resulting in material adjustments to the carrying amounts of assets and liabilities within the next
financial year.

Impairment of investments in subsidiary undertakings

The carrying value of the Company’s investments in subsidiary undertakings are reviewed for indicators of impairment on an annual basis.
In the event impairment indicators are identified, the recoverable amount is determined based on a value in use calculation which requires the
determination of appropriate assumptions in relation to cash flows over a forecast period, the long-term growth rate to be applied beyond this
period and the risk-adjusted discount rate used to discount the estimated cash flows to present value. As the Company holds all of the Group’s
trading entities, the main assumptions supporting the carrying values of the Company’s most significant investments in its subsidiary
undertakings are consistent with those disclosed in note 3.1 “Intangible assets” of the Group’s consolidated financial statements.

Estimation uncertainty arises due to changing economic and market factors, industry trends, increasing technological advancement and
the Group’s ongoing strategic and digital transformation programmes.

Critical judgements in applying the Company’s accounting policies

The following are critical judgements that the Company makes, apart from those involving estimations (which are dealt with above), that the
Directors have made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts
recognised in the financial statements.

Tax

In relation to tax, these include the interpretation and application of existing legislation. The Company’s key judgement relates to the application
of tax law in relation to the EU State Aid Investigation. Details in relation to this judgement are set out in note 2.4 “Tax” of the Group’s
consolidated financial statements.

Impact of adoption of new accounting standards

The impact of adoption of new accounting standards or amendments is disclosed in Section 1 – Basis of Preparation of the Group’s consolidated
financial statements.

New standards and interpretations effective for future periods and not yet adopted

Amended standards and interpretations not yet effective are not expected to have a significant impact on the Company’s financial statements.

Notes to the Company Financial StatementsVidendum plc Annual Report and Accounts 2022

219

b) Exemptions taken by the Company under FRS 101
The Company has applied the exemptions available under FRS 101 in respect of the following disclosures:

– Cash Flow Statement and related notes;
– comparative period reconciliations for share capital, tangible fixed assets and intangible assets;
– disclosures in respect of transactions with wholly owned subsidiaries;
– disclosures in respect of capital management;
– disclosures in respect of leases;
– the effects of new but not yet effective IFRSs; and
– disclosures in respect of the compensation of key management personnel.

As the consolidated financial statements of Videndum plc include the equivalent disclosures, the Company has also taken the exemptions under
FRS 101 available in respect of the following disclosures:

– IFRS 2 “Share-Based Payments” in respect of Group settled share-based payments; and
– certain disclosures required by IFRS 13 “Fair Value Measurement” and the disclosures required by IFRS 7 “Financial Instruments: Disclosures”.

c) Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to these
financial statements.

Investments in subsidiary undertakings
Investments in subsidiaries are stated at historical cost, less provision for any impairment in value.

The Company holds investments in all of the Group’s intermediate holding companies, financing companies and trading subsidiaries.

It is possible that changes in outlook over the next year that are different to the assumptions made by Management could require a material
adjustment to the carrying value of the Company’s investments in its subsidiaries.

Pensions
The Company participates in the Group’s defined benefit scheme operated in the UK, which was closed to future benefit accrual with effect from
31 July 2010. All UK employees of the Company are now offered membership of the defined contribution scheme. The assets of the schemes are
held separately from those of the Company. The Company has a very small proportion of the scheme’s total members. As such, the Company has
adopted a policy to recognise the full net pension cost, and hence pension asset, in its subsidiary Videndum Production Solutions Limited’s
financial statements prepared in accordance with FRS 101.

Details in respect of the UK defined benefit pension scheme are disclosed in note 5.2 “Pensions” of the Group’s consolidated financial statements.

220

Notes to the Company Financial Statements continued

Dividends receivable
Dividends received and receivable are credited to the Company’s Income Statement.

Other significant accounting policies are consistent with the Group’s consolidated financial statements and below are references where they
are disclosed:

Section 1 – Basis of Preparation
3.1 “Intangible assets”
3.2 “Property, plant and equipment”
3.3 “Working capital”
3.5 “Provisions”
3.6 “Leases”
4.1 “Net debt”
4.1 “Net debt”
4.2 “Financial instruments”
4.3 “Share capital and reserves”
5.3 “Share-based payments”

Foreign currencies
Intangible assets
Property, plant and equipment
Debtors and creditors
Provisions
Leases
Cash and cash equivalents
Bank loans
Derivative financial instruments and hedging activities
Share capital and reserves
Share-based payments

d) Employees

Employee costs comprise:
Wages and salaries
Employers’ social security costs
Employers’ pension costs – defined contribution schemes
Share-based payment charge

Monthly average number of employees during the year

2022
£m

4.7
0.5
0.2
1.5

6.9

2022

2021
£m

5.4
0.4
0.2
1.4

7.4

2021

Further details of Directors’ remuneration and share incentives are disclosed in the Remuneration report.

e) Audit fees
The details regarding the remuneration of the Company’s auditor are included in note 2.1 “Profit before tax” of the Group’s consolidated financial
statements under “Fees payable to the Company’s auditor for the audit of the Company’s annual financial statements”.

f) Intangible assets

Cost and net book value
At 31 December 2021
Depreciation

At 31 December 2022

Capitalised
software
£m

0.1
–

0.1

Notes to the Company Financial StatementsVidendum plc Annual Report and Accounts 2022

221

Right-of-use
assets –
Leasehold land
and buildings
£m

Total
£m

Leasehold
improvements
£m

3.6

1.8
0.2

2.0

1.8

1.6

3.1

1.3
0.2

1.5

1.8

1.6

0.5

0.5
–

0.5

–

Shares in Group
undertakings
£m

Loans to Group
undertakings
£m

Total
£m

776.3
119.5

895.8

292.3

484.0

603.5

697.0
39.0

736.0

292.3

404.7

443.7

79.3
80.5

159.8

–

79.3

159.8

g) Property, plant and equipment

Cost
At 31 December 2021 and at 1 January 2022

Cost at 31 December 2022

Accumulated depreciation
At 31 December 2021 and 1 January 2022
Depreciation charge in the year

At 31 December 2022

Carrying amounts
At 31 December 2021 and 1 January 2022

At 31 December 2022

h) Investments in subsidiary undertakings

Cost
At 1 January 2022
Additions

At 31 December 2022

Provisions
At 1 January 2022

At 31 December 2022

Net book value
At 1 January 2022

At 31 December 2022

The additions to shares in Group undertakings during the year reflect an increase in the Company’s subsidiary holding, Videndum Group Holdings
Limited. On 16 August 2022, the Company contributed a loan of US$47.0 million (£39.0 million) receivable from another Group company,
Videndum US Holdings Inc., to Videndum Group Holdings Limited, in exchange for the issuance of shares.

The additions of £80.5 million during the year relate to an increase in loans to the Company’s subsidiary holdings, Videndum US Holdings Inc.
(US$47.0 million: £39.0 million) and Videndum Investments Limited (US$50.5 million: £41.5 million).

The Company’s investments in subsidiaries as at 31 December 2022 are included in note 5.6 “Group investments” of the Group’s consolidated
financial statements.

Loans to Group undertakings are unsecured, bear floating rates of interest and are repayable after more than one year.

222

Notes to the Company Financial Statements continued

i) Debtors

Amounts falling due within one year
Amounts owed by subsidiary undertakings
Other debtors
Prepayments
Derivative financial instruments – interest rate swap
Derivative financial instruments – forward exchange contracts
Deferred tax assets

Long-term receivables
Corporation tax
Derivative financial instruments – forward exchange contracts
Derivative financial instruments – interest rate swap

Total receivables

2022
£m

80.7
0.1
0.2
1.6
1.6
1.4

85.6

3.0
1.4
2.4

92.4

2021
£m

94.2
0.3
0.3
–
0.4
1.0

96.2

3.0
–
0.1

99.3

Amounts owed by subsidiary undertakings are unsecured and payable on demand. Of the amounts included in Derivative financial instruments,
£0.9 million (2021: £0.3 million) relate to contracts with subsidiary undertakings which mirror the terms of contracts held by the Company with
external third parties. Derivative financial instruments of £4.0 million (2021: £0.1 million) relate to interest rate swaps. Details of these derivatives
are included in note 4.2 “Financial instruments” of the Group’s consolidated financial statements.

j) Creditors

Amounts falling due within one year
Bank overdraft (unsecured)
Bank loans (unsecured)
Lease liabilities
Amounts owed to subsidiary undertakings
Derivative financial instruments – forward exchange contracts
Deferred tax
Trade payables
Other creditors
Accruals

Amounts falling due after more than one year
Bank loans (unsecured)
Lease liabilities
Other creditors
Derivative financial instruments – forward exchange contracts
Amounts owed to subsidiary undertaking

2022
£m

–
36.0
0.3
69.8
1.6
1.0
1.3
0.1
1.3

111.4

137.9
1.5
0.4
1.4
91.0

232.2

2021
£m

3.1
13.1
0.2
72.3
0.4
–
0.5
0.3
2.8

92.7

108.7
1.6
0.3
–
19.0

129.6

Amounts owed to subsidiary undertakings due within one year are unsecured and payable on demand. Amounts owed to subsidiary undertakings
due after more than one year are unsecured, bear floating rates of interest and are repayable after more than one year. Derivative financial
instruments of £2.1 million (2021: £0.1 million) relate to contracts with subsidiary undertakings which mirror the terms of contracts held by
the Company with external third parties.

Lease payments of £0.1 million were made in the year.

Notes to the Company Financial StatementsVidendum plc Annual Report and Accounts 2022

223

k) Contingent liabilities
There are no contingent liabilities at 31 December 2022 (2021: £nil).

l) Provisions

At 31 December 2021 and 1 January 2022
Provisions created during the year
Provisions utilised during the year

At 31 December 2022

Provisions
£m

0.1
0.9
(0.3)

0.7

Provisions of £0.7 million include a dilapidations provision of £0.1 million and a restructuring provision of £0.6 million which is expected to be
utilised during 2023.

m) Called up share capital
Disclosure in respect of the Company’s share capital are provided in note 4.3 “Share capital and reserves” of the Group’s consolidated
financial statements.

The registered address of the Company is Bridge House, Heron Square, Richmond, TW9 1EN, United Kingdom.

Options over shares of the Company have been granted to employees of the Company under various plans. Details of the terms and conditions
of each share-based payment plan are given in the Remuneration report on pages 122 to 127 and note 5.3 “Share-based payments” of the Group’s
consolidated financial statements.

n) Other reserves
Other reserves of £58.8 million represent the reduction of the share premium account; £22.7 million in 1989 and £37.3 million in 1995 less
£16.0 million of share repurchases in 1995; a capital redemption reserve of £1.6 million created on the repurchase and subsequent cancellation
of 885,000 ordinary shares by the Company in 1999; and £13.2 million in relation to a merger reserve.

o) Cash flow hedge reserve
As described in note 4.2 “Financial instruments” of the Group’s consolidated financial statements, the Company hedges the variability in cash
flows of a proportion of its floating rate borrowings. This reserve records the effective portion of the cumulative net change in the fair value
of derivative financial instruments where they are designated in cash flow hedge relationships.

p) Related party transactions
The Company has identified a related party relationship with its Board, the Vitec Group Pension Scheme and members of the Operations
Executive as disclosed in the Remuneration report and note 5.5 “Related party transactions” of the Group’s consolidated financial statements.
There are no other related party transactions to disclose.

q) Post Balance Sheet events
The proposed final dividend for the year ended 31 December 2022 was recommended by the Directors. This is subject to approval by shareholders
at the AGM. See note 4.3 “Share capital and reserves” of the Group’s consolidated financial statements.

224

Glossary of Alternative Performance Measures
(“APMs”)

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 and enable an alternative comparison of performance over time.

The Group uses APMs to aid the comparability of information between reporting periods and Divisions, by adjusting for certain items which
impact upon IFRS measures, to aid the user in understanding the activity taking place across the Group’s businesses. APMs are used by the
Directors and Management for performance analysis, planning, reporting and incentive purposes. Where relevant, further information on
specific APMs is provided in each section below.

APM

Income Statement measures

Closest equivalent
IFRS measure

Definition and purpose

Adjusted gross profit

Gross profit

Calculated as gross profit before adjusting items.

The table below shows a reconciliation:

See note 2.2 “Adjusting items”.

Gross profit
Adjusting items in cost of sales

Adjusted gross profit

2022
£m

195.5
2.6

198.1

2021
£m

173.1
0.1

173.2

Adjusted gross profit margin

None

Calculated as adjusted gross profit divided by revenue.

Adjusted operating profit

Profit before tax

Calculated as profit before tax, before net finance expense, and
before adjusting items. This is a key management incentive metric.

Adjusting items include non-cash charges such as amortisation of
intangible assets that are acquired in a business combination, and
effect of fair valuation of acquired inventory and property, plant and
equipment. Cash charges include items such as transaction costs,
earnout, retention and deferred payments, and significant costs
relating to the integration of acquired businesses.

The table below shows a reconciliation:
See note 2.2 “Adjusting items”.

Profit before tax
Net finance expense
Adjusting items in operating profit

Adjusted operating profit

2022
£m

24.7
6.8
28.5

60.0

2021
£m

29.6
3.9
12.7

46.2

Adjusted operating profit margin

None

Calculated as adjusted operating profit divided by revenue.
Progression in adjusted operating margin is an indicator of the
Group’s operating efficiency.

Adjusted operating expenses

Operating expenses

Calculated as operating expenses before adjusting items.

The table below shows a reconciliation:
See note 2.1 “Profit before tax (including segmental information)”.

Operating expenses
Adjusting items in operating expenses

Adjusted operating expenses

2022
£m

164.0
(25.9)

138.1

2021
£m

139.6
(12.6)

127.0

Adjusted net finance income/(expense)

None

Calculated as finance expense, less finance income and amortisation
of loan fees on borrowings for acquisitions.

Notes to the Company Financial StatementsVidendum plc Annual Report and Accounts 2022

225

APM

Closest equivalent
IFRS measure

Definition and purpose

Adjusted profit before tax

Profit before tax

The table below shows a reconciliation:

Finance expense
Finance income
Adjusting finance expense – amortisation of
loan fees on borrowings for acquisitions

Adjusted net finance expense

2022
£m

(9.9)
3.1

0.8

(6.0)

2021
£m

(4.4)
0.5

0.1

(3.8)

Calculated as profit before tax, before adjusting items. This is a key
management incentive metric and is a measure used within the Group’s
incentive plans as set out in the Remuneration report.

See Consolidated Income Statement for a reconciliation.

Adjusted profit after tax

Profit after tax

Calculated as profit after tax before adjusting items.

Adjusted basic earnings per share

Basic earnings per share

Cash flow measures

Free cash flow

Net cash from
operating activities

See Consolidated Income Statement for a reconciliation.

Calculated as adjusted profit after tax divided by the weighted average
number of ordinary shares outstanding during the period. This is a key
management incentive metric and is a measure used within the Group’s
incentive plans as set out in the Remuneration report.

See note 2.5 “Earnings per share” for a reconciliation.

Net cash from operating activities after proceeds from property,
plant and equipment and software, purchase of property, plant and
equipment, and capitalisation of software and development costs.
This measure reflects the cash generated in the period that is available
to invest in accordance with the Group’s capital allocation policy.

See “adjusted operating cash flow” below for a reconcilliation.

See “Five Year Financial Summary” on page 230.

226

Glossary of Alternative Performance Measures
(“APMs”) continued

APM

Adjusted operating cash flow

Closest equivalent
IFRS measure

Net cash from operating
activities

Definition and purpose

Free cash flow before payment of interest, tax, restructuring and
integration costs, and transaction costs relating to the acquisition
of businesses. This is a measure of the cash generation and working
capital efficiency of the Group’s operations. Adjusted operating cash
flow as a percentage of adjusted operating profit is a key management
incentive metric.

Profit for the period
Add back:
Taxation and net finance expense
Adjusting items

Adjusted operating profit
Depreciation excluding effect of fair
valuation of property, plant and equipment
Amortisation of capitalised software and
development costs
Adjusted working capital movement(1)
Adjusted provision movement(1)
Other:
– Fair value losses on derivative financial

instruments

– Foreign exchange losses
– Share-based payments excluding retention

charges and restructuring costs

– Impairment losses on property, plant

and equipment

– Proceeds from sale of property, plant

and equipment and software

Purchase of property, plant and equipment
Capitalisation of software and development
costs

Adjusted operating cash flow
Interest paid
Tax paid
Payments relating to:
Restructuring and integration costs
Earnout and retention bonuses
Transaction costs

Free cash flow
Proceeds from sale of property, plant and
equipment and software
Purchase of property, plant and equipment
Capitalisation of software and development
costs

Net cash from operating activities

2022
£m

32.9

(1.4)
28.5

60.0

15.2

7.4
(19.4)
(0.8)

0.1
0.6

6.9

–

2021
£m

25.9

7.6
12.7

46.2

12.9

5.8
1.1
(0.8)

–
–

5.9

0.2

–
(7.1)

0.1
(10.8)

(13.1)

(10.9)

49.8
(9.4)
(7.2)

(2.0)
(1.3)
(1.4)

28.5

–
7.1

13.1

48.7

49.7
(4.5)
(6.5)

(1.9)
(2.2)
(1.5)

33.1

(0.1)
10.8

10.9

54.7

(1) See “adjusted working capital movement” and “adjusted provision movement” below

for a reconcilliation.

Notes to the Company Financial StatementsVidendum plc Annual Report and Accounts 2022

227

APM

Closest equivalent
IFRS measure

Definition and purpose

Adjusted working capital movement

None

The adjusted working capital movement excludes movements
in provisions and movements relating to adjusting items.
2022
£m

Increase in inventories
Increase in receivables
(Decrease)/increase in payables

(8.0)
(5.0)
(5.6)

2021
£m

(21.9)
(5.8)
27.8

(Increase)/decrease in working capital,
excluding provisions
Deduct inflows from adjusting charges:
Effect of fair valuation of acquired inventory
Add back following outflows:
Adjustments for integration and
restructuring costs, transaction costs
relating to acquisition of businesses, and
earnout and retention bonuses

Adjusted working capital movement

(18.6)

0.1

(0.5)

(0.1)

(0.3)

(19.4)

1.1

2021
£m

(2.7)

0.7
–
1.2

(0.8)

Adjusted provisions movement

Increase/(decrease)
in provisions

The adjusted provisions movement excludes movements relating
to adjusting items.

Increase/(decrease) in provisions
Adjustments for integration and
restructuring costs
Adjustments for grant payments
Earnout and deferred payments

Adjusted provision movement

2022
£m

2.8

(1.9)
(1.8)
0.1

(0.8)

Other measures

Return on capital employed (“ROCE”)

None

ROCE is calculated as annual adjusted operating profit for the last
12 months divided by the average total assets (excluding defined
benefit pension asset and deferred tax assets), current liabilities
(excluding current interest-bearing loans and borrowings), and
non-current lease liabilities.

The average is based on the opening and closing of the 12 month period.
See “Five Year Summary”.

Adjusted operating profit for the last 12
months
Capital employed at the beginning of
the year
Capital employed at the end of the year
Average capital employed

Adjusted ROCE %

2022
£m

2021
£m

60.0

46.2

279.6
357.9
318.8

235.1
279.6
257.4

18.8%

18.0%

228

Glossary of Alternative Performance Measures
(“APMs”) continued

APM

Closest equivalent
IFRS measure

Definition and purpose

Constant currency

None

Cash conversion

Net debt

None

Adjusted EBITDA

Operating profit

Constant currency variances are derived by calculating the current year
amounts at the applicable prior year foreign currency exchange rates,
excluding the effects of hedging in both years.

Revenue growth is represented on a constant currency basis as this
best represents the impact of volume and pricing on revenue growth.

This is calculated as adjusted operating cash flow divided by adjusted
operating profit. This is a key management incentive metric and is a
measure used within the Group’s incentive plans as set out in the
Remuneration report.

See note 4.1 "Net debt" for an explanation of the balances included
in net debt, along with a breakdown of the amounts.

Calculated as adjusted operating profit for the last 12 months before
depreciation of tangible fixed assets and amortisation of intangibles
(other than those already excluded from adjusted operating profit).

The table below shows a reconciliation:

Adjusted operating profit for the last 12
months
Add back depreciation excluding effect of
fair valuation of property, plant and
equipment
Add back amortisation of intangible assets
Less amortisation of acquired intangible
assets

Adjusted EBITDA

2022
£m

2021
£m

60.0

46.2

15.2
18.3

(10.9)

82.6

12.9
13.0

(7.2)

64.9

Notes to the Company Financial StatementsVidendum plc Annual Report and Accounts 2022

229

Five Year Financial Summary
Years ended 31 December

Revenue
Adjusted operating profit
Adjusted net interest on interest-bearing loans and borrowings
Interest on lease liabilities
Other net financial income

Adjusted profit before tax

Cash generated from operating activities
Interest paid
Tax paid

Net cash from operating activities
Net capital expenditure on property, plant and equipment, software and
development costs

Free cash flow

Capital employed
Total assets
Current liabilities

Total assets less current liabilities
Less defined benefit asset
Less deferred tax assets
Add the current portion of interest-bearing liabilities
Less non-current lease liabilities

Statistics
Adjusted operating profit (%)
Adjusted effective tax rate (%)
Adjusted basic earnings per share (p)
Basic earnings per share (p)
Dividends per share (p)
ROCE (%)

Year-end mid-market share price (p)

2022
£m

451.2
60.0
(7.5)
(1.5)
3.0

54.0

65.3
(9.4)
(7.2)

48.7

(20.2)

28.5

552.2
(146.4)

405.8
(3.9)
(51.2)
36.0
(28.8)

357.9

13.3
23.2
90.1
71.4
40.0
18.8

2021(2) (3)
£m

394.3
46.2
(3.2)
(1.0)
0.4

42.4

65.7
(4.5)
(6.5)

54.7

(21.6)

33.1

441.1
(116.5)

324.6
–
(33.6)
13.2
(24.6)

279.6

11.7
24.3
69.9
56.4
35.0
18.0

2020(2)
£m

290.5
9.9
(3.9)
(0.8)
0.3

5.5

34.0
(5.9)
(3.1)

25.0

(15.5)

9.5

334.6
(114.0)

220.6
–
(24.6)
50.6
(11.5)

235.1

3.4
25.4
9.0
(11.6)
4.5
4.1

2019(2)
£m

2018(1) (2)
£m

376.1
52.4
(3.7)
(0.9)
0.2

48.0

59.2
(4.3)
(6.3)

48.6

(18.1)

30.5

360.6
(77.8)

282.8
–
(21.0)
0.2
(12.4)

249.6

13.9
24.4
80.6
44.9
12.3
20.9

385.4
53.5
(2.7)
–
0.4

51.2

54.0
(2.5)
(4.1)

47.4

(13.9)

33.5

364.2
(82.7)

281.5
–
(29.7)
0.5
–

252.3

13.9
17.9
93.2
76.1
37.0
24.2

1,078.0

1,420.0

917.0

1,100.0

1,192.5

(1)

In 2019, the process to measure the fair values of the assets and liabilities acquired was completed in respect of the Amimon acquisition. The 2018 Balance Sheet was adjusted to reflect
an increase in goodwill of £1.3 million which was recognised in the period as a result of fair value adjustments to deferred tax assets.

(2) Capital employed has been restated in the previous years for the exclusion of deferred tax assets, and changes to IFRS 16 “Leases” in 2020.
(3) In 2022, the process to measure the fair values of the assets and liabilities acquired was completed in respect of the Savage acquisition. The 2021 Balance Sheet was adjusted to reflect
a decrease in goodwill of £0.7 million as a result of adjustments increasing deferred tax assets by £0.5 million, increasing acquired intangible assets by £0.3 million, and increasing other
creditors by £0.1 million.

230

Shareholder Information and Financial Calendar

Shareholder information
The Investors section of the Group website, www.videndum.com,
contains detailed information on news, key financial information,
Annual Reports, financial calendar, share price information, dividends
and key contact details. The following is a summary and readers are
encouraged to view the website for more detailed information.

Shareholder enquiries
For all enquiries about your shareholding please contact the
Company’s registrar, EQ Group plc:

Equiniti Limited

Website
Address

Phone from UK

www.shareview.co.uk
Aspect House, Spencer Road, Lancing,
West Sussex, BN99 6DA, UK
0371 384 2030*

* Or if calling from overseas +44 (0) 121 415 7047. Lines are open between 9.00am to 5:00pm

(UK time) Monday to Friday (except public holidays in England and Wales).

Alternatively you can contact the Group Company Secretary either
by phone on +44 (0)20 8332 4600 or email on info@videndum.com.

Dividend Reinvestment Plan
The Company offers a Dividend Reinvestment Plan that enables
shareholders to reinvest cash dividends into additional shares in
the Company. Application forms can be obtained from EQ Group plc.

International dividend payment service
Overseas shareholders can receive dividends in a local currency instead
of Sterling and can find out more about this by contacting EQ Group
plc on +44 121 415 7047. Any election to receive dividends in local
currency in respect of a dividend must be received by EQ Group plc
not later than the associated record date for that dividend.

Share price information
The closing mid-market price of a share of Videndum plc on
31 December 2022 was £10.78. During 2022, the share price fluctuated
between £10.40 and £15.30. The Company’s share price is available on
our website with a 15-minute delay, and from the Financial Times
website, www.ft.com, with a similar delay.

Share scams
Shareholders should be aware that fraudsters may try and use
high-pressure tactics to lure investors into share scams. Information
on share scams can be found on the Financial Conduct Authority’s
website, www.fca.org.uk/scams, or via their consumer helpline:
0800 111 6768.

Financial calendar

Ex-dividend date for 2022 final dividend

Thursday 20 April 2023

Record date for 2022 final dividend

Friday 21 April 2023

Last day for DRIP election

Friday 5 May 2023

Annual General Meeting

Thursday 11 May 2023

2022 final dividend payment date

Friday 19 May 2023

Announcement of 2023 half year results

Thursday 10 August 2023

Proposed 2023 interim dividend payment date Friday 27 October 2023

Analysis of shareholdings as at 31 December 2022

Number
of holders

% of
holders

Number of
shares

% of
shares

Shares held

Up to 1,000

1,001 to 5,000

5,001 to 10,000

10,001 to 50,000

50,001 to 100,000

100,001 and over

Total

Institutions and
companies

Individuals including
Directors and their
families

138,113

0.30%

536,355

1.15%

314,855

0.68%

1,909,846

4.10%

2,067,404

4.44%

397

219

47.89%

26.42%

5.31%

9.89%

3.74%

829

313

6.76%

41,618,760

89.34%

100%

46,585,333

100%

37.76%

45,159,917

96.94%

516

62.24%

1,425,416

3.06%

Total

100%

CBP00019082504183028

Printed by a CarbonNeutral® Company certified to ISO 14001
environmental management system.

Printed on material from well-managed, FSC™ certified forests
and other controlled sources.

100% of the inks used are HP Indigo ElectroInk which complies
with RoHS legislation and meets the chemical requirements of the
Nordic Ecolabel (Nordic Swan) for printing companies, 95% of press
chemicals are recycled for further use and, on average 99% of any
waste associated with this production will be recycled and the
remaining 1% used to generate energy.

The paper is Carbon Balanced with World Land Trust, an
international conservation charity, who offset carbon emissions
through the purchase and preservation of high conservation value
land. Through protecting standing forests, under threat of clearance,
carbon is locked-in, that would otherwise be released.

Videndum plc
Bridge House
Heron Square
Richmond
TW9 1EN
United Kingdom

t +44 (0)20 8332 4600

info@videndum.com
www.videndum.com

Notes to the Company Financial StatementsBack cover image: Daisy Gilardini

Videndum plc
Bridge House
Heron Square
Richmond
TW9 1EN
United Kingdom

t +44 (0)20 8332 4600
info@videndum.com
videndum.com