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Optimal material solutions
for the benefit of society
Zotefoams plc
Annual Report 2021
Zotefoams plc
Annual Report 2021
1920s
Marshall registers the trademark
Onazote in Great Britain and the USA;
the name derives from the words
ebonite – hardened rubber – and
azote,the French word for nitrogen.
1925 The company name changes
to The Expanded Rubber Company
Limited.
1927
The company moves to a new
home at the 50,000 sq.ft Palace of
Arts at W
embley
,
constructed for the
1924–25 British Empire Exhibition.
Zotefoams plc is recognised as the world leader in
advanced technical foams. The Company is the direct
descendant of Onazote Limited, the company that
was founded in 1921 and commercialised the world’s
first hard and soft expanded rubber.
Inspired by the work of Hans, Fritz and Herman
Pfleumer – Austrian brothers who had experimented
with expanded rubber as an alternative to pneumatic
tyres – Charles Marshall patented a process to
manufacture expanded rubber.
1925 –
T Wall and Sons
adopts Onazote as
an insulation material
in its new ice cream
business
Fritz Pfleumer
holding a section
of expanded rubber
material used for
tyre filling in 1910
In 1921,
Charles
Marshall established
Onazote Limited in
north London
Charles Marshall
Zot
efoams
plc
An
nua
l Re
por
t 2021
1960s
In 1962,
Plastazote
®
polyethylene
foam – the foundation of the modern-
day
AZOTE
®
portfolio – is launched,
meeting with immediate success
ina huge range of applications
andindustries.
1968
saw the introduction
of
Evazote
®
EVA copolymer
foam, a further world-class
product,
boasting additional
toughness and resilience.
Introducing
Plastazote
®
and
Evazote
®
Zotefoams
materials were
first used in
running shoes in
the 1970s
1950s
Demand for Onazote and Rubazote
continues unabated and new
equipment,
a laboratory and the
appointment of agents globally
supports rapid growth of the
business.
The decade is characterised by
innovation, with products such as
Zote
and
Rubacurl
introduced for
new areas of application.
A world of
applications
Onazote
lifejacket approved
by the Ministry of
T
ransport
Early 1950s
–
the Expanded
Rubber Company is
the world’s largest
company solely
manufacturing
expanded
materials
1945
–
Sir Stafford Cripps,
President of the
Board of T
rade,
tours the Dundee
factory
1970s
The success and of Plastazote and
Evazote leads to rubber materials
being phased out and the sale of
the expanded polystyrene business.
By the end of the decade,
four-
shift working is in place to meet
demand for these materials
across a multitude of markets.
The
company is acquired by BP (British
Petroleum) and remained part of the
Chemicals business until 1993.
New ownership
and a farewell to
expanded rubber
1970
–
Jensen specifies
Plastazote for its
impact/energy
absorption
A century
of
innovation...
1930s
In 1935,
the company moves
to a former cable works in
Mitcham Road,
Croydon,
where
Zotefoams’ headquarters and main
manufacturing site are still located.
Ownership passes to The
St Helens Cable and Rubber
Company in 1938.
New Managing
Director
,
Henry Shelmerdine,
reorganises and oversees investment
in new equipment.
Within a year
,
production is running
at
half an imperial ton per week
of Onazote and Rubazote
– hard
and soft expanded rubber
.
Success beckons
1940s
New factories help meet demand
for marine buoyancy and aviation
applications.
Aerozote,
for self-sealing aircraft fuel
tanks,
is introduced and the company
develops new materials –
Formvar
,
an expanded vinyl with great impact
strength and
FUF
,
expanded urea-
formaldehyde resin – to counteract the
shortage of natural rubber
.
BX Plastics Limited acquires the
company in 1943 and transfers
ownership in 1948 to its parent The
British Xylonite Company Limited.
Innovation and
expansion in
support of
the nation
2000s
As the new millennium dawns,
opportunities and optimism abound –
but on the night of 22 October 2000,
afire at Mitcham Road destroys a
thirdof the factory
.
In the aftermath, the management
team reassesses prospects and
decides to leverage the three
stage process for new,
advanced
materials.
The resulting ZOTEK
®
High-Performance Products portfolio
meets demanding regulatory and
application requirements, opening up
new markets.
In 2001,
Zotefoams Inc moves into a
purpose-built facility in Kentucky
.
Also in
the USA and in 2008,
Zotefoams takes
a stake in MuCell Extrusion LLC (MEL),
acquiring 100% ownership four years
later
.
The company’s technology is the
genesis of the ReZorce mono-material
barrier packaging range.
The
High-P
erformance
decade
1980s
In 1981,
Plastazote achieves
royal recognition,
winning
the Prince Philip Award for
polymers in the service of
mankind.
The Award is
presented
by its namesake, a champion of
British technology and industry.
The decade sees continuing growth
and success on the global stage,
firmly
establishing Plastazote
and Evazote as the world’
s
leading technical foam brands.
Royal recognition
and global
growth
2010–today
This is a decade of accelerating
change and growth for Zotefoams.
ZOTEK
®
F
is recognised as a
gamechanger for air- and spacecraft
interiors and PEBA joins the HPP line-
up in 2012:
this material famously
becomes the basis of Zotefoams’
exclusive partnership with Nike.
We increase our global presence,
with new facilities in China,
the
USA,
India and Poland.
A programme of foam manufacturing
capacity investments in the UK, the
USA and Poland concludes with the
opening of our new Polish plant in
February 2021: this increases block
foam capacity by 60% compared to
the end of 2017.
A world leader in
optimal material
solutions
2021
–
production
commences at our
Polish f
acility
, serving
customers in
mainland Europe
2021
–
Zotefoams breaks
production records
as it supplies over
750,000 sheets of
AZOTE
®
for use in
face visors
Zotefoams
continues to
provide insulation
to manufacturers
of global food
brands
In 2017, an
exclusive
partnership with
Nike – based on
our groundbreaking
ZOTEK
®
PEBA – is
announced
1970s
The success and of Plastazote and
Evazote leads to rubber materials
being phased out and the sale of
the expanded polystyrene business.
By the end of the decade,
four-
shift working is in place to meet
demand for these materials
across a multitude of markets.
The
company is acquired by BP (British
Petroleum) and remained part of the
Chemicals business until 1993.
New ownership
and a farewell to
expanded rubber
1990s
Following a management
buyout in 1992,
a flotation on
the London Stock Exchange
in1995 gives birth to
Zotefoams plc.
International growth continues with
the establishment of Zotefoams Inc
in the USA,
to meet rapidly growing
demand with local service and, a
few years later
, manufacturing.
A new era
and the birth of
Zotefoams plc
1
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Learn more
zotefo
ams.com
I
n 2
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2
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Gro
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lan
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12
A uni
qu
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uf
actu
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ss
14
Our business model
16
Ou
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20
Ou
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22
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26
An intr
oduction fr
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30
Gro
up CE
O’
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32
Gro
up CF
O’
s rev
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38
Ris
k ma
nag
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ent a
nd p
ri
nci
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is
ks
45
Viabilit
y stat
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55
Envi
ron
me
nta
l, soc
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nd
56
gove
rn
anc
e (ESG) re
po
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Our people
70
s
1
72(
1
) sta
teme
nt
74
Gov
ernance
Boa
rd of D
ire
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s
78
Corporate
governance
80
The Board
and its Committ
ees
81
Audit Committ
ee report
84
Nomination
Committee report
87
Directors
’ Remuneration r
epor
t
88
Directors
’ report
10
0
Stat
ement of
Directors
’ responsibilities
10
3
Financial
Statements
Independent audit
or’
s report
10
4
Consolidated income stat
ement
10
9
Consolidated stat
ement of
11
0
comprehensive in
come
Consolidat
ed stat
e
ment o
f financial posit
ion
111
Company st
atement
of financial
position
11
2
Co
nso
lid
ated st
atem
ent of c
as
h flows
11
3
Co
mpa
ny state
me
nt of ca
sh fl
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114
Co
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lid
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ent of c
ha
nge
s in e
qu
it
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115
Co
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me
nt of ch
an
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s in eq
ui
ty
11
6
No
tes
117
Fiv
e-yea
r trad
in
g sum
ma
r
y
15
5
Noti
ce of th
e 2022 An
nua
l Ge
ne
ra
l Me
etin
g
15
6
Company in
formation
16
0
Financial calendar
16
0
Contents
Basic earnings
per share
9
.
0
1p
Change
-39%
2020
14
.
8
7
p
T
otal
dividend
fo
r th
e ye
ar
6.5
0
p
Change
+3%
2020
6.30p
Return
on capital
employ
ed
6
.1%
Change
-
2
90 basis
points
2020
9.0%
Financial
KPIs
Group rev
enu
e
£
10
0
.
8
m
Change
+22%
2020
£8
2
.7m
Gross margin
2
6
.
4%
Change
-
720
basis points
2020
33
.6%
Operating
profit
£8.
1
m
Change
-11%
2020
£
9
.1
m
Pr
ofit b
e
for
e t
a
x
£
7.
0
m
Change
-16
%
2020
£8.3m
O
p
t
i
ma
l
mat
e
r
ia
l
s
ol
u
t
io
n
s
f
o
r
t
h
e
b
e
n
efi
t o
f s
o
c
i
e
t
y
- pa
s
t
, p
r
e
s
e
n
t
an
d
f
u
tu
re
2
Zot
efoams plc
An
nua
l Re
por
t 2021
2
Throu
ghout i
ts histor
y
, Zot
efoa
ms has be
en at the
forefront of develop
ments in mater
ials that save en
ergy
byinsulating or s
ave fuelc
osts by reducin
g weight.
Our business is predominantly b
ased on long-
term
applications –
underpinned by the particular durability
ofour materia
ls – such th
atthe resourc
es use
d in the
manu
facture of our prod
ucts de
liver paybac
k over an
extended period.
As Zot
efoams ma
rks 1
0
0 year
s of its three stage p
roces
s,
it is well-pl
aced to ser
ve the need
s of a world whe
re the
conse
r
vation ofreso
urces is a p
rior
it
y and the re
duction
of carb
on emi
ssio
ns animp
erative.
Zot
efoa
ms alre
ady of
fer
s the lightest cl
osed ce
ll
cross
linked foam inthe wor
ld and o
ur materia
ls frequ
ently
of
fer a con
side
rably b
etter pe
r
form
ance to weight
ratiothan thos
e of our comp
etitors. T
o deli
ver optimal
materia
ls for spe
cific ap
plic
ations we continu
e t
o pus
h
the boun
dari
es of our tech
nolog
y and evalu
ate new
rawmaterial
s. Be it eng
inee
ring even l
ighter foams or
replacing t
raditi
onal mat
erial choices with ligh
tweight
alternat
ives, our de
velopment pr
ogramme is informed b
y
a dee
p knowl
edg
e of the markets we ser
ve, continuin
g to
anticipate and re
spond to the sust
ainab
ilit
y amb
itionsof
our cust
omers.
W
o
r
k
i
n
g w
it
h
o
u
r
c
u
s
t
o
mer
s
t
o d
e
v
el
o
p t
h
e
p
r
o
d
u
c
t
s
t
he
y
nee
d
f
o
r
a
lo
w
-
c
a
r
bo
n
f
u
tu
re
3
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
3
S
u
p
p
o
r
t
i
ng
in
d
u
s
t
ri
e
s
o
f
t
h
e
f
u
tu
re
R
ed
u
cin
g
o
u
r
o
w
n
en
v
ir
o
nmen
t
al
i
m
p
ac
t
P
l
a
y
i
n
g o
u
r pa
r
t
in
t
h
e
cir
c
u
l
a
r
e
c
o
nom
y
Emerging t
echnology and clean energy industries
aret
ypic
ally fou
nded o
nsusta
inabi
lit
y prin
ciple
s,
mak
ingZot
efoams’ advance
d materia
ls an at
tractive
proposit
ion. E
lectric vehicles
, wind turbines
, data
centres
,
satellitecomm
unicatio
ns… these are just s
ome of the
new indu
strie
s withwhi
ch we are eng
aged.
As we
embed sustainability int
o our business model,
weare unde
r
tak
ing a wi
de rang
e of initiatives to reduc
e
our own imp
act on the e
nvironme
nt, setting targ
ets for
great
e
r mat
erial ef
ficiency
, lower consump
tion of w
at
er
and e
nergy a
nd redu
ced c
arbo
n emis
sion
s. W
e are
examining the
sustainabilit
y pot
ential and per
formanc
e
ofalternative raw materi
als. Read m
ore abou
t the
deli
ver
yof our su
staina
bilit
y strategy i
n our ESG
repor
tonpage
s 56 to 69
.
The ongoing development
of ReZ
orce
®
mono-mat
er
ial
barr
ier p
ackagi
ng is a world-first, of
ferin
g thepotential
fora truly c
ircula
r mode
l in the 30
0 billio
n unit p
er ann
um
globa
l beverage c
ar
ton mar
ket
. Of
fe
ring a
n altern
ative
tothe current mul
ti-material so
lution, ReZorce i
s easy
torecycle back into the same t
y
pe of packag
ing, rather
than being downcy
cled.
4
Zot
efoams plc
An
nua
l Re
por
t 2021
USA
Zotefoams e
st
abl
ish
ed a pr
ese
nc
e in the
USAove
r 25 years a
go, set
ting u
p a Nor
th
Am
er
ica
n sa
le
s sub
sid
iar
y
, Zotefoam
s Inc,
tomeet r
api
dly g
rowi
ng de
ma
nd wi
th
localservic
e.
In 20
0
1
, Zotefoa
ms Inc m
oved in
to a
purpose-built manufact
uring facility in
Kentu
ck
y
, s
trateg
ic
all
y loc
ated for e
as
e
of
access t
o major manufact
uring hubs
in the U
SA
.
Th
e firs
t cycl
e of inves
tmen
t ce
ntred
ontheex
pa
nsi
on of ni
trog
en-s
atur
ated
slabspr
oduced in Cr
oydon
, allowing us
to
bring
production onst
ream quickly
.
In re
cen
t yea
rs, we have inve
sted
ini
nfrastructure
, extrusion capabilities and
twoh
igh
-pre
ss
ure au
toclave
s, the s
ec
ond of
whi
ch wa
s com
mis
sio
ne
d in 2020. Zotefoams
Inc i
s now pos
iti
one
d to supp
ly m
any key
A
ZOT
E
®
polyolefin
foam grades
to
the
Nor
thAm
er
ica
n ma
rket.
C
lo
s
e
r
t
o
o
ur c
us
t
o
m
e
r
s
202
1 saw the cu
lmination of a mu
lti-y
ea
r investment prog
ramm
e t
o incre
ase
globa
l foam man
ufactur
ing ca
pacit
y
, with the o
peni
ng in Febr
uar
y of our
new pla
nt in Br
zeg, Poland.
Capacity inv
estments
in the UK
and the U
SA, alongside the con
struction
of the Polish pla
nt, mean that glob
al foam prod
uction c
apaci
ty is n
ow 60%
highe
r than the p
osition at the e
nd of 20
1
7
.
With thre
e plants strategic
ally l
ocated clos
e to manufactur
ing hub
s in
the UK, USA a
nd ce
ntral Europe, Zo
tefoams is well-pl
aced to respo
nd
t
o our cust
omers’ needs.
Significant ongoing d
isruption t
o global
supply chains
, combined with s
ustainability consideration
s fuelling
trends towardsnear
-s
horin
g, makes the availabi
lit
y of Zo
tefoams
mat
erials frommultiple
locations a
par
ticularly attractiv
e proposit
ion
forexistinga
ndpotential customer
s.
Zotefoams Inc
W
alton
, K
Y
5
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Pol
a
n
d
Our £23
million manufact
uring plant in
B
rzeg,
Poland
commenced production
in February
202
1
. T
he pro
jec
t ver
y muc
h foll
ows the
blu
ep
rint f
or the e
sta
bli
shm
ent of o
ur pl
ant i
n
Kentu
ck
y
, U
SA
, whe
re exp
ans
ion of ex
tr
ud
ed,
nitro
ge
n-sa
turate
d sla
bs was th
e fir
st pro
ce
ss
to be intro
duc
ed. T
his a
llows u
s to brin
g
operations onstream at t
he earliest
opportunit
y
, using
a large high
-t
e
mperatur
e,
low
-pressure a
utocla
ve t
o expand slabs
man
ufa
ctur
ed in th
e UK o
r USA an
d se
r
ve
cust
omers in cont
inental Eur
ope.
Close t
o major manufacturing
centres and
tran
s-Euro
pe
an ro
ad and r
ail n
et
wor
ks,
this13
,00
0 m² st
ate-
of-
the
-ar
t s
ite is now
supplying many
cust
omers in Eur
ope with
mar
ket-lead
ing g
rade
s fro
m ou
rA
ZO
T
E
polyolefin f
oams range.
The capability to
store ma
terials f
or rapid
deliver
y is almost as important as the ability
toprodu
ce th
em in th
e fir
st pl
ace. We have
the c
apa
cit
y to store up to 7
,600 p
all
ets of
foam a
t the
Polish plan
t,
including inside
storag
e for 1
,60
0 pa
lle
ts, ens
ur
ing th
e
be
stpo
ssi
ble s
er
v
ic
e for ou
r cus
tomer
s.
UK
Zo
te
foams
’ headquarters
and main
manufacturing sit
e since 1
935
, the
Croy
don
fac
ilit
y h
as evol
ved c
ons
tantl
y to devel
op a
nd
subsequently manufa
cture ne
w mat
erials and
reflect gr
owing demand
for our
materials
.
The site
ha
s t
he largest range
of pr
oduction
equipment,
some adapt
ed t
o produce
spe
ci
ali
st gr
ade
s, and i
s als
o hom
e to
extensive R&D f
acilities and state-of
-the-ar
t
test
ing laborat
orie
s.
In 201
8, foll
owin
g the an
nou
nc
eme
nt of ou
r
ex
clusive partnership with
Nike
, construction
be
gan o
n a new f
actor
y to ho
use t
wo
high-
temperat
ure,
low
-pressure aut
oclaves,
whi
ch wa
s of
fici
all
y op
ene
d in M
ay 20
1
9.
Zotefoams pl
c
Croyd
on,
UK
Zotefoams Polan
d
Brzeg, P
oland
T
a
ke a vid
eo to
ur of
Zotef
oams’ P
oland plant:
zote
.info/
3uA6aLC
6
Zot
efoams plc
An
nua
l Re
por
t 2021
S
t
a
n
d
in
g
t
o
ge
t
h
er
,
d
e
l
i
v
erin
g
in
p
a
r
t
n
er
s
hip
Our ex
clusive par
tnership wit
h Nik
e, t
hrough which
we supply
lightweight
ZOT
E
K
®
high-p
er
for
manc
e foams for use i
n the comp
any’
s top flight
run
ning sho
es, mar
ked its fif
th yea
r in 202
1
.
202
1 was co
loured by the co
ntinuing im
pact of the pand
emic, whi
ch
created com
plex supp
ly cha
in issu
es. Th
ese ch
alle
nge
s ser
ved to unde
rlin
e
the streng
th of our par
tne
rshi
p
, w
ith the Nike and Zotef
oam
s teams work
ing
close
ly to monitor the situatio
n and e
nsure the availab
ilit
y and d
elive
r
y of
materia
ls in a rapi
dly evolv
ing enviro
nment.
Elsewhe
re, the par
tner
s focuse
d on innovation, explor
ing the prop
er
tie
s and
potential of Z
OTEK, with Nike sig
nallin
g its intent to intr
oduc
e the materia
l
into more of its highes
t
-p
er
for
ming ru
nning s
hoe ra
nges a
s the popu
lari
ty
ofrunni
ng and the re
putation of its foot
wear c
ontinue to grow
.
Sustainability
, t
oo
, was a
priorit
y
, with both
par
ties looking t
o optimi
se
materia
l usage, activel
y work
ing to reduce waste gen
erated by the
manufacturing p
rocess and t
o recy
cle or reuse
residual mat
eria
l
wherev
erpossible
.
7
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
8
Zot
efoams plc
An
nua
l Re
por
t 2021
B
r
e
ak
i
ng
d
o
w
n
b
a
r
ri
er
s
t
o t
h
e c
i
r
c
u
l
ar
eco
n
o
m
y
ReZorc
e
®
Circular P
ackaging
The foo
d and bever
age sec
tor is highly c
ompetiti
ve
, with
product inno
vat
ion essential t
o maintaining a
competitiv
e
edge. This has pr
oduced an explosion o
f choice in the j
uice
and al
ternative dai
r
y sec
tors in rece
nt years, wi
th products
typically del
iver
ed in
shelf
-friendl
y cartons
pro
duced fr
om
liquid packaging board (LP
B)
.
Some 3
00 bi
llion of the
se car
tons are produce
d eac
h year
and de
man
d shows no sig
n of slowing – but th
ere is a
significant drawback
: although pr
oduced predominantly
from wood fib
re, the mixed material n
ature of LPB makes it
dif
ficult or impossible and o
f
ten economically unattract
ive
to recycle, such that any
whe
re bet
ween 50% and 75
%
ofcar
tons are se
nt to landfill or i
ncine
rated.
Rese
arch c
onduc
ted in late 2
020 identifie
d the beverag
e
car
ton
market
as one where ReZ
orce mono-mat
erial barrier
packaging can help
manufactur
ers comply with impending
legislation
on recy
cling and r
ecyclability
, moving t
owards
acircula
r eco
nomy whe
re LPB cann
ot
.
Develop
ment to date has bee
n cond
ucted in par
tners
hip
with Plas
tilene SA
, a lic
ense
e of MEL since 20
1
5 and
a well-resp
ected an
d innovative packagi
ng provide
r
based in Colombia. This partnership has been critical
in the develo
pment of Re
Zorce and Plastil
ene a
re the
exclusive lice
nsee of MEL in m
uch of South A
mer
ica
forcommerciali
sation o
f this t
e
chnology
.
In 202
1
, we accel
erated investment i
n pilot facili
ties
and people dedicated t
o the dev
elopment of ReZ
orce
tomeetthis dem
and. Our c
omme
rcial ac
tivit
y is cu
rrently
focuse
d on the Western Europe
an ma
rket
, whe
re a large
number of global
brands hav
e their headquar
t
ers.
W
e commissioned a Life Cy
cle Assessment that
demonstrat
ed ReZorce is a
more sustainable solut
ion
thanLPB in term
s of energ
y and water usag
e and redu
ced
global warming po
tent
ial.
Par
tnerships wer
e formed with
theUn
iversity of Manchest
er and Queen’
s University Belfast
to fur
ther ou
r unde
rsta
nding of the potential a
nd capa
biliti
es
of ReZ
orce.
Investment in o
ur Mas
sach
uset
ts, USA, Develo
pment
Centerbo
re frui
t, with int
er
nal tri
als co
mmen
cing in Q1 2
022
and we confi
rme
d dates for factor
y sca
le-up tr
ials at sever
al
customer s
ites from Q2 2022
. T
hes
e includ
e a pouc
h format
for a div
ision of one of the wor
ld’
s large
st food prod
uce
rs.
We establis
hed a pa
r
tner
ship w
ith leadi
ng UK waste
management company
Bif
fa t
o demonstra
t
e the po
ten
tial
for circula
rit
y wi
th ReZorce and e
ngag
ed with the
lead
ing players i
n LPB, explorin
g routes to accele
rate
commercialisat
ion.
In tand
em, we mounted a comm
unic
ations ca
mpaig
n t
o
address negativ
e perceptions
of plast
ic and promo
te
the
benefits o
f ReZ
orce as an easily r
ecyclable mon
o-mat
erial
solu
tion in the beverag
e car
ton market. Gaining po
sitive
media cov
erage thr
oughout Europe
, the campaign was
entirel
y in tune wi
th Zo
tefoams’ “
optima
l material s
olution
s
for the ben
efit of soci
ety
” purp
ose stateme
nt and resu
lted
in numerous accolades for ReZ
orce,
including winning
the Briti
sh Plasti
cs Federati
on and Horners Bottlemak
er’
s
Award
, Bes
t New Conc
ept at the UK Packa
ging Awards
and a G
reen A
pple Env
ironme
ntal Award, as well as
beingshor
tlist
ed for sev
eral innova
tion,
recycling and
env
iro
nm
ent
al aw
ard
s.
9
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
“T
he Judg
es felt R
eZorce
®
Circular Pa
ckaging to
be
ashini
ng exampl
e of how
technical dev
elopments
inplas
tics ca
n help u
s
allmove to
wards the
circular
economy
.
”
Horner
s A
wards
Committee
“ReZor
ce
®
is a futu
re for
liquid board t
hat tackles
thebig pl
ayer alternative
s
and ma
kes it ea
sy for the
consu
mer to dispo
se of
andus
e recycled c
ontent.
”
UK Packaging
Aw
ards
Judging Committee
Aw
ard winning
innov
ation
1
Plastic
HDPE pelle
ts,
including a high
proportion of
recycled
mater
ia
l, are fed i
nto
the e
xtruder
2
.
.
.an
d mad
e into roll
s
of ma
terial f
or the
packaging company
..
.
3
.
..
where the ReZ
orce
ca
r
tons ar
e mad
e
a
n
d
fi
l
l
e
d
...
4
HDPE m
ono-material
cartons
are d
eliver
ed
to
wholesaler or r
etailer
5
Of
f-
the-shelf
purchase b
y
consumer
6
Easy r
ecycling
for t
he consumer
7
Household
recyclin
g collection
8
Cartons
are s
eparat
ed
and p
roc
es
sed a
t loc
al
recyclin
g facilit
ies
9
Recycled pelle
ts
delivered to
film
extruder
lower Global
Warming
Potent
ial
l
es
s wate
r
less energy
Wat
ch
ou
r
ReZorce video:
ht
tps:
/
/zote.
in
fo/3w
P
yoEK
10
Zot
efoams plc
An
nua
l Re
por
t 2021
T-
F
I
T
®
foam in
sulation
harnesse
s the
special proper
ties o
f
ZOT
E
K
®
high-p
er
for
manc
e material
s t
o satisf
y dema
nding
applications in
ke
y economic sectors includin
g healthcare
and biot
e
ch,
food and bev
erage and semiconduct
or
manufacturing
.
With su
staina
bilit
y now at the top of most customer
s’
agen
das, insul
ation has a
n impor
tant role to play in ene
rgy-
int
ensive ind
ustries. T
-FIT offers an unparalleled proposit
ion
in this reg
ard, offe
ring e
quival
ent or bet
ter pe
r
forma
nce tha
n
tradit
ional alt
ernatives usi
ng less mat
erial and a far longer
lifes
pan, whic
h reduce
s the am
ount of waste goingtolandfil
l.
T
-FIT is u
nusua
l in the Zot
efoams p
or
t
folio in that it i
s
supplied as a finished pr
oduct – a modular range designed
t
o fit the
dimensions of
standard ind
ustrial pipew
ork, duct
ing
and e
quipme
nt. Thes
e par
ts are prod
uced at o
ur factor
y
in Chin
a, with a se
cond prod
uction u
nit at our new foa
m
manufacturing p
lant in P
oland coming soon
to
enable
rapidser
vice.
T
-FIT creat
es the oppor
tunity to gr
ow our business quickly:
as a finished product
it commands a high margin t
hanks
toits unique qu
alitie
s and su
per
ior pe
r
forma
nce.
In 202
1
, we imple
mented a pla
n to accele
rate the growth
oft
he T
-FIT business, inv
esting in commercial resources
andma
rketing activ
ities to raise awaren
ess, cre
ating a
globa
lbrand a
nd ge
nerating l
eads.
I
nve
s
t
i
n
g
t
o
a
cc
el
e
r
a
t
e
g
r
ow
t
h
Build
ing on the su
cce
ss alre
ady se
en in Ch
ina, we
renegot
iat
ed our agreement wit
h UFP t
echnologies, formerly
our exclusive fa
bric
ator and distrib
utor in the USA. T
he
new ar
range
ment s
ees the p
ar
tne
rship c
ontinue, but w
ith
commercial responsibi
lities no
w residing wit
h Zo
tefoams
,
while UFP f
ocuses on fabrication.
A new com
mercia
l team ded
icated to growing the attrac
tive
USA mar
ket is now in place, incre
asing the o
ppor
tu
nit
y
forT
-FIT i
nsulation to be spe
cifi
ed in glo
bal acc
ounts.
Digi
tal ma
rketing activi
ties have also b
een key to this ramp-
up
, with a new
, dedi
cated mar
keting manage
r overse
eing
the consol
idation o
f the T
-FIT pr
oposition
, subsequent
ly
expres
sed in a n
ew website and a ra
nge of targeted acti
vitie
s
that have built a sol
id pipe
line of potential bus
ines
s.
We hav
e see
n this strategy be
gin to bear f
rui
t des
pite
challenging business condit
ions thr
ough 20
2
1 and, as w
e
move int
o 2022
, we are co
nfident that we have a blue
print
forthe high g
rowth a
nd globa
l succ
ess that T
-FIT me
rits.
Visit the T
-
FIT w
ebsite:
zote
.info/
2
HZbiEZ
11
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
10
20
30
40
0
Revenue by industry
%
Product
protection
T
ransportation
Sports
and leisure
Building and
construction
Industrial
Medical
Other
2021
2020
2020
2021
Polyolefin
Foams
HPP
MEL
Revenue by business unit
£m
0
£20
£40
£60
£80
£100
£120
12
Zot
efoams plc
An
nua
l Re
por
t 2021
Gr
oup at a gl
anc
e
F
our s
tr
ong, d
ist
inc
t
ive bra
nd
s
Premium
durable fo
ams
Unifor
mly de
nse foam s
heets wi
th a
consist
ent cell st
ructure
. These foam
she
ets and blo
cks are ma
nufacture
d
from common polymers using
our
unique nitrogen-e
xpansion process.
Key ma
r
ket
s se
r
ve
d
Autom
otive
Avia
tion
Building and const
ruction
Industrial
Marine
Medical
Militar
y
Product pr
ot
ection
Sports and leisure
Key ma
r
ket d
ri
ve
rs
Light
weighting
Dura
bility
Reduced
toxicity
Fire
safety
Energy
savi
ng
POL
YOLEFIN
FO
AMS
A
ZO
T
E
®
Nort
h America
Local manufact
uring
presence in K
entucky
for
the P
olyolefin
Foams business,
cutting operation in
Oklahoma to service
the const
ruction
marke
t,
and
headquar
ters
ofMu
Cel
l E
x
tru
sio
n
LLC (MEL), base
d
inMa
ss
ach
uset
ts,
licensing t
echnology
globally and behind
the d
evel
opm
ent of
Re
Zorc
e
®
. Loc
al
representation
for
our
High-Performance
Products
(HPP
)
business.
United Kingdo
m
Group headquarters
and main f
actory
,
manufacturing
polyolefin foams
and
high-performa
nce
products
for
sale
globally
.
Continental
Europe
Significant mark
et
forpo
lyo
lefin fo
am
s.
Local manufact
uring
presence in Brzeg,
sou
th wes
t Pola
nd,
sin
ce Fe
bru
ar
y 202
1
,
initially servicing the
Poly
olefin Foams
business. Sufficient
lan
d ha
s bee
n
purchased t
o
all
owlar
ger-scal
e
operations
in
thefu
ture.
Res
t of t
he
wor
ld
T-
F
I
T
®
technical
insulation
manufacturing i
n
China for
sales of
insulation
products
globally
. Local
representation
for
ourH
PP bus
ine
ss.
Joint ve
nture wi
th
INO
AC
Corporation
fo
r A
ZOT
E
®
polyolefin
foam
s sa
le
s in
Asia.
Commercial
operation
in India
forT
-F
IT ins
ulat
ion.
Re
ad m
or
e
page 26
Zot
efoams produces a wide range of innov
ative
products that are cr
itical components in a wo
rld
ofev
er
yda
y applications
United
Kingdom
11%
(2020: 23%)
Nor
th
America
2
0%
(2020: 21
%)
Res
t of
the wo
rld
4
1%
(2020: 3
4
%)
Continental
Europe
2
8%
(2020: 22%)
AUT
OCL
AVE TECHNOLOG
Y
13
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
AUT
OCL
AVE TECHNOLOG
Y
Lightweight
technical f
oams
Foams which o
f
fer superior
technical properties such as energy
management
, durability
, heat and/
or
fire re
sist
anc
e, Z
OTEK
®
foam
s are
manufactured from engineering
polymers using our unique
nitrogen-e
xpansion process.
Key ma
r
ket
s se
r
ve
d
Athlet
ic foo
twear
Autom
otive
Avia
tion
Construction
Product pr
ot
ection
Key ma
r
ket d
ri
ve
rs
Light
weighting
Dura
bility
Personal
safety
High-
technology
insulation
Spor
ts
and leisure
Fire
safety
HPP
ZOT
E
K
®
T
echnical insulation for industr
y
A range of
insulation
products
manu
factured f
rom Zot
efoams’
own Z
O
TEK blo
ck foam materi
als.
T-
F
I
T
®
insulation
products ar
e
purpose-designed to
per
form
indemanding environments
.
Key ma
r
ket
s se
r
ve
d
Food and
personal care manufact
uring
High-t
em
perature
processing environments
Pharmaceuti
cal, b
iot
ech and
semiconductor
cleanrooms
Key ma
r
ket d
ri
ve
rs
Ageing
population
Demographic
changes
Energy
savi
ng
Reduced
toxicity
HPP
T-
F
I
T
®
Inno
vativ
e and a
ccessible
technology for greener
,
lower
-
cost plast
ic products
This pioneering technology
inje
ctsgas into plastic
s dur
ing the
manu
factur
ing proce
ss to create
micro-bubbles and is licensed t
o
cust
omers manufacturing
plastic
par
ts. Th
e end-prod
uct use
s
1
5
–20% less materi
al. Rece
ntly
developed ReZ
orce
recy
clable
mono-mat
er
ial barrier solutions
usethis
technology
.
Key ma
r
ket
s se
r
ve
d
Autom
otive
Consumer packaging
Key ma
r
ket d
ri
ve
rs
Environmental
benefit
Lower c
ost
MEL
Mu
Cell
®
EX
TRU
SION TECH
NOLOG
Y
Re
ad m
or
e
page 26
Re
ad m
or
e
page 2
8
14
Zot
efoams plc
An
nua
l Re
por
t 2021
A unique
manufacturin
g proce
ss
The Zotef
oams dif
ferenc
e
Zot
efoams manufactures a wide range of closed cell,
cross
link
e
d,light
weight block foams using variation
s of our
unique nitrogen-expansion manufacturing process
. This affords
an ex
clusive combinat
ion of beneficial characteristics – uniformit
y
,
purit
y
, lo
w to
xicit
y and dur
ability – that dif
ferentiates Z
otef
oams’
materials from all other foams. Our core autocla
ve process is
capital-intensive
, with a long in
vestment cyc
le, andrepresents
aconsiderable bar
rier to entr
y for pot
ential competitors.
Slab
s are loade
d into a high-pres
sure
aut
oclav
e. The ma
terial is
heated
above
its melt
ing point and
pressurised with
pure nitrog
en gas. O
ver a long p
eri
od
oftime, the nitrogen ga
s dif
f
use
s into
the sla
bs. Arapid de
pres
suri
sation
destabilise
s the absorbed nitrogen
nucleating
cells in the
slab
. The slabs
are then c
oole
d unde
r pres
sure in
theautoclave, lockin
g the nitroge
n
in the
unexpanded slabs
, prior
tothembeing u
nloade
d.
St
age 1
Ext
rusion
and
crosslinking
Polymer and an
y addit
ives (
colours,
fireretardants, con
ductive ag
ents) are
extruded int
o a continuous
solid plat
e.
The p
late passes th
rough an oven
which activat
es the crosslinking
proce
ss. Itthen c
ools a
nd is cut
int
o slabs.
St
age 2
Nitrogen
saturat
ion
15
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Ope
rating at tempe
ratures up to 2
50
ºC,
thisnitrog
en-base
d proce
ss (see page 1
8) is
extre
mely fl
exible, allowin
g us to foam a wide
rang
e of polym
ers. T
he comb
ination of foami
ng
proce
ss an
d poly
mer pe
r
form
anc
e deli
vers
prope
r
ties su
ch as excelle
nt fire resis
tance,
high-
t
emperature s
tability
, t
oughne
ss and
insul
ation, which a
re prized in a w
ide ran
ge
of
demanding applications.
St
age 3
Expansion
The nitr
ogen-charged slabs
are loa
ded
into a large lower
-pres
sure autocl
ave
and, unde
r mode
rate pressu
re
, are
heated to above their me
lting point.
Whe
n the pres
sure isred
uced, the
nitrogen e
xpands, turning t
he slabs
intolarger foam s
heets. Th
is expans
ion
proce
ss isun
constra
ined, so is un
iform
in eac
hdime
nsion.
S
ca
n the Q
R
co
de to se
e
ourp
ro
ce
ss
inac
ti
on
ht
tps:
/
/zote.
info/
3
NAZPrP
16
Zot
efoams plc
An
nua
l Re
por
t 2021
Our busi
ness
mode
l
Lev
e
ragi
ng uni
qu
e tech
nology w
it
h an
inno
v
at
ion-led por
t
folio o
f adv
anced produc
ts
Our rout
e to incr
eased profit
ability includes
running our uni
que machinery as near to
fu
ll ca
pac
it
y as po
ss
ibl
e – and fi
lli
ng new
ca
paci
t
y as qu
ick
ly a
s pos
si
ble – a
nd th
en
mix
-enriching our product
por
tfolio.
We
produce two di
stinct product
por
tfolios which
combine t
o mak
e our model
work: poly
olefin
foams and high
-per
formance products
.
Polyo
lefi
n foam
s (ty
pi
cal
ly b
ran
ded a
s
A
ZOT
E
®
) are ba
se
d on po
ly
mer
s that a
re
als
ofoam
ed by m
any of ou
r com
peti
tors,
compete
primarily thr
ough the
superior foam
prop
er
t
ies c
rea
ted by our te
chn
olo
gy
, a
re
prod
uc
ed in l
arg
e volu
mes a
nd a
re sol
d
toawide va
ri
et
y of cus
tomer
s wh
o the
n
inc
or
pora
te the foa
m into many d
if
fe
ren
t
products
. High-performance products
(ty
pi
ca
lly b
ran
ded a
s ZO
T
EK
®
)
, meanwhile
,
arem
ade of mo
re co
stly a
nd s
pec
ia
lise
d
pol
ym
er
s that ve
r
y few co
mp
etitor
s canf
oam,
are c
urre
ntl
y prod
uce
d in re
lati
vel
ylower
volu
me
s and a
re so
ld atahi
ghe
r pr
iceto
asma
lle
r nu
mbe
r ofcu
stome
rs. T
he
se
cus
tomer
s the
n us
ethistec
hn
olo
gic
all
y
adva
nc
ed foa
m forh
igh
lysp
ec
ific
applications.
While the
superior per
formance o
f our
foam
scre
ates d
ema
nd gl
oba
lly
, mo
st of our
polyolefin
foam cust
omers are regional –
for
us tha
t means the
UK, mainland E
urope and
North America and reflects
the geographic
locations
of our
manufacturing plan
ts. This
isin p
ar
t dr
ive
n by dis
trib
uti
on co
sts an
d by
the im
por
tan
ce of go
od s
er
v
ice l
evel
s. By
con
tras
t, distr
ibu
tion c
osts m
ake up a f
ar
sma
lle
r pro
por
tion of th
e val
ue of ou
r HPP
por
tfo
lio, so d
o not co
nstra
in gl
oba
l rea
ch,
and the
complexity and higher v
alue make
itmo
re ef
fe
cti
ve to produ
ce the H
PP ran
ge
from t
he more est
ablished UK sit
e.
Ove
r time we ex
pe
ct to inc
rea
se profi
ta
bili
t
y
through
mix enrichment. Our cor
e process
all
ows us to pro
duc
e a ran
ge of both
pol
yole
fin an
d HPP foa
ms. W
ith th
e hig
her
margins a
chievable fr
om HPP
and more
technical polyolefin
foams,
we prioritise
these
products
in our product
ion decision-making.
Howe
ver
, the mark
ets f
or polyole
fin foams
,
with many
segments ranging fr
om those
higher margin
, specified,
technical f
oams
tothe hig
hl
y com
peti
tive foa
ms w
ith low
swit
ching costs
, afford
us the fle
x
ibility t
o
make
full use o
f any
significant av
ailability
ofca
paci
t
y whi
le sti
ll ge
ne
ratin
g goo
d
margins
and providing
highly valued
sol
utio
nsto our c
ustom
er
s. Sup
por
t
ing a
broad
product portfolio theref
ore r
emains
cr
itic
al to ourl
ong
-term su
cc
es
s. Cur
rentl
y
,
the P
ol
yolefin
Foams busi
ness unit utilises
mos
tof our c
apa
cit
y
.
We par
tn
er w
ith a net
wo
rk of cu
stome
rs
around t
he globe t
hat fabricat
e
s our
polyolefin
foam
s an
d prom
otes the
m in the
ir g
eo
gra
phi
c
market
s. Some
specialise in specific sect
ors,
whi
le othe
rs s
pe
cia
lis
e in foa
m fab
ri
cati
on
ca
pab
ili
ties f
or ge
ne
ral m
ar
kets. Our a
im is
alway
s to be the ma
teri
al of ch
oic
e for ou
r
par
tne
rs. Ou
r blo
ck fo
ams a
re so
ld, and of
ten
spe
ci
fie
d, into a broad r
ang
e of ind
ustr
ie
s,
suc
h as au
tomoti
ve, aeros
pac
e, produ
ct
prot
e
ction,
industrial par
ts,
marine, building
and construct
ion, and
sports and leisur
e.
Th
e A
ZO
TE po
r
t
foli
o is t
yp
ica
ll
y viewe
d
as‘be
st-in-c
las
s’ for pe
r
for
man
ce, of
ten
measured b
y weight
, purity and durability
,
andc
an b
e ef
fic
ie
ntly fa
br
ic
ated into co
mpl
ex
sha
pe
s. We provi
de ou
r cus
tomer
s wi
th
products
that
offer improv
ed performance per
unit of
weight
over
competitiv
e solutions
. They
are li
ghte
r
, m
ade w
ith l
es
s raw mate
ria
l an
d
their durabil
ity means they need
replacing less
of
ten. Th
is ma
kes th
em a pro
du
ct of ch
oic
e
int
hermal insulat
ion, t
ranspor
tat
ion or when
protec
ting g
ood
s intra
nsi
t wh
ere li
ght we
igh
t
helps reduce
fueland energy
consumption
.
Zo
tef
oams products
are predominantly
found
in permanent solut
ions. Our
Plastazot
e
®
andEva
zote
®
polyolefin
foam brands
are
he
ldin hi
gh re
ga
rd in the i
ndu
str
y a
nd of
fe
r
premium performance in the
port
folio
ofafoam f
abr
ic
ator
.
At
our block f
oam manufacturing
sites in
theU
K, the U
SA an
d Pola
nd, we ope
rate
proprietary technology t
o produce f
oams
fro
ma vari
et
y of di
f
fere
nt po
ly
mer
s. Ou
r
manufacturing process almost
always
invol
ves th
ree s
equ
enti
al ste
ps – ex
tru
si
on,
nitrogen sa
turati
on and e
xpansion.
Zotefoams’ di
f
fere
nti
al ad
vant
age is t
he us
e
ofautoc
lave
s, devel
ope
d fro
m a ce
ntur
y of
exp
eri
en
ce, us
ing a ni
trog
en-
bas
ed pro
ce
ss.
Al
l of our a
sse
ts are flex
ib
le – we ca
n us
e
eac
h of the
m to make ma
ny prod
uc
t grad
es.
Th
e hig
h leve
ls of kn
ow-how an
d ca
pit
al
req
uire
d to use au
toclave
s is a d
if
fic
ult b
ar
rie
r
for ne
w entr
ants to overc
ome. Paten
ts on
ourb
asi
c proc
es
s exp
ire
d som
e year
s ag
o,
alt
hou
gh we are a
bl
e to obtai
n patents fo
r
products
manufactured
by t
hat process
, in
par
ticular in
our High-P
er
formance Products
(HPP) bu
sin
es
s. Th
is, an
d the fa
ct that o
ur
proc
es
s al
lows us to pro
duc
e mate
ria
ls
thatc
an
not be m
ade by any ot
her m
etho
d,
de
live
rs a m
ean
ing
fu
l and s
ust
ain
abl
e
competitiv
e advan
tage.
Foam h
as h
igh d
istr
ibu
tion c
osts r
elati
ve
topric
e, par
t
icul
ar
ly fo
r our p
olyo
lefi
n foam
product range
. It i
s more economic and
sus
tai
nab
le to expa
nd th
e foam c
los
er to
cus
tomer
s an
d we have re
cen
tly inve
sted
inr
egional manufacturing
capacity in Poland
tobe clo
se
rto cer
t
ain m
arkets.
Im
age © N
ike
For more
information on
our
process, see
pag
es 14 an
d 15
17
Zote
foams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
A significant
por
tion o
f t
echnical, sales and
mar
ketin
g expe
nd
iture i
s all
oc
ated for th
e
deve
lop
me
nt of our H
PP por
t
fo
lio, sol
d und
er
t
h
e ZO
T
E
K
and T
-FIT
®
brand names. Close
and direct
collaboration
with cust
ome
rs,
and
a focus
on the
ultimat
e end-users, is
crucial
tothe suc
ce
ss of th
is bu
sin
es
s uni
t. We have
a lon
g his
tor
y of inve
sting i
n R&D, whi
ch
enables us t
o inno
vat
e and meet
the needs
ofcus
tomer
s wi
th tech
nic
al
ly de
ma
ndi
ng
requirements seeking solution
s that
consume
fewer re
so
urce
s, op
era
ting in s
ec
tors su
ch
asfoot
we
ar a
nd avi
atio
n. The
se bu
sin
es
se
s
are m
ore gl
oba
l in nat
ure an
d we have
stron
gma
nag
eme
nt al
ign
me
nt to the
prod
uctr
ang
e an
d ce
r
tai
n key mar
kets.
Developing pr
oducts t
o dema
nding t
e
chnical
specifications, and
promot
ing these globally
,
ca
n mea
n that a n
ew HPP p
rodu
ct ma
kes
los
se
s at fir
st. However
, o
nce a p
rodu
ct’s
specifications ha
ve been finalised and
ordersar
e secured
, the
opportunities are
longer
ter
m and
cash gen
erat
ion po
tent
ial
ish
igh. Our
HPP business
unit margins
reflecta
port
folio of
products
and applications
at dif
fere
nt st
age
s of the li
fec
ycle a
nd we
seeconsiderable
oppor
tunity t
o gro
w and t
o
en
ric
h our p
rodu
ct m
ix over th
e me
diu
mterm.
Our HPP
por
tfolio comprises innov
ative
and ve
rs
atil
e raw mate
ria
ls w
hic
h, like
ourpoly
olefin f
oams, lend
themselves
tobein
gfab
ri
cated i
nto com
plex pa
r
ts by
ourc
ustom
er
s. Th
e uni
que a
nd ad
vanc
ed
prop
er
t
ies of th
es
e foam
s of
ten a
llow
de
sig
ne
rs an
d ind
ustr
y both to me
et stri
nge
nt
regulation
s, f
or example
around saf
ety or
env
iron
me
nt, and to of
fer b
et
ter pro
duc
ts,
often b
y substit
uting non
-fo
am products
or
replacing mult
iple prod
ucts. F
or ex
ample, our
foam i
s now us
ed by th
e aviati
on in
dus
tr
y for
ducting
, where it
acts as
both
the st
ructure
and the insulat
ion, visual windo
w surrounds,
whe
re it a
lso a
cts as t
he se
al, as we
ll as
‘sof
ttouch’ mater
ial
s wi
thin th
e ca
bin.
Th
is are
a of the b
usi
ne
ss is m
ore
read
il
ydefe
nsi
ble b
ec
aus
e of the un
iqu
e
per
formance adv
antages inherent
in our
adva
nc
ed tec
hno
log
y
, th
e patents we h
old
and t
he hi
ghl
y spe
ci
fied m
ar
kets we se
r
ve.
Th
ese f
actor
s als
o en
abl
e us to se
ll at a
hig
he
rpri
ce w
ith a be
tter m
arg
in. Ul
timate
ly
,
expanding our
HPP portfolio is critical t
o
ourp
ast, pre
se
nt an
d fut
ure grow
t
h.
In so
me ca
se
s, however
, we a
re ab
le to move
even f
ur
th
er u
p the val
ue c
hai
n and u
ltim
ately
provi
de fin
is
hed p
ar
ts d
irec
tly to cu
stome
rs.
Th
e be
st exam
ple of t
his is o
ur T
-F
IT tech
nic
al
ins
ulati
on bu
sin
es
s. We take a ‘direct to
mar
ket’ a
ppro
ach to se
ll thi
s cle
an i
nsu
latio
n.
Wh
ile th
is is a d
epa
r
ture f
rom o
ur t
yp
ica
l
mod
el of c
ontr
ibu
ting to, rathe
r tha
n
producing,
the finished pr
oduct,
we are
able
and r
ead
y to make si
mil
ar move
s in re
spo
nse
to
unmet demand when
it complements our
glo
bal n
et
work of f
abr
ic
atio
n par
t
ner
s.
In a ‘stead
y state’
, our b
usi
ne
ss is s
trong
ly
ca
sh ge
ne
rati
ve, but we have s
ign
ific
ant
opportunit
y t
o grow and
have
theref
ore
cho
se
n to re-inve
st to take ad
vant
age of
profitable
opportunities. Since t
he beginning
of 20
1
8, we h
ave inc
rea
sed c
ap
aci
ty
significantly in an
ticipation
of pr
ojected
demand. While our
mix enrichment strat
eg
y
favour
s ou
r HPP po
r
t
foli
o, and inve
stme
nt
inthe U
K ha
s focu
sed o
n inc
rea
sin
g our
capacity to
deliver on t
hese opportunities,
thek
noc
k
-o
n imp
act of HPP g
row
th is a
reduction
in av
ailable UK capacity t
o ser
vice
our highly v
alued and pr
ofitable P
olyolefin
Foam
s bus
ine
ss. T
he l
arg
er pa
r
t of thi
s
capacity expansion has
consequently been
outs
id
e the UK
, to allow u
s to meet o
ur
growth e
xpectations i
n polyolefin
foams while
increasing our service levels and r
educing
transport-r
elated emissions
through closer
proxi
mit
y to our c
ustom
er
s. An
d as on
e woul
d
expect
, our new
facilities
use stat
e-of-
the-art
technology wit
h impro
ved energy
efficie
ncy
.
Al
lthis a
llows u
s to pur
sue m
ore op
por
tuni
tie
s
tha
n befo
re in ter
ms of new p
rodu
cts a
nd
sol
utio
ns, ma
ny of wh
ich w
ill th
en h
elp to
grow
the
business further
.
18
Zot
efoams plc
An
nua
l Re
por
t 2021
Our busines
s model
Continued
Thr
ee fu
r
t
he
r compet
it
ive
advant
ages a
re a
lsoimp
or
t
ant
contr
ibutors to our succes
s
Our sustainab
le
compet
itive advantages
As de
scri
bed on pa
ge 1
6 in ‘Our
business model’
, ours
ustainable
competit
ive adv
antages include
:
High-
value,
unique assets
T
echnical
kn
ow-h
ow
Established
mark
et
position
V
alued
brands
Ou
r place i
n a lower
-
ca
rbon
economy
The
re are four as
pects of our b
usine
ss that w
ill
ena
ble us to thrive wi
thin a lower
-c
arbo
n eco
nomy
.
Over time, we plan to build o
n these ad
vantage
s
so that we can c
ontinue to grow
, reduce o
ur
car
bon footpri
nt and he
lp our cus
tomers be
come
more sustainable
.
Fo
r mo
re i
nfo
r
mat
io
n ab
ou
t ou
r ESG a
pp
ro
ac
h,
se
e pag
es 5
6 to 69.
1
. Ou
r nit
rog
en-ba
sed p
roces
s
Our core high-
pressure aut
oclave
foaming process
use
sni
troge
n as th
e foa
min
g age
nt, bor
rowed f
rom the
atmosphere during
the product
ion process, so
there is
limit
ed fur
ther en
vironmental impact
b
ey
ond the
use of
en
erg
y and r
aw pla
stic. At the s
am
e time, th
is pro
ce
ss
isbe
co
min
g more e
f
fici
ent a
s we inve
st in ne
wer
, mo
re
efficient autocla
ves.
2
. Ef
fic
ient u
se of raw ma
teri
al
We are pro
ud that o
ur un
iqu
e tec
hno
log
y de
live
rs fo
am
prod
uct
s with b
et
ter pe
r
for
ma
nce p
er u
nit of we
igh
t, whic
h
allows
us t
o offer high-quality solut
ions made wit
h less
mat
erial. F
ur
thermore
, no
t only do
we use
less material
to produ
ce ou
r foa
ms, bu
t the inte
gr
it
y and d
ura
bil
it
y of
ourp
rodu
cts a
lso m
ea
n they ne
ed r
epl
aci
ng le
ss of
te
n.
3. O
ur pr
oduc
ts’ rol
e
in av
oiding emissions
Ou
r prod
ucts a
re t
yp
ica
lly u
se
d in a way wh
ich, in
therou
nd, re
duc
es e
mis
sio
ns a
nd co
nse
r
ves s
ca
rce
resources.
For e
xample,
our foams
are used
for thermal
insulation
, they pr
ot
ect products
in tr
ansit that
have
a high
ca
rbo
n footp
rint a
nd th
ey of
ten re
pla
ce he
avi
er a
nd mo
re
wast
eful alt
ernative
materials
.
4. New pr
oduc
t developme
nt
As the
demand grow
s for
products
that act
ively
he
lpusmove to a le
ss wa
stefu
l, lower-car
bon f
utu
re,
wearea
lre
ady re
sp
ond
ing, wi
th mo
re to come. Fo
r
example
,ReZ
orce
®
is a 1
0
0%
recyclable
mono-barrier
packaging s
olution which has
been designed t
o replace
difficult-
to-recy
cle tubes,
laminated
paper
, pouches
andc
ar
tons.
1.
Growing
global
reach
Be
gin
nin
g from a s
ing
le si
te in the U
K, we
now
hav
e major manufact
uring sit
es operating
in the U
SA an
d Pola
nd, se
r
vi
ng re
gio
nal a
nd
int
ernational cust
omer
s.
Pro
ximity to
major
manufacturing cent
res is
a significant
adva
ntag
e in o
ur ma
rkets. H
avin
g thre
e site
s
provides
the fle
xibility to
ser
ve r
egional market
s,
while retaining
high capacity utilisation
across
the G
roup, and s
er
ve m
ar
kets that a
re grow
ing
at dif
fere
nt rate
s with d
if
fe
re
nt prod
uct
s.
Ou
rman
ufa
ctur
ing b
ase a
lso i
ncl
ude
s a
well
-loc
ated T
-
FIT su
bsi
dia
r
y in C
hin
a, a
T
-FITs
al
es su
bsi
dia
r
y inI
ndi
a and a f
aci
lit
y
inO
kla
ho
ma, US
A, cu
t
ting A
Z
OTE
®
par
ts
foraval
ue
d cus
tomer
.
19
Zo
tefo
ams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
We sell to cu
stome
rs i
n a wid
e var
iet
y of
dif
fere
nt se
ctor
s, so we have a mo
re lim
ited
expo
sur
e to a downtu
rn in a
ny par
ticu
lar
ind
ustr
y
. We have al
so de
mo
nstra
ted the
abi
lit
y to qu
ick
ly m
eet a c
han
ge ind
em
and,
aswi
th ou
r work o
n pro
duc
ing fo
am for
personal prot
e
ctive
equipment during
theCOV
ID-
1
9 pan
de
mic.
Crit
ical resources
and relations
hips
In order for u
s to continue as a vi
able
and su
cce
ssfu
l busin
ess, we are aware
of the nee
d t
o se
cure acce
ss to
, and
/
or
inv
est in, our k
ey resources and
relation
ships, which include
:
X
Raw ma
terials
X
Stable business envir
onment
X
Plant and
equipment
X
Int
ellectual property
, including pat
e
nts
X
Well
-t
rained people and t
heir capacity
toinnovate (rea
d more a
bou
t ou
r peo
pl
e
on pa
ge 70)
X
Relationships
with channel p
ar
tners
X
Relationships wit
h HPP
end-users
X
Ab
ili
ty to move g
ood
s bet
wee
n
manufacturing sit
es and cust
omers
X
Financial resour
ces.
Our stable finances
enable us t
o inv
est in
new
oppor
tunities
as they
appear
, giving
usa
significant
competitiv
e edge.
We
have
there
sou
rce
s avail
ab
le to move into new
polymers, or t
o displace competit
ion b
y
superior per
formance.
We hav
e gro
wn
org
ani
ca
lly fo
r many ye
ar
s and we b
el
ieve
that
much mor
e is possible
.
Our MuCe
ll Extrusion business
Mu
Cel
l E
x
tru
sio
n LLC (MEL) li
ce
nse
s a
patente
d proc
es
s that c
reate
s mic
ro-b
ubb
le
s
in the c
ore of p
las
tic pa
r
ts or p
rodu
cts by
inj
ect
ing g
as into the
m as th
ey are
man
ufa
ctur
ed. Th
is pro
duc
es afo
am
ed
cor
e,boun
d by a soli
d sk
in into on
e inte
gra
l
mat
erial, tha
t seems indist
inguishable from
asol
id product
. Products
using MuCell
®
tech
nol
og
y can b
e de
sig
ne
d to per
fo
rm li
ke
sol
idpl
asti
c, but w
ill t
yp
ic
all
y use 1
5
–20%
le
ssma
teri
al, rea
lis
ing b
oth cos
t and
environmental
benefits b
y using i
ner
t carbon
diox
ide o
r nitro
ge
n gas a
nd re
duc
ing t
he
plastic con
tent
at sour
ce.
Mos
t cus
tomer
s are i
n the fa
st-movin
g
consumer goods (
FMCG) or
food packaging
ind
ustr
ie
s, whe
re val
ue is c
rea
ted fro
m
mak
in
g asma
ll s
avin
g in pl
asti
c con
tent,
which is multiplied across many millions
ofpar
ts ann
ua
lly
,and w
he
re the c
urre
nt
env
iron
me
nt isin
cre
asi
ngl
y dr
ivi
ng the
m
to
wards
more sustai
nable solutions
.
MEL
shares in t
he cust
ome
rs
’ benefits
byrec
eiv
in
g a lic
enc
e feefo
rIP an
d/or
royalt
yo
n par
ts mad
e.
Re
cen
tly
, a va
ri
atio
n of this tec
hno
lo
gy ha
s
be
en us
ed to cre
ate ReZo
rce, a rec
ycla
ble,
mono-mat
erial barrier packaging
solution
anda
nin
dust
r
y-first. In 2021
, we i
de
ntifi
ed
the
milestones
necessa
ry to commer
cialise
ReZo
rce a
nd inve
sted in th
e exp
er
ti
se, as
sets
and p
ar
tn
er
shi
ps ne
ce
ss
ar
y to ac
hieve
thiso
na pha
se
d bas
is. Th
e potent
ial
ofReZo
rce ha
s be
en re
co
gni
sed w
ith
mul
tipl
eind
ustr
y award
s.
2.
Diversit
y of
products an
d
cus
tome
r
s
3.
Sta
ble finances
enabling organic
gr
ow
t
h
20
Zot
efoams plc
An
nua
l Re
por
t 2021
Our e
x
ternal conte
x
t
Ou
r res
pons
e to shor
t a
nd long
-
te
rm t
re
nds
W
e deliver stakehold
er value
by using un
ique technology
to creat
e a por
t
folio of
dif
ferentiated produc
ts. We
focus resources primar
ily on
markets where w
e are, or hav
e
the pot
ential to be, a mark
et
leader
. W
e
intend to de
velop
our busines
s through
susta
ined high levels of
organic grow
th and, where
approp
riate, through
par
tne
rs
hips or acquisitions.
We have buil
t a cl
ea
r lon
g-term str
ategy fo
r
growth based ar
ound three long
-t
erm global
me
gatre
nds th
at are d
ri
vin
g de
man
d for
ourpr
oducts.
Understanding these market t
rends informs
ours
trateg
y an
d prod
uct d
evel
opm
ent, as
well a
s the a
llo
cati
on of ou
r res
ourc
es. G
ive
n
the di
ver
si
ty of a
ppl
ic
ation
s for foa
m, it is n
ot
possible t
o tra
ck ev
er
y use f
or our mat
eria
ls,
and a n
ew id
ea or a
pp
lic
atio
n may co
me fr
om
a foam c
onve
r
ter
, an e
nd-
use
r or f
rom wi
thi
n
Zo
tef
oams. W
e therefor
e activ
ely monit
or
the
se an
d ma
inta
in flex
ibi
lit
y to rea
ct to a
wid
evar
iet
y of po
ss
ibil
iti
es.
As th
e worl
d arou
nd us c
ha
nge
s, we reg
ula
rl
y
re-test o
ur str
ateg
y
. We bel
ieve o
ur exi
stin
g
strate
gy co
ntin
ue
s to ser
ve u
s well a
nd
con
tinu
esto en
abl
e us to grow str
ong
ly
.
Sometimes
, as has happened
during
thepa
nd
emi
c, sho
r
t
-term f
actor
s distor
t
lon
ge
r
-term t
rend
s. Wi
th cla
ri
ty ofp
ur
pos
e
anda
n un
der
sta
nd
ing of th
e fun
da
men
tal
dr
iver
sof our b
us
ine
ss e
nviro
nm
ent, we
wil
lmake ad
jus
tme
nts to our s
hor
t-term
app
roac
h, suc
h as li
miti
ng exp
en
ses a
nd
capitale
xpenditure
, while ensuring
that
ourlon
ger
-term
goals remain a
chievable
.
Opti
mis
ing th
e use of s
car
ce re
sou
rce
s has
be
com
e a uni
ver
sa
l dri
ver
. L
ig
htwe
ig
hting
isfu
nd
ame
nta
l to redu
cin
g fue
l us
age a
nd
control
ling emissions f
or the
aviation
and
automo
tive industries
. High-quality insulat
ion
conserves
thermal
energy
.
MuCell
®
technology uses
less mat
erial
tomake ever
yday ite
ms an
d save
s cost
s.
Re
Zorc
e
®
mono-mat
erial technology can
beus
ed to cre
ate bar
ri
er pa
cka
gin
g for ite
ms
suc
h as ju
ic
es, toothp
aste, food a
nd d
rie
d
goods, which
can be
recycled using
c
ommon
kerbside col
lections. Much
of our
A
Z
OTE
®
foam i
s use
d in p
er
man
ent p
ack
agi
ng or
pac
kag
ing th
at is de
si
gne
d to be reu
sed,
whi
le foa
ms u
sed i
n tran
spo
r
tati
on ar
e
normally specified t
o the
light
est weight
for
there
qui
red p
hysic
al p
er
fo
rm
anc
e. Zotefoams
products
typically use less plastic
than
competitiv
e solution
s due t
o the cell st
ructure
offoam m
ade i
n our a
utocl
ave proc
es
s, gi
vin
g
usboth a c
ost a
nd e
nviro
nm
enta
l ad
vanta
ge.
Zotef
oams versus o
ther materials:
t
ypical
lik
e
-
for
-lik
e per
formance
using le
ss polymer
ReZorc
e
®
is a b
et
te
r so
lu
ti
on w
it
h lowe
r
environmental
impact
Zotefoams
Crosslinked
Non-crosslinked
+
10
–1
5%
>1
5
%
Based on
an independently
conducted Life
C
ycle Assessment
, comparing
the
environmental
impact o
f ReZor
ce with
a widely used
multi-mat
erial alternat
ive,
liquid
packaging board
lower
Global
Warming
Pot
ential
le
s
s wa
ter
less energy
Environment
Polymer cont
ent
21
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Better healthcar
e has creat
ed a population
boom,
especially in older age
groups,
while
globally
, discret
ionar
y spending pow
er is
rising rapidly
. Demand for healthcare
products
is accelerating
. W
ealthier and more
discerning
con
sum
er
s are d
riv
in
g grow
th rate
s in othe
r
ind
ustr
ie
s suc
h as fo
od an
d dri
nk, s
por
t
s
equipment and transportation
.
T
ran
spo
r
t, med
ic
al an
d spo
r
ts an
d le
isu
re
app
lic
atio
ns ac
cou
nt for a
roun
d 53% of sal
es
directly
, while our T
-FIT
®
insulation
products
–de
man
d for wh
ic
h is cu
rre
ntly li
nked to
semiconductor
, pharmaceutical and
biot
ech
manufacturing –
account f
or a further 4
%
ofsa
les.
Regulatory pressures, primarily t
o safeguard
con
sum
er
s, are d
riv
ing u
psta
nd
ards
wor
ldw
ide. T
he
se sta
nd
ards i
n tur
n cre
ate
de
man
d for both s
afe
r prod
ucts a
nd
prot
e
ctive
equipment.
Regulatory requirements
mainly cover
the
per
formance o
f end-use pr
oducts,
a
lthough
the
reare s
pe
cifi
c tests for fi
re pe
r
for
ma
nce
andtoxi
cit
y li
mits i
n foa
ms for c
er
t
ain
industries and jurisdictions. Zot
efoams
provides
specifically test
ed mat
e
rials for
semiconductor
, pharmaceutical and
biot
ech
man
ufa
ctur
e and a
utomoti
ve, airc
raf
t a
nd ra
il
insulation and pr
ovides validat
ed mat
erials
forme
di
cal t
rans
po
r
tatio
n an
d dev
ice
s, an
d
military storage
and personnel pro
tect
ion.
Ou
rtech
nic
al tea
m iscl
ose
ly i
nvolve
d in
deve
lop
ing n
ew mater
ia
ls tomee
t and
anti
cip
ate stan
dar
ds an
d we are cu
rre
ntl
y
wor
kin
g on pro
je
cts for a
utomoti
ve bat
ter
ie
s,
high-
tech composit
es, foams fr
om recy
cled
mater
ia
ls an
d foam
s whi
ch c
an b
e more
ea
sil
yrecyc
le
d. We sell A
ZOTE
grades
forau
tomoti
ve, medi
ca
l and p
ack
agin
g
designed to
minimise emissions and/
or
me
etsp
eci
fic pu
ri
ty re
qu
irem
en
ts. Aro
und
49% of Zotefoams’ reven
ue f
rom foa
ms
in2021 came f
rom p
rodu
cts w
ith sp
ec
ific
prop
er
t
ies te
sted to cus
tome
r requ
ire
men
ts,
alt
hou
gh not a
ll of thi
s was de
mon
stra
bl
y
for
regulation
compliance.
Plastazote
®
from our
A
Z
O
TE polyolefin
foams
ran
ge is th
e mos
t fre
qu
entl
y cite
d
thermoplastic
foam in
medical litera
ture due
toits pur
it
y a
nd hyp
oal
ler
gen
ic c
har
acter
isti
cs.
It me
ets ISO10993 st
and
ard
s for eva
luati
ng
the biocompa
tibility of
medical devices
andi
sthe m
ateri
al of ch
oic
e for s
ki
n
contact
applications
.
Lif
e exp
ec
ta
nc
y
, 2
019
Oceania
Europe
Americas
Asia
World
Africa
No data
54 years
58 years
62 years
66 years
70 years
74 years
78 years
82 years
86 years
90 years
No data
54 years
58 years
62 years
66 years
70 years
74 years
78 years
82 years
86 years
90 years
Demogra
phic
s
Regulation
Lif
e exp
ec
ta
nc
y
, 1
770 to 2
019
22
Zot
efoams plc
An
nua
l Re
por
t 2021
Our s
tr
ategic object
iv
es
W
e m
easu
re p
rogr
ess aga
ins
t six s
t
rate
gic objec
ti
v
es:
W
e have mad
e t
wo changes this y
ea
r on ho
w we repor
t our strategic objectives.
W
e have separated HP
P from MEL to create two separate gro
w
th objectives,
given ho
w distinct the r
espec
tive oppor
tunities ar
e. W
e a
re also including
environmental, social and gov
er
nance objectives t
o suppor
t our shor
t,
mediumand long-t
erm develo
pment. Responsible susta
inability has always
beenimpor
ta
nt to the Group
, but we are now embedding it formally int
o
ourstrategy for the benefit of our emplo
yees and st
akeh
older
s.
Grow sa
les in ou
r
A
ZOTE
Pol
yol
efi
n
Fo
a
m
s
bus
ines
s in ex
c
ess of
t
wic
e th
e rat
e of GDP
global grow
th
Zo
tef
oams is a
capital-int
e
nsive
business with high
operational
gearing. The P
olyolefin Foams
business is the
la
rgest user
ofca
paci
t
y and i
ts volu
me
s are pa
r
tic
ula
rl
y imp
or
t
ant fo
r the
abs
or
ption of fi
xedco
sts. A
ZOTE foams p
rovid
e un
iqu
e sol
utio
ns
to a broad s
pre
ad of cus
tomer
s ac
ross m
any in
dus
tri
es, se
r
v
ing
as ava
lua
ble m
itig
ant a
gai
nst i
ndu
str
y a
nd cu
stome
r ris
k.
De
man
dforim
prove
d reso
urc
e ef
fic
ien
cy
, re
gu
latio
n an
d
global
demographics underpins our gr
owth pot
e
ntial
in
this
business unit
.
2
Deve
l
o
p a
n H
PP
por
t
foliotode
liver
enhanced
margins
HPP of
fe
rs hi
gh
er grow
t
h rates a
nd the p
otentia
l for h
igh
er
mar
gins t
han A
ZO
T
E
®
foams.
High-per
formance products
use
the s
ame a
ss
et bas
e as th
e Polyol
efin Fo
ams b
usi
ne
ss a
nd
leverage
our uniqueness b
y pro
viding cust
om
ers with
solutions
bas
ed on f
oam
s that c
an on
ly b
e man
ufa
cture
d us
ing o
ur
technology
. They offer larger
-scale opportunities t
han our
polyolefin
foams and
higher drop-
through
operating
margins.
1
Why
?
Increase our
operatingmargins
Zotefoams t
arg
ets im
proved o
pe
ratin
g mar
gins th
rou
gh a
con
tinu
ous fo
cus o
n the ef
fici
ent u
se of its a
ss
ets and m
ix
enrichment across its
product range and
by de
veloping
applications which
most effectively leverage
its unique
technology
. This applies no
t only t
o our High-P
e
rformanc
e
Product
s business but also
to our P
olyolefin Foams
business.
Zotefoams a
dopts a m
ed
ium- to lo
ng-ter
m vie
w
, b
ala
nci
ng
imm
edi
ate ope
rati
ng ma
rgin g
ai
n with t
he inve
stme
nts re
qui
red
ini
nfrastructure
and capacity (
and their
consequent impact
onsh
or
t-t
er
m ma
rgin), t
o ma
x
im
ise f
utur
e grow
th. Hi
ghe
r
operating
margins generat
e higher returns
to
shareholders.
3
23
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
In 2021
, sa
le
s of A
ZO
TE p
olyo
lefi
n foa
ms re
cove
red s
tron
gly
fro
mthe pa
nd
em
ic, grow
ing 10% in the ye
ar or
, exclu
din
g the
uni
qu
e PPE sa
les o
f 2020, growi
ng 36%. Ag
ain
st 201
9, sa
les
wereu
p 1
0%.Inven
tor
y retu
rn
ed to no
rm
ali
sed l
eve
ls in m
ost
industrial
sectors
. The Group
’
s Poland manufact
uring plant
was
commissioned in F
ebruar
y 20
2
1
, completin
g the Gr
oup
’
s
recent capacity e
xpansion programme
. The P
olyolefin F
oams
bus
in
es
s uni
t ma
rgin d
ec
lin
ed to 1
% (2020: 1
0%)
, ma
inl
y du
e
toinc
rea
sed i
npu
t co
sts a
nd th
e lag o
n pri
ce i
ncr
eas
es to pa
ss
these cost
s thro
ugh t
o cust
omers.
We are co
nfid
ent t
hat g
rowin
g A
ZOTE sal
es at t
w
ice t
he rate of G
DP
grow
th i
s ach
ieva
bl
e an
d are ve
r
y sa
tisfi
ed w
ith th
e rec
over
y acro
ss
A
ZO
TE m
ar
kets du
rin
g the ye
ar
. Th
e key dr
ive
rs of th
is bu
sin
es
s
– use of m
ater
ia
ls, li
ght we
ig
ht, insu
lati
on etc – re
ma
in as r
ele
vant
aseve
r an
d we are d
evel
opi
ng o
ur pro
du
ct ra
nge a
nd g
eo
gra
ph
ica
l
rea
ch ac
co
rdin
gl
y
. O
ur tec
hn
ic
al de
velo
pm
ents a
nd m
ar
ket focu
s
are h
eav
ily i
nflu
en
ce
d by sup
ply c
ha
in a
nd inte
rn
al (Sc
op
e 1 an
d 2
emissions)
sustainability objectiv
es to
reduce and
reuse wast
e as
wel
l as prov
id
ing m
ater
ia
ls wh
ich o
ptim
ise o
ur cu
stom
er
s’
sustainability position
(Scope 3
emissions)
. All these
developments
are s
et to broa
de
n fur
the
r Zotefoa
ms’ prod
uct r
an
ge an
d of
fe
r goo
d
opportunities to
grow market
s
hare b
y aligning closely with
market
trends
and cust
omer needs.
In 2021
, s
ale
s in th
e HPP se
gm
ent in
cre
ase
d by 4
1
% a
nd
acc
oun
ted for 42% (2
020: 36%
) of Gro
up reve
nue, wi
th the
grow
th i
n Foot
wea
r res
ulti
ng in i
t, alon
e, acco
unti
ng for3
4
%
(2020: 26
%
) of Gro
up reve
nue. ZO
TEK
®
F fluoropolymer f
oams,
primarily for
aviation
applications
, declined f
or a second
con
se
cuti
ve yea
r
, and a
re now a
roun
d 60% lowe
r tha
n pe
ak
sa
les, p
rim
ar
ily d
ue to the i
mpac
t of the pa
nd
emi
c. T
-FIT
®
ins
ulati
on pr
odu
cts gre
w by 1
1
% (2020: 4
%)
, a
gai
n with
per
formance negat
ively impact
e
d b
y the
pandemic. The
profit
mar
gin of th
e HPP bu
sin
es
s uni
t was 21
% (2020: 26
%
), with
thema
rgi
n de
clin
e ma
inl
y due to ad
ver
se do
lla
r excha
nge r
ates.
We expe
ct to retu
rn to, and s
ur
pas
s, pre
vio
us m
arg
ins i
n HPP
, wi
th
the r
ate of mar
gin e
nha
nc
em
ent d
ep
en
de
nt on b
oth the c
ap
aci
ty
uti
lis
atio
n of the G
rou
p and t
he re
lati
ve leve
l of inve
stm
ent i
n
early-stage
and high-growth opportunities within
our HPP portfolios,
as we
ll as t
he sp
ee
d of rec
over
y fro
m the p
and
em
ic in m
ar
kets
suc
hasav
iati
on a
nd ou
r T
-FI
T bu
sin
es
s.
In 2021
, in ag
gre
gate, se
gm
ent m
arg
ins (
befo
re for
eig
n excha
ng
e
ga
ins a
nd lo
ss
es a
nd ce
ntr
al co
sts) de
cre
as
ed to 8.7
% f
rom 13.
7%.
Th
is de
cl
ine i
n ma
rgin, d
es
pite s
tron
g grow
th i
n Gro
up reve
nu
e,
res
ult
s fro
m the ra
pi
d, larg
e an
d un
pre
dic
tab
le i
ncre
as
e in in
pu
t cos
ts
suf
fere
d by ma
ny bu
sin
es
se
s dur
in
g the ye
ar
, i
ncl
udi
ng Zotefo
ams,
wh
ich we we
re un
ab
le to of
fs
et by th
e pri
ce i
ncre
as
es i
mpl
em
ente
d
during the
year
, as well as
the commissioning of
the P
ola
nd
ma
nuf
actu
ri
ng fa
cil
it
y
, w
hic
h wi
ll re
qui
re tim
e befo
re it b
ec
ome
s pr
ofit
acc
reti
ve. Af
ter c
ent
ral c
ost
s, whi
ch in
cl
ude c
or
por
ate, fina
nc
e and I
T
,
ma
inl
y rel
atin
g to the co
rp
orate g
over
na
nce of a
n in
cre
asi
ng
ly
co
mpl
ex org
ani
sat
ion, a
s well a
s net f
ore
ign exc
han
ge m
ovem
ents,
Gro
up op
er
atin
g mar
gin d
ec
lin
ed to 8.
1
% (2020: 1
1
.0%
).
Zo
tef
oams believes
that t
he 20
2
1 pricing f
or low
-de
nsity
polyeth
ylene is unsus
tainably high b
y hist
oric standards and t
hat
thi
ssho
uld b
eg
in to adj
ust d
ownwa
rds d
ur
ing 2022, sub
je
ct to the
rap
id
ly ch
an
gin
g sit
uati
on c
aus
ed by eve
nts in E
as
tern Eu
rop
e an
d
the c
onti
nui
ng im
pac
t of COVI
D-
1
9 on s
upp
ly c
ha
ins, b
ut tha
t othe
r
cos
ts, su
ch as l
ab
our a
nd oth
er r
aw mate
ria
ls, h
ave eit
he
r ratch
eted
upwa
rds a
nd wi
ll not s
ig
nifi
ca
ntly d
ec
lin
e or
, i
n the c
ase of f
re
igh
t,
en
erg
y an
d nitr
oge
n, wi
ll re
mai
n hig
h for th
e ma
jor
it
y of 2022. Pri
cin
g
acti
on
s imp
le
men
ted du
ri
ng 2022 w
ill a
llow g
ros
s mar
gin
s in the
me
diu
m term to re
cove
r an
d the d
rop-th
rou
gh ef
fe
ct o
n un
der
ly
in
g
profi
t to incr
ea
se mate
ri
all
y
. We a
lso ex
pe
ct th
e pro
duc
t mi
x to
imp
rove as ZOTEK F sa
le
s rec
over
, p
la
nt ef
fi
cie
ncy a
t the n
ewer
USA a
nd Pol
an
d fac
ili
tie
s to improve w
ith ex
pe
ri
en
ce a
nd in
cre
as
ed
utilisation
, and higher
margin T
-FIT technical insulat
ion sales t
o grow
.
The opportunity from ReZor
ce
®
remains significant but uncertain
dur
in
g this d
eve
lop
me
nt ph
ase, bu
t wi
ll be
co
me c
le
are
r as we
progress thr
ough 20
22
.
Nex
t yea
r
, a
nd b
eyon
d
Th
is yea
r
24
Zot
efoams plc
An
nua
l Re
por
t 2021
Our str
ategic objectives
Continued
Clarify and impro
ve
th
eGr
oup ap
pr
oach
tosus
ta
ina
bilit
y an
d
climate change
Our purpose is
to
provide
optimal
mat
erial solutions f
or the
benefit of
society
, reflecting
our belief that
, used appropriat
ely
,
plastics ar
e frequently
the best solut
ion for
the sophis
ticat
ed,
lon
g-term a
ppl
ica
tion
s ty
pi
cal
ly d
eli
vere
d by our c
ustom
ers.
Mat
erials manufactured
using Zo
te
foams
’ unique t
echnology
helpcus
tomers sa
ve energy
, for e
xample,
by i
mproving
insulation
and r
edu
cin
g the c
ar
bon e
mis
si
ons of c
ars, p
la
nes a
ndtr
ain
s
byprovi
din
g lower we
ig
ht sol
utio
ns th
at lower f
ue
l co
nsu
mptio
n.
Ou
r core p
roc
es
s use
s onl
y temp
er
ature, pre
ss
ure a
nd ni
trog
en
borrow
ed from t
he atm
osphere for
expansion
, creati
ng mat
erials
that a
re uni
qu
ely p
ure a
nd du
rab
le an
d wh
ich u
se le
ss p
oly
me
r
tha
nks to the
ir su
per
io
r per
for
man
ce to wei
ght rati
o. ReZorc
e
mono-mat
erial barrier packaging technology present
s the
oppor
tunity t
o increase recy
cling rat
e
s in consumer
packaging,
reducing w
aste
and creat
ing the
pot
ential f
or circularity
.
Zotefoams p
rod
ucts f
req
ue
ntly fo
rm pa
r
t of the e
nvi
ronm
ent
al
sustainability agenda f
or our cust
omers and embedding this
more fo
rm
all
y into ou
r strateg
ic ob
je
ctive
s wi
llsup
por
t Zotefoams’
deve
lop
me
nt over th
e sho
r
t, med
iuma
ndlo
ng ter
m.
5
Impro
ve o
ur return
onca
pit
al (o
ver our
inv
estment cy
cle)
Zotefoams u
se
s uni
que a
nd c
api
ta
l-inten
si
ve ass
ets.
Weunde
rs
tan
d the im
por
tan
ce of ge
ne
ratin
g a go
od retu
rn
onthe
sea
ss
ets to provid
e ou
r sha
reh
old
er
s with s
tron
g retur
ns
andm
ai
ntai
n the
ir su
ppo
r
t wh
en fu
nd
ing is r
equ
ired to dr
ive
lon
ge
r
-term c
ap
ita
l proj
ec
ts. As Zotefoa
ms’ busi
ne
ss grow
s, we
have inve
sted in l
arg
e ca
pit
al pro
gra
mm
es w
hic
h have ch
ang
ed
the s
hap
e of our b
ala
nc
e she
et. In ord
er fo
r retur
n on c
api
tal
toprovid
e a me
ani
ng
ful m
ea
sure
me
nt, maj
or ca
pac
it
y an
d
inf
ras
truc
ture i
nvestm
ent
s, whi
ch are ex
pe
cted to re
quir
e
considerable capital o
ver a
number of y
e
ars befor
e being
commissioned as pr
oduction asset
s, ar
e ex
clude
d from
the
calculation un
til t
he point
of commissioning
.
4
Why
?
Deve
l
o
p a
n
d
inve
s
t
inMuCell technolog
y
MEL r
educes plastics use
at sour
ce using pa
tent
e
d
high-pressure
gas t
echnology at cust
omers’ fa
cilities and
ope
rate
s on a royal
ty b
asi
s over a p
er
iod i
n exces
s of ten yea
rs.
This underlying t
echnology is the
basis f
or mono-mat
e
rial barrier
packaging,
which we ha
ve br
anded ReZorce
. Using significant
recycled
plastic cont
ent andbeing
readily r
ecyclable,
the pot
ential
mar
ket is l
arge a
nd fa
cin
g sig
nifi
ca
nt pre
ss
ure to imp
rove
sustainability rapidly
.
6
25
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
In 2021
, we stre
ng
the
ne
d the ESG f
ram
ewor
k wi
th a for
ma
l
Group
Sustainability Steering
Committee,
introducing
challenging
sus
tai
na
bil
it
y ta
rget
s ar
isi
ng fr
om ou
r SASB a
ss
es
sm
ent, prov
id
ing
fuller disclosures
compliant with
the T
ask Force
on Clima
te-relat
ed
Financial Disclosures
guidance (TCFD
)
, running customer
focus
gro
ups o
n sus
tai
na
bil
it
y an
d usi
ng th
e dat
a to guid
e stra
tegy. In line
with our
commitment t
o using electricity from r
enewable sour
ces
wherever
feasible,
we s
witched t
o a fully sustainable
energy source
in th
e UK in 2021
. A re
newa
bl
e ene
rg
y con
trac
t ha
s als
o be
en
agr
ee
d for ou
r Pola
nd s
ite fro
m 2022 an
d ef
fo
r
ts co
ntin
ue to id
enti
f
y
renewable
energy opportunities in o
ther locat
ions in which
we
ope
rate. In M
arc
h 2022, we inc
orp
ora
ted cl
ea
rl
y defi
ne
d ESG
targets
within our bank
refinancing arrangements.
We are ca
lc
ula
ting t
he ca
rb
on c
ost of o
ur foa
ms a
nd Re
Zorc
e
tech
no
log
y
. We w
ill b
e uti
lis
ing th
is in
for
mati
on in
tern
al
ly an
d
wor
ki
ngwi
th se
le
cted c
ustom
er
s to ass
es
s how th
is c
an be
usedcons
tructively t
o make ob
jective decisions
to
steer our
ownb
usi
ne
ss a
nd gu
ide o
ur c
ustom
er
s in ch
oo
sin
g the o
ptima
l
mate
ria
l so
lut
ion
s for th
eir a
pp
lic
atio
ns. We wi
ll al
so re
por
t bac
k
aga
ins
t the s
ust
ain
ab
ili
ty t
arg
ets s
et in 2021
, se
e pag
e 61
.
In 2021
, th
e retur
n on c
api
tal d
ec
lin
ed to 6.
1
% (2020: 9.0%
).
Op
erat
ing pr
ofit de
cli
ne
d, whil
e the c
api
ta
l base r
ose to inc
lud
e
the
Poland manufa
cturing sit
e
’
s assets fr
om February 202
1
.
The Group has
c
ommitted t
o a large capacity e
xpansion
pro
gra
mm
e over re
ce
nt yea
rs, w
hi
ch e
nde
d in Fe
br
ua
r
y 2021
with
the commissioning
of t
he Poland
manufacturing
site
. The
bal
an
ce s
hee
t, whi
ch in
clu
de
s new c
ap
aci
ty a
s wel
l as s
upp
or
ti
ng
inf
ras
tru
ctu
re wh
ich w
ill n
ot di
rec
tly g
en
erate re
tur
ns, ha
s inc
re
ase
d
significantly
. W
e approv
ed these pro
jects, acknowledging and
acc
ept
ing th
e dil
uti
on of ret
urn i
n ca
pi
tal ove
r the s
ho
r
ter ter
m bu
t
rec
og
nis
ing t
he im
por
tan
ce of ad
eq
uate
ly inve
sti
ng in t
he ca
pa
cit
y
needed for an
ticipat
ed future
growth and
the corresponding
imp
rovem
en
t in retu
rn o
n ca
pit
al th
at sh
oul
d acc
om
pany i
t.
Th
e foc
us an
d res
ou
rce al
lo
cati
on at M
EL is cu
rre
ntl
y dir
ecte
d
tothedev
elo
pm
ent of th
e Re
Zorce o
pp
or
tu
nit
y
, wi
th grow
t
h in
theu
nde
rl
yi
ng bu
si
nes
s be
in
g res
tri
cted to exi
stin
g cu
stome
rs.
Neve
r
the
le
ss, s
al
es i
ncr
eas
ed by 32% in th
e yea
r to £2.3m. Of
gre
ater s
trateg
ic re
leva
nc
e to the Gr
oup wa
s the p
rog
res
s mad
e
onRe
Zorc
e, whe
re th
e cre
atio
n of a sk
ill
ed a
nd ex
pe
rie
nc
ed te
am
was comple
ted,
the trial equipment
successfully commissioned
an
dpar
t
ner
s en
ga
ged f
or tr
ial
s that a
re exp
ec
ted to ta
ke plac
e in
H
1202
2
. The reduced
customer
acquisition
activity coupled with
ca
pit
ali
sat
ion of c
er
t
ai
n deve
lop
me
nt co
sts un
de
r ac
cou
ntin
g
sta
nd
ards r
es
ulte
d inare
duc
tio
n in the s
eg
me
nt lo
ss at M
EL
by52%t
o £0.
7
m (2020:£1
.4m)
.
Th
e lic
en
sin
g bus
in
es
s of MEL, w
hic
h is a
ime
d at re
duc
ing
cust
omers’ con
sumption
of plast
ic volumes
, will con
tinue t
o
sup
po
r
texi
stin
g lic
en
see
s a
nd cu
rre
nt pro
je
cts. We inte
nd to
inve
stwi
thi
n the G
roup’
s ri
sk ap
pet
ite to deve
lop a
nd c
omm
erc
ia
lis
e
the M
uC
ell te
ch
nol
og
y
, w
hic
h at thi
s time i
s foc
use
d on R
eZorc
e
mono-material b
arrier packaging. This appr
oach recognises
thatth
er
e is a hi
gh “opti
on val
ue” fo
r suc
ce
ss a
nd at th
is ti
me
ourb
us
ine
ss m
od
el re
mai
ns fl
exib
le to de
li
ver th
is val
ue in t
he be
st
way for o
ur st
akeh
ol
der
s. Hav
in
g inve
sted £
2.
4m unti
l the e
nd of
2021
, we a
rein
cre
as
ing o
ur inve
stm
en
t in the R
eZor
ce op
po
r
tun
it
y
in 2022 a
swe en
gag
e wit
h strate
gi
c par
t
ne
rs to val
idate th
e
technology and
det
e
rmine the
business model tha
t will
capture
them
ost va
lu
efor th
e Grou
p an
d its s
har
eh
old
er
s.
Nex
t yea
r
, a
nd b
eyon
d
Th
is yea
r
Zot
efoams plc
An
nua
l Re
por
t 2021
26
https://z
ote.info/3
1
bk
f76
https:
/
/zote.info/3Dha
Au8
Leveraging the properties of ZOTEK
®
F high-performance foam, this unique
and innovative Flexible Environmental
Control System (ECS) Duct is used
in commercial air
craft and space
applications.
T
echnifab saw the potential of ZOTEK
F to replace heavier
, less flexible and
less reliable silicone material, cr
eating
a comprehensive test and validation
plan which saw rigorous aer
ospace
approvals for flight awar
ded in 2012.
The design incorporates self-aligning
“clamp-less” cuffs for easy installation
and the duct is highly flexible,
accommodating tight bend radii
and expanding and compressing for
ultimate adaptability
. It is incredibly
lightweight, saving fuel and improving
ergonomics during installation.
TECHNIF
AB INC
A
VON, OH, USA
Flexible Environmental
Control System (ECS) Duct
Most innovative
application
Winner
W
atch the interview with
Bruce Whitman
A life-size replica of a Suzuki Bandit
motorbike using a variety of grades
from Zotefoams’ AZOTE
®
polyolefin
foams family was described by the
judges as “a wonderful example of
high-end foam fabrication that also
benefits society
.”
The stunning foam motorbike
provides the vehicle ‘targets’ used
in collision-testing of car onboard
computer systems and automatic
braking. The motorbike is part of
a ‘foam village’ of targets that, as
well as the official EuroNCP V
ehicle
T
arget, includes anything commonly
involved in collisions with cars.
Afoammotorbike allows continuous
crash-testing without having to
replaceeitherthecaror the bike.
FOAM ENGINEERS,
HIGH WYCOMBE, UK
Foam motorbike
Most unique
application
Winner
W
atch the interview with
Steve Macwhirter &
Matt Wright
zotefoams100.com
Marking 100 years since the
commercialisation of the unique thr
ee
stage foam manufacturing process,
the Zotefoams Centenary Awar
ds
were instigated to r
ecognise the
excellence, creativity and innovation
of the companies that turn Zotefoams
materials into products that save
weight, save energy
, or deliver a creative
solution for a challenging application.
There was also an awar
d to honour the
ingenuity and dedication of an individual
or individuals who have applied their
expertise to establish Zotefoams
materials as an optimal solution to a
real-world challenge.
Our brands
in a
ct
ion
Cele
br
at
ing ou
r cus
tomer
s
27
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
https://z
ote.info/3ERRACN
ht
tps://
zote.info
/3ERR
ACN
https://z
ote.info/3EAGimb
Evazote
®
V
A35 and Plastazote
LD45 from the AZOTE polyolefin
foams range offer the perfect
combination of buoyancy
,
comfort and ease of cleaning in
this application. Hydrotherapy
and swimming give a wonderful
sense of freedom to anyone
who is otherwise confined to a
wheelchair or has limited mobility
.
Part of a range of swimming
collars, head and neck supports
and other flotation devices for
children and adults, the float
is adjustable and comes in a
range of sizes. The purity of the
materials means that they are safe
for extended contact with skin
without the risk of irritation.
KEWELL CONVERTERS,
TONBRIDGE, UK
Swimming floats for
disabled children (1993)
Longest running
application
Winner
W
atch the interview with
Marcos Kewell
A stalwart of the technical foam
sector
, T
im was recognised
for his work in supporting the
UK’
s NHS during the COVID-19
pandemic with the design of
a unique, two-piece reusable
visor that leveraged the unique
properties of Zotefoams’
Plastazote
polyethylene foam.
The visor was developed in a
matter of weeks and, in May
2020, Ramfoam was awarded a
government contract to supply
three million visors per week.
At the height of the pandemic,
the company was the leading
supplier of face visors to the
NHS, working closely with
Zotefoams and other UK foam
converters to meet the demand.
TIMOTHY MULQUEEN
Sales Director
,
Ramfoam, UK
Foam Innovator
of the Year
Business
Winner
W
atch the interview with
Timothy Mulqueen
Chengdu FlexT
ech Environment
Protection T
echnology Co Ltd
specialises in fitting out and
converting buses to clean energy
.
The electrification of bus fleets is
an important part of China’
s carbon
reduction strategy
, set out in the
2019 Blue Sky initiative.
T
asked by Sichuan Bus Group
with converting its fleet, FlexT
ech
opted to reduce vehicle weight by
replacing the traditional glass-fibr
e
boards with a lightweight foam.
FlexT
ech specified Zotefoams’
Plastazote
®
LD24FR flame-retar
dant
low-density polyethylene foam for
both the bus bodywork and the
EV battery insulation. LD24FR is
significantly lighter than glass-fibre
board, which weighs anything
between three and 25 times
moreper cubic metr
e.
W
atch the interview with
Eddie Peng
FLEXTECH (RAINBOW
ENVIRONMENT
PT HK), HONG KONG
Insulation for
electric buses
Best energy
saving
application
Winner
Bruce Whitman has over 20 years’
experience in specialist fabrication,
particularly for the aviation market.
Bruce was the creative leader
responsible for the Boeing 787
Window Seal, a highly engineered
housing for an electronically
dimmable window pane. Boeing
first introduced foam Window Seals
on its 737 aircraft, using ZOTEK F
high-performance PVDF foam to
reduce weight by 50% compar
ed
with traditional silicone materials.
The 787 Window Seal fulfils
demanding aesthetic as well
as technical requir
ements: by
incorporating ZOTEK F30 Grey
intothe outer part of the seal, Bruce
and his team were able to pr
event
any light from entering the cabin
around closed blinds.
W
atch the interview with
Bruce Whitman
BRUCE WHITMAN
T
echnical Fellow
,
T
echnifab Inc., USA
Foam Innovator
of the Year
Technical
Winner
https://z
ote.info/3EZbUCc
28
Zot
efoams plc
An
nua
l Re
por
t 2021
T
-F
IT fo
am insulation
featu
resi
n Chin
a
’
s CO
V
ID
-
1
9
va
ccine ef
for
t
T-
F
I
T
®
The T
-FIT insulation st
or
y
began with end-us
ers looking
for a solution t
o insulate pipes
in pharmaceutical a
nd
biotechnology cleanrooms.
T-
F
I
T
®
Clean was developed
as a unique thermal insulation
system designed for these
demanding, highly
controlled
production environments.
Based on t
he unique t
e
chnology owned
by
Zotefoams a
nd fo
llow
ing th
e suc
ce
ss of T
-
FIT
Clean insulation
, Zo
tefoams is
expanding the
T
-FIT r
ang
e to addre
ss t
he req
uire
me
nts of
the fo
od, dai
r
y
, p
er
son
al c
are a
nd ge
ne
ral
proc
es
s ind
ust
rie
s. Th
es
e are p
rodu
cts tha
t
are i
nhe
rent
ly pu
re and f
re
e of che
mic
al
res
idu
es a
nd me
et le
adi
ng fire c
er
tific
atio
n
standards. Demonstrably resistant to
growth
of mou
ld an
d bac
teri
a, the f
ull r
ang
e of T
-FIT
insulation
products manufactur
ed by
Zot
efoams is durable, moisture-resistant
ande
asy to in
sta
ll an
d cle
an.
Co
nt
ex
t
In Sept
embe
r 2
020
, Chinese health
of
fici
al
sset the c
ou
ntr
y’
s he
alt
hca
re
sector
a challenging target
of pr
oducing
one billion
doses of
COVID-
1
9 vaccine
overth
e foll
owin
g twe
lve mo
nths.
Speed was o
f the essence in
bringing
large-scale manufact
uring facilit
ies online
:
mos
t proj
ect
s requ
ire
d a 40
- to 60-
day
construction
window –
an ex
ce
pt
ionally
demanding schedule considering
sites
t
ypi
ca
lly c
over ar
oun
d 30,00
0 squ
are
metre
s an
d prod
uc
e 400,00
0 va
cci
nes
each da
y
.
Rapid facility const
ruction needed t
o be
match
ed by an e
qu
all
y rap
id eq
uip
me
nt
phase,
with suppliers
quoting
long lead
time
s not b
ein
g con
sid
ere
d.
Wh
at we d
id
Th
e T
-FIT te
am su
ppl
ied n
o le
ss th
an
nin
eof the
se pro
jec
ts wi
th T
-FIT C
le
an
andT
-
FIT Hyg
ie
ne in
sul
ation. Pro
ce
ss
ed
atZotefoam
s’ facili
t
y in Kun
sha
n, mater
ial
s
aret
y
pic
all
y avail
ab
le in C
hin
a on a
one
-wee
k le
ad tim
e.
One of
the manufact
uring facilit
ies is
biological products
developer and
manufacturer
Shenzhen Kangtai Biological
Prod
ucts C
o Ltd, whic
h expa
nd
ed an
d
upgraded it
s cleanroom faci
lities using
T
-FITC
le
an. Th
e co
mpa
ny’
s re
qu
irem
ents
included an opera
ting t
e
mperatur
e range
of0°C
–
1
50°C, low VOC (vo
latil
e org
ani
c
compound) emissions,
exceptional
cor
ros
ion re
si
sta
nce, an
d a sm
ooth
clo
sedc
el
l sur
face fo
r ea
sy cl
ea
ning.
Th
e par
t
icu
late-fre
e natu
re of T
-FI
T
insulation meant that installat
ion could take
place during pr
oduction wit
hout the
need
for PPE or s
pe
cia
l con
tai
nme
nt me
as
ure
s.
Dow
ntime wa
s the
refore m
ini
mis
ed, wi
th
installat
ion taking less t
han one mont
h
andpr
oduction continuing
unint
errupted
for8
0% of that tim
e.
Results
Shenzhen Kangtai and t
he ot
her
manufacturers
who selected T
-FIT
for
cleanroom and asep
tic pipe
work insula
tion
were a
ble to byp
as
s the le
ad tim
e is
sue
s
often associat
e
d with
tradit
ional insulat
ion
mat
erials, while als
o benefitting from
the
superior per
formance o
f T
-FIT insula
tion.
The huge nat
ional effort produced
astounding
results,
with more
than
2
.2
billion doses o
f Chinese-manufactured
vaccines being administ
ered worldwide
bythe e
nd of2021
.
Our bra
nds in action
Continued
T-
F
I
T
®
Hygiene is
designed for lar
ge-scale,
aseptic
, food
processing. Pr
oduction areas
are b
uilt to exa
ctin
g sta
nda
rds, wh
ere th
e
spe
ci
fica
tion i
s for a pu
re, poll
uta
nt- and
fibre-
free thermal insula
tion wit
h the
capabilit
y to
withstand the st
eam purging
proc
es
s t
yp
ica
l in thi
s se
ctor
. T
-FI
T Hygi
en
e
can ensure air
c
onditioning
, air filtrat
ion
andoth
er p
roc
es
s equ
ipm
ent c
onti
nue
s to
ope
rate at opt
imum l
evel
sof pe
r
for
man
ce.
Uni
que i
n both it
s mater
ial (ny
lon PA
6) an
d
its f
oam insulat
ion class,
T
-FIT
®
Proc
es
s is
the high
temperat
ure addit
ion t
o the
T
-FIT
ran
ge a
nd op
erate
s at temp
er
ature
s up to
1
6
0°C wi
th sp
ikes, for c
le
ani
ng in p
lac
e, up
to 205°C
. A
im
ed at th
e util
it
y an
d ge
ner
al
processing indust
ries around t
he world
,
T
-FIT P
roce
ss w
ill a
ss
ist pro
je
ct an
d
proc
es
s en
gin
ee
rs in t
hei
r que
st fo
r
ever
more
durable and heat
-resistant
insulation
solutions.
Case study
29
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
30
Zo
tefoams
plc
An
nua
l Re
por
t 2021
An i
nt
rodu
ct
ion f
rom ou
r Chai
r
Performance
In 2021
, reve
nu
e grow
th was s
tron
g as
polyolefin
foams demand r
ebounded from t
he
imp
acts of C
OVID-
1
9 in th
e prev
iou
s year a
nd
our Foo
twear business gre
w significantly
as
expected
. Significant and unpredictable
input
cost inflat
ion thr
oughout the y
ear suppressed
margins,
alongside unfa
vourable currency
movement
s, as higher
selling prices to
recover
the
se hi
ghe
r co
sts were r
etros
pec
tive
ly
implemented
and were
theref
ore no
t sufficient
to recove
r the f
ull i
mpac
t of co
ntinu
ing c
ost
inc
rea
se
s. Grou
p reven
ue was 22% up o
n
thepr
evio
us ye
ar at £1
0
0.8m (2020: £82
.
7
m).
Op
erat
ing pr
ofit was 1
1
% be
low th
e prev
iou
s
yea
r at £8.
1
m (2020: £9.
1
m). Basi
c ea
rni
ngs
pe
r sha
re was d
own 39% at 9.0
1
p (2020:
1
4.8
7
p). Exclu
din
g a £1
.0
m defe
rre
d ta
x
cha
rge re
su
ltin
g fro
m the UK g
over
nme
nt’s
announced change in UK Corporat
ion T
a
x
rate fro
m 1
9% to 25
% in 2023, ba
sic e
ar
nin
gs
pe
r sha
re was d
own 25
% a
t 1
1
.
1
p. At the e
nd
of the ye
ar
, the b
ala
nc
e she
et re
mai
ne
d
stron
g, with l
ever
age at 2.
1
x (2020: 2
.
1
x) an
d
well w
ith
in cove
na
nts, and l
iqu
idi
t
y hea
droo
m
of £1
3.4m (
2020: £1
9.2m) af
ter £6.5m of
ca
pit
al re
paym
ents.
Strategi
c pro
gress
Ou
r strateg
y is b
uilt a
rou
nd a foc
us on
sustainable organic
growth.
Zote
foams has
aportfolio of differentiat
ed products based
onun
iqu
e an
d env
iron
men
tal
ly fr
ie
ndl
y
tech
nol
og
y and i
ntell
ect
ual p
rope
r
t
y
. We wor
k
with our
par
tners t
o optimise
our mat
e
rials
forth
eir n
ee
ds an
d have deve
lo
ped a p
or
t
fol
io
of high
-per
formance pr
oducts tha
t further
enrich our product
mix, adding
more value
for
cust
omers and t
o our business
. Alongside
this, we h
ave est
abl
ish
ed a d
iver
si
fied
int
ernational manufact
uring foo
tprint t
o ensure
the
re is su
f
fic
ien
t cap
aci
t
y to meet g
rowin
g
de
man
d acro
ss a ra
ng
e of attr
acti
ve en
d
mar
kets. In a
nothe
r ch
all
en
ging ye
ar
, we h
ave
mad
e goo
d fu
r
the
r prog
res
s wi
th this s
trateg
y
.
Our largest mark
et segment
, Polyolefin
Foam
s, rec
overe
d in 2021 with vol
ume
s
growi
ng 39% af
te
r exclud
ing th
e one
-of
f PPE
sa
les of 2020. We con
tinu
e to see str
uc
tura
l
growth pr
ospects in t
his important business
unit,
underpinned by
the megat
rends of
environment
, regulat
ion and demographics
and facilit
ated
by our
new global
capacity
.
Inthi
s reg
ard, we co
mmi
ssi
on
ed ou
r Pola
nd
manufacturing f
acility in February 202
1
,
mar
k
ing th
e fina
l pha
se of a mu
lti-yea
r
capacity improv
ement commitment
adding
60% ca
pac
it
y to pre-201
8 level
s. In ou
r
High-Performance Pr
oducts (HP
P) b
usiness,
we de
live
red a
nothe
r exce
lle
nt yea
r of grow
th
St
eve Goo
d
Chair
I
n t
h
e s
e
c
o
n
d y
e
a
r o
f
t
h
e p
a
n
d
e
m
ic
,a s
t
r
o
ng
m
a
r
k
e
t r
e
c
o
v
e
r
yh
a
s
b
e
e
n
a
ccom
pa
n
i
e
d
b
yi
n
fl
a
t
io
n
a
r
y c
h
a
l
l
e
ng
es
a
sw
ec
o
nt
i
n
u
e t
od
e
l
i
v
e
r
s
t
r
a
t
e
g
icp
r
o
g
r
es
s
31
Zotef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
hard-
working employ
ees and their
supportive
fam
ili
es w
ho have h
elp
ed th
e Grou
p co
ntinu
e
to
make good
strat
e
gic progr
ess during these
ver
y c
ha
lle
ngi
ng tim
es.
Sustainabilit
y
Th
e Boa
rd is foc
use
d on th
e imp
or
t
anc
e of
sustainability and t
he ev
olving debat
e around
the use
of plast
ics by
society
. It considers
both in re
lati
on to the f
utu
re de
sire
d ou
tcome
s
for al
l sta
keho
lde
rs. Ac
co
rdin
gly
, our s
trateg
y
incorporat
es the considera
tion o
f climat
e
change in t
er
ms o
f financial and opera
tional
imp
acts. Zotefoa
ms’ prod
ucts a
re us
ed
almost e
xclusiv
ely for permanent sol
utions
and of
ten for
m a pos
iti
ve ele
me
nt of ou
r
cust
omers’
own sustainability a
genda. They
are seldom
deployed f
or single-use
purposes
which, understandabl
y in certain appli
cations,
have
c
aused most
public concern.
The
premise o
f our MuCell
®
technology i
s the
reduction
of plast
ic in socie
ty and our e
xciting
ReZor
ce mono-mat
erial barrier packaging
sol
utio
n, usi
ng thi
s tech
nol
og
y
, is a f
ull
y
circ
ula
r sol
uti
on to ver
y c
hal
le
ngi
ng ta
rgets s
et
by gover
nm
ents a
nd br
and
s in re
duc
ing th
eir
ca
rbo
n footp
rint a
nd i
ncre
as
ing th
e use of
recycled
materials
. W
e believe
that plastics,
used appropriat
ely
, remain the op
timal
solution bo
th functionally and en
vironmentally
for our
cust
omers’
needs and for
society
. We
also recognise
the importance of
continuous
improv
ement around pr
oduct development
and o
pe
ratin
g ef
fic
ie
ncy to red
uce t
he Gro
up’
s
environmental impact. Sustainability and
cli
mate ch
ang
e are re
co
gni
sed a
s a pr
inc
ipa
l
ris
k at Zotefoam
s, se
e page 4
9, and both
thestr
ategi
c and o
pe
ratio
na
l impa
cts of
sustainability are being
embedded within
decision-making processes throughout t
he
Gro
up. Thi
s year
, we m
ade g
oo
d prog
res
s
refining
our sustainability st
rat
egy
, based on
our purpose o
f providing
“op
timal mat
er
ial
solutions
for the
benefit of
society”
, see
Envir
onment,
social and go
vernance (E
SG)
rep
or
t onp
age
s 56 to 69 for f
ur
th
er d
eta
ils.
Follo
wing our adop
tion o
f the
SASB
fra
mewo
rk in 2020, theb
usi
ne
ss ha
s set c
le
ar
targ
ets a
ime
d at optim
isi
ng the u
se of raw
materials
, minimising w
aste and
improving
rec
ycla
bil
it
y and we h
ave de
live
red o
ur fir
st
res
pon
se to the T
as
k Forc
e on Cl
imate
-rel
ated
Fin
anc
ia
l Dis
clo
sure
s (
TCFD), see pag
e 62 for
fur
ther details. More details
are also included
und
er th
e ‘Strate
gy up
date’ in theG
roup
CEO’
s re
view o
n pag
e 32 and i
nthe ESG
rep
or
t on p
age 56.
Go
vernance
and the Board
Th
ere we
re no ch
an
ge
s to the expe
ri
en
ced
and e
ng
age
d Boa
rd du
rin
g the ye
ar
.
The Board leads
a
n ongoing
programme t
o
ensure t
he highest standar
ds of
corporate
governance and
int
egrit
y acr
oss the Gr
oup
and h
as re
ma
ine
d abr
eas
t of deve
lop
ing
gover
na
nce s
tan
da
rds. T
he Bo
ard’
s
int
eractions and
communications
with
execu
tive ma
nag
em
ent c
onti
nue to be
excel
len
t and, a
s a resu
lt, the B
oard i
s
well
-pla
ce
d to chal
le
nge, gu
ide a
nd su
ppo
r
t
execu
tive ma
nag
em
ent i
n the d
eli
ver
y of
thegr
ow
th strate
gy
. Dur
in
g the ye
ar
, we
con
tinu
ed to pay pa
r
ticu
la
r atte
ntio
n to the
provi
sio
n of a safe wo
rk
ing e
nvi
ronm
ent
forou
r staf
f acro
ss al
l glo
bal l
oc
atio
ns
andmain
tained the
improv
ed visibility and
qua
lit
y of s
afet
y pe
r
for
ma
nce d
ata ac
ros
s
thebu
sin
es
s, se
e the Sa
fet
y
, He
al
th and
Envi
ronm
ent s
ec
tion o
n pag
es 6
3 to 65, and
Itha
nk al
l emp
loye
es at Zotefoa
ms for th
ei
r
ef
for
ts in ac
hiev
in
g an im
proved p
er
fo
rm
anc
e
this ye
ar
. We co
ntin
ue to sup
por
t a
nd
em
power o
ur e
mpl
oyees a
nd a
re me
etin
g
ourcommit
ment t
o enhancing t
he employ
ee
voice in
the boardroom t
hrough t
he position
ofJon
atha
n Car
lin
g, Inde
pe
nd
ent N
ED,
asBo
ard re
pre
se
ntati
ve for wor
k
forc
e
engagement
. The Board
a
lso a
cknowledges
the benefit
s of
diversity
, including t
hat of
ge
nde
r an
d ethni
cit
y
, an
d is co
mmi
tte
d to
setting an
appropriat
e t
one from t
he t
op
inal
ldive
rs
it
y an
d inc
lus
ion m
at
ters.
The Board con
siders that it
has fully applied
all th
e pr
inc
ipl
es a
nd prov
isi
ons of th
e UK
Corporate
Governance Code during 2
021
.
More in
formation
is pro
vided in t
he Corporat
e
Gove
rna
nc
e rep
or
t on p
age 8
0.
Look
i
ng to t
he f
ut
u
re
Zotefoams i
s wel
l pos
itio
ned w
ith we
ll
inves
ted, dif
fere
ntiate
d ass
ets an
d a cl
ear
strate
gy for o
rga
nic g
row
th. We have
committed,
capable and passionat
e people
and a st
rong pipeline
of new opportunities,
inc
lud
ing R
eZorc
e, and w
hil
e we rema
in
mindful
of th
e uncertain
ext
ernal en
viro
nment
,
made further unpredictable wit
h current
events i
n Ea
ster
n Europ
e and th
e ong
oin
g
cha
lle
ng
es th
at COVID
-
1
9 a
nd its va
ri
ants
bri
ng, we are c
onfi
de
nt ab
out o
ur fu
ture
pros
pe
cts for g
row
th an
d ma
rgin
impr
ov
ement
.
S P Go
od
Chair
6 Ap
ril 2022
in Foot
we
ar a
nd wor
ked cl
ose
ly w
ith ou
r
partner to de
velop further long-
term
opportunities. Also in
HPP
, st
ructural
high-gro
w
th opportunities in
T
-FIT
®
insulation
products
and Z
O
TEK
®
technical fo
ams for
aviat
ion bot
h remained se
verely impact
ed by
COVID-
1
9 restrictions
, growing b
y a modest
1
1
% a
nd d
ecl
ini
ng 1
0% res
pec
tive
ly
. Th
e
long-
term gr
owth outlook f
or these
markets
rem
ain
s com
pe
llin
g an
d we expe
ct to se
e
rec
over
y i
n the sh
or
t to me
diu
m term. We al
so
made significant
progress a
t MuCell Ex
trusion
LLC
, co
ntinu
ing t
he deve
lo
pme
nt of the
Re
Zorc
e
®
mono-mat
erial barrier packaging
sol
utio
n wh
ich of
f
ers s
oc
iet
y a tru
ly c
ircu
lar
option
using e
xisting r
ecycling i
nfrastructure
.
We buil
t an exp
er
ie
nce
d tea
m and i
nsta
lle
d
and commissioned bo
th our
pilot l
ine in t
he
USA a
nd a ster
ile c
ar
ton pack
agi
ng ma
chi
ne
to test the s
he
et’
s ca
pab
ili
ty to be fo
rm
ed in
to
a ca
r
ton an
d sea
le
d to the req
uire
d ind
ustr
y
sta
nda
rds. We have se
cu
red su
ppo
r
t to tri
al
the t
e
chnology with leading
, recognised
industry players
, and pr
ogressed the
routetoma
rket opti
ons. We exp
ec
t to
up
d
ate
sta
kehol
de
rs on t
he pro
gre
ss of th
is
high-rew
ard,
high-risk opportunit
y during 2
022
.
Dividend
Th
e Boa
rd is pro
pos
ing a fi
na
l div
ide
nd of
4.
40
p (2020: 4
.27
p) whi
ch, if a
pprove
d by
sha
reh
old
er
s, woul
d make a tota
l div
ide
nd
forth
e year of 6.50
p (2020: 6.30
p)
, a
n
inc
rea
se of 3.0%. This r
efle
cts the B
oa
rd’
s
con
tinu
ed c
onfid
en
ce in th
e Gro
up’
s fu
ture
and i
s lin
e wit
h its pro
gre
ss
ive di
vid
en
d
policy
,
recognising the importance to
our
sha
reh
old
er
s of the d
ivi
de
nd as p
ar
t of th
eir
overa
ll retu
rn. If a
pprove
d, the fin
al di
vi
de
nd
wil
l be pa
id on 1 J
une 2022 to sh
are
ho
lde
rs
on the r
egi
ster o
n 6 May 2022.
Our people
We know th
at our p
eo
ple a
re key to our
suc
ce
ss a
nd 2021 has on
ce ag
ain
showc
as
ed the
ir i
mpo
r
tan
ce. T
hey have f
ace
d
a con
tinu
ation of t
he pa
nde
mic, B
rexi
t and
sever
e supply chain
challenges combined
with high
levels
of business a
ctivity and a
ne
ed to res
pon
d qui
ck
ly
. Th
eir re
si
lie
nce a
nd
com
mit
men
t have be
en o
utst
and
ing a
nd have
ens
ure
d that th
e ne
eds of c
ustom
er
s were
met i
n the mo
st di
f
ficu
lt of ci
rcum
sta
nce
s.
Havi
ng th
e rig
ht pe
opl
e at Zotefoam
s, who
und
er
sta
nd an
d prom
ote our cu
ltu
re, act at a
ll
times with
integrity
, safety-consciousness and
dedication and possess t
he right knowledge
and s
ki
lls, c
ontin
ue
s to be cr
itic
al to our f
utu
re
suc
ce
ss. I wo
uld li
ke to welco
me the n
ew
employees who
hav
e joined us
around the
wor
ld du
rin
g the pa
st t
wel
ve month
s an
d give
a spe
ci
al me
nti
on to our c
oll
eag
ue
s who h
ave
started up our
newest manuf
acturing facil
ity
inPol
and. I wou
ld a
lso li
ke to thank th
ose w
ho
have
he
lped all o
ur new colleagues
integra
te
suc
ce
ssf
ul
ly an
d tha
nk, on
ce ag
ain, a
ll ou
r
32
Zote
foams plc
An
nua
l Re
por
t 2021
Gr
oup CEO’
s r
evie
w
R
e
c
o
r
d s
a
l
es e
x
c
e
e
d
i
ng
£
1
0
0
m
b
u
t
p
r
o
fit
a
b
ili
t
y
d
a
m
p
e
n
e
d b
y a l
a
g i
n
r
e
c
o
v
erin
g
u
n
p
r
ed
i
c
t
a
bl
e
c
o
s
t
i
nfl
at
i
on
20
21
United
Kingd
om
Continental
Europe
Nor
th
America
Rest of
the w
orld
To
t
a
l
Change %
(4
4%)
5
8%
13
%
4
9%
22%
Gr
ou
p r
eve
nu
e (£
0
0
0
’s)
10,
76
8
28,200
1
9,959
41,
8
2
3
100
,7
5
0
% of G
ro
u
p reve
n
ue
11%
2
8%
20%
4
1%
10
0
%
2020
Gro
up reve
nue (£0
0
0’
s)
1
9
,1
0
6
1
7,
8
5
6
1
7,
6
2
9
28
,0
61
82,
6
52
% of Gro
up reve
nue
23%
22%
2
1%
3
4%
10
0%
*
Re
st of t
he Wor
ld c
om
pr
is
es C
hi
na: £
28.4m (20
20: £13.9m) an
d oth
er c
ou
ntr
ie
s: £1
3.4m (20
20: £1
4.2m)
In 2021
, Zotefoa
ms ac
hieve
d a si
gni
fica
nt
mil
eston
e by de
live
rin
g £1
0
0m of s
al
es in th
e
ce
ntena
r
y yea
r of the i
nventi
on of the n
itro
gen
gas p
roc
es
s that we u
se today
. Th
is mi
les
tone
was ac
hie
ved in tu
rbu
le
nt tim
es wi
th
pandemic restrictions
, large s
wings in
prod
uctm
ix a
nd a ver
y dif
ficu
lt su
ppl
y
cha
ine
nviro
nme
nt.
In add
iti
on to this st
rong s
al
es pe
r
for
ma
nc
e,
we have ma
de go
od pro
gre
ss o
n two n
otab
le
initiat
ives, wit
h the
commissioning of
our
£23m capacity e
xpansion in P
oland to
bud
geta
nd at th
e expe
cted ti
me a
s well
ast
he commissioning o
f our R
eZorce
®
mono-mat
erial barrier packaging
developmen
t centr
e in Massachus
etts,
USA
.Al
so notewor
thy
, an
d bas
ed o
n our
demonstrable f
ocus on sa
fety across
the
Zotefoams G
rou
p, was the fac
t that we h
ad
no major
repor
table accident
s for
the first
timei
n ma
ny year
s.
We now see Zotefoa
ms a
s an e
sta
blis
he
d,
well-in
vested fo
am technology b
usiness
wit
ha goo
d por
t
fo
lio of c
ontin
uin
g grow
th
opportunities alongside ReZ
orce,
which is
apr
omising and
disruptive
new pla
tform
offering significant pot
ential.
Th
e ec
ono
mic e
nviro
nm
ent h
as be
en ve
r
y
challenging,
with significant
and often
unexpected
cost increases fr
om suppliers
toge
ther with
headwinds from un
fav
ourable
currency mov
ements. I
n particular
, prices
for
our main r
aw mat
eria
l,
low
-density
polyet
hylene (LDP
E),
which is a
commodity
pol
ym
er
, in
cre
ase
d ver
y sha
rp
ly in th
e se
con
d
qua
r
ter of th
e yea
r sho
r
tly af
ter we had
implemented price incr
eases to
our
cust
omers. This,
along with
the addit
ional
overhead
needed to
manage our business
,
inc
lud
ing c
osts re
late
d to our new f
acil
it
y in
Poland
, has r
educed margins in
the short
term
. As further inflat
ionar
y pressures
have
em
erg
ed, we have im
ple
me
nted a se
ri
es of
price increases across our
business, although
the
se pre
ss
ure
s of
ten re
sul
t in a tem
pora
r
y
mar
gin sq
ue
eze as, in m
ost c
as
es, infl
atio
nar
y
sho
cks f
rom o
ur su
ppl
y cha
in, su
ch as i
n
frei
ght, are not forewar
ned a
nd are the
refore
impossible t
o predict or pass
on immediat
ely
.
Over the
course of
the business c
ycle
,
weinten
d to recove
r in fu
ll th
ese h
igh
er
inp
utco
sts.
Zotefoams’ co
ntri
buti
on to a low c
arb
on
future
, and sust
ainability more generally
, is a
key con
sid
era
tion i
n how we pl
an an
d op
erate
our b
usi
ne
ss. We util
ise u
niq
ue tec
hno
log
y to
make w
hat we c
ons
ide
r to be “be
st in c
la
ss”
foam
s for a va
rie
ty of u
se
s ali
gne
d to glob
al
environmental
, regulat
or
y and demographic
tren
ds. We firm
ly b
eli
eve that p
las
tic, our m
ai
n
raw
material
, is t
he opt
imal mat
erial for
the
applications f
or which our pr
oducts are
used.
These are predominantly
not single-use
and
of
ten f
unc
tion fo
r ma
ny year
s as i
ndu
stri
al a
nd
David
Stirling
Gro
up CEO
33
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
consumer durables in
applications
as varied
as me
di
cal d
evi
ce
s, foot
wea
r
, cle
an
room
ins
ulati
on, ca
rs, a
ircr
af
t an
d mar
in
e buoya
ncy
.
Zot
efoams’
stated business purpose is
“op
timal material
solutions f
or the
benefit of
society” and,
when considering our pr
oduct
ran
ge, ma
rkets, op
er
ation
s and i
nvest
men
ts,
this is
the guiding
principle when choosing
bet
we
en var
io
us co
urs
es of a
ctio
n.
The principal driv
ers of short
-t
er
m pr
ofitability
for our
business are t
he ability t
o manage
pri
ce
s in li
ne wi
th ou
r cos
t base, o
per
ating
ef
fic
ie
ncy
, h
igh a
ss
et uti
lis
ation a
nd a
n
improv
ed product mix
. W
e anticipa
te a
higher
proportion of
sales from our
more t
e
chnical
ZOT
E
K
®
HPP foa
ms a
nd T
-FI
T
®
insulation
prod
uct
s to be the key dr
ive
rs of retu
rns i
n
them
edi
um ter
m.
Gro
up reve
nue i
ncre
as
ed by 22% to £
100.8m
(2020: £82
.7
m)
, w
ith o
pe
ratin
g profit of £8.
1
m
(2020: £9.
1
m)
, 1
1
% b
el
ow las
t yea
r mai
nly d
ue
to inflati
ona
r
y co
st pre
ss
ure
s not be
ing f
ul
ly
rec
overe
d in the p
er
iod. A s
trong
er p
oun
d,
rel
ative to the US d
oll
ar i
n par
ti
cul
ar
, a
lso
negatively
impacted
sales and pro
fitability by
an e
stim
ated £4.
1
m an
d £0.5m res
pec
tive
ly
.
In2020, revenu
e inc
lud
ed a “on
e time” PPE
con
trac
t in the U
K wor
th £
9.
6m fo
r Polyo
lefi
n
Foam
s. E
xclud
ing t
his c
ontra
ct, Grou
p
reven
ue in
cre
ase
d by £27
.7
m, or 36%, of
whi
ch £1
4.9m was an i
ncre
as
e in Pol
yole
fin
Foam
s wi
th stron
g mar
ket rec
over
y and
£1
2.2m was Foot
we
ar
. O
the
r movem
ents
were re
lati
vel
y min
or
, wi
th T
-FI
T insu
lati
on
products
and MuCell Extrusion LLC
(MEL)
reven
ue
s both grow
ing by ove
r 1
0% f
rom
sma
ll ba
se
s and s
al
es of ZO
TEK F fo
ams
de
cli
ning d
ue to wea
k ae
rosp
ace m
arket
conditions
and associat
ed cust
omer
destocking
.
Strategy
update
Zotefoams’ str
ategy re
ma
ins u
nch
ang
ed: to
inves
t in flex
ibl
e as
sets a
nd tec
hno
log
y wi
th
the capability t
o suppor
t the
organic gro
w
th
opportunities afforded by
our div
erse, and
of
ten un
iqu
e, prod
ucts. T
he re
su
lts of thi
s
inves
tme
nt, in deve
lop
me
nt and
/or cap
acit
y
,
t
ypi
ca
lly t
ake time to be r
eal
ise
d fu
lly a
nd
thisc
an c
reate a s
hor
t-term he
adw
ind fo
r
mar
gins. H
owever
, we a
re co
nfide
nt th
at
ouri
nvestm
ent d
ec
isi
ons a
re al
ign
ed to
lon
ge
r
-term g
row
th tre
nds a
nd th
at our
dif
ferentia
ted and
diverse products
generate
goo
d leve
ls ofde
ma
nd wi
th pr
ici
ng powe
r
over
the economic
cycle
.
Ove
r the pa
st co
upl
e of yea
rs, we have
cur
tai
led i
nvestm
ent i
n som
e are
as to
man
ageo
ur c
osts a
nd ca
sh at a ti
me of
extreme
uncertainty
, but ha
ve con
tinued
toinvest i
n Foot
wea
r prod
uct
s, T
-FIT
insulation
a
nd ReZ
orce mono-ma
terial barrier
tech
nol
og
y
. In 2021
, we s
aw the b
en
efits of
this i
n Foot
wea
r sa
le
s and d
eli
vere
d go
od
progress again
st t
echnical milestones
in
ReZo
rce. Th
e ab
ili
ty todeve
lo
p our T
-
FIT
business unfortunat
ely contin
ued to
be heavily
imp
acted by p
and
em
ic res
tri
ctio
ns an
d the
sa
les g
row
th he
re was n
ot as su
bsta
ntia
l as
exp
ecte
d, alth
oug
h we do not b
eli
eve this
diminishes its
longer
-t
erm prospects.
Sustainability is a
ke
y consideration
in
developing
and implementing
our str
ategy
.
Our core ma
terials o
f
fer improv
ed product
per
formance in
durable solutions
while
using
less material t
han competit
ors do.
Recyclability of
waste ma
terial int
o foams has
be
en prove
n bu
t is not yet c
omm
on in t
he
mar
kets in w
hic
h we cur
re
ntly op
er
ate. MEL
licenses technology specifically t
o reduce
pol
ym
er c
ontent a
nd R
eZorc
e of
fer
s a fu
lly
recyclable
, circular
, barrier packaging solut
ion.
The str
ongly negativ
e public per
ception o
f
pla
stic i
s be
com
ing m
ore nu
an
ced b
eyon
d
the environmental impact of
ill-considered,
single-use plast
ic used pr
edominantly in
consumer packaging. Z
ot
efoams
’ current
mar
kets are n
ot imm
ed
iatel
y imp
acted by th
is,
as products
using our f
oams are primarily
int
egrated
components in
larger sys
tems
orpro
duc
ts (suc
h as ca
rs, p
lan
es, fo
otwe
ar
and m
ed
ica
l pa
r
ts) or use
d in th
e lon
g-term
storag
e of item
s. Th
ey are ve
r
y ra
rel
y use
d
inco
nsu
me
r dis
pos
abl
e item
s. Ou
r foam
s
save we
ight a
nd f
uel i
n ca
rs, tra
ins a
nd
airc
raf
t, save e
ne
rgy by in
sul
atin
g and
provi
dep
rotectio
n to peo
ple a
nd g
ood
s.
Ourpr
oducts help
our cust
omers reduce
em
iss
ion
s, lower e
ne
rgy u
sag
e, improve
fuelefficiency and comply
with increasingly
stri
nge
nt s
afet
y reg
ula
tion
s. In co
mmo
n with
othe
r bus
ine
ss
es, we se
ek to mi
nim
ise th
e
use of
natural
resources t
hrough measures
suc
h as re
duc
ing e
ne
rgy a
nd po
ly
me
r usa
ge,
whi
ch b
ene
fits th
e envi
ronm
en
t and re
du
ces
our c
osts. We be
li
eve Zotefoams h
as
demonstrable cr
edibility in reducing
the
ca
rbo
n footp
rint of o
ur cu
stome
rs, b
ut the
wor
ld is c
han
gin
g rap
idl
y wit
h dif
fe
re
nt
competitiv
e solution
s and a r
edefinition o
f
requ
ireme
nts dr
iven by prefe
renc
es an
d
regulation
. We t
herefor
e continue
to
develop
both
our product r
ange and technology
toantic
ipate an
d rea
ct to the
se ch
ang
es.
Wereco
gni
se the r
is
k of not me
etin
g our
stakeholder expectations on sustainabilit
y
andh
ave refle
cted th
is in o
ur key ri
sks a
nd
unc
er
t
ain
tie
s as a co
nse
que
nc
e, see p
age 49.
Capacit
y and in
vestment
Zotefoams i
s wel
l inves
ted in c
apac
it
y to
manufacture
foams and
our facilit
ies in t
he
USA a
nd Pola
nd h
ave bee
n deve
lop
ed w
ith
abas
e inf
rast
ruc
ture to al
low fu
ture c
ap
acit
y
inc
rea
se
s at lower i
ncr
eme
nta
l cos
ts. In
mak
in
g the
se inve
stme
nts, we took a
cc
ount
of the pote
ntia
l grow
th ra
tes of var
iou
s
products
across different geographies.
Simplistically
, our polyole
fin foams
markets
are subst
antially r
egional, benefitting
from a
local manufacturing presence which allo
ws
swi
f
t and e
f
fici
ent d
istr
ib
utio
n to our
customers
, while our HP
P product
s are
technically mor
e complex
and expensiv
e
andcus
tomers ar
e more able
to
plan further
ahead,
with transport being a
significantly
lower p
rop
or
tio
n of the c
ost to the c
ustom
er
.
Our UK faci
lity
, which has the
highest
capacity
, theref
ore supplies al
l HPP
products
alo
ng w
ith A
ZOTE
®
polyolefin
foam pr
oducts,
som
e of whi
ch s
hip to As
ia an
d the Mi
ddl
e
Eas
t, whil
e our f
aci
liti
es in t
he USA a
nd Pol
and
are tod
ay onl
y sup
ply
ing t
hei
r loc
al m
ar
kets
with poly
olefin fo
ams.
Our capacity management decision-making
requires us
to
consider the
three major
man
ufa
ctur
in
g proc
es
se
s to make a foa
m:
extrusion,
high-pressure
gassing and
low
-pressure f
oam expansion
. E
xtrusion
isthel
owes
t cost p
er u
nit of c
ap
aci
ty a
nd
hig
h-pr
es
sure g
ass
ing i
s the h
igh
est c
ost a
nd
most comple
x process,
incorporating
much of
our proprietary technology
. W
e can separat
e
these thr
ee processes,
for e
xample in P
oland,
where its
low
-pressure f
oaming capacity
receives
int
ermediat
e “pr
e-gassed” sheet
s
fro
m the UK o
r the US
A to expan
d into foa
ms
and t
here
by red
uc
e the tra
nsp
or
t c
ar
bon
consumpti
on and cost
. Additionally
, our
ex
tru
der
s tend to be s
et up fo
r spe
ci
fic
polymer typ
es, while
high- and lo
w-pressure
autoc
lave
s can b
e us
ed for a
ll po
ly
me
r ty
pe
s,
with our
newer v
essels offering complet
e
flexibility t
o manufacture all
products
. W
e
consider capacity on a
global basis
with many
fact
ors influencing
the decision ar
ound which
products
to manufact
ure in
which locations,
including cus
tomer service, sust
ainability and
profit o
ptimi
sati
on. Futu
re inves
tme
nt at ou
r
three main
foam pr
oduction sit
es is planned
to
remove
production
bottlenecks, impro
ve
operating
and carbon efficiency and upgrade
infrastructur
e t
o impro
ve our risk pr
ofile
.
Outside o
f our aut
oclave t
echnology
, ot
her
pla
nn
ed inve
stme
nts re
late to T
-FIT
, wh
ich
req
uire
s a rel
ative
ly l
ow cap
ita
l co
st to conve
r
t
she
ets of foa
m into in
sul
ation p
rodu
cts, a
nd
the ReZ
orce opportunity
, which is addressed
separately below
.
34
Zot
efoams plc
An
nua
l Re
por
t 2021
Group CEO’
s review
Continued
Segment re
venue
£5
6.
2
m
Change
+10
%
2020
£50.9
m
Segment profit margin
1.
2
%
2020
9.
5%
Segment profit
£
0
.7m
Change
(8
6
)%
2020
£4.8m
POL
Y
OLEFIN
F
O
AMS
In 2021
, s
ale
s in th
e Polyo
lefi
n Foam
s
bus
ine
ss u
nit g
rew by1
0% to a record
£56.2m (2020: £50.
9m) a
nd acc
ou
nt for 56%
of Gro
up reve
nue (2020: 62%
). In con
sta
nt
cur
ren
cy
, s
al
es in
cre
ase
d by 1
5%. As
exp
ecte
d, there wa
s no re
pe
at ofthe 2020
sa
les of £
9.6m for pe
rso
na
l protec
tive
equ
ipm
ent (
PPE) fo
r the U
K Natio
na
l Hea
lth
Se
r
vi
ce. Ove
ral
l, sal
es vo
lum
e grew by 6%,
pri
ce i
ncre
as
es de
li
vere
d 4
%s
ale
s grow
t
h in
the p
eri
od a
nd sa
le
s mixi
mprove
d by 5
%,
of
fs
et by adve
rs
e cur
ren
cy move
men
ts of 5
%.
V
olume
s impr
oved
by 39
%, when e
xcluding
PPE from t
he 2020 com
pa
rative a
nd af
te
r ver
y
sha
rp f
all
s acro
ss mo
st in
dus
tria
l se
ctors i
n
2020, and wer
e 1
3% ahe
ad of 201
9. Over
all,
we exp
eri
en
ce
d a broad
-bas
ed re
cove
r
y
inmo
st ma
rkets by ge
og
rap
hy and by
application
segment,
with the
notable
excepti
on
s of avia
tion a
nd a
utomoti
ve,
whi
chre
ma
ine
d well b
el
ow prev
iou
s level
s
ofacti
vi
ty. Geog
rap
hic
all
y
, th
ose a
rea
s whi
ch
exp
eri
en
ce
d the sh
ar
pe
st fal
ls in d
em
and
in2020 t
ypi
ca
lly g
rew fa
stest i
n 202
1
. We
inc
rea
sed p
ri
ce
s late in the s
ec
ond q
ua
r
ter
,
with the
consequence that t
hese price rises
onl
y co
ntri
buted p
ar
ti
all
y to ful
l year r
evenu
es.
Inp
ut co
sts for p
ol
yolefi
n foa
ms are p
rim
ar
ily
raw mate
ria
ls a
nd, to a les
se
r exte
nt, ene
rgy
and operati
onal costs
such as labour
. Fr
eight
cos
ts, whe
the
r pai
d by Zotefoams o
r by
cust
omers, can also
be a significant
fact
or
.
Prices for
the main
raw ma
terial,
low-density
polyet
hylene (LDP
E),
increased rapidly and
significantly fr
om the
relativ
e lows
experienced
in the s
ec
ond a
nd th
ird qu
ar
ter
s of 2020. The
avera
ge pr
ic
e pai
d dur
ing 2021 was aro
und
80% hi
ghe
r tha
n the pr
evio
us ye
ar an
d 50%
higher than t
he long-run,
pre-pandemic
avera
ge. Wh
en we we
re imp
le
men
ting p
ric
e
increases during 20
2
1
, we initially pr
edicted
that th
is pe
ak wo
uld c
orr
ect towar
ds the
lon
g-r
un aver
age re
lati
vel
y qui
ck
ly an
d that
relativ
ely modest increases in pricing w
ould
recov
er general inflat
ionar
y pressures
plus the
catch
-up f
rom the re
lati
ve lows of p
oly
me
r
pricing in t
he previous period
. At
that t
ime
inthe s
ec
ond q
ua
r
ter of 2021
, ethy
le
ne, the
main feedst
ock for LDPE
which normally
acc
oun
ts for 70
–
80% of th
e LDPE p
ric
e,
waspr
ic
ed a
roun
d its lo
ng-r
un ave
rag
e
andL
DPE pr
emi
um pr
ic
ing wa
s dri
ven by
aca
paci
t
y sho
r
tag
e of pol
ym
er p
roce
ss
ing
inEuro
pe. Si
nce th
en, de
ma
nd for p
ol
yme
r
has remained high
a
nd et
hylene prices ha
ve
risen considerably
, leading t
o unprecedented
leve
ls of LD
PE pri
cin
g. Inpu
t cos
ts for oth
er
mater
ia
ls an
d ser
vi
ces a
lso i
ncr
eas
ed
mar
ked
ly
, p
ar
ti
cul
arl
y late
r in the ye
ar w
ith
res
pe
ct to ene
rg
y and p
rodu
cts w
hic
h are
en
erg
y-intens
ive. As a r
esu
lt, inp
ut co
sts
dur
ing 2021 were o
nly p
ar
ti
all
y rec
overe
d
through
pricing adjust
ments,
impacting
our
margins in
Polyolefin F
oams significantly
.
In the fi
nal q
ua
r
ter of 2021
, we i
mpl
eme
nted
fur
ther pricing increases e
f
fective
early
Jan
uar
y 2022 in mo
st ma
rkets a
nd in
Jan
uar
ynotifi
ed s
ome c
ustom
er
s of a fur
ther
price increase from
April. In
setting prices
his
toric
all
y
, we h
ave ty
pic
al
ly tr
ied to ab
sor
b
the short
-t
er
m variability in
polymer and
fre
igh
tpri
ce
s and a
ct on i
nflati
on wh
ich i
s
more “
permanent” such as emplo
yment
cos
tsor
, as i
n the pa
st, com
mo
dit
y co
sts
which hav
e undergone
a structur
al change
inpr
ici
ng. Co
st in
cre
ase
s in po
ly
me
r
,
fre
igh
t,ene
rgy a
nd othe
r raw mate
ri
als we
re
substantially
more imp
actful than expect
ed
and o
ur 2022 pr
ic
e inc
rea
se
s have refle
cted
this. W
heth
er th
es
e mater
ia
ls an
d ser
vic
es
have
unde
rgone a
structural
change in
pri
cin
grem
ain
s too ea
rl
y to call at t
his ti
me.
Se
gme
nt profi
t de
cli
ned to £0.
7
m (2020:
£4
.8m), repre
sen
ting a m
argi
n of 1
% (2020:
1
0%)
, w
ith th
e vari
an
ce be
in
g acc
ounte
d
foral
mos
t enti
rel
y by the tim
ing a
nd le
vel
ofpri
cin
g not re
cover
in
g inc
rea
ses i
n raw
mater
ia
l and oth
er i
npu
t cos
ts in the p
er
iod.
Se
gme
nt ma
rgin b
en
efited f
rom a
n inc
rea
se
invol
ume
s of
fs
et by ma
nuf
actu
rin
g yi
eld
inefficiencies, predominantly
in the
USA,
where on-
site
suppor
t wou
ld normally ha
ve
com
e fro
m UK tec
hni
ca
l staf
f, and a
dve
rse
fore
ign exch
an
ge rate
s of arou
nd £0.6m
(partially offset b
y hedges recorded
ce
ntr
ally)
.
A
ZOT
E
®
35
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
HPP comprises Z
OTE
K
®
technical fo
ams,
whi
ch in
clu
de fo
ams fo
r foot
wea
r wh
ere we
have
a
n e
xclusive
relationship with
Nike
, and
T-
F
I
T
®
insulation
products.
These products
are typically unique or highly differentiat
e
d
anddesigned t
o deliver specific performance
at
trib
utes, s
uch a
s en
erg
y man
age
me
nt,
ex
cellent fire
resistance or
high-t
empe
ratur
e
pe
r
for
man
ce to me
et the exa
ctin
g ne
eds of
industries such as
spor
ts equipment
, avia
tion,
aut
omot
ive
, bio
tech an
d pharmaceut
ical.
The HPP
business unit sales incr
eased
by4
1
% to £4
2.3m (2020: £30.
0
m) and
acc
oun
ted for 42% of Group s
al
es in 2021
(2020: 36%
). In con
sta
nt cur
ren
cy
, s
al
es
inc
rea
sed by 47
%. W
ith
in thi
s bus
ine
ss
uni
tthe
re are c
urr
entl
y thre
e mai
n en
d-us
e
applications
: foo
twear
, aviat
ion and t
echnical
ins
ulati
on. Foot
we
ar gre
w stron
gly a
s
expected
, following
on from t
he str
ong
se
con
d hal
f in 2020 an
d, with s
al
es of
£33.9m, now a
cco
unts fo
r 34
% (2020: 26
%
)
of Gro
up reve
nue. T
his s
trong p
er
fo
rm
anc
e
came despite
well-publici
sed shutdo
w
ns o
f
Nike
par
tner fa
ctories in
Vietnam in
the
se
con
d hal
f of the ye
ar du
e to COVID
-
19
restriction
s, which
negatively imp
acted t
he
man
ufa
ctur
in
g of som
e sho
e mod
el
s.
Wehave an exclu
si
ve and c
los
e rel
ation
shi
p
wit
h Nike wh
ich a
lig
ns ou
r acti
vi
tie
s to
their
business priorities on performance,
sustainability and v
alue in pr
emium running
sho
es. T
his a
ls
o give
s go
od vi
sib
ilit
y a
roun
d
Nike’
s i
ntentio
ns for th
e fu
ture, wi
th de
ma
nd
pla
nn
ing b
ein
g a cri
tic
al pa
r
t of ou
r
cooperation
. Sales of
Z
OTEK
F fluoropolymer
foams,
primarily for a
viation applications
,
red
uce
d aga
in in 2021
, by 1
0%, fol
lowi
ng a
lar
ge de
cl
ine in 2020. Sa
le
s of £4
.2m (2020:
£4
.6m) are now 5
8% below th
eir p
ea
k of
201
9, du
e to the imp
act of c
ontin
ue
d sup
ply
cha
in c
ontra
ctio
n pr
ima
ril
y lin
ked to Boe
ing’
s
ongoing reduct
ion in manufa
cturing o
f cer
tain
airc
raf
t m
ode
ls. D
ema
nd fo
r airc
raf
t i
nteri
or
prod
uct
s, mai
nly l
inked to ai
rl
ine
s, saw so
me
mod
es
t grow
th f
rom a low b
ase i
n the
prev
iou
s yea
r
. As de
ma
nd for a
ir trave
l retur
ns,
we are fo
cus
ing o
n the de
velo
pme
nt of
applications
that us
e our mat
eria
ls wit
hin the
Segment re
venue
£42
.
3
m
Change
+
41%
2020
£30.0
m
Segment profit margin
2
0
.
6%
2020
26
.
3%
Segment profit
£8.
7
m
Change
+10
%
2020
£
7.
9
m
ca
bin a
nd wh
ich s
up
por
t th
e dr
ive to make
aviat
ion light
e
r and t
hus less fuel consuming
.
Furthermore,
our t
echnical and business
deve
lop
me
nt focu
s over th
e past f
ew yea
rs
has ex
te
nde
d beyo
nd avi
ation, w
ith a
n
emphasis on o
ther areas
of opportunity
suchas
battery insulation
for electric
vehicles
and ot
her technical insulat
ion applications
,
where feedback
from cust
omer trials in t
hese
markets
is encouraging.
These initiativ
es, and
the fa
ct that
our product
s remain
specified on
existi
ng aviat
ion manufacturing
applications
,
give us
good grounds
for op
timism
later
in
2022 and b
eyon
d. T
-
FIT in
sul
atio
n prod
ucts
grew by 1
1
% in th
e yea
r
, whi
ch was a s
ec
ond
year significant
ly below
our expectat
ions
mai
nl
y due, ag
ain, to COVID
-
1
9 i
mpac
ts
par
ticu
lar
ly i
n Indi
a, wh
ere s
al
es gr
ew
modestly
, and Europe
, where sales declined
for th
e sec
ond c
ons
ec
utive ye
ar
. I
n Chi
na,
whe
re we ma
nu
fact
ure mo
st of ou
r T
-FIT
products
, sales gre
w str
ongly t
owar
ds the
end of t
he yea
r an
d the co
untr
y now ac
cou
nts
for 52% of T
-
FIT sa
le
s. We rema
in opti
mist
ic
about T
-FIT insulation
but need t
o recognise
that o
ur ab
ili
ty to cr
eate de
ma
nd for th
is
technical product
range at t
his stage
of
deve
lop
me
nt reli
es o
n sa
le
s teams m
ee
ting
cus
tomer
s. Ove
r tim
e we wil
l fur
the
r deve
lop
our T
-
FIT br
and
ing a
nd l
evera
ge cu
stome
rs
who c
le
ar
ly have a p
osi
tive ex
per
ie
nc
e of
ourpr
oducts,
thereb
y transit
ioning from
thecu
rre
nt hi
gh-
con
tact s
al
es m
ode
l to
anin
cre
asi
ngl
y exp
er
ie
nce
d team fo
cus
ed
onspecific
development
oppor
tunities.
Se
gme
nt profi
t inc
rea
sed by 10
% to
£8.
7m(
2020: £7
.9m) a
nd by 25
% to £9.9m
inco
nst
ant cu
rre
ncy. The ma
in di
f
fere
nc
e
bet
we
en sa
le
s grow
th of 4
1
% an
d the lowe
r
pe
rce
ntag
e inc
rea
se in s
egm
ent p
rofit, in
addition t
o adverse currency mo
vements
whi
ch a
re he
dge
d ce
ntra
lly
, was the c
ost of
se
r
vi
cin
g custom
er
s, par
ticu
lar
ly i
n res
pec
t of
hig
he
r fre
ight c
osts l
ate in the ye
ar
, i
nvestm
ent
in T
-FI
T se
llin
g cos
ts rel
ative to the g
row
th in
sales and a higher
allocation o
f depreciation
to this se
gm
ent. Se
gme
nt ma
rgi
n de
clin
ed
to2
1
% (2020: 26%
).
T-
F
I
T
®
ZOT
E
K
®
HPP
36
Zot
efoams plc
An
nua
l Re
por
t 2021
Group CEO’
s review
Continued
Given the
market
oppor
tunity and mult
iple
cha
lle
ng
es to co
mme
rci
ali
se, we are inve
sti
ng
in a phased
manner
, with
future in
vestment
and t
he pref
er
red bu
sin
es
s mod
el to be
deter
mi
ned fo
llow
ing th
e ou
tcome
s of the
current phase o
f t
echnical development
andm
ar
ket as
ses
sm
ent. At this t
ime, we
arefo
cus
ing o
n the be
vera
ge ca
r
ton ma
rket,
whi
ch we e
stim
ate to be in exces
s of £7
.5
bn
reven
ue
s from t
he sa
le of pa
cka
gin
g mater
ial
s
which ReZor
ce could replace
, although w
ork
is al
so pro
gre
ss
ing o
n pou
che
s an
d othe
r
opportunities in the
back
ground.
Int
ernally
,
wehave es
tab
lis
he
d a pil
ot line to de
velo
p
and manufactur
e ReZor
ce sheet and
commissioned a st
er
ile carton pa
ckaging
mac
hin
e to test the s
he
et’
s ca
pab
ili
ty to
befor
me
d into a ca
r
ton an
d se
ale
d to the
req
uire
d ind
ustr
y sta
nda
rds. T
his h
as
proveds
uc
ces
sf
ul on a l
imi
ted bas
is,
loo
ki
ngat on
e ca
r
ton for
mat a
nd, rel
ative to
the most
modern machiner
y
, running very
slow p
roc
es
sin
g spe
ed
s. As we move to
commercial trials
, planned f
or the second
qua
r
ter th
is yea
r
, the te
chn
olo
gy w
ill be
exposed t
o much more demanding conditions
including high-speed pr
ocessing. If t
hese
tri
alsa
re suc
ce
ss
ful, we w
ill have p
ass
ed a
significant milest
one in creatin
g value fr
om
ReZo
rce c
ar
tons a
nd w
ill c
ons
ide
r a num
be
r
of bus
ine
ss m
ode
ls w
hic
h ca
n del
ive
r valu
e
toour st
akeh
old
er
s.
Revenue
from the
MEL business
unit
inc
rea
sed by 32% to £2.3m (2020: £
1
.
7m
),
although bo
th periods w
e
re hea
vily impact
ed
by the in
abi
lit
y of ou
r sta
f
f to travel an
d
develop
business. Sales in
constant currenc
y
inc
rea
sed by 37%. Segm
ent l
oss fo
r the ye
ar
was £0.
7
m (2020: los
s of £1
.4m)
, rep
res
enti
ng
a ne
gati
ve marg
in of 30% (2020: neg
ative
mar
gin 8
3%
), whic
h refle
cts th
e swi
tch in
business focus
to
developing
the ReZ
orce
mater
ia
l and th
e ca
pit
ali
sati
on of ce
r
ta
in st
af
f
and oth
er c
osts i
n acc
ord
anc
e wit
h IAS 38.
Overall ReZ
orce capital
expenditure
was
£1
.9
m, of whi
ch £0.8m wa
s the c
api
tal
isat
ion
of in
tangible asset
s, mainly
relat
ed to
p
eople
and I
P deve
lop
men
t cos
ts.
Segment re
venue
£
2
.3m
Change
+32%
2020
£1.7m
Segment loss before
amort
isation
£0
.5m
Change
+58%
2020
£1.
2
m
Se
gm
ent l
os
s af
t
er
amort
isation
£
0
.7m
Change
+52%
2020
£1.
4
m
The MuCell Ex
trusion LL
C (MEL)
business
mod
el i
sto develo
p and l
ic
ens
e or se
ll
intel
lec
tua
l prop
er
t
y (I
P) and re
late
d
machiner
y
. The f
ocuso
f MEL
’
s business
hase
volve
d to createu
niqu
e pro
pe
r
tie
s in
plastic r
ather t
hanmerely r
educe the plas
tic
con
tent of an a
r
tic
le. Sp
ec
ific
all
y
, we have
be
en wor
k
ing to deve
lop a
nd c
omm
erc
ial
ise
mono-mat
erial barrier technology
, branded
Re
Zorc
e
®
, for pa
cka
gin
g of food a
nd dr
ink
inaco
nta
ine
r whi
ch is r
ecyc
lab
le a
nd us
es
rec
ycle
d con
tentin i
ts man
ufa
ctur
e – a
true
circular economy
product
.
Th
e core M
uC
ell
®
technology can reduce
pol
ym
er c
ontent, an
d co
st, in exis
ting
pac
kag
ing by ar
oun
d 1
5% by injec
ting i
ne
r
t
gas t
o displace
plastic with
microcellular
bubbles. This r
equires the packaging
man
ufa
ctur
er a
nd bra
nd to al
ign b
oth
technically and
commercially on t
he
imp
rovedso
lut
ion, wh
ic
h has p
roved
dif
ficult
as packaging pr
oducers are often
rem
une
rated o
n a “cost p
lus” ba
sis. T
he
ReZor
ce technology i
s a complet
ely new
solution
, offering brands t
he ability t
o
significantly r
educe their carbon
footprin
t
anda
lso h
el
p mee
t the
ir pl
edg
es o
n both
rec
yclin
g and u
se of re
cycl
ed c
ontent i
n the
ir
packaging
, putting sust
ainability at the
hear
t
of our M
EL deve
lop
me
nt age
nd
a. Th
ere a
re
considerable challenges t
o dev
eloping the
complete
“end-t
o-end” solution,
but we
have
mad
e goo
d prog
res
s in c
reati
ng a sh
eet
mater
ia
l whi
ch me
ets th
e req
uire
d ox
ygen
andm
ois
ture ba
rr
ie
r prop
er
tie
s and h
as a
ran
ge of sti
f
fn
es
se
s to allow i
t to be use
d in
both c
ar
ton a
nd po
uch
es, t
wo of the m
ost
common barrier packaging
formats
for food
and d
ri
nk. We bel
ieve th
ere i
s a sig
nifi
can
t
mar
ket pu
ll for th
is tec
hno
log
y
, as c
ur
rent
bar
ri
er pa
cka
gin
g is t
yp
ica
ll
y made f
rom
combinations
of ma
terials and
is there
fore
dif
ficu
lt to recyc
le an
d of
ten us
es l
ow or
nore
cycl
ed co
ntent.
MuCe
ll
®
Re
Zo
rc
e
®
MEL
37
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Measuring str
ategic progress
Th
e mar
kets in w
hic
h we ope
rate ar
e dri
ven
by glob
al trends –
environment
, regulation
andd
em
ogr
aph
ic
s – whi
ch we be
li
eve of
fer
the pote
ntia
l for hi
gh rate
s of mar
ket grow
th
as we
ll as o
ppo
r
tun
it
y for ou
r dis
ru
ptive
technology solutions
. Having
previously
me
asu
red st
rategi
c pro
gres
s on fo
ur me
tric
s,
we have thi
s yea
r dec
id
ed to sep
ara
te MEL
from HP
P and ha
ve a
dded sustainability
asase
pa
rate strate
gic o
bje
ctive:
1.
We intend ou
r HPP bu
sin
es
s un
it to of
fer
hig
he
r grow
th rate
s and b
et
ter ma
rgi
ns
tha
n Polyo
lefin Fo
ams. S
al
es in o
ur HPP
business unit
, which o
f
fers unique
disruptive
products and
solutions,
now
acc
oun
t for 42% (
2020: 36%
) of G
rou
p
reven
ue
s with g
row
th of 4
1
% (
4
7% in
constant curr
ency)
. The unique benefits
offered by
these pr
oducts,
combined with
mar
ket re
cover
y in avi
atio
n, off
er go
od
grow
th p
rosp
ec
ts. Ma
rgin
s in the p
er
iod
were 21
% (2020: 26%
), while m
arg
ins i
n
ourP
olyolefin Foams
business unit wer
e
1
%
(2020: 1
0%)
.
2.
Sal
es of o
ur hi
ghl
y di
f
fere
ntia
ted A
ZO
TE
polyolefin f
oam products
increased by
1
0%
(
1
5% in con
sta
nt cur
ren
cy), agai
nst ou
r
targ
et rate of t
wi
ce gl
oba
l GDP g
row
th. Th
e
mar
ket di
sru
ption a
nd U
K gover
nm
ent PPE
con
trac
t in the s
ec
ond h
alf of 2020 di
stor
ts
the underlying gr
owth of
this business
unit
and, a
gai
nst 201
9, whic
h is a b
ette
r
com
par
ative, s
ale
s grew by 9% (1
4
% in
constant currency)
.
3.
Grou
p ope
rati
ng ma
rgin wa
s 8.
1
% (2020:
1
1
.0%
). Inc
rea
sed i
npu
t cos
ts, not fu
ll
y
rec
overe
d in the p
er
iod, we
re the p
rim
ar
y
reason f
or the r
educed operating
margin,
which was
also impact
ed by unfa
vourable
foreign
ex
change rat
es, manufact
uring yield
inefficiencies and the addit
ional costs
of
ser
vicing cust
omer
s particularly lat
e in
the
yea
r
. We antic
ipate ma
rgi
n rec
over
y a
s the
pri
ce
s we ch
arge o
ur cu
stome
rs i
ncre
as
e
more q
uic
kl
y tha
n inp
ut c
osts in 2022 a
nd
as we exp
er
ie
nce g
row
th in h
igh
er m
argi
n
are
as su
ch a
s aviati
on a
nd T
-FI
T prod
uct
s.
4.
Group r
eturn on
capital declined t
o 6.
1
%
(2020: 9
.0%
), larg
el
y as a re
sul
t of the
lowerp
rofit
abi
lit
y of the Po
lyol
efin Fo
ams
business unit and
an increased capital
base which includes t
he commissioning
of
the P
ola
nd manufact
uring facility
. The
Gro
up ha
s inves
ted in a l
arge c
ap
aci
ty
enhancemen
t pr
ogramm
e o
ver
recent
years,
including significant
expenditure
in
the supporting in
frastructure
that
will be
suf
ficient t
o suppor
t further capacity
, if
ne
ede
d, at mu
ch lowe
r inc
rem
ent
al co
st.
There is curr
ently no
fur
ther commitment
tolarg
e-sc
al
e inc
rea
se
s in ca
pac
it
y an
d
theG
roup i
s well i
nveste
d to supp
or
t f
utur
e
growth.
Capital spending
is planned t
o
retur
n to more n
orm
al, lowe
r leve
ls, bro
adl
y
in li
ne wi
th de
pre
ciati
on. T
he net a
ss
ets of
the business
have
increased significantly
and p
rofit a
nd ma
rgi
n rec
over
y a
nd hi
ghe
r
as
set uti
lis
atio
n fro
m inc
rea
sed s
al
es wi
ll be
an important fact
or in deliv
ering mat
erial
imp
roveme
nts i
n the retu
rn o
n cap
ita
l over
the c
omi
ng yea
rs.
5.
In 2021
, we intro
duc
ed m
ateri
al
sustainability target
s arising fr
om our
SASBa
sse
ss
me
nt, provi
ded f
ul
ler
disclosures complian
t with t
he T
ask Force
on Climat
e-related
Financial Disclosures
gui
da
nce (
TCFD) a
nd ra
n custom
er fo
cus
groups
on sustainability t
o generat
e data
to
gui
de str
ategy. In line w
ith ou
r com
mit
men
t
to
using electricity from
renewable
sources
whe
reve
r fea
sib
le, we swi
tched to a f
ull
y
sustainable energy so
urce in
the UK in
202
1
. In M
arc
h 2022
, we inc
or
por
ated
cle
ar
ly d
efin
ed ESG ta
rgets i
n our b
ank
refinancing arrangements.
6.
MEL has po
tent
ially disruptiv
e t
echnology
to
improve
sustainabili
ty
, primar
ily in
con
sum
er p
ack
agin
g. We intend to inve
st
wit
hin th
e Grou
p’
s ris
k ap
peti
te to develo
p
and commercialise thi
s technology
, which
at this t
ime is f
ocu
sed o
n ReZo
rce
mono-mat
erial barrier packaging. This
app
roac
h rec
og
nis
es tha
t the
re is a hi
gh
“option va
lue” fo
r suc
ce
ss a
nd at thi
s tim
e
our business model
remains flexible
to
de
live
r this va
lu
e in the b
est way fo
r
ours
take
hol
der
s.
People
Th
e top pri
or
it
y for Zotefoa
ms is e
nsu
rin
g
thehe
al
th an
d safet
y of e
mpl
oyee
s and s
ite
vis
itor
s. The B
oa
rd tole
ran
ce for r
isk i
s set
acc
ordi
ngl
y
, w
ith He
al
th an
d Safet
y a
n
age
nd
a item at eve
r
y Bo
ard a
nd E
xecu
tive
Committee meetin
g. The
behaviour of
all
employees i
s now
the major
factor
dr
iving our
imp
roved pe
r
fo
rma
nc
e and l
ower r
isk p
rofile
and, i
n 202
1
, the
re wer
e no ma
jor re
por
tab
le
inj
uri
es i
n the G
roup (2020: 1
).
For the p
ast t
wo ye
ar
s, man
agin
g the
bus
ine
ss d
ur
ing COV
ID-
1
9 has r
equ
ire
d us to
ada
pt to dif
fe
rent way
s of work
in
g, incl
udi
ng
staf
f work
in
g from h
om
e and th
e ado
ption of
new s
afet
y protoc
ols ac
ros
s all G
rou
p site
s.
During this period
, our employ
ees have
demonstrated fle
xibilit
y and resilience and
embraced the challenges of
rapidly changing
business priorities caused b
y the external
env
iron
me
nt. Thi
s has n
ot bee
n ea
sy
,
particularly for new
er employ
ees unfamiliar
with t
he Company
or their colleagues
and
also for
people working on
new init
iatives
.
Clear communication o
f our str
ategy
,
obj
ect
ives, p
rog
res
s and a
ppr
oach to di
f
fe
rent
cha
lle
ng
es, a
s well a
s a com
mon c
ult
ure, are
particularly impor
tant t
o ensure cohesion in
the
se di
f
ficu
lt tim
es.
I woul
d like to ex
tend my th
anks to my
col
le
agu
es a
nd to thei
r fam
ili
es fo
r thei
r
suppor
t given
.
Forward-looking stateme
nts
For
wa
rd-lo
ok
ing s
tatem
ents h
ave bee
n
mad
eby the Di
rec
tors in g
oo
d fai
th usi
ng
informat
ion av
ailable up un
til t
he dat
e
theya
pprove
d this A
nn
ual R
ep
or
t. Th
es
e
forward-looking stat
e
ments should
beco
nsi
de
red i
n ligh
t of the co
ntin
uin
g
uncer
tainty surrounding
the imp
acts o
f
theCOV
ID-
1
9 vir
us a
nd the g
eo
pol
itic
al
env
iron
me
nt, curr
entl
y mos
t impa
cted by
theeve
nts in E
aster
n Euro
pe, on e
con
omi
c
trends and business.
Cu
rr
en
t tr
ad
in
g an
d ou
t
look
Geopolitical risks
are current
ly much higher
than normal
. While t
hese hav
e limit
ed direct
imp
act o
n our o
per
atio
ns cu
rre
ntly
, we are
min
df
ul of the r
isk t
hat the
y may le
ad to
more
significant indir
ect impacts
, especially
insu
ppl
y ch
ain, in
flatio
n and d
em
and,
renderi
ng f
orward
looking
sta
temen
ts
par
ticularly uncertain.
Cur
ren
tly
, we a
re exp
er
ien
cin
g go
od de
ma
nd
across our
business consist
ent with
our
expectation
s. Prices
for poly
olefin foams
werei
ncre
as
ed in J
anu
ar
y a
nd, in s
ome
products
and geographies, w
e ha
ve addit
ional
inc
rea
se
s notifi
ed to take ef
f
ect i
n the se
co
nd
quar
ter
. The infla
tionary environment f
or our
inp
ut co
sts re
mai
ns hi
ghl
y uns
et
tle
d, with
pri
cin
g of raw ma
teri
als, f
rei
ght an
d en
erg
y
inpa
r
tic
ula
r expe
cte
d to be volati
le for t
he
rem
ain
de
r of the yea
r
, at le
as
t, and
accent
uated
by
curren
t e
vent
s in Eas
tern
Europ
e. Our s
al
es p
ric
es a
nd ma
rgi
ns are
theref
ore being
closely managed.
Our
operational
per
formance also con
tinues t
o
bechallenged b
y an unpredictable supply
chain and t
he ongoing challenges pr
esented
by COVID
-
19 and its va
ri
ants. We co
ntinu
e
towork ha
rd to man
age th
e im
pacts of
the
seas e
f
fec
tive
ly as p
os
sib
le, however
inefficiencies are t
o be e
xpected.
We expe
ct mo
de
st volu
me g
row
th in ou
r
Poly
olefin Foams
business during t
he year
,
wit
h a sim
ila
r prod
uct m
ix to 2021 and a
strong
benefit from price increases impr
oving
margins,
subject to
managing cost in
flation
appropriat
ely
. In our
HPP busi
ness unit,
both
T
-FIT i
nsu
latio
n an
d Z
OTEK foa
ms for av
iatio
n
are ex
pe
cted to grow stro
ngl
y as m
ar
ket
conditions
improv
e,
par
ticularly in
the second
hal
f of the ye
ar
, w
hil
e dem
an
d for foot
we
ar
prod
uct
s is exp
ec
ted to rema
in at si
mil
ar
leve
ls to 202
1
.
ReZorce
barrier packaging represents
a
pot
entially v
er
y significant
oppor
tunity for
Zotefoams b
ut d
ep
end
s on ac
hiev
in
g a
number of
developmental
milestones
, the
outco
me a
nd tim
ing of w
hic
h are d
if
fic
ult to
pred
ict. We are therefore c
ondu
cting f
requ
ent
revi
ews of pro
gre
ss b
ut cu
rre
ntly ex
pe
ct tha
t,
wor
kin
g wit
h par
t
ner
s, we wil
l be a
ble to
successfully develop
and commercialise
the
tech
nol
og
y
. We wil
l upd
ate stake
hol
de
rs w
hen
appropriat
e.
Ove
ral
l, the Bo
ard re
mai
ns co
nfid
ent a
bou
t
the futur
e prospects
for our
business.
David
Stirling
Gro
up CEO
6 Ap
ril 2022
38
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Gar
y McGrath
Gro
up CFO
Gr
oup CFO
’
s r
eview
Overview
Gro
up reve
nue fo
r the ye
ar in
cre
ase
d by 22%
to £
1
0
0.8m (2020: £82.
7
m), with an
othe
r
stron
g yea
r in Foot
we
ar le
adi
ng to grow
th
of
4
1
% in High-P
e
rformance Products (HP
P)
and Po
lyol
efin Fo
ams g
rowin
g 1
0%, or 3
6%
exclud
ing th
e on
e-of
f PPE sal
es i
n 2020, as
many e
nd m
ar
kets rec
overe
d and s
upp
ly
chains re
filled. MuCell
E
xtrusion LL
C (ME
L)
sa
les g
rew 32%, albe
it f
rom a sm
al
ler b
ase.
Inco
nsta
nt cu
rre
ncy
, Gro
up reve
nue
inc
rea
sed by 27% t
o £1
04.9m, an
adve
rs
ecur
ren
cy im
pact of £4.
1
m.
Op
erat
ing pr
ofit de
cli
ne
d 1
1
% to £8.
1
m
(2020:£9.
1
m)
. Inp
ut co
sts ro
se ra
pid
ly an
d
unp
red
ict
abl
y an
d were not f
ull
y of
f
set by
pri
ce i
ncre
as
es in th
e yea
r
. Averag
e raw
mater
ia
l cos
ts for ou
r key raw mate
ria
l
low
-density polyeth
ylene (LDPE) more
than
doubled,
along with signifi
cant increases in
fre
igh
t, ene
rgy a
nd op
erat
ing c
osts f
rom ou
r
newly commissioned P
ola
nd fa
cility
. This led
to a gross m
arg
in de
cl
ine of £1
.2m to £26.6m
(2020: £27
.8m), and a gro
ss ma
rgi
n
pe
rce
ntag
e of 26.
4
% (2020: 33.6%
). Net
fina
nc
e cos
ts were £1
.
1
m (2020: £0.9m)
,
res
ulti
ng in p
rofit be
fore ta
x of £7
.0m (2020:
£8.
1
m). The ta
xatio
n cha
rge wa
s £2.6m
(2020:£
1
.
1
m) an
d inc
lud
es a £1
.0m d
efer
red
ta
x ac
cr
ual r
elate
d to the UK gove
rn
me
nt’
s
announced increase in t
he Corporation
T
a
xrate fro
m 1
9% to 25
%, a fu
r
the
r £1
.0
m
defe
rre
d ta
x c
har
ge re
lated to a pr
ior ye
ar
ta
xcr
edi
t and c
ur
rent ye
ar ove
rse
as l
oss
es
pr
ude
ntly n
ot rec
ogn
ise
d as a
n as
set. Bas
ic
ea
rni
ngs p
er s
ha
re was 9.0
1
p (2020: 1
4.8
7
p),
down 3
9%. In con
sta
nt cur
ren
cy
, p
rofit be
fore
ta
x was £7
.5m, an ad
ver
se im
pac
t of £0.5m.
At 3
1 De
ce
mbe
r 2021
, ne
t debt wa
s £34.3m
(2020: £35.
6m) an
d leve
rag
e (net de
bt to
EBITD
A
, using de
finitions under
the bank
facility agreement
, see section ‘
Debt facility’
)
was 2.
1
x (2020: 2
.
1
x). Net d
ebt de
cl
ine
d by
£1
.3
m af
ter ne
t cas
h flows g
en
erate
d fro
m
ope
rati
ng ac
tiv
itie
s of £1
0.9m (2020: £
1
1
.4m)
were c
ons
ume
d mos
tly by c
api
tal ex
pe
ndi
ture
of £7
.0m (2020: £1
3.3m) an
d div
ide
nd
s of
£3.
1
m (2020: £1
.0m).
Group re
venue
£
10
0
.
8
m
Change
+22%
2020
£8
2
.7m
Net debt
£3
4.3
m
Change
+4%
2020
£35.6m
Pro
fit b
efor
e t
a
x
£
7.
0
m
Change
-16
%
2020
£8.
1m
Lev
er
age
2
.1
x
Change
nil
2020
2
.1x
2
0
2
1 w
a
s a m
i
x
e
d y
e
a
r
fo
r
Z
o
t
e
fo
a
m
s
,
w
i
t
h
s
i
gni
fi
ca
n
t
r
e
v
enu
e
gr
o
w
t
h
gen
er
a
t
ed
f
r
o
m
f
o
o
t
w
e
a
r
a
n
d p
ol
y
ol
e
fi
n f
o
a
m
s
m
a
r
k
e
t
s
a
ccom
pa
n
i
e
d
b
y
s
ig
n
i
fic
a
nt c
o
s
t es
c
a
l
a
t
io
n
a
c
r
o
s
s p
r
od
u
c
t
io
n i
n
p
u
t
c
o
s
t
s
, f
r
e
ig
ht a
n
d c
e
r
t
a
i
n
c
ri
t
i
cal
o
v
er
h
e
a
d
s
39
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Reven
ue by m
ar
ket
(%)
20
21
2020
Sports and leisure
37
29
Product pr
ot
ection
26
21
Building and const
ruction
11
12
T
ra
nspor
tation
10
12
Industrial
7
7
Medical
5
16
*
Oth
er
4
3
*
1
1.6% of this 16% was a r
es
ul
t of the P
PE sa
le
s.
Within t
he transportation s
egment,
avia
tionre
pre
se
nted 4.5
% (2020: 6.5%
)
anda
utomoti
ve 5.8% (
2020: 5.5
%) of Grou
p
reven
ue. Th
es
e two m
ar
kets rem
ain we
ll
be
low the
ir pre
-pa
nd
emi
c leve
ls an
d in
201
9we
re 1
5.0% and 7
.0% resp
ec
tive
ly
.
Gros
s profit
Gro
ss ma
rgi
n dec
rea
se
d to 26.
4% (
2020:
33.6%
), repre
se
ntin
g a redu
cti
on of £1
.
2m
inab
sol
ute term
s fro
m £27
.8
m to £26.6m.
Wh
ile s
ale
s pr
ice i
ncr
eas
es we
re im
ple
me
nted
in the Po
lyol
efin Fo
ams b
usi
ne
ss in Q
2 202
1
,
cos
ts for re
lated r
aw mater
ial
s co
ntinu
ed to
escalate
and more
than doubled t
hrough H
1
202
1
, re
mai
nin
g clo
se to thei
r pe
ak for t
he
res
tof the yea
r
. Zotefoam
s’ appro
ach h
as
prev
iou
sly b
ee
n to adju
st pr
ic
es on
ly w
hen
longer
-t
erm structural
changes in input
pri
cin
gare ev
id
ent, ab
sor
bin
g the ad
vant
age
s
andd
is
adva
ntag
es of s
hor
t-term pr
ic
e
movement
s while longer
-t
e
rm shifts are
pas
se
d on thro
ugh p
ri
cin
g to custome
rs.
Theunpredictable and
significant increase
inLD
PE pri
ce
s throu
gh
out 2021 mea
nt that
cos
ts were n
ot ful
ly re
cove
red du
ri
ng the
period. Pricing
actions implement
ed during
2022 are p
lan
ne
d to allow gr
oss m
arg
ins
inthe m
ed
ium ter
m torec
over an
d the
drop-
through
effect on underlying pro
fit t
o
inc
rea
se mate
ri
all
y
. In a
ddi
tion to the
se raw
mat
erial price increases,
freight a
vailability
pus
he
d log
isti
cs ch
arg
es u
p
,mo
st nota
bl
y
inH2 2021
, a
nd u
tilit
ies i
ncr
eas
ed s
ign
ific
antl
y
in Q4 d
es
pite so
me prote
ctio
n dur
ing t
his
pe
rio
d fro
m ene
rg
y hed
ge
s. In Feb
ru
ar
y
202
1
,the Gro
up commissioned its
third
majorf
oam manufacturing
site in P
oland,
which increasedo
verhead costs
, including
de
pre
ciati
on of £0.
7
m a
nd a
n equ
iva
len
t
leve
lof other fi
xed ove
rhe
ad as ex
pe
cted,
anddelivers a
dditional,
global, operat
ing
ca
pab
ili
ty th
at is n
ot yet ful
ly u
tilis
ed. T
he
inc
rea
sed s
tren
gth of ste
rli
ng ag
ain
st the
USdo
lla
r
, in pa
r
tic
ula
r
, als
o imp
acted g
ros
s
mar
gin by £
2.
0m, w
ith the of
fse
tti
ng im
pact
s
of the G
roup’
s h
edg
ing s
trateg
y ap
pea
ri
ng
under distribution and administrative
costs
be
low
, in li
ne wi
th acc
oun
ting s
tan
dard
s.
Distribution and administrative co
sts
The Group has
a clear e
xpansion stra
tegy
,
founded on
proprietary cellular mat
erials
technology link
ed t
o longer
-t
erm demand
grow
th i
n our c
hos
en ma
rkets. O
rga
nic
grow
thw
ith a po
r
t
foli
o of uni
que a
nd h
igh
ly
dif
fere
ntiate
d prod
ucts r
equ
ire
s that we inve
st
acti
vel
y in, an
d repr
io
riti
se w
here n
ee
de
d,
technical,
sales-focused
and administra
tive
res
ourc
es to cre
ate, execute a
nd ma
nag
e this
grow
th. Af
te
r a larg
e pa
r
t of 2020 was sp
ent
managing the
unc
ertainties of C
OVID-
1
9,
with
ope
rati
ng co
st inve
stme
nt in
to these g
row
th
drivers post
poned and discre
tionary spend
tigh
tly co
ntrol
le
d, a retur
n to investm
ent i
n this
are
a com
me
nce
d in th
e lat
ter pa
r
t of 2020 an
d
con
tinu
ed in 2021
. Du
rin
g the ye
ar
, the ave
rag
e
number of
Group emplo
yee roles
not dir
ectly
rel
ated to prod
ucti
on am
ou
nted to 1
91
, a
n
inc
rea
se of seve
n over th
e prev
iou
s yea
r
.
Inc
lud
ed w
ithi
n dist
rib
utio
n cos
ts in th
e
con
sol
idate
d inc
ome s
tatem
ent a
re sa
le
s,
marketing
and warehousing
expenses. These
cos
ts inc
rea
se
d by £0.5m, or 8%, t
o £7
.3
m
(2020: £6.8m) duri
ng the ye
ar
, m
ostl
y refle
cti
ng
a rec
over
y of s
ome of th
e exp
end
itu
re hel
d
bac
k dur
ing 2020 a
nd in
cre
ase
d sa
le
s acti
vit
y
.
Included within a
dministrativ
e expenses are
technical dev
elopment, fi
nance, inf
ormation
system
s an
d admi
nis
tratio
n co
sts as we
ll
ast
he impact
of f
oreign e
xchange hedges
matu
rin
g in the p
er
iod a
nd n
on-
cas
h fore
ign
excha
nge tr
ans
lati
on exp
en
ses. T
he
se c
osts
red
uce
d in 2021 by £0.8m, or 6%, t
o £1
1
.
1
m
(2020: £
1
1
.9m). However
, af
te
r remov
ing
foreign e
xchange mo
vements,
these
adm
inis
trati
ve cos
ts inc
rea
sed by £0.7
m,
mostly r
epresenting increased support costs
inAs
ia, Pol
an
d and at M
EL, togeth
er w
ith
hig
he
r rec
rui
tme
nt co
sts af
ter a q
uie
t 2020.
Se
e, ‘
Cu
rre
ncy rev
iew’
, be
low for f
ur
th
er
informat
ion and con
te
x
t aroun
d foreign
ex
change mo
vements
.
The business unit r
esults do
not include
ce
ntral p
lc c
osts, w
hic
h are not c
ons
id
ere
d to
be segment specific
. Neither do
they
include
he
dgin
g move
men
ts. In 2021
, c
entr
al pl
c
cos
ts were £1
.8m (2020: £1
.9
m)
.
Re
venue performance
Poly
olefin Foams
business unit sales gr
ew
1
0% to £56.2m (2020: £50.
9m). In con
sta
nt
cur
ren
cy
, s
al
es gre
w 1
5% t
o £58.3m.
E
xclud
ing £
9.6m of PPE-related s
al
es in H2
2020, whic
h were a u
niq
ue co
ntra
ct se
cure
d
by the G
roup’
s la
rge
st U
K cus
tomer w
ith th
e
UK gove
rn
me
nt dur
ing t
he de
pths of th
e
pan
de
mic, an
nua
l sa
le
s of pol
yole
fin foa
ms
inc
rea
sed 3
6%. Thi
s refle
cted th
e stron
g and
rap
id re
cover
y in gl
oba
l de
man
d foll
owin
g the
sha
rp d
ec
lin
e in act
ivi
t
y from Q
2 2020,
cou
ple
d wi
th res
tock
ing w
hic
h, in mo
st ca
se
s,
was co
mp
lete by the e
nd of the ye
ar
. A
ll
reg
ion
s expe
ri
en
ced ve
r
y str
ong s
ale
s grow
t
h:
the U
K (ex PPE) inc
rea
sed 13
%, Eu
rope
inc
rea
sed 5
8%, the USA inc
rea
se
d 1
3% and
the Re
st of th
e worl
d inc
rea
se
d 49%, whil
e
mos
t ind
ustr
ial m
ar
kets rec
overe
d except
aviat
ion and aut
omotive
.
HPP sa
le
s inc
rea
se
d 4
1
% to £4
2.3m (2020
:
£30.0m). In cons
tant c
ur
ren
cy
, s
ale
s grew
4
7% to £
44.
1
m. Fo
otwe
ar i
s the la
rge
st
app
lic
atio
n cur
re
ntly w
ithi
n HPP an
d reven
ue
in thi
s mar
ket grew 5
6% versu
s 2020, af
ter
growi
ng 68% in 2020, ma
inta
ini
ng the r
un
rateach
ieve
d in H2 2020. Sal
es we
re bo
osted
by the de
laye
d 2020 Oly
mp
ic Ga
me
s but
hin
de
red la
ter in the ye
ar by a
n ei
ght-week
shu
t dow
n of ope
rati
ons at o
ne of the G
rou
p
’
s
key custom
er
s in V
ietn
am. ZO
TEK
®
F
fluoropolymer fo
am sales ended the
year
1
0%dow
n ver
sus 2020, im
pac
ted by the
continuing
depression of
the airline
industry
,
alt
hou
gh we be
ga
n to see so
me s
igns of
rec
over
y i
n Q4 2021
. T
-
FIT
®
advan
ced
insulation
s
ales contin
ued to
face challenges
fro
m COVID
-
19
, p
ar
ti
cul
ar
ly in Eu
rope a
nd
Ind
ia, wh
ic
h limi
ted grow
t
h to 1
1
% (2020: 4
%)
,
wit
h a stron
g per
for
man
ce in C
hin
a of
fs
et by
ade
cli
ne in Eur
ope.
MEL s
ale
s grow
th wa
s af
fe
cted by th
e cur
rent
strate
gy to focu
s on ex
istin
g cus
tome
rs an
d
red
irec
t res
ourc
es to the R
eZorc
e
®
mono-mat
erial barrier packaging
initiativ
e.
De
spi
te this, s
ale
s grew by 32% to £2.3m
(2
020
: £1
.
7
m)
, with negligible imp
act in
absolu
te
t
erms fr
om cu
rrency
.
40
Zot
efoams plc
An
nua
l Re
por
t 2021
Operating
profit
Op
erat
ing pr
ofit was £8.
1m
, 1
1
% be
low
2020(£9.
1m
).
Finance costs
Th
e total inte
rest c
ha
rge for t
he yea
r inc
rea
se
d
to £
1
.
1
m (2020: £0.
9m) a
nd inc
lud
es £0.
1m
(2020: £0.2m
) of intere
st o
n the De
fine
d
Benefit Scheme pension
obligation
. The
Gro
up ca
pi
tali
se
d £nil (2020: £0.6m) of
intere
st i
n rela
tion to the fi
nan
cin
g of its
capacity enhancement projects
still under
construction
, a reduction
following
the
commissioning o
f the P
oland plant at t
he
beginning of
Februar
y 202
1
, at
which point
intere
st c
api
ta
lis
ation i
n the G
roupc
ea
sed.
Pro
fit b
efor
e t
a
x
Profit b
efore t
a
x de
cre
ase
d by 1
6% to £7
.0m
(2020: £8.3m)
.
Currency
review
E
xc
ha
ng
e r
ate
s
Zo
tef
oams transact
s significantly
in US
dollars
and e
uro
s. The exc
han
ge rate
s use
d to
tran
sla
te the key flows an
d bal
an
ce
s were:
20
21
2020
GBP to US
D – avera
ge
1.
37
6
1.
2
8
4
GBP to US
D
– yea
r
-
ends
pot
1.
3
51
1.
3
6
6
GBP to eu
ro – aver
age
1
.1
6
3
1.1
2
5
GBP to eu
ro
– yea
r
-
en
d spot
1
.1
9
2
1
.111
Movem
en
ts in fore
ign exc
han
ge rate
s ca
n
have
a significant impact on
results
. During
the ye
ar
, the s
terl
ing ave
rag
e excha
nge ra
te
year
-on-y
e
ar against
the US
dollar
stre
ngth
en
ed by 7% and th
e ster
ling ave
rag
e
excha
nge r
ate agai
nst th
e eur
o stren
gth
ene
d
by 3%. The ster
lin
g spot r
ate aga
inst th
e
USdo
lla
r fro
m 3
1 De
ce
mbe
r 2020 to 3
1
De
ce
mbe
r 2021 weaken
ed ma
rgi
nal
ly by 1
%,
ris
ing s
teadi
ly by 4
% to the mid
-year b
efore
steadily falling back,
while the st
erling spot
rate aga
ins
t the eu
ro fro
m 3
1 De
ce
mb
er 2020
to 3
1 D
ec
em
ber 2021 stre
ngth
en
ed by 7%,
wit
h most of t
he ga
in be
ing a
chi
eved by
m
i
d
-
y
e
a
r.
Zotefoams i
s a pre
dom
ina
ntly U
K
-ba
sed
exporter which inv
oices mostly in
local
cur
ren
cy
. I
n 202
1
, ap
proxi
matel
y 90% of s
ale
s
(2020: approx
imatel
y 79%
) we
re de
nom
inated
in cu
rre
nci
es oth
er th
an ste
rli
ng, mos
tly US
dol
lar
s or e
uros. M
ost o
pe
ratin
g cos
ts are
inc
urr
ed in s
terl
ing, othe
r tha
n the m
ain r
aw
mat
erials for poly
olefin f
oams used for
production
in the UK,
which are
euro-denominat
ed, U
S subsidiary production
and operating costs
, most other subsidiaries’
staf
f and o
pe
ratin
g cos
ts and s
ome H
PP raw
mat
erials, which ar
e US dollar
-denominated.
Poland operating
costs are incurred
in Zloty
.
The Group t
herefor
e uses forward
exchange
contract
s t
o hedge its
foreign currency
tran
sac
tio
n ris
k to US dol
lar a
nd th
e euro.
Th
eGrou
p ge
ne
rated a ne
t gai
n on for
ward
excha
nge c
ontr
acts of £1
.3m (2020 los
s:
£
0
.1
m
)
.
Zotefoams a
ls
o face
s tra
nsl
atio
n ris
k.
Zo
tef
oams plc
, the
parent compan
y
, holds
the
Group
’
s multi
-currency borro
wings facility
and h
as p
rovid
ed in
terco
mpa
ny loa
ns an
d
int
ercompany t
rading f
acilities t
o the USA
andP
ola
nd t
o suppor
t the
Group
’
s capacity
expa
nsi
on pr
oje
cts. It a
lso h
as a grow
ing
Foot
wea
r bus
ine
ss, w
hic
h is invo
ice
d fro
m
theU
K in US do
lla
rs, ad
din
g to its exp
osu
re
toforei
gn cu
rre
ncy d
eno
min
ated ne
t ass
ets.
This transla
tion e
xposure is
mitigat
ed,
where
possible,
through
an offset with
same-currency
liabilities,
primarily thr
ough borrowin
g in the
releva
nt cur
rency
. Ever
y mo
nth, these fore
ign
currency denominat
ed inter
company net
positions
, despite
being cash neutral
, require
tobe tran
sla
ted by Zotefoams p
lc on a m
ar
k to
mar
ket ba
sis a
nd the m
ovem
ent ta
ken to the
Com
pa
ny inc
ome s
tateme
nt. Th
is tre
atme
nt
als
o app
lie
s to the no
n-ster
li
ng acc
ou
nts
receivable balances held
on the
Company’
s
bal
anc
e sh
eet, the i
mpa
ct of wh
ich s
hou
ld
rev
erse through
forward currency
contract
s but
is su
bje
ct to the tim
ing d
if
fe
ren
ce b
et
wee
n the
recordi
ng of
accounts r
eceivable and
cash
rec
ei
ved. In th
e year
, t
he Gro
up re
cor
ded a
tran
sla
tion l
oss i
n the in
co
me sta
teme
nt of
£0.
1
m
(2020
lo
ss:
£0.
2m).
Cu
rr
en
cy im
pa
ct o
n bu
si
ne
ss s
egm
en
ts i
n 2
021
Currency had
a £4
.
1
m negative
impact on t
he Group
’
s sales per
formance
Se
gme
nt reve
nu
e £m
20
21
Reported
20
21
Adjuste
d*
2020
Reported
Ne
t c
ha
ng
e %
Reported
Adjuste
d
Poly
olefin Foams
56.
2
58
.4
5
0.9
10
15
HPP
42
.3
4
4
.1
30.0
41
47
MEL
2.3
2.4
1.
8
32
37
Group
10
0
.
8
10
4
.
9
8
2.7
22
27
*
Co
nst
an
t cu
rre
nc
y, adju
sti
ng 20
21 valu
es to 2
020 ra
tes
. Se
e exch
an
ge r
ates t
ab
le a
bov
e.
Group CFO’
s
review
Continued
Curren
cy m
ov
ements
during t
he y
ear
ne
gati
vely i
mpa
cted G
roup reve
nu
e by £4
.
1
m
(2
020
: £0.
1
m negative
impact)
. They posit
ively
imp
acted o
pe
ratin
g cos
ts by £2.4m (
2020:
£0.
1
m n
ega
tive im
pac
t)
, re
su
ltin
g in a ne
t
ne
gati
ve impa
ct of £1
.
7m (
2020: neg
ative
impact £
0.2
m) befor
e hedging
. After
de
duc
ting th
e he
dgi
ng ga
in of £1
.
2m
(2020:charg
e of £0.3m)
, the n
et cu
rre
ncy
ne
gati
ve impa
ct for th
e yea
r was £0.5m
(2020:negat
ive im
pact £
0.6m)
.
We expe
ct grow
t
h to come m
ain
ly f
rom
outs
id
e the UK a
nd re
co
gni
se that o
ne of
ourp
rin
cip
al r
isks i
s our ex
pos
ure to fore
ign
currency fluct
uations
, particularly the US
dollar
, which we wi
ll manage t
hrough hedging
strate
gie
s. Ba
sed o
n 2021
, it i
s esti
mated th
at,
wit
h res
pec
t to trans
ac
tion r
isk a
nd fo
r ever
y
one p
erc
ent
age p
oint m
ovem
ent i
n the US
dol
lar/
ster
ling r
ate, profit move
s by £0.2
4m
unhedged and £0
.08m hedged.
In the
year
,
itis a
ssu
me
d that th
e tran
sac
tio
n ris
k fro
m
euro/ster
lin
g movem
ents c
onti
nue
s to be
substantially
naturally
hedged, wit
h sales
reven
ue
s of
fse
t by cos
ts, pri
mar
il
y rel
ated
toraw mater
ial p
urc
has
es a
nd ce
r
ta
in
fu
r
the
rproc
es
sin
g co
sts.
The Group does
not curr
ently hedge f
or the
translat
ion of
its f
oreign subsidiaries
’ assets or
liabilities.
The foreign
currency hedging
policy
is kept u
nde
r reg
ula
r revi
ew an
d is for
ma
lly
app
roved by th
e Boa
rd on a
n ann
ual b
asi
s.
T
ax and earnings per
s
hare
Th
e ef
fe
ctive t
a
x rate for th
e yea
r is 37
.6%
(2020: 1
3.
7%
), which i
s sig
nifi
ca
ntly a
bove
theG
roup’
s we
igh
ted avera
ge co
rp
orate ta
x
rate for th
e yea
r of 1
9.0% (
2020: 1
9.
7%)
. T
his
res
ulted i
n a ta
x c
harg
e of £2.6m in th
e year
(2020: £
1
.
1
m). The hi
gh
er ef
fe
cti
ve ta
x ra
te for
the ye
ar ar
is
es pr
im
ari
ly f
rom an i
ncr
eas
e in
the d
efer
red t
a
x cha
rge of £1
.0m th
at res
ults
fro
m the exp
ec
ted fu
ture c
han
ge i
n UK
Cor
po
ratio
n T
a
x rates to 25
% fro
m the cu
rre
nt
1
9% an
d whi
ch wa
s sub
stan
tive
ly en
acte
d
on1
4 M
ay 202
1
, a pr
ude
nt ap
proa
ch to
rec
ogn
isi
ng over
se
as ta
x los
se
s as a def
er
red
inc
ome t
a
x as
set, am
ounti
ng to £0.4m
41
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Inve
st
m
en
ts
Given the
capital int
ensive na
ture o
f the
Zo
tef
oams business,
long lead t
imes for
keyequ
ipm
ent a
nd th
e imp
or
ta
nc
e of
operational
gearing, in
vestment decisions
require
significant planning and
are made
wit
h a cle
ar a
sse
ss
me
nt of strate
gic fi
t,
ris
k,ri
sk a
ppeti
te and ex
pe
cted retu
rn
s.
Confidence in t
he Group
’
s developing
port
folio o
f HPP
opportunities is a
significant considerat
ion in
determining
the
timi
ng of ce
r
ta
in inve
stm
ents, w
hil
e the
strat
e
gic importance of maintaining
growth
in the
profitable
Poly
olefin Foams
business,
the Gr
oup
’
s largest vol
ume product
range,
info
rms th
e de
cis
ion to in
cre
ase tota
l
Group
capacity versus relying
solely
onmi
xen
ric
hm
ent.
Zotefoams t
arg
ets im
provem
ents i
n
theG
roup’
s ret
urn o
n ca
pit
al over t
he
inv
estment cy
cle,
while recognising t
he
shor
t
-term
impact on t
his re
turn during
construction
and operatin
g initially
at low
e
r
util
isa
tion l
evels. W
he
n Zotefoam
s em
bar
ks
on inv
e
stment
in a major
expansion or
new
location
, such as
the ins
tallation o
f extrusion
and h
igh
-pre
ss
ure c
apa
bil
it
y at ou
r exist
ing
Kentu
ck
y
, U
SA si
te or the mo
st re
ce
nt
inves
tme
nt in foa
m ma
nuf
actu
rin
g at the
Pola
nd si
te, we take into acc
oun
t the
imp
or
ta
nc
e of sca
le a
nd di
luti
on of he
av
y
inf
ras
truc
ture c
ost ove
r a (fu
ture) se
con
d or
third l
ine. A
s suc
h, the fir
st step i
s invar
ia
bly
more d
ilu
tive to ca
pit
al retu
rn th
an a
ny
sub
se
que
nt inve
stm
ent
s.
Zo
tef
oams defines t
he ret
urn on capital
em
ploye
d (ROC
E) a
s op
erati
ng pro
fit befo
re
excepti
ona
l item
s div
id
ed by the ave
rag
e
sum of i
ts eq
uit
y
, n
et de
bt an
d other
non-current l
iabilities. This
measure
ex
cludes acquired intangible
assets and
the
ir am
or
ti
satio
n co
sts. We als
o exclud
e
significant capacity in
vestments
under
construction
until
they en
ter pr
oduction.
Wedo not at
tempt to ad
just fo
r the fi
rst
phase inefficiencies as mentioned
above
.
In 2021
, th
e Grou
p’
s retur
n on c
ap
ita
l
em
ploye
d dec
rea
se
d to 6.
1
% (2020: 9.
0%
)
.
Th
e mai
n cau
se of th
is move
men
t in the
year is
the commissioning
of t
he Poland
manufacturing sit
e at the
beginning of
Februar
y 20
2
1
, which was previously
adj
usted fo
r as a co
nse
qu
enc
e of it b
ein
g
asignifi
cant capacity inv
estment under
construction
in line
with the
Group
’
s
defi
niti
on of RO
CE, and re
du
ced o
pe
ratin
g
profit. T
he ma
in c
aus
e of a redu
cti
on in
ROC
E sin
ce 201
8 is the i
ncre
as
e in the
capital base f
ollowing
the complet
ion of
ouri
nvestm
ent
s in the U
K, USA a
nd Pol
an
d
and the
additional opera
ting cost
s arising
fro
m thei
r ope
rati
on, wh
ich i
s exp
ecte
d
dur
ing t
his st
age of th
e inve
stme
nt cycl
e.
Howeve
r
, bus
ine
ss g
row
th as a re
sul
t of this
inc
rea
sed c
ap
aci
ty a
nd im
prove
d util
isat
ion
is exp
ec
ted to improve R
OCE b
eyond th
at
previously achiev
ed.
The Group
’
s recent committed capacity
expansion pr
ogramme is
now complet
e.
Inves
t
in
g in g
row
t
h (
£m)
2
0
15
2
016
2
0
17
2
0
18
2
0
19
2020
2021
To
t
a
l
Growth capital
6
.1
6.9
7.
8
12
.
8
19
.
8
10
.
3
3.4
6
7.1
Capitalised interest
–
–
–
–
0.9
0.6
0.0
1.
5
Maint
enance capital
2.6
5.
2
3.6
3
.0
3
.7
2
.1
2
.6
22.8
T
otal inv
estment in
proper
ty,
pla
nt and
equipment
8
.7
1
2
.1
11
.
4
15
.
8
24
.
4
13
.
0
6.0
91.
4
(2020:a credi
t of £0.
1
m), no adju
stme
nts
inthe c
ur
rent ye
ar to the p
rio
r yea
r UK
Cor
po
ratio
n T
a
x ch
arg
e (2020: a credi
t of
£0.4m
) an
d a lower p
rofit b
efore ta
x of £7
.0m
(2020: £8.3m)
. N
et in
com
e ta
x pa
id du
ri
ng
theye
ar was £1
.
1
m (2020: £
1
.
1
m).
Bas
ic e
ar
nin
gs pe
r sha
re was 9.01
p
(2020:1
4.87
p)
, a re
du
ctio
n of 39%. With
out
the d
efer
red t
a
x cha
rge a
s a res
ult of th
e
expected
future change
in UK Corporat
ion
T
a
x rates, e
ar
nin
gs p
er sh
are wa
s 1
1
.
1
p,
ared
ucti
on of 25
%.
ReZorc
e
Re
Zorc
e
®
technology
, being de
veloped
byMEL, of
fe
rs b
ran
d owne
rs th
e abi
lit
y to
significantly r
educe their carbon
footprin
t
anda
lso h
el
p mee
t the
ir pl
edg
es o
n both
rec
yclin
g and u
se of re
cycl
ed c
ontent i
n the
ir
packaging
, putting sust
ainability at the
hear
t
of our M
EL deve
lop
me
nt age
nd
a. Du
rin
g the
year
, Zot
efoams significantly increased it
s
invest
ment in this
oppor
tunity
. Labour
amo
unti
ng to £0.4m was redi
rec
ted fro
m MEL
to ReZorc
e and c
ap
ita
lis
ed. On
e ha
lf of thi
s,
as we
ll as ex
pe
ndi
ture of £0.6m re
pre
sen
ting
additional
, direct
ly attributable cost
s, w
as
ca
pit
ali
sed i
n lin
e with I
AS 38 “Ca
pit
ali
sati
on of
Deve
lop
me
nt Cos
ts”
. T
he G
rou
p als
o inves
ted
£0.9m of ca
pi
tal a
nd us
ed th
e other £
0.2m
of
MEL labour
resource t
o complete
the
commissioning o
f its pi
lot line
and implement
sterile
car
ton
packaging
, the combined
sum
of whi
ch h
as be
en re
co
rde
d as ta
ngi
ble
as
sets. In tota
l, investm
ent i
n Re
Zorce
amo
unted to £1
.9m du
rin
g 2021 and £2.4m
cumulatively
, which will be amortised in
line
with Group
policies, if
successful,
orbef
ul
ly im
pai
red, if n
ot, in line w
ith
acc
oun
tings
tan
dard
s.
42
Zot
efoams plc
An
nua
l Re
por
t 2021
Dividend
Th
e Boa
rd ha
s a prog
res
si
ve div
ide
nd
policy
,
recognising the importance to
our
sha
reh
old
er
s of the d
ivi
de
nd as p
ar
t of th
eir
overal
l ret
urn. The Dir
ectors ar
e proposing
afina
l di
vid
end of 4.40p (2020: 4.27
p)
,
whi
chwou
ld b
e payab
le on 1 J
une 2022 to
shareholders on t
he Company
register
at the
clo
se of bu
sin
es
s on 6 May 2022. T
aken w
ith
the in
teri
m div
ide
nd of 2.
1
0
p (2020: 2
.03p)
,
this wo
uld b
rin
g the total d
iv
ide
nd fo
r the ye
ar
to 6.50p (2020: 6.30p) an
d woul
d rep
res
ent a
div
id
end c
over of 1
.4 tim
es (2020: 2
.4 time
s)
.
Th
is mu
ltip
le is l
ower tha
n that of 2020 a
s a
result o
f the
shor
t
-term in
flationary impact on
mar
gins a
s wel
l as the h
igh
er t
a
x cha
rge fo
r
the ye
ar
, in p
ar
t d
rive
n by the n
on-re
cu
rr
ing
defe
rre
d ta
x c
har
ge ar
is
ing f
rom the U
K
Cor
po
ratio
n T
a
x in
cre
ase to 25
% i
n 2023.
Ca
sh fl
ow
Th
e Grou
p co
ntinu
es to be h
igh
ly c
ash
generative
with net
cash from opera
tions
befo
re inves
tme
nt in wor
k
ing c
api
tal a
nd
provi
sio
ns of £1
6.5m, up 3% on th
e prev
iou
s
yea
r (2020: £
16.
1
m)
. Of t
his, £3.0m (2020:
£2.4m
) was re
-inve
sted in wo
rk
ing c
ap
ita
l.
T
rad
e and oth
er re
ce
iva
ble
s inc
rea
se
d by
£1
.6m (2020: red
uc
ed £1
.
2m)
, re
flec
ting
gre
atly i
ncre
as
ed sa
le
s. Ove
rdu
e bal
anc
es
rem
ain
ed o
n averag
e be
low 0.5
%. Inven
torie
s
inc
rea
sed by £
2.8m (2020: incre
ase
d £4
.5m),
wit
h the move
me
nt be
ing d
rive
n by an
inc
rea
se in fo
otwe
ar r
aw mater
ia
l refle
ctin
g
theV
ietn
am s
hutdow
n clo
se to the ye
ar en
d
and a b
uil
d-up of fi
nis
he
d goo
ds inve
ntor
y in
Poland
now t
hat it is
op
erational
. The change
in mi
x als
o imp
acts th
e val
ue of inve
ntor
y
, w
ith
HPP raw m
ateri
als b
ei
ng si
gni
fica
ntly m
ore
expensive
than their
polyolefin
counterparts
and their uniqueness requiring higher
inven
tor
y leve
ls to miti
gate su
ppl
y cha
in r
isks.
T
rad
e and oth
er paya
bl
es in
cre
ase
d £1
.5
m
(2
020
: increased £1
.0m
)
, supporting higher
business activity
. Zo
te
foams recognises
the
importance of its
supplier relat
ionships and
has impro
ved its performance with r
espect to
hon
our
ing a
gre
ed pay
me
nt ter
ms. As a re
sul
t
of the a
bove, cas
h ge
ne
rated f
rom op
era
tion
s
was in l
ine w
ith th
e prev
iou
s yea
r at £1
2.8m
(2020: £1
3.0m).
Group CFO’
s
review
Continued
Du
rin
g the ye
ar
, the G
rou
p pai
d intere
st of
£0.8m, no
ne of wh
ich wa
s ca
pit
ali
sed (2020:
pai
d intere
st of £1
.
1
m, of w
hic
h it ca
pi
tal
ise
d
£0.6m on qu
ali
f
y
ing a
sse
ts und
er IA
S 23
“Cap
ita
lis
atio
n of Bor
rowi
ng Co
sts”). The
intere
st pa
id h
as be
en s
pli
t bet
we
en op
er
ating
acti
vi
tie
s of £0.8m (2020: £0.5m) and inves
ting
acti
vi
tie
s of £nil (2020: £0.6m) to reflec
t the
Gro
up’
s uti
lis
ation of th
e inter
est p
aid.
T
a
xati
on pa
id du
rin
g the ye
ar a
mou
nted
to£
1
.
1
m (2020: £
1
.
1
m).
Zo
tef
oams’
proper
ty
, plant and equipment
ca
pit
al exp
en
ditu
re red
uc
ed in 2021
, as
exp
ecte
d, follow
ing s
ever
al yea
rs of c
apa
cit
y
expansion
, with
to
tal expenditur
e including
ca
pit
ali
sed i
ntere
st of £6.0m (2020: £1
3.0
m)
.
Th
e pri
ma
r
y focu
s on th
is yea
r’
s expe
nd
iture
was inve
stm
ents i
n the Pol
and p
lan
t to allow
for it
s commissioning in
Februa
ry 202
1
,
as
sem
bli
ng a pi
lot lin
e an
d tria
l syste
m for the
MEL ReZ
orce oppor
tunity
, and impr
ovement
s
to
the Cr
oydon
pla
nt
. A small
amount o
f
ca
pit
al inve
stme
nt is o
utst
and
ing i
n Pola
nd,
de
layed f
rom 2021
, a
nd th
e level of
exp
end
itur
e on Re
Zorce d
uri
ng 2022 wi
ll be
de
pen
de
nt on key mi
le
stone
s dur
ing t
he yea
r
.
Oth
er th
an th
is, we exp
ect c
ap
ita
l exp
end
itu
re
to be at leve
ls mo
re in li
ne wi
th the G
rou
p
’
s
depreciation
charge.
The Group also
invest
ed
£1
.
1m (
2020: £0.3m) in inta
ngi
ble a
ss
ets,
alm
ost e
ntire
ly re
lated to MEL p
atents a
nd
capitalised dev
elopment costs
for t
he
ReZor
ce opportunit
y at
MEL.
Af
ter d
ivi
de
nds p
aid i
n the yea
r am
oun
ting to
£3.
1
m (2020: £1
.0
m) and le
as
e paym
ents of
£0.5m (2020: £0.
4m)
, c
los
ing n
et de
bt was
£34.3m (2020: £35.6m)
. At th
e yea
r end, th
e
Group r
emains comfortably within it
s bank
fac
ilit
y c
ovena
nts, wi
th a rati
o of EBIT
DA to
netfi
nan
ce ch
arg
es of 1
6 (2020: 2
4)
, aga
ins
t
acove
nant m
ini
mum of 4, an
d net d
ebt to
EBIT
DA (leve
rag
e) of 2
.
1x (
2020: 2
.
1
x
)
, aga
ins
t
a cove
nant of 3.0x. S
ee ‘D
ebt fa
cili
t
y’ for
adefi
niti
on of leve
rag
e an
d infor
mati
on o
n
theG
roup’
s re
newa
l of its refi
na
nci
ng
ar
ran
ge
men
ts in Ma
rch 2022. We expec
t to
remain withi
n cov
enant levels
going f
or
ward
.
Debt facility
At 3
1 De
ce
mbe
r 2021
, the G
rou
p’
s gros
s
fina
nc
e faci
liti
es we
re £4
7
.3m (2020: £53.8m)
,
comprising a multi
-currency term loan
of
£20.0m (2020: £25.0m)
, a mul
ti-c
urre
nc
y
revol
vin
g cre
dit f
acil
it
y of £25.0m (2020:
£25.0m) and a re
ma
inin
g bal
an
ce of £
2
.3m
(2020: £3.8m) of a fur
th
er £7
.5m ster
ling
annually renew
able t
erm loan, r
epayable
ineq
ua
l qua
r
ter
ly in
sta
lme
nts. Th
e ba
nk
fac
ilit
y i
n pla
ce at 31 Dec
emb
er 2021 is for
afive
-year p
er
iod a
nd exp
ire
s in May 2023.
Atthe date of th
e statem
ent of fi
na
nci
al
position
, headroom
, which w
e define as
the
combination
of amoun
t undrawn
on the
facility
and c
as
h and c
as
h eq
uiva
le
nts dis
clo
se
d on
the Sta
tement o
f Financial Posit
ion, amoun
ted
to £
1
3.4m (2020: £
1
9.2m)
. Th
e faci
lit
y is
sub
jec
t to two c
ovena
nts wh
ich a
re tes
ted
se
mi-a
nnu
all
y: net d
ebt to EBIT
DA (leve
rage)
and EB
ITDA to net fi
nan
ce ch
arg
es.
Zotefoams d
efin
es EB
ITDA as p
rofit fo
r the
year bef
ore tax, adj
usted f
or depreciat
ion
anda
mo
r
tis
ation, n
et fina
nc
e cos
ts, the
sha
reof profi
t
/l
oss f
rom i
ts joi
nt ventu
re an
d
equ
it
y-set
tle
d sh
are
-ba
sed p
ayme
nts. Ne
t
debt comprises short and long-
term loans
le
ss c
ash a
nd c
ash e
qui
val
ents a
nd is
adj
usted f
rom IF
RS by the im
pac
ts of IFRS 2
and I
FRS 1
6 und
er th
e ban
k fac
ili
ty d
efin
itio
n.
Wi
th the G
roup’
s d
ebt fac
ili
t
y ar
ran
gem
ent
expi
ri
ng 1
3 m
onths f
rom th
e date of si
gni
ng
ofthe fin
an
cia
l state
men
ts, the Gr
oup h
as
und
erg
one a r
ene
wal tend
er p
roc
es
s and
sel
ec
ted Ha
nde
ls
ban
ken an
d NatWes
t, the
inc
umb
ents, to co
ntin
ue as i
ts le
nde
rs. U
nde
r
the t
er
ms o
f the ne
w facility
, completed in
Ma
rch 2022, theGrou
p’
s gros
s fin
anc
e fac
ili
ty
comprises a £50m
multi-currency re
volving
cre
dit f
acil
it
y wi
th a £25m ac
cord
ion, o
n a 4+
1
teno
r
, and w
ith a
n intere
st ra
te ratchet o
n
slightly
improv
ed t
erms to
the pr
evious facil
ity
and i
ncl
udi
ng a sm
all e
le
me
nt rel
ated to the
achievement
of sus
tainability targets
. The
fina
nc
e cos
t and l
evera
ge c
ovena
nts re
mai
n
inpl
ace, wi
th the fo
rm
er re
mai
nin
g at 4:
1
andt
he lat
ter i
ncre
as
ing to 3.5:
1 f
rom3.0:
1
.
Una
mo
r
tise
d co
sts of £0.3m re
latin
g to the
prev
iou
s fac
ilit
y w
ill b
e cha
rge
d to inco
me
inthe fi
rsth
al
f of 2022
.
43
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Group banking cov
enants defin
ition
Net d
e
bt to E
BITDA ra
t
io (L
ever
ag
e)
£m
20
21
2020
£m
2
021
2020
Profit af
ter ta
x
4.4
7.
2
Net d
ebt p
er IFR
S
34.3
3
5.6
Adjust
ed for
:
IFRS 16 leas
es
(
1
.1
)
(
1.
4
)
Depreciation
and amortisation
7.
6
6
.7
Fi
nan
ce l
eas
es p
re 1Jan
uar
y 201
9
0.0
0
.1
Finance costs
1
.1
0.
8
Roundings
0.0
(
0
.1
)
Finance income
0.0
0.0
Net d
ebt p
er ba
nk
33.2
34.
2
Share o
f result fr
om joint
ventur
e
0.0
0.0
Equity-se
ttled share-based payments
0.4
0.
3
Ta
x
a
t
i
o
n
2
.6
1
.1
Roundings
0.0
0
.1
EB
IT
DA
1
6
.1
16
.
2
Leverage per ban
k
2
.1x
2
.1
x
EB
ITDA to net fi
na
nc
e ch
ar
ge
s ra
t
io
£m
20
21
2020
£m
2
021
2020
EBIT
DA, as a
bove
1
6
.1
16
.
2
Fin
ance costs
1
.1
0.8
Finance income
0.0
0.0
Share o
f result fr
om joint
ventur
e
0.0
0.0
EBIT
DA to net fina
ncec
ha
rge
s
1
6
.1
x
2
3
.7x
N
et fin
anc
e cha
rge
s
1
.1
0.8
Po
st
-employment
benefits
Th
e las
t ful
l actu
ar
ial va
lu
ation of th
e De
fine
d
Benefit Scheme (
‘DB Scheme
’) t
ook place
asat 5 A
pr
il 2020, in lin
ewith t
he req
uir
eme
nt
to have a trie
nn
ial va
lu
ation. O
n a Sta
tutor
y
Fundi
ng O
bje
cti
ve basi
s, a defi
cit wa
s
ca
lcu
lated fo
r the DB S
che
me of £7
.
7m
(pr
evio
us tr
ie
nni
al val
uati
on: £4
.
2m)
. A
s a
result
, the
Company agr
eed with the
T
rustees
to make co
ntri
buti
ons to the D
B Sc
hem
e of
£643,20
0 p
er an
num, b
eg
inn
ing 1 Ju
ly 2021
,
to meet th
e sh
or
t
fal
l by 3
1 Oc
tober 2026
(pr
evio
us
ly 31 Octobe
r 2026)
, up f
rom
£
492
,000 per annum previously
. In
addition,
the Compan
y pay
s the
ongoing DB Scheme
exp
ens
es of £
2
1
6,00
0 per a
nn
um (p
revi
ous
ly
£1
80,00
0 pe
r an
num) to cover
death-in-
ser
vice insurance premiums,
the
exp
ens
es of ad
min
ister
ing t
he DB S
che
me
and Pension
Protect
ion F
und levies.
Th
e net IA
S 1
9 de
fici
t on th
e DB Sc
hem
e
de
cre
ase
d by £4
.2m to £
4.
7
m as at 31
De
ce
mbe
r 2021 (
2020: £8.9m)
. Th
e ma
in
fac
tors le
adi
ng to the im
provem
en
t were th
e
stron
g inve
stme
nt pe
r
for
ma
nce ove
r the ye
ar
and c
ha
nge
s in a
ssu
mptio
ns, in p
ar
ti
cul
ar
theus
e of a hig
he
r dis
cou
nt rate fol
lowi
ng an
inc
rea
se in c
or
pora
te bond y
ie
lds ove
r the
yea
r
, whi
ch ha
s pl
ace
d a lower va
lu
e on the
defined benefit obl
igation
. The deficit
is the
net total of £
34.
1
m (2020: £3
1
.9m) of as
sets
and £
38.8m (2020: £40.8m) of liab
ilit
ies a
nd
rep
res
ents 4.8% (202
0: 9.4
%) of cons
oli
dated
net a
sse
ts. Zotefoams d
oe
s not co
nsi
de
r its
pe
nsi
on sc
hem
e to be a key ris
k to its ab
ili
ty
to
achieve
its st
rat
egic objectiv
es. Mitiga
tion
offu
r
the
r ris
k is exp
ec
ted to com
e fro
m our
grow
th ex
pe
ctati
ons a
nd th
e refoc
us by the
T
ru
stee
s on a lowe
r
-r
is
k strate
gy to me
et the
DB Scheme
’
s deficit shortfall.
Going concern
The Group
’
s business activities,
toget
her
wit
hthe fac
tors l
ikely to af
fe
ct i
ts fu
ture
development
, per
formance and posit
ion,
ares
et out i
n the S
trateg
ic Re
por
t on pag
es
1to 77 and the s
ec
tion e
ntitl
ed ‘R
isk
man
age
me
nt an
d pr
inc
ipa
l ris
ks’ on pag
es
45to 54. The
se a
lso de
sc
rib
e the fi
nan
cia
l
pos
itio
n of the G
roup, its c
ash fl
ows an
d
liquidity position.
In addition
, note
2
1 t
o the
financial stat
eme
nts
includes the
Group
’
s
objectives
, policies and
processes for
managing its
c
apital,
its financial
risk
management objectiv
es, detail
s of
its
financialin
struments and
hedging activit
ies,
borrowing
facilities
and its e
x
posure
to
cre
ditr
isk a
nd li
qui
dit
y r
isk
.
44
Zot
efoams plc
An
nua
l Re
por
t 2021
Th
e Dire
ctor
s be
lieve th
at the G
rou
p is wel
l
placed t
o manage it
s business risks
and,
af
term
ak
ing e
nqu
iri
es i
ncl
udi
ng a rev
iew
offore
cas
ts an
d pred
ict
ion
s, tak
ing a
cco
unt
of
reasonably possible changes
in tradi
ng
per
formance and con
sidering the r
enewal
andte
rms of t
he new d
ebt fa
cil
it
y
, have a
reasonable e
xpectation tha
t the
Group has
ade
qua
te reso
urce
s to conti
nue i
n op
erati
ona
l
exis
tenc
e for the n
ex
t twe
lve m
onth
s foll
owin
g
the d
ate of approva
l of the fi
nan
cia
l
state
men
ts. Th
e Dire
ctor
s have al
so dr
awn
upo
n the ex
pe
rie
nc
es of 2020 an
d the
Gro
up’
s suc
ce
ss i
n reac
ting to th
e cha
lle
ng
es
of COVID
-
1
9 th
roug
h its sa
fet
y protoco
ls a
nd
cos
t and c
as
h man
age
me
nt, all of w
hic
h
cou
ld be r
epl
ica
ted in a si
mil
ar sc
en
ar
io.
Af
ter d
ue co
nsi
de
ratio
n of the ra
nge a
nd
likel
iho
od of pote
ntia
l outco
me
s, the D
irec
tors
continue
to
adopt t
he going
concern basis of
accounting in
preparing the
Annual Repor
t.
Financial
risk management
The main financial
risks of
the Gro
up relat
e
tofund
ing a
nd li
qui
dit
y
, cre
dit, inte
rest r
ate
fluctuat
ions and currenc
y exposures
. The
man
age
me
nt of the
se r
isk
s is do
cum
ented
innote 21
.
G C McG
r
at
h
Gro
up CFO
6 Ap
ril 2022
Group CFO’
s
review
Continued
45
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Risk manage
ment and principal ris
ks
Ma
naging ou
r ris
ks t
o ach
iev
e ou
r st
r
ategic objec
t
ives
Zot
efoams
’ risk management pro
cess is designed to impro
ve the l
ik
elihood of achie
ving its
strategic objectives, k
eep its employees safe
, protect the interests of its shareholders a
nd
k
eystakehold
er
s and enhance the qualit
y of its decision-making. The Group is commit
ted
toconducting b
usiness in line with allapplicable la
ws and regulations and in a manner
consistentwith its v
a
lues
Risk management
framewor
k
Board
E
xec
ut
i
ve Co
mm
it
t
e
e
Audit Committee
Ensu
res t
hat ri
sk is m
an
age
d
across
the business
Inp
uts i
nto the Bo
ard’s proce
s
s for se
tti
ng r
isk a
pp
etite
Imp
le
me
nts str
ateg
y in li
ne wi
th the G
rou
p’
s ri
sk a
ppe
tite
Manages opportunities and t
he resulting
risks arising
Leads operat
ional management’
s approach
to
risk
Inp
uts i
ts as
se
ss
men
t of ris
k an
d opp
or
t
uni
tie
s into
the
Int
ernal Controls
Committee
Rev
iews a
nd a
ss
es
se
s the ef
f
ect
ive f
unc
tio
nin
g of, and pro
pos
ed a
me
ndm
en
ts to, the Grou
p’
s ri
sk m
ana
ge
me
nt fr
ame
wor
k
Rev
iews t
he ou
tpu
ts an
d the ef
fec
tive
ne
ss of a
ll fu
nc
tio
nal s
teer
in
g com
mi
tte
es a
nd ta
kes a
ctio
n wh
ere o
utp
uts
donota
ch
ieveth
e de
sire
d ef
fe
ct
Rev
iews t
he co
ntex
t wi
thin w
hi
ch Zotefoa
ms o
pe
rates a
nd th
e ef
fe
ct of r
isk
s and o
pp
or
tu
nit
ies o
n ma
nag
em
ent
syste
msa
ndstr
ategi
c dir
ec
tion
Assesses and ensures mit
igation
actions ident
ified at
functional st
eering committees are
planned, implement
e
d and
effective
Rev
iews, u
pd
ates a
nd su
bmi
ts th
e Grou
p’
s pr
in
cip
al r
isks a
nd u
nce
r
ta
int
ies to th
e Boa
rd
Reviews
and appro
ves the
Zo
tef
oams business cont
inuity plan
Monitors
and revie
ws the
effectiveness of
the Group
’
s
risk
management framew
ork
Defi
ne
s the Gr
oup’
s a
ppeti
te for ri
sk
Assesses the Group
’
s principal risks
and opportunities
Internal C
ontrols Committee
Functional
Steering C
ommittees
Operational management
Employ
ees
Members of funct
ional st
eering committees
Crea
tes
an en
viron
ment w
here r
isk man
agement
is
embraced and t
he responsibility f
or risk management
is
acc
epte
d by all e
mp
loye
es
Implements and
maintains risk
management processes
With plc responsibility*
He
alt
h and S
afet
y (w
ith a
sub-committeeon
Fire Pro
tection
)
Envi
ronmen
t
Sustainabilit
y
IT
Qualit
y
Product De
velopment
Marketing
Communications
Planning and
Capacity
Capital Planning
Foreign
Exchange
HR and T
raining
Key
Supplier Review
Contract
Control
Credit
Maint
enance
With local responsibility
Zotefoa
ms In
c Exe
cu
tive, pl
us
functional
sub-committees
MEL Execut
ive,
plus functional
sub-committees
Zot
efoams Poland Executive
, plus
functional sub-committees
*
Cov
er
s al
l ent
iti
es o
the
r th
an th
os
e hi
gh
lig
hte
d
under local r
esponsibility
Chaired b
y
, and includin
g, Executiv
e Committee
members
Provi
de a re
gu
lar f
oru
m for a
cti
ve mon
itor
ing of key b
us
ine
ss r
is
ks as th
ey rel
ate to the ac
hie
vem
ent of th
e Gro
up’
s s
trate
gic
objectives
, the con
trols
and activities
in place t
o mitigat
e them
, the
key
actions
required and
their ti
mings
Repor
t bi-
annually t
o the
Internal
Controls
Committee on successful a
dherence t
o their t
erms of ref
erence specific t
o risk
an
drai
se any f
ail
ure
s in th
e ef
fe
cti
ven
es
s of exi
stin
g pro
ce
sse
s
Steering committ
ees are in
place for
:
Acti
ve in th
e day-to-d
ay und
er
sta
nd
ing a
nd
ma
nag
em
entof r
is
k
46
Zot
efoams plc
An
nua
l Re
por
t 2021
Risk appetite
Zotefoams i
s a bus
ine
ss w
ith g
ood
opportunities for gr
owth. R
eflecting the
uniqueness of our
technology
, its capital
int
ensity and the importance of
mat
ching
capacity with our
demand expectation
s, w
e
pla
n for th
e fu
ture ove
r five yea
rs a
nd co
nver
t
these plans
int
o financial for
ecasts. T
o achie
ve
more a
mb
itio
us ta
rgets, we u
nde
rs
tan
d we
mus
t be wi
lli
ng to acc
ept hi
ghe
r leve
ls of r
isk.
We
seek an appropriat
ely balanced outcome
,
whe
re we co
nsi
de
r the le
vel of rewa
rd
com
me
nsu
rate wit
h the li
kelih
ood of s
ucc
es
s.
We reco
gni
se the i
mpo
r
ta
nce of t
ak
ing
the
seri
sks w
ithi
n cle
ar b
oun
da
rie
s as
rec
omm
en
ded by th
e E
xecu
tive tea
m
anda
pp
roved by the B
oard. We ch
all
en
ge,
rea
sse
ss a
nd re
af
fir
m the
se b
oun
dar
ie
s
reg
ula
rl
y and, fo
r key dec
isi
ons, o
n a
ca
se-
by-cas
e bas
is. As a m
an
ufac
tur
ing
com
pa
ny
, the h
ea
lth an
d safe
ty of o
ur
employees will
always
be paramount
, which
tran
sla
tes into an ex
tre
me
ly low tol
er
anc
e
forr
isk i
n this a
rea.
Devel
op
me
nt
s du
ri
ng t
h
e year
X
COVID-
1
9 and go
vernments
’ responses
to the pan
de
mic re
ma
ine
d fore
mos
t in
our thinking during
202
1
, although w
e
managed this
primarily with an
evolut
ion
of prev
iou
sly e
mb
edd
ed m
ea
sure
s. Bo
ard
activity ret
urned to
more normal
levels
after significantly gr
eater
activity in 2
020
.
Zo
tef
oams maintained
its high
prioritisation
of the he
al
th an
d safet
y of o
ur wor
k
forc
e
and the
immediate
needs of
our cust
omers
and conti
nued to
r
un comprehensive
site
pandemic r
esponse measures a
cross
all l
oc
ation
s, keep
ing th
em f
lu
id to refl
ec
t
changing developments
and ensuring the
y
foll
owed or exc
ee
ded l
oc
al gove
rn
me
nt
pol
ici
es at a
ll tim
es. T
he
se me
as
ure
s,
togeth
er w
ith ma
int
ain
ing a str
ong
tech
nol
og
y of
fer
ing to al
low st
af
f to work
effectively from
home,
have
helped ensure
ope
rati
ons c
onti
nue
d safe
ly d
uri
ng thi
s
se
con
d yea
r of the pa
nde
mi
c
X
The Group
’
s Poland manufact
uring facility
was commissioned
in February 202
1
,
providin
g an alt
ernative
supply channel
int
o the
Group
’
s Eur
opean cust
omer base
and concluding
the mult
i-y
ear capacity
expansion commit
ment
X
The ReZor
ce
®
mono-mat
erial barrier
packaging initia
tive
, which puts
sustainability at
the heart of the
MEL
developmen
t agenda,
progressed w
e
ll
,
although significant
challenges remain.
We esta
bli
she
d a pi
lot lin
e to devel
op
and manufactur
e ReZor
ce sheet and
commissioned a st
er
ile carton pa
ckaging
mac
hin
e to test the s
he
et’
s ab
ilit
y to for
m
into a ca
r
ton an
d sea
l to the req
uir
ed
industry standards.
Commercial trials
are planned f
or the
second quarter this
yea
r whi
ch, if s
ucc
es
sf
ul, wil
l lea
d to an
as
ses
sm
ent of th
e rig
ht bu
sin
es
s mod
el
todeli
ver va
lue to st
akeh
old
er
s
X
Risk discussions
remained highly pr
ominent
at Boa
rd me
etin
gs a
nd reg
ula
r up
dates
were h
eld d
ur
ing th
e yea
r as the B
oa
rd
discuss
ed,
consider
ed and
assessed
its ongoing
responses to CO
VID-
1
9,
the
challenging supply chain
environment
and
the br
oad-based
inflationary pressures, as
well a
s the d
evel
opm
ent a
nd exec
utio
n of
objectives
and activities
X
Th
e E
xecu
tive tea
m, who a
re als
o me
mbe
rs
of t
he functional
steering committ
ees, met
tw
ic
e dur
ing th
e yea
r sp
eci
fi
ca
lly to rev
iew
and u
pd
ate the Gro
up’
s pr
inc
ipa
l ris
ks an
d
uncer
tainties
X
Zotefoams p
rep
are
s an a
nnu
al str
ategi
c
pla
n over a f
ive
-year p
er
iod. T
he B
oard
and E
xe
cuti
ve tea
m ris
k
-as
ses
se
d this
pla
ndu
rin
g the t
wo-
day an
nua
l stra
tegic
review
in Oct
ober
X
The Group r
eviewed
its k
ey poli
cies,
including anti
-briber
y and corruption
,
competition
, ethics
, whistleblowing
and
sha
re de
al
ing, to make s
ure they r
ema
in
rel
evant a
nd a
re ope
rati
ng ef
fe
cti
vel
y
X
Zo
tef
oams implement
ed a cyber security
aware
ne
ss tes
ting p
rogr
amm
e acro
ss
all s
taf
f i
n the UK
, sta
r
tin
g in Jul
y an
d
foll
owed by mo
nthl
y testi
ng, wit
h trai
nin
g
programmes for
those employ
ees failing
the tes
t. Dur
ing th
e pe
rio
d, the fa
ilu
re rate
fel
l from 16
% to 3
% wh
ile te
sting d
if
f
ic
ult
y
increased
X
Zotefoams s
uc
ce
ssf
ull
y reg
ain
ed th
e Cy
be
r
Essentials
Plus certification,
an in-dept
h
and tho
rough independent
assessment
of our I
T system
s, whi
ch i
t fir
st ac
hi
eved
in 201
8 and h
as m
aint
ain
ed e
ach ye
ar
sin
ce. Th
e C
ybe
r Es
sen
tial
s Sch
em
e is pa
r
t
of the UK g
over
nme
nt’s Nation
al C
yb
er
Se
cur
it
y Str
ategy
, wi
th the pr
im
ar
y a
im of
mak
in
g the U
K a safe
r pla
ce to con
duc
t
business online
. It encoura
ges businesses
and organisat
ions t
o implement digital
prot
ection against common
cyber
-attacks,
whi
le al
lowi
ng th
em to de
mon
strate an
inc
rea
sed awa
ren
es
s of cy
ber s
ec
uri
t
y
X
Re
newed a
cc
redi
tati
on to the new
Occupational
Health and Saf
ety
Ma
nag
eme
nt S
ystem IS
O 450
01
:20
1
8
was obt
ain
ed d
uri
ng the ye
ar
, w
hic
h the
Company successfully t
ransitioned t
o in
May 2020, led by s
ign
if
ica
nt foc
us a
nd
ef
for
t from a d
ed
ica
ted He
alt
h and S
afet
y
team o
n our U
K site, su
ppo
r
ted by the
E
xecu
tive tea
m an
d impa
ctin
g all U
K
-
bas
ed e
mpl
oyee
s. As wi
th prev
iou
s yea
rs,
acc
red
itati
on a
nd syste
ms au
dits we
re
conducted
during 20
2
1 and t
he Company
received no
significant non-conformit
ies
X
Th
e Grou
p co
ntinu
es to us
e an ex
ter
nal
adviser t
o perform its financial
internal
aud
it se
r
v
ice
s. Du
rin
g the ye
ar
, ba
sed o
n
the G
roup’
s i
ntern
al r
isk a
sse
ss
me
nts,
our Int
er
nal Audit
or Grant Thornt
on LLP
completed
a pa
yroll audit
across all
Zo
tef
oams subsidiaries,
with out
c
omes
and i
mprove
me
nt pl
ans p
res
ented to
the A
udit Committee.
At
the request
of
the A
udit Committee and
in recognition
of t
he increased si
ze and
complexity
of the or
gan
isa
tion, a th
ree
-year ro
lli
ng
aud
it pl
an, wi
tht
wo inter
nal a
udi
ts pe
r
yea
r
, was pre
se
nted a
nd ap
proved
forim
ple
me
ntati
onf
rom 2022.
Risk management and pr
incipal risks
Continued
47
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Deve
lop a
n HPP po
r
t
fo
lio to
deliver
enhanced margins.
Imp
rove ou
rre
tur
n onc
ap
it
al
(overour i
nves
tme
nt cyc
le).
Gr
ow sa
le
s inou
rA
ZOTE
®
Polyolefin
Foams business
inexce
ss of t
w
ice t
he r
ate
ofgl
oba
l GD
P gr
ow
th.
Cla
r
if
y a
nd im
pr
ove theG
ro
up
approach to sustainability and
climate change.
Inc
re
as
e ouro
pe
ra
tin
g ma
rg
ins
.
Deve
lop a
nd inve
st i
nMu
Cel
l
®
technology to deliv
er potentially
high-value disruptive,
sustaina
ble
technology while remaining within
the Group risk appetite.
Re
ad m
or
e on
pa
ge
s 22 to 25.
Th
e deta
ils of o
ur pr
inc
ipa
l ri
sks a
nd
uncer
tainties
and the k
ey mitigat
ing activit
ies
ca
n be fou
nd on p
age
s 48 to 54. We are
disclosing those risks
and uncer
tainties
thatwe b
eli
eve have th
e grea
test im
pac
t
inac
hiev
in
g our st
rategi
c obj
ec
tive
s. The
Gro
up is ex
pos
ed to a wid
e ra
nge of r
isks
inad
diti
on to thos
e liste
d, and th
ese a
re
managed thr
ough the
risk management
fra
mewo
rk s
hown o
n pag
e 45. Thi
s
framework enables us
to
monit
or for an
y
inc
rea
se in l
ikeli
hoo
d or im
pac
t and e
nsu
re
that
we ha
ve t
he appropriat
e mitigations
inpl
ace.
Zotefoams’ ri
sk pro
file w
ill evo
lve as
thebu
sin
es
s grows at i
ts ta
rgeted p
ace,
alt
hou
gh we exp
ec
t the
se pr
inc
ipa
l ris
ks an
d
uncer
tainties
to
remain broa
dly consist
ent.
Key to lin
ks to t
he s
t
ra
teg
y
Princip
al risk
s and uncer
taint
ies
1
4
2
5
3
6
Scaling up
int
ernational
operations
Ex
t
ernal
Cust
omer
con
cen
tration
Operational
disruption
Global
capacit
y
management
Sustainabilit
y
and climate
change
T
ec
hnology
displacement
Ou
r pri
nci
pal r
isk
s and u
nce
r
ta
inti
es a
re:
Havi
ng as
se
ss
ed the i
npu
ts fro
m our r
is
k fra
mewo
rk me
ch
an
ism d
uri
ng the c
ur
rent ye
ar
,
wehave co
ncl
ude
d that t
here a
re no f
ur
th
er c
han
ge
s to our as
se
ss
men
t.
48
Zot
efoams plc
An
nua
l Re
por
t 2021
Risk management and pr
incipal risks
Continued
Descript
ion and context
Wh
at i
s th
e ri
sk
?
The per
formance o
f our business
will
beim
pac
ted if we a
re una
bl
e to run ou
r
equipment and manufacture and distribute
prod
uct
s at rates at l
ea
st eq
uiva
le
nt to thos
e
currently
achieved
. The po
tential
impacts
of
operational
disruption ar
e:
i) sizeable financial
consequen
ces rela
ted
to mi
ssed sales
and
the high
operational
gearing nature
of t
he
business;
ii) the
commercial and longer
-t
erm
consequences of not
delivering t
o strat
egic
cust
omers dependent on our
products
; and
iii) t
he reputat
ional damage tha
t might
impact
the bu
sin
es
s as we
ll as th
e fu
ture c
han
ce
s to
acquire
new business.
Material influencin
g factors
X
The Cro
ydon
, UK sit
e manufact
ures the
majority of Z
ot
efoams
’ polyolefin f
oams
and,
given their
complexity
, all o
f its
high-
pe
r
for
man
ce p
rodu
cts. It o
per
ates at hi
gh
utilisat
ion rat
e
s.
A major incident
specific
to safet
y
, h
ea
lth an
d the e
nviro
nm
ent,
including a fire
, high absenteeism r
esulting
fro
m a pan
dem
ic su
ch a
s COVID
-
19 or a
significant operational
disruption
from the
fai
lure of e
ith
er cr
iti
ca
l equ
ipm
ent o
r the IT
system
s that d
ri
ve them, c
oul
d shu
t dow
n
the pl
ant fo
r a pe
rio
d of tim
e
X
We do wha
t other
s do n
ot, mak
ing u
s uni
que
and pro
viding significant oppor
tunities.
Howeve
r
, this u
niq
ue
nes
s al
so me
ans t
hat
cer
tain o
f our engineering component
s
and r
aw mater
ia
ls are s
ourc
ed f
rom s
ing
le
suppliers. Disrup
tion t
o those supplies,
either on a
temporary or more
permanent
basis, could
affect production and supply
to
the Gr
oup
’
s customers
, with
the knock
-on
impact,
in cer
tain defined circumstanc
es,
of con
tractual
commercial consequences
resulting
in possible cus
tomer claims
X
At the tim
e of wr
itin
g of this A
nn
ual R
epo
r
t,
the w
ar in Ukraine
has creat
ed significant
uncer
tainty around
the cost
and av
ailability
of prod
uct
s and u
tili
tie
s, the im
pact of w
hi
ch
is too ea
rl
y to pred
ict. Howeve
r
, Zotefoam
s
con
sid
er
s this r
is
k to be more re
late
d to cost
than operat
ional disrupt
ion at
this t
ime.
Mitigating actions
Safety
, Health
and Environmen
t
policies
We have exte
nsi
ve Safet
y
, He
alth a
nd
Environment
(SHE) policies and pr
ocedures
inpl
ace w
hic
h are i
n lin
e with b
es
t prac
tic
e.
The reporting of incident
s, including
‘near
mis
se
s’ and da
mag
e to plan
t or eq
uip
me
nt
not r
esulting in personal injur
y
, is mandat
or
y
inord
er to trac
k is
sue
s an
d to prevent
recurr
ences. Regu
lar in
t
ernal and
external
aud
its ar
e per
for
med, w
ith hi
gh le
vels of
Execut
ive
team
engagement
, and qu
arterly
rep
or
ts a
re sub
mit
ted to, and d
iscu
ss
ed
by
,the B
oar
d.
COVID
-
19 in t
he wor
k
pl
ace
We
hav
e adapt
e
d our
on-sit
e health and
safe
ty m
ea
sure
s in li
ne w
ith the c
ha
ngi
ng
governance guidance in
each of our
global
facilities
. The nat
ure o
f our business
operations allo
ws for
social distancing without
major disrupt
ion,
while all r
elevant
measures
specific t
o face pr
ot
ection,
cleanliness,
permitted gatherings
and visit
ors t
o site
are
revi
ewed o
n a reg
ula
r bas
is to ens
ure th
e
highest standards
of sa
fety and business
con
tinu
it
y
. A
ll st
af
f ab
le to wor
k from h
ome
cur
ren
tly do s
o, supp
or
ted by mo
de
rn
tech
nol
og
y and c
aref
ul a
ppr
ais
al of th
eir
wor
kin
g env
iron
me
nts. We have lim
ited trave
l
in li
ne wi
th Worl
d Hea
lth O
rga
niz
atio
n adv
ic
e.
All manufacturing
sites ha
ve remained
operational
, ot
her than as
specifically not
e
d
elsewhere,
throughout t
he pandemic. W
e
have pl
ans a
nd ne
w proc
ed
ure
s in pl
ace to
manage working
conditions as
the impact
s
and r
is
k of the pa
nde
mi
c sub
sid
e.
International trade and
Brexit
We have inc
rea
sed o
ur c
apa
bil
it
y aro
und
logistics and
import
/
export compliance,
throu
gh p
eop
le, sk
ill
s and fo
cu
s, as a res
ult
ofthe in
cre
ase
d co
mpl
exit
y i
n tradi
ng
inter
nati
ona
ll
y post B
rexi
t, whe
re inp
ut a
nd
outp
ut tr
ade c
an be b
lo
cked at p
or
ts a
nd
penalties can be i
mposed for i
ncorrect
paperwork.
Insurance
Th
e Grou
p en
sure
s that i
t ha
s upd
ated an
d
suf
ficient ins
urance in place
to
cover
capital
res
tatem
ent a
nd lo
ss of profi
ts in th
e event of
operational
disruption caused
by un
foreseen
events. We a
lso wor
k cl
ose
ly w
ith ou
r
ins
ura
nce a
dvi
se
rs an
d the
ir exp
er
t
s to ensu
re
operations
maintain t
he highest lev
e
l o
f fire
prot
ection measures.
Maintenance strategy
We ensu
re that o
ur as
sets a
re wel
l loo
ked
af
ter th
roug
h a well
-res
ourc
ed m
ain
tena
nce
team a
nd pro
acti
ve ma
inten
anc
e inve
stme
nt,
including annual
shutdo
wns. Our
pressure
equipment is operat
ed under prevailing
reg
ulati
ons a
nd is s
ubj
ec
t to systemat
ic
int
ernal and
frequen
t e
xternal
inspect
ions
.
Appropriat
e contingency
pla
ns are
in place
inthe e
vent of th
e fail
ure of c
er
t
ain m
ajo
r
pieces of equipment
.
Operations outside
the UK
Zo
tef
oams has complet
ed a large in
vestment
programme in
manufacturing
capability
outs
id
e the UK
, add
ing 6
0% cap
aci
ty to th
at
wit
h whi
ch it s
tar
ted 201
8. T
he Ke
ntuc
k
y
, US
A
site
commissioned its
first full manufact
uring
lin
e in A
pri
l 20
1
8 a
nd a se
co
nd li
ne be
ca
me
avail
abl
e in M
arch 2020. T
hes
e lin
es p
rovid
e
pol
yole
fin foa
m ca
pac
it
y
, in th
e fir
st ins
tan
ce,
but a
re sp
ec
ifie
d to provid
e ca
pac
it
y for H
PP
foam
s if n
eed
ed. We als
o sta
r
ted ou
r thir
d
foam manufa
cturing locati
on in P
oland,
thefir
st li
ne of wh
ic
h was co
mmi
ss
ion
ed
inFeb
ru
ar
y 2021
.
Seeking
dual source
s
Wherever
possible,
supplies and service
s
are
sourced from
more t
han one supplier
orlo
cati
on. Howeve
r
, thi
s is not al
ways
possible due t
o the special na
ture o
f the
rawmate
ria
ls, pa
r
tic
ula
rl
y thos
e use
d to
manufacture
high-performance products
, and
the machinery used.
We
continually
monitor
suppliers, and
search for
new ones
, and ha
ve
expanded o
ur procur
ement department t
o
sup
por
t this. We have id
en
tifie
d new
component suppliers in
the US
A as a
result
ofour i
nvestm
ent a
cti
viti
es at o
ur Ken
tuck
y
,
USA pl
ant a
nd c
ontin
ue to inve
st de
dic
ated
res
ourc
es i
n the se
arc
h for
, a
nd testi
ng an
d
approv
al of
, alternat
ive suppl
iers of criti
cal
mater
ia
ls an
d ser
vi
ces. We a
lso e
nde
avour
tohave suf
fi
ci
ent l
evels of s
afet
y stoc
k to
mitigat
e short-
term supply issues, which will
be further suppor
ted
by
our Poland
plant,
clo
se to key Europ
ea
n custom
er
s.
Inve
st
i
ng i
n IT
We conti
nue to inve
st in o
ur IT sy
stems a
nd
de
par
t
men
t. W
e op
erate th
e lates
t ver
sio
n
ofthe Mi
cro
sof
t D
yna
mic
s A
X E
RP syste
m.
We
have
multiple redundancy
points limit
ing
fai
lure of a
ny one h
ard
ware o
r ope
rati
ng
syst
e
m,
up-t
o-date policies and
procedures
and comprehensive
documentation
on all
ourc
ri
tica
l as
sets a
nd co
re co
nfigu
rati
ons.
Weare acc
red
ited to the C
y
ber E
sse
ntia
ls
Plus c
er
tific
atio
n, par
t of th
e UK gove
rn
me
nt’
s
Nati
ona
l Cy
be
r Se
cur
it
y Str
ategy
, wh
ich
req
uire
s an a
nnu
al, fu
lly i
nde
pe
nd
ent
as
ses
sm
ent of o
ur IT sy
stems’ ab
ilit
y to
de
alwi
th co
mmo
n cyb
er
-at
tac
ks. We
als
otrai
n our e
mp
loyee
s on a re
gu
lar b
asi
s
tospot pote
ntial c
yb
er
-at
tac
ks throu
gh
communication and online
training
.
Control Committe
es
X
Boa
rd
X
Executive
Committee
X
Planning and
Capacity Committee
X
He
alth a
nd S
afet
y Stee
ri
ng Co
mmi
t
tee
X
Envir
onmental St
eering Committee
X
Ke
y Supplier Re
view St
eering Committee
X
Contract
Review St
ee
ring Committee
X
IT St
eering Committee
X
Maint
enance Steering Committee
X
Zotefoams I
nc E
xec
uti
ve Com
mit
tee
X
Zo
tef
oams Poland
Executive
Committee
Operat
ional disruption
Ri
sk t
re
nd
Strategy
1
2
3
4
49
Zo
tefoams
plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Descript
ion and context
Wh
at i
s th
e ri
sk
?
Zotefoams’ bu
sin
es
s mod
el, str
ategy
,
inves
tme
nts or o
per
atio
ns are a
ss
es
sed
bysta
keho
lde
rs a
s havi
ng an u
nac
ce
ptab
le
future imp
act on t
he natur
al environment
and
on nat
ional and int
ernational target
s t
o tackle
climat
e change,
with consequences ranging
from financial
penalties and an inabil
ity to hi
re
the right
staff,
up to business
viability
.
Material influencin
g factors
X
T
ransitional risks e
xist relat
ing t
o
developments
in political and
regulatory
requ
ireme
nts that af
fe
ct the pro
ducts tha
t
Zo
tef
oams manufactur
es. As
businesses
progress t
owards a
net z
ero gr
eenhouse
gas t
arg
et by 2050, the
re is pote
ntia
l for
abrup
t go
vernmen
t in
terven
tion
aimed
at
ens
ur
ing c
er
t
ain m
ile
stone
s are m
et. Th
is
int
er
vention
may in
volve legal and r
egulatory
changes, including loss
of financial
incentives
, new
ta
xation
, compliance costs
relating
to plastic
products
or enhanced
repo
r
ting exp
end
iture, with a res
ultin
g
financial impact
X
Grow
ing g
loba
l co
nce
rn
s over was
te
generated
from the
over
-consumption
,
mis
use a
nd over-packa
gin
g of con
sum
er
goo
ds. A la
ck of un
de
rst
and
ing th
at pl
asti
c
can be the
optimal
mat
erial solution f
or the
benefit of
society when used for
cer
tain
applications could
lead t
o changes in
de
man
d pat
ter
ns for ou
r pro
duc
ts.
Mitigating actions
Firm en
vironmental footing
We cons
ide
r Zotefoam
s to be well p
osi
tio
ned
environmentally
. Our core ma
terials o
ffer
impro
ved product
per
formance using
less
mat
erial than compet
itors and
MuCell
®
technology r
educes polymer cont
ent and/
or
imp
roves re
cycl
ing. W
hile t
her
e is
understandable consumer concern at
the
env
iron
me
ntal i
mpa
ct of wh
at we co
nsid
er
ill-considered
, single-use
plastic,
used
predominantly
in consumer pa
ckaging,
products
using our foams
are primarily int
egral
components in
larger sy
stems or
products
or
are u
sed i
n the lo
ng-ter
m protec
tion a
nd
storag
e of item
s. Th
ey are ve
r
y ra
rel
y use
d in
con
sum
er d
isp
osa
bl
e items. O
ur fo
ams s
ave
weig
ht an
d fu
el in c
ar
s, trai
ns an
d airc
raf
t,
save e
ner
gy by ins
ula
ting a
nd prov
ide
prot
ection to
people and goods
. Our product
s
help our cus
tomers r
educe emissions,
lower
en
erg
y usa
ge, imp
rove fu
el ef
fi
cie
nc
y and
comply with
increasingly stringent
s
afety
reg
ulati
ons. I
n the m
edi
um ter
m, we antic
ipate
our te
chn
olo
gy b
ein
g use
d to mee
t the
growing
demand for
improv
ed sustainability
,
with f
oams which include
recycled
or
renewable
content
pol
ymers. W
e recognise
the importance of
reducing energy
emissions
in our pr
oduction processes and pursue
continuous
improv
e
ment in
our operation
s,
supported by
invest
ment in capital
additions
or re
pla
cem
en
ts whi
ch f
ur
th
er thi
s aim. T
his
wil
l be su
ppo
r
ted by ef
fe
cti
ve rep
or
ti
ng on o
ur
ESG per
for
man
ce, se
e be
low
.
Sustainabilit
y-
focused
deve
lo
p
me
nt
s
In 20
2
1
, we
establish
ed sustainabilit
y targets
focu
se
d on the re
du
ctio
n of our S
cop
e 1 an
d
2 ca
rbo
n em
iss
ion
s. In pa
ral
lel w
ith th
es
e
spe
ci
fic Sc
ope 1 a
nd 2 t
arge
ts, we have
ca
lcu
lated th
e ca
rbo
n cos
t of our fo
ams
(refer
red to as “ca
rb
on ac
cou
ntin
g”) an
d
Re
Zorc
e
®
circular barri
er packaging
technology and
are uti
lising thi
s informa
tion
inter
na
lly
, and wo
rk
in
g with s
el
ecte
d
cus
tomer
s, to ass
es
s how thi
s ca
n be us
ed
constructiv
ely to
make
objective
decisions,
stee
r our ow
n bus
ine
ss a
nd g
uid
e our
cust
omers in choosing
the opt
imal mat
er
ials
for th
eir s
olu
tion
s. We are al
so deve
lop
ing L
ife
Cycle Assessments (
L
CAs
) for
our product
s
inus
e that w
ill g
ive us v
isi
bil
it
y of Sco
pe 3
em
iss
ion
s on a ca
se stu
dy b
asi
s. For fu
r
the
r
info
rmat
ion, refe
r to “Key tar
gets” in th
e
Envir
onmental,
social and go
vernance
(ESG)rep
or
t o
n page 61
.
Ef
fe
c
ti
ve re
po
r
t
in
g on ES
G
per
formance
With an
environmentally con
scious t
echnology
and mat
e
rial solutions
focused on non
single-use applications
, Zo
tef
oams is uniquely
positioned t
o help reduce cust
omers’ carbon
foot
prints or
increase ma
terial efficiency
.
Havi
ng re
cog
nis
ed th
e ne
ed to provi
de
stakeholders wit
h financially ma
terial,
decision-useful in
formation
relatin
g t
o our E
SG
pe
r
for
man
ce, we have e
nga
ged i
n a pla
n to
adopt
the Sustainabil
ity Accounting
Sta
nda
rds B
oard (S
ASB) fr
am
ework a
nd a
re
rep
or
tin
g aga
ins
t itf
rom 2021
. Se
e ou
r
dis
clo
sure
s on p
age
s 67t
o 69. Zotefoam
s
also publicly
suppor
ts t
he T
ask Force
on
Climat
e-relat
ed Financial
Disclosures (TCF
D)
gui
da
nce a
ndha
s em
bar
ked on i
mpl
em
enti
ng
its r
ecommendations.
Finally
, the
Group has
ver
yre
ce
ntl
y com
ple
ted a ban
k refin
an
cing
proc
es
s wh
ich i
ncl
ude
s ESG ta
rgets.
Control Committe
es
X
Boa
rd
X
Executive
Committee
X
Group Sust
ainability Steering Committee
X
Envir
onmental St
eering Committee
X
Ke
y Supplier Re
view St
eering Committee
X
Zotefoams I
nc. E
xecu
tive C
omm
it
tee
X
MEL Execut
ive Committee
X
IT St
eering Committee
Sustainabilit
y and climate change
Ri
sk t
re
nd
Strategy
1
2
3
4
5
6
50
Zot
efoams plc
An
nua
l Re
por
t 2021
Risk management and pr
incipal risks
Continued
Descript
ion and context
Wh
at i
s th
e ri
sk
?
As we grow o
ur bu
sin
es
s at the r
ate we
targ
et, it is c
ri
tica
l that we c
reate th
e requ
ire
d
capacity to
mat
ch the an
ticipat
ed demand.
Failu
re to execu
te well an
d in a tim
el
y man
ne
r
will impact
both
opportunit
y creat
ion and t
he
spe
ed of g
row
th. We face m
ater
ial r
isk
s due
to the unc
er
tai
nt
y of med
ium to lo
ng-term
de
man
d, the hi
gh ca
pi
tal c
osts a
nd lo
ng
construction
periods of o
ur unique
technology
, the successful e
xecution
of our
inves
tme
nt proj
ec
ts, the r
isk of l
oss of a
n
important customer
and the
ability to
finance
the
se inve
stm
ent
s.
Material influencin
g factors
X
Zotefoams’ grow
th i
s foun
de
d upo
n its
uni
que of
fer
ing, it
s rele
vanc
e to the gl
oba
l
megat
rends
of env
ironm
ent
, r
egulat
ion
and d
em
ogr
aph
ic
s, liste
d on pag
es
20 and 21
, and i
ts ab
ilit
y to cre
ate new
market
s and new
applications
. The nat
ure
of de
man
d dif
fer
s bet
wee
n ou
r Polyo
lef
in
Foams and
HPP b
usiness units.
Polyole
fin
foam s
al
es a
re ver
y d
ive
rsi
fi
ed a
nd mo
re
ali
gne
d wi
th GDP
, bu
t are b
oos
ted by the
benefit of
the envir
onment,
regulation
and
de
mog
rap
hic
s me
gatre
nd
s. HPP sa
le
s are
more aligned
with specific,
often larger
,
opportunities with t
he end-user who
also
has a m
ore d
irec
t invol
vem
ent i
n the grow
t
h
traject
or
y
. T
ogether
, this can mak
e the
timing o
f gro
w
th difficult to
predict,
but
not ha
v
ing t
he right capacity a
vailable a
t
the right
time ma
y mean the opportunity
ca
nnot b
e rea
lis
ed. We pla
n to invest i
n
orde
r to mai
ntai
n pe
r
for
ma
nce a
nd pr
ic
e
for po
lyo
lef
in foa
m prod
uc
ts as we be
lie
ve
thisi
s the b
est a
ppro
ach to e
nsur
e the
future gr
owth prospects
of t
his pro
f
itable
business unit
X
Our unique t
echnology is highly capital
inten
sive w
ith l
ong l
ead ti
me
s. The U
K si
te
is highly dev
eloped, with
space limitat
ions
res
tric
ting f
ur
t
her i
nvest
men
t, mea
ning t
he
nex
t grow
t
h ini
tiati
ves have b
ee
n in othe
r
sites
and geographies, most
recently t
he
USA and
Poland
. New sit
es require siz
eable
infrastructural investment, accurat
e risk
as
ses
sm
ent a
nd mo
re tim
e to impl
eme
nt
the
m. Bec
aus
e foa
m is co
stly to tra
nsp
or
t,
a ge
ogr
aph
ica
l mi
smatch of c
ap
aci
ty a
nd
cust
omers could impact
sales growth and/
or margins
in the
Poly
olefin Foams
business
X
The Group needs
to
have
suf
ficient cash
or be a
bl
e to draw on lo
an fa
cil
itie
s or
acc
es
s ca
pit
al ma
rkets to fin
anc
e thi
s
capacity expansion
. Funds
for i
nvestment
are re
qui
red u
p to a numb
er of ye
ar
s befor
e
the a
sset
s star
t ge
ner
ating c
as
h, whi
ch
inc
rea
se
s debt l
evel
s and l
ever
age ra
tios.
Mitigating actions
New
processes and
longer
-t
erm
planning
Du
rin
g the ye
ar
, we have c
ontin
ue
d to refine
our mont
hly sales and operat
ions planning
proc
es
s, wh
ich g
en
erate
s hig
h leve
ls of
cross-
f
unctional engagement
to
ensure
collaboration
and consist
e
ncy in
planning
sales and production
over
the upcoming 2
4
mon
ths. We als
o mee
t qua
r
ter
ly as a Pl
an
nin
g
and Capacity St
eering Committee,
w
ith a
five
-year v
iew to refle
ct th
e lon
ge
r time
horizons
relat
ed t
o capacity planning.
An
nua
lly
, ou
r five-ye
ar str
ategi
c pla
n, whi
ch
includes capacity considerat
ions t
o meet
project
ed sales gro
w
th
, is rigor
ously test
ed by
the B
oard. T
he la
st a
nnu
al rev
iew me
etin
g
took
place in
October 2
02
1
.
Current in
vestment
programme
completed
We have bee
n en
gag
ed i
n a sig
nifi
ca
nt
programme o
f capital in
vestment
, the lat
e
st
phase of
which is comple
te
with the
start-up
of our
Poland
foam manufact
uring facility in
Feb
rua
r
y 2021
. T
he fi
rst s
tage of t
his
programme w
as complet
ed in t
he USA
in
20
1
8, comprising a
high-pressure
autocla
ve
,
extrusion and ancillary equipment and
inf
ras
truc
ture fo
r two f
ur
t
her l
ine
s. Th
is was
foll
owed by the c
om
mis
sio
nin
g of a sec
on
d
hig
h-pr
es
sure a
utocl
ave in Ma
rch 2020. In
theU
K, t
wo hig
h-tempe
ratu
re, low-pre
ss
ure
autocla
ves, t
ogether with
ancillary equipment
and infrast
ructure
, were
completed
in
December 20
1
9
. The Poland
facility
, a
greenfield sit
e sized t
o offer significant
fur
ther
ca
paci
t
y in the f
utu
re, wil
l init
ial
ly exp
and
she
ets m
anu
fac
ture
d by the UK a
nd USA i
n
its high
-t
e
mperature
, low-
pressure aut
oclave.
Building
on our
experience
s
in t
he U
SA
, UKa
nd Pol
an
d
The experiences gained thr
ough the
recent
inves
tme
nts in th
e Kentu
ck
y
, U
SA an
d Br
zeg,
Pola
nd si
tes, as we
ll as th
e wor
k pe
r
for
med
around high-
temperature
, low
-pressure
ves
sel
s inthe U
K, h
ave provi
ded a s
ign
ific
an
t
inc
rea
se ink
now-h
ow
, s
pre
ad acro
ss m
ore
personnel, which
reduces uncertaint
y o
f
future e
xecut
ion. W
e have
identified new
sup
pli
er
s of cri
tic
al e
qui
pme
nt in th
e USA a
nd
mainland Europe
, which were pr
eviously
single sourced in
the UK. I
n-house
pro
ject
managemen
t expertise
has b
een
developed or
enhanced through
either
newh
ires o
r exis
ting s
taf
f h
avin
g be
en gi
ven
the opportunity to
grow
. We
have
engaged
andd
evel
ope
d rel
atio
nsh
ips w
ith ex
per
ie
nce
d
consultants
to
lead and/
or work alongside
us.
Suf
ficient
funding t
o support
inve
st
m
en
t
In Ma
rch 2022, we com
plete
d a debt
refinancing
that pr
ovides us
with the
ne
ce
ssa
r
y f
und
ing to su
ppo
r
t our fi
ve-yea
r
plan. This
includes a £2
5m accordion
.
Aswego fo
r
ward, we w
ill c
ons
ide
r fu
r
the
r
opportunities as the
y arise and
consider
optio
ns su
ch as t
his ac
co
rdio
n or an e
qu
it
y
rai
se, the la
tte
r bei
ng an o
ptio
n we
suc
ce
ssf
ul
ly dre
w upo
nin201
8.
Control Committe
es
X
Boa
rd
X
Executive
Committee
X
Planning and
Capacity Steering Committ
ee
X
Group Sust
ainability Steering Committee
X
Capital Planning
Steering Committ
ee
X
Zotefoams I
nc E
xec
uti
ve Com
mit
tee
Global capaci
t
y management
Strategy
Risk trend
1
2
3
4
5
51
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Descript
ion and context
Wh
at i
s th
e ri
sk
?
The loss of
our t
echnological advantage could
increase compet
ition and
affect growth rat
es
and margins
. Either
our foam
manufacturing
proc
es
s or o
ur Mu
Ce
ll
®
technology (including
Re
Zorc
e
®
) cou
ld be m
atche
d or b
ette
red.
Material influencin
g factors
Our processes for
the manufa
cture o
f our
prod
uct
s are un
iqu
e to the Gro
up. We are not
awar
e of
anyone
using aut
oclave
technology
to
make
similar product
s in commercial
quantities
. While t
he principles behind t
he
proc
es
se
s are n
ot confi
de
ntia
l, the pre
cis
e
kn
ow-how is. O
ur au
toclave te
chn
olo
gy i
s
flexible
, allowing
us to manufact
ure f
oams
fro
m a ran
ge of po
ly
mer
s. For a p
rodu
ct
with
substantial
growth opportunities,
or a
product wit
h a large
consolidat
e
d mark
et,
acom
peti
tor cou
ld ta
rget a
n al
tern
ative,
more
economic, process.
Critical t
o the success of
MuCell Ex
trusion
LLC (MEL) is t
he stre
ng
th of its inte
lle
ctu
al
prop
er
t
y a
nd, on th
e bac
k of that, its a
bili
t
y
togrant c
om
mer
cia
l lic
enc
es. I
ts intel
lec
tua
l
prop
er
t
y c
oul
d be
com
e dated o
r its pa
tents
expire
or be successfully challenged or
circ
umve
nted. We are al
so inve
stin
g
significant resour
ce in de
veloping ReZ
orce
,
whi
ch is h
igh r
is
k but of
fer
s the pote
ntial f
or
ver
y h
igh r
etur
ns, an
d it is p
oss
ibl
e that
anoth
er p
ar
t
y la
unc
he
s a sol
utio
n befo
re we
do wh
ic
h is pe
rce
ived by th
e ma
rket as b
et
ter
,
or the
market
decides that plast
ic,
albeit fully
circ
ula
r
, is not a p
ath it w
ish
es to pur
su
e.
Inthi
s cas
e, we may be re
qui
red to wr
ite
of
fso
me or a
ll of ou
r inves
tme
nt in thi
s
technology
. The size o
f the
opportunit
y
andt
he ri
sk tha
t this i
nvestm
ent m
igh
t not
res
ult i
n an ef
fe
cti
ve sol
uti
on an
d req
uire a
wr
ite-
of
f are th
e jus
tific
atio
n for tre
atin
g this
ris
k as b
ein
g on a
n upward tre
nd.
Mitigating actions
Reinforcin
g high
barriers to en
tr
y
Th
ere a
re hig
h bar
ri
er
s to entr
y fo
r the
man
ufa
ctur
in
g of our u
niq
ue foa
ms.
Significant capital in
vestment,
know-ho
w
andti
me a
re req
uire
d to invest i
n autoc
lave
s
and relat
ed infrastructure
. High-per
formance
products
are significant
ly more
complex
to
manufactur
e than
our polyolefin
foams
andc
er
tai
n mater
ial
s req
uire ye
ar
s to
bequalified
for supply
.
We have redu
ce
d, and c
onti
nue to se
ek
toredu
ce, tech
nol
og
y dis
pla
cem
ent r
is
k
byenter
in
g new ma
rkets w
ith s
ign
ific
ant
bar
ri
er
s and c
ost of m
ar
ket entr
y for
competit
or
s.
For e
xample,
the dev
elopment
of
high-per
formance product
s and ReZ
orce
mono-mat
erial barrier technology
using
MuCell processes, where t
he product
of
fer
in
gs are u
niq
ue a
nd protec
ted by paten
ts
and
/or proc
es
s know-h
ow an
d cap
abi
lit
y
,
opens up ne
w market
s for
the Group
w
ith
pot
entially signifi
cant and last
ing differential
adva
ntag
es.
Inv
est
ing in
R&D
capability
and people
We invest i
n pe
opl
e to broad
en ou
r tech
nic
al
ca
pab
ili
ty
, res
ea
rch ne
w ways to lever
age o
ur
technology and
accelerate
the opportunities
that m
ake Zotefoam
s uni
que. We inve
st in
pe
opl
e to ensu
re that k
now-h
ow rel
ated to
the
design and efficient use o
f high-p
ressure
autoc
lave sys
tems a
nd kn
ow-how re
lated
topoly
me
r pro
ces
si
ng is ret
ain
ed by th
e
bus
ine
ss. We r
un a Gr
adu
ate Sche
me a
nd
have
d
ev
eloped strong
relationshi
ps with
respected un
iversities t
o attract
high-po
tential
ind
iv
idu
als i
n the fie
lds of m
ater
ial s
cie
nc
e and
engineering. W
e dedicate
financial resource
totesting m
ater
ial
s and s
olu
tio
ns to rema
in at
the f
orefront
of cellu
lar mat
erials technology
.
Protecting our intellectual proper
t
y
We
actively
maintain our
int
ellectual propert
y
and p
atent o
ur tech
no
log
y
, wh
ere
ver we
be
lieve i
t is ap
prop
ri
ate to do so, and gu
ard
our k
now-h
ow to susta
in pr
otectio
n wh
en
tech
nol
og
y is not su
bje
ct to paten
t or pate
nts
are no
longer applicable. This know
-how
spans multi
ple disciplines a
cross our
business, making it
difficult to
poach.
We
prot
ect our know-
how using
confidentiality
and contr
actual agr
eements with
employees,
suppliers and customers and b
y maintaining
cyb
er s
ecu
ri
ty. The Gro
up kee
ps a watch
ing
brief on
competit
or activity and main
tains
close conta
ct with it
s cust
ome
rs and
end
-us
ers of i
ts pro
duc
ts to unde
rs
tan
d
market
activity
.
MEL ac
tive
ly ma
int
ains a
nd u
pdate
s its
int
ellectual propert
y portfolio.
This is done
byund
er
t
ak
ing re
se
arc
h and d
evel
opm
ent
toadd new p
atents to the p
or
t
fol
io, fur
th
er
developing it
s know-
how and ob
ta
ining
lic
en
ces f
or key third
-pa
r
t
y patents w
hic
h are
complementar
y t
o the
existi
ng port
folio
. In
some cases,
our close connecti
on with our
cus
tomer
s an
d de
dic
atio
n to a customi
sed
solution has
yielded new in
tellectual
propert
y
opportunities. Pr
ot
ecting these
pat
ents also
provi
de
s us wi
th val
uab
le in
sig
ht into any
possible competit
ive t
hreats
on the
horizon
and a
llow
s us to take tim
el
y acti
on to
mitigat
epossible displacement risk
.
MEL li
ce
nce
s t
yp
ica
lly i
ncl
ude a b
und
le of
patents a
nd k
now-h
ow and th
erefo
re are
notco
mpl
etel
y dep
en
de
nt on a
ny par
ti
cul
ar
patent. A
ll li
cen
ce
s are rev
iewe
d by se
nio
r
pe
rso
nne
l an
d the G
roup C
EO to ensu
re
thatter
ms a
re ap
prop
ria
te. The po
r
t
foli
o
isma
nag
ed by a d
edi
cated i
ntell
ec
tual
propert
y direct
or repor
ting in
to
the
MEL
Executive
Committee.
Control Committe
es
X
Executive
Committee
X
Product
Development
Committee
X
Zotefoams I
nc E
xec
uti
ve Com
mit
tee
X
MEL Execut
ive Committee
T
ech
nology d
isp
lacem
ent
Risk trend
Strategy
1
2
3
4
5
6
52
Zotef
oams plc
An
nua
l Re
por
t 2021
Risk management and pr
incipal risks
Continued
Descript
ion and context
Wh
at i
s th
e ri
sk
?
Working
more remo
tely wit
h int
e
rnational
ope
rati
ons a
nd e
nga
ging w
ith l
eg
al
environment
s and cult
ures less familiar
tousinc
rea
se
s the ri
sk of not d
eli
ver
ing
onour
gro
wth oppor
tunities
or suffering
acompliance
incident
. W
e must ensur
e
thatwe h
ire the r
ig
ht pe
opl
e and m
an
age
thes
pan of c
ontro
l cha
lle
ng
es.
Material influencin
g factors
X
Our business is
growing
in Asia and
our manufact
uring facility in
Poland
com
me
nce
d op
erat
ion
s in Feb
ru
ar
y 2021
X
Unti
l rec
entl
y
, mo
st of Zotefoam
s’ revenue
was sh
ipp
ed f
rom th
e UK. Fo
llow
ing o
ur
inves
tme
nts in th
e USA
, Europ
e an
d Asi
a,
the Gr
oup now
employs mor
e people,
hol
ds mo
re as
sets a
nd ge
ne
rates a h
igh
er
prop
or
ti
on of reve
nue
s ou
tsid
e the U
K. We
are h
iri
ng pe
op
le gl
oba
lly at a f
aster r
ate
than pr
eviously
, with
high expectat
ions
of ma
terial cont
ributions t
o the Group
’
s
grow
th strateg
y
X
Failur
e t
o ensure
responsible corporat
e
be
havi
our i
n the
se new a
rea
s wi
ll
undermine our r
eputation in
these new
regions,
could bring substantial
financial
penalties and a
f
fect our
growth pat
h.
Failure t
o provide these distant operations
wit
h ef
fec
tive f
in
anc
ial a
nd I
T system
s,
edu
cate th
em ef
f
ecti
vel
y on a
ll as
pec
ts of
Zotefoams’ cu
lture a
nd eth
ic
s and a
lig
n
them on our
strat
e
gic objectiv
es could
impact business
per
formance
X
Cr
itic
al to any G
roup’
s s
ucc
es
s is its
people. The
failure t
o attract
, develop
or
retain the
right calibre of staff will impact
our a
bil
it
y to del
ive
r
. Get
tin
g this r
igh
t fro
m
a dis
tan
ce, in cu
ltur
es le
ss f
ami
lia
r to us,
wil
lbe ch
all
en
gin
g
X
COVID
-
1
9 c
ontin
ue
s to tightl
y rest
ric
t
int
ernational tr
avel
, particularly in Asia,
requi
ring m
anagemen
t and
recrui
tment
by
distance.
This is making it more
challenging
to ensu
re the r
igh
t peo
pl
e are in th
e ri
ght
roles and
that beha
viours are aligned
with
thos
e at the c
or
pora
te centr
e.
Mitigating actions
Th
e Boa
rd an
d E
xecu
tive Co
mmi
t
tee
haveco
ntin
ued to rev
iew th
e Grou
p’
s
corporat
e culture
, its communicat
ion
andt
heem
be
ddi
ng of co
ntrol
s acro
ss
the
organisation
.
Direct engagement
wit
h
over
sea
sem
pl
oyee
s
Ke
y leaders, under
normal circumstances
,
have trave
lle
d fre
qu
entl
y to overse
as l
oc
ation
s
to ensu
re that th
e ri
ght p
eop
le a
re in the r
ig
ht
roles and
that beha
viours are aligned
with
thos
e at the c
or
pora
te centr
e. Over th
e pas
t
two ye
ar
s, as a re
sul
t of the trave
l res
tri
ctio
ns
imp
ose
d by COVID
-
1
9, this h
as not b
ee
n
possible for
most o
f the
Group
’
s locations
andt
his e
nga
gem
en
t has ta
ken p
lac
e via th
e
Group
’
s videoconferencing
facilities
. While a
sho
r
t pe
ri
od of red
uc
ed trave
l an
d physi
ca
l
pre
sen
ce c
an b
e man
age
d, the lo
nge
r tha
t
time p
as
ses, th
e mor
e dis
rupti
ve the
se trave
l
res
tric
tio
ns be
com
e, and th
e mor
e overs
ea
s
staf
f addi
tio
ns or move
me
nts ta
ke plac
e,
thele
ss f
am
ilia
r the s
taf
f may b
ec
ome w
ith
asp
ec
ts of Zotefoam
s’ cultur
e and et
hic
s
andl
es
s ali
gn
ed wi
th ou
r strateg
ic ob
je
ctive
s.
While many coun
tries are loosening t
heir
vis
itor c
ontro
ls in th
e ear
ly p
ar
t of 2022,
Chi
naan
d Ind
ia, w
her
e the Gr
oup h
as
important operations
, remain r
estricted
.
Hiring and
dev
eloping
over
sea
sle
ad
er
s
The Group
’
s USA operation
s, comprising
Zotefoams I
nc a
nd Mu
Ce
ll E
x
tru
sio
n LLC
(MEL), have be
en p
ar
t of th
e Grou
p sin
ce
2001 and20
08 r
esp
ec
tive
ly
, h
ave
experi
enced man
agement
teams wi
th
sig
nifi
ca
nt tenu
re atZotefoam
s and
well
-em
be
dde
d rep
or
ti
ng an
d co
ntrol
str
uctu
res, a
nd en
gag
e in re
gul
ar a
nd
effectivecommunication
with senior
ope
rati
ona
l le
ade
rs of Zotefoa
ms an
d the
Boa
rd. Th
e Zotefoams I
nc Pre
sid
ent i
s a
member of t
he Executiv
e Committee.
The Group
’
s China subsidiary was formed i
n
20
1
6, while t
he India sub
sidiar
y was
formed
in201
9. With th
e excepti
on of Fi
nan
ce, lo
cal
man
age
me
nt re
por
t
s dire
ctl
y into the HPP
Bus
ine
ss L
ead
er
, w
ho ha
s cre
ated stro
ng
communication
and reporting structur
es.
Th
eloc
al fi
nan
ce tea
ms re
por
t dire
ctl
y
int
ot
heGroup
Financial Controller f
or
independ
ence
, clear
er lea
dership
and
great
erassurance
around go
vernance.
Bu
il
di
ng u
p ou
r glo
ba
l fu
nc
t
ion
s
We
hav
e inv
ested signifi
cantly in h
uman
res
ourc
e over th
e pas
t few yea
rs as we b
uil
d
glo
bal f
un
ctio
ns an
d hire l
ead
er
s wi
th the sk
il
ls
and ex
pe
ri
enc
e to del
iver t
he cu
rre
nt an
d
future needs
of the
Zo
tef
oams business.
Po
land manufa
cturing si
te start-
up
We reco
gni
se the i
mpo
r
ta
nce a
nd r
isks
surrounding
the operat
ion of
a new
manufacturing sit
e in a count
r
y with
which
weare l
es
s fam
ilia
r
. T
he ma
in as
pe
cts of the
Poland
build and t
he running o
f the
facility
since its
commissioning in Februar
y 2
02
1
have
b
een very successful despite t
he inability
of UK exp
er
ie
nce
d pe
rs
onn
el to be phy
sic
all
y
pre
sen
t. This i
s in pa
r
t du
e to hiri
ng the
Ge
ne
ral M
ana
ge
r for Zotefoam
s Pola
nd in
201
9 i
n adva
nc
e of the pro
je
ct co
mme
nc
ing
and b
asi
ng hi
m in the U
K for s
evera
l mon
ths
whi
le he g
ai
ned ex
pe
ri
enc
e wi
th Zotefoams’
unique t
echnology
, became familiar wit
h the
key fun
ctio
na
l sup
por
t s
taf
f i
n the UK r
equ
ired
to
support the plant goi
ng forward
, and
und
er
stood a
nd ad
opted th
e Zotefoams
cul
ture. Key pl
ayers i
n his l
ead
er
sh
ip team,
hire
d du
rin
g H2 201
9, sh
are
d this U
K
-ba
sed
exp
eri
en
ce a
nd have su
cc
es
sfu
lly t
aken u
p
their operat
ional roles
during the
year
. Since
Ma
rch 2020, the be
gin
nin
g of the pa
nd
emi
c,
UK a
nd Pola
nd tea
ms have m
ain
tai
ned
hig
hleve
ls of en
gag
em
ent, as
sis
ted by
communication t
echnology and
personalfamiliarity
.
Upgraded IT
We have up-to-d
ate IT syste
ms wh
ic
h
standardise information and impro
ve
communication
and visibility
. W
e
useM
icro
sof
t T
e
am
s for ef
fe
cti
ve
videoconferencing and have
continued
torollou
t and e
du
cate the u
pgr
ade
s that
Microsoft has int
roduced throughout
the
pe
rio
d. The s
ystem
s are im
ple
me
nted in
to
alln
ew su
bsid
ia
rie
s as th
ey are s
et up.
T
raining
We have introd
uc
ed a gl
oba
l trai
nin
g tool
whi
ch p
rovid
es tra
in
ing ac
ros
s many f
acet
s,
from go
vernance compliance t
o areas
ofpe
rso
nal d
evel
opm
ent, pl
us tra
ck
ing
me
cha
nis
ms ac
ros
s all o
ur lo
cati
ons o
n
aris
k
-as
se
sse
d bas
is. Key po
lic
ie
s are
tran
sla
ted into lo
cal l
an
gua
ges to
facilitate
understanding.
Control Committe
es
X
Boa
rd
X
Audit Committ
ee (in relat
ion t
o Finance)
X
Executive
Committee
X
HR and T
raining St
eering Commit
tee
X
IT St
eering Committee
X
Zotefoams I
nc E
xec
uti
ve Com
mit
tee
X
MEL Execut
ive Committee
X
Zo
tef
oams Poland
Executive
Committee
Scaling up int
ernational operations
Risk trend
Strategy
1
2
3
4
53
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Descript
ion and context
Wh
at i
s th
e ri
sk
?
Gro
up pe
r
for
ma
nce c
oul
d be im
pac
ted by the
los
s, ins
olve
ncy o
r di
verg
enc
e of intere
st w
ith
a key custom
er
.
Material influencin
g factors
X
Oth
er th
an in o
ur Fo
otwe
ar bu
si
nes
s, the
Group
’
s largest c
ustomers ha
ve tradit
ionally
be
en c
onver
te
rs of foa
m, non
e of wh
om
have re
pres
ente
d a mater
ia
l sha
re of the
Group
’
s re
venue or fut
ure opportunities.
The Group has
successfully grown
its
Footwear b
usiness through
an ex
clusive
par
tne
rsh
ip wi
th Nike, wh
ich i
n 2021
rep
res
ented 3
4
% of G
roup s
al
es (2020:
26% of Group s
al
es), and proj
ec
ts in the
HPP po
r
t
foli
o have the p
otentia
l to be
muc
h la
rge
r than w
ith o
ur t
yp
ica
l A
ZO
TE
®
cus
tomer
s. Di
verg
en
ce of inte
res
t with N
ike
rep
res
ents a m
ateri
al r
isk i
f the bu
sin
es
s is
lost
, while our
growth opportunities in
HPP
area
lso li
kely to re
sha
pe th
is ri
sk prof
il
e
X
The Group
’
s capacit
y e
xpansion
programme has
completed
, built in some
ca
ses to se
r
v
ice g
row
th fro
m the
se
cus
tomer
s. In a
n orga
nis
atio
n wi
th hig
h
operational
gearing, filling
capacity is critical
to
strong
financial performance.
Mitigating actions
We have goo
d kn
owle
dg
e of the en
d-u
ser
s of
our major
customers f
or polyole
fin foams
and,
wit
h som
e addi
tio
nal s
hor
t
-term wo
rk an
d a
stable macroeconomic envir
onment,
would
expect t
o bring or identify additional
converter
capacity
, supply rout
e
s and
channel par
tners
or ta
ke a dire
ct a
ppro
ach to se
r
vi
ce th
ese
ma
r
kets
.
We have a ver
y c
los
e work
in
g rel
ation
shi
p
wit
h Nike, led by a d
ed
icate
d E
xecu
tive
teamm
em
ber
. Vis
ibi
lit
y of f
utu
re sa
les
isgo
od,wi
th a clo
se re
latio
nsh
ip on
development
and supply chain
. Group
resou
rces
and r
egular
engagemen
t ensu
re
wemai
nta
in cl
ose ove
rsi
ght ove
r cus
tomer
se
r
vi
ce leve
ls a
nd al
so un
der
sta
nd N
ike’
s
future di
rection and
expectations
, enabling
usto ali
gn ou
r res
ourc
es a
cco
rdin
gly a
nd
remain a
core t
echnology for t
his important
cus
tomer i
nto the lo
ng ter
m.
We
are e
xcit
e
d b
y the
size o
f the
oppor
tunities
of
fer
ed by ou
r Z
OTEK
®
product portfolio and
have the r
is
k app
etite to pur
sue t
hem. W
he
re
we en
gag
e with l
arg
e HPP cu
stome
rs, we
se
ek to ens
ure th
at our i
ntere
sts ar
e protecte
d
by
balanced commercial cont
racts and
strong
relation
ship management such
as with Nik
e.
Th
e Boa
rd is he
avi
ly invo
lved i
n suc
h
decisions. These r
elationships
are b
y their
nature
longer term,
providing
a unique
technical sol
ution and compe
titive
advantage
to the ZO
T
EK foa
ms cu
stome
r or e
nd-u
ser
.
Th
e los
s of suc
h a cus
tome
r is like
ly to com
e
wit
h a rea
son
abl
e notic
e pe
rio
d, all
owin
g us
time to ta
ke app
ropr
iate ac
tion. C
ontin
ue
d
inves
tme
nt in th
e por
t
fo
lio c
oul
d yie
ld f
ur
th
er
suc
ce
ss
es tha
t spre
ad th
e ris
k of any si
ngl
e
los
s, wh
ile th
e T
-FIT
®
insulation
busine
ss
provides
fur
ther balancing
with its
more
broadly spr
ead global cust
om
er base
.
E
xis
ting l
arg
e HPP cu
stome
rs a
re blu
e-
chi
p
global organisations
, which management
considers t
o hav
e the
financial str
ength or
strat
egic impor
tance to withstand a
pandemic.
We will c
onti
nua
lly re
view o
ur cu
stome
r
spr
ead a
nd ba
lan
ce, pa
r
ticu
la
rly a
s the H
PP
business segment tak
es on mor
e importance.
Control Committe
es
X
Boa
rd
X
Executive
Committee
Customer concent
rat
ion
Risk trend
Strategy
1
2
3
4
54
Zot
efoams plc
An
nua
l Re
por
t 2021
Descript
ion and context
Wh
at i
s th
e ri
sk
?
Business gro
w
th pr
ospects are
vulnerable
tomoveme
nts in fo
rei
gn exch
ang
e rates a
nd
geopolitical and economic dev
elopments.
Th
ese f
actor
s are of
te
n out of o
ur co
ntrol
andm
ay influ
en
ce ou
r bus
in
es
s in a num
be
r
of ways, inc
lud
ing i
nflue
nc
ing th
e othe
r
keyris
kslis
ted.
Material influencin
g factors
X
COVID-
1
9 has realised t
he previously
con
sid
ere
d low r
isk l
ikeli
hoo
d of a
pandemic event
severely imp
acting
demand, a
f
fecting
continuity of
operations
and t
he he
al
th of our s
taf
f, and re
str
icti
ng
the ability t
o manage a business and
people in different geographic
locations
X
Ou
r mar
kets are ex
pos
ed to ge
ne
ral
economic and political changes which
have
a
n influence on
economic stability
and m
ar
ket and c
ons
um
er co
nf
ide
nc
e,
whi
ch in t
urn m
ay imp
act th
e Gro
up’
s
per
formance and abil
ity to a
chieve
our
strat
e
gic objectiv
es. Being at
the beginning
of the va
lue c
hai
n, the Gr
oup of
te
n see
s the
imp
acts of d
owntu
rns e
ar
ly
, acc
entu
ated
as cust
ome
rs deplet
e their
invent
ories,
but i
t the
n be
nef
its f
rom se
ei
ng the
recov
er
y sooner t
oo
. The pro
fit impact on
suc
h ri
sk is ac
ce
ntua
ted by the G
roup’
s
operational
gearing and its
demand for
skilled employ
ees, given
the business
’
s
uniqueness, which makes
shor
t
-t
e
rm cost
cutting often inadvisable
X
At the tim
e of wr
itin
g of this A
nn
ual R
epo
r
t,
the w
ar in Ukraine
has creat
ed significant
uncer
tainty around
the cost
and av
ailability
of pr
oducts and
utilities
, the
impact of
whi
ch is too e
ar
ly to pre
dic
t
X
Inp
ut co
sts c
an ri
se fa
ster th
an the G
rou
p’
s
abi
lit
y to rai
se pr
ic
es, w
hic
h are t
yp
ic
all
y
increased only a
f
ter
discussions and
impact
assessment with our
cust
omers, placing
sho
r
t to mid-ter
m pre
ssu
re on m
arg
ins
dueto the t
imin
g of inf
lati
on re
cover
y
X
Zotefoams i
s exp
ose
d to forei
gn excha
ng
e
fluctuations
. This is
both
transactional
and on t
he transla
tion o
f foreign
currency
balances and the
consolidati
on of
its
foreign
subsidiaries. Despite
recent
inv
estment
s o
verseas
, our oper
ati
ons
rem
ain s
ubs
tanti
all
y ba
sed i
n the UK a
nd,
theref
ore,
most o
f our manufact
uring assets
and c
osts a
re ster
li
ng de
nom
ina
ted. We
normally inv
oice our c
ustomers in
their local
currencies and in
202
1 a lar
ge proportion
of the G
roup’
s reve
nu
e was in c
urr
enc
ie
s
other
than st
erling,
mainly US dollars
or
euros.
We
theref
ore generat
e surpluses in
US do
lla
rs a
nd eu
ros, wh
ich a
re co
nver
te
d
into
sterling
X
Wh
ile a tra
de de
al wa
s co
nclu
de
d bet
we
en
the U
K and th
e Europ
ea
n Uni
on at th
e en
d
of 2020 all
owin
g for ta
rif
f-free trad
e, the
re
rem
ain
s the thr
eat th
at this m
igh
t be al
tere
d
whi
ch c
oul
d lea
d to disr
uptio
n an
d tar
if
f
penalties or
, in the
longer t
erm, tariff or non-
tar
if
f b
ar
rie
rs b
ei
ng intro
duc
ed. T
he
re have
also been siz
eable challenges t
o managing
import and export compliance, wit
h the
risk
of HMR
C imposing penalt
ies and product
s
be
ing h
eld at b
ord
ers. A
ddi
tion
all
y
, th
e ris
k
remains of
increased dif
ficulty in attracting
EU tal
ent i
nto our gl
oba
l he
adq
uar
ters i
n the
UK as a r
esu
lt of the e
nd of f
ree m
oveme
nt
of people
.
Mitigating actions
CO
VID-
19
response
See ‘
Operational disruption
’ risk, abov
e.
Diversifying our
markets
Som
e of our m
ar
kets ca
n be cyc
lic
al.
Howeve
r
, this r
isk i
s spr
ead g
eo
gra
phi
cal
ly
and a
cros
s a nu
mbe
r of se
gme
nts tha
t are
expected
to
diversify fur
ther with t
he gro
wth
of HPP an
d MEL. T
he G
roup i
s ope
rati
ona
lly
ge
are
d, but ou
r exp
er
ien
ce is t
hat, dur
ing
challenging times
, certain operational labour
cos
ts ca
n be re
duc
ed, po
ly
mer p
ri
ce
s
generally fall wit
h reduced economic
demand,
giv
in
g a cost b
en
efit, an
d ca
sh ca
n be
generated
from bo
th reducing
working capital
and slowing
c
apital e
xpenditure pro
jects t
o
he
lp of
fs
et the ef
fec
ts of a down
tur
n. Thi
s was
our ex
pe
ri
enc
e dur
in
g 2020. Deci
sio
ns in th
is
reg
ard a
re, however
, t
aken w
ith re
spe
ct to ou
r
as
ses
sm
ent of th
e und
er
pin
nin
g rea
son
s for a
down
tur
n, our be
li
ef in the l
ikel
y rec
over
y a
nd
an a
sse
ss
me
nt of the im
pac
t of sho
r
t-
term
cost cont
rol on
medium-t
er
m gro
w
th
po
ten
ti
al.
Managing
input co
st pressure
20
2
1 experienc
ed an
unpreced
ent
ed in
crease
in in
put c
osts, i
ncl
udi
ng raw m
ateri
als,
se
r
vi
ces, u
tili
tie
s an
d staf
f c
osts. Zotefoa
ms’
pol
icy i
s to adjus
t pri
ce
s whe
n the c
ha
nge
s
are c
ons
ide
red s
tru
ctur
al bu
t kee
p pri
ce
changes infrequent t
o minimise di
sruption
tocustom
er
s and a
llow ad
jus
tme
nts fu
r
the
r
along the
supply chain where
practical
. This
res
ults i
n Zotefoams s
ha
rin
g the b
ene
fits a
nd
disadvantages o
f price mov
ements thr
ough
the cy
cle without fluctuat
ions being l
inked t
o
any pa
r
tic
ula
r inp
utc
ost or i
ndex. T
he c
ur
rent
env
iron
me
nt is a new ex
pe
ri
enc
e for m
any
and is r
equiring regular consideration
of
pri
cin
g an
d cos
t to achi
eve the r
ight b
ala
nc
e
bet
we
en sh
or
t-t
er
m ma
rgin m
an
age
me
nt and
long-t
er
m str
ategic gr
owth.
Ma
na
gin
g exp
osu
r
e to t
he U
S
do
lla
r a
ndeu
r
o
We
reduce our
net for
eign exposur
e for
transactional
items
by making
purchases
either in
US dollars or
euros.
For e
xample,
the
re are USd
oll
ar c
osts a
sso
ci
ated wi
th the
Gro
up’
s op
erati
ons i
n Kentu
ck
y
, U
SA an
d wit
h
MEL.
Ina
ddition,
the majority of the
Group
’
s
raw mate
ria
ls a
re purc
ha
sed i
n euro
s or US
dollars. Wit
h our significant
capital inv
estment
in Kent
uck
y
, USA c
omp
lete, we have re
duc
ed
exposure
for t
ransactional it
ems to t
he US
dol
lar by i
ncre
as
ing th
e op
erati
ng co
st ba
se
inthe U
SA
. Raw mate
ria
ls a
re now pu
rcha
se
d
loc
al
ly an
d a la
rge
r work
fo
rce s
upp
or
ts f
ull
process product
ion.
While on a
smaller scale,
at le
ast to be
gin w
ith, th
e sam
e wi
ll ap
ply fo
r
the eur
o as our
Poland manufa
cturing facility
ramps up
production
.
Currency hedgin
g
Th
e Grou
p ha
s a hed
gin
g pol
icy w
hic
h is
app
roved by th
e Boa
rd. The G
rou
p he
dge
s a
proportion of
its net
exposure
to
transactional
ris
k by usi
ng for
ward exch
ang
e co
ntrac
ts.
Wedonot he
dg
e for the tr
ans
lati
on of ou
r
foreign
subsidiaries
’ assets
or liabilities
in
the
consolidation
of t
he Group
’
s financial
state
men
ts. We do, however
, he
dge o
ur
stat
ement of
financial position
through
mat
ching,
where possible
, our foreign
currency
denominated
assets wit
h foreign
currency denominat
ed liabilities,
such as
byfore
ign c
urre
ncy d
ebt fi
nan
cin
g.
Managing our debt
facilities
We
maintain clos
e relat
ionships with
our
suppor
ting b
anks, meeti
ng with t
hem
regularly and upda
ting them
on performance
and o
utl
ook. I
n 2020, our sh
or
t-t
er
m
ame
nd
me
nts to the leve
rag
e coven
ant
toprovid
e gre
ater se
cu
rit
y at a ti
me of
ex
trem
e unc
er
t
ain
ty d
em
onst
rated th
e goo
d
rel
ation
shi
p we have wi
th the
m. In Ma
rch
2022, we compl
eted a ne
w refin
anc
ing ro
und
to repl
ace th
e exis
ting o
ne w
hic
h was exp
iri
ng
in 1
3m
onth
s, rem
ain
ing w
ith ou
r inc
umb
ent
ban
ks fol
lowi
ng a stro
ng co
mpe
titive p
roc
es
s.
With our
capacity expansion pr
ogramme
com
pl
ete and ba
se
d on ou
r mos
t rec
ent
five
-year str
ategi
c pla
n, we exp
ect o
ur ne
t
de
bt level
s to fall. O
ur bu
dget
s and fo
rec
asts
going forward
include inv
e
stments
in growth
opp
or
tu
niti
es, s
ome of w
hic
h ca
n be sl
owed
ifne
ce
ss
ar
y. W
e stre
ss-test o
ur po
ss
ibl
e
outco
me
s and e
ng
age w
ith ou
r ba
nks to
ensure t
heir continued
suppor
t under al
l
circumstances.
Control Committe
es
X
Executive
Committee
X
Foreign
Exchange Steering Committ
ee
X
Zotefoams I
nc E
xec
uti
ve Stee
rin
g
Committee
X
MEL Execut
ive Committee
Risk management and pr
incipal risks
Continued
Ex
ternal
Risk trend
Strategy
1
2
3
4
5
6
55
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Via
bilit
y st
atement
The viabilit
y period
In ac
cord
an
ce wi
th prov
isi
on 30 of th
e
201
8U
K Cor
po
rate Gove
rna
nc
e Cod
e,
theD
ire
ctors h
ave ass
es
se
d the pro
spe
cts
ofthe G
roup ove
r a lon
ge
r pe
rio
d tha
n
thet
wel
vemon
ths req
uir
ed by the g
oin
g
concernpro
vision.
The Direct
ors consider the
timeline o
f five
yea
rs to be a
ppro
pri
ate, bein
g the p
er
iod
upon which t
he Group
actively f
ocuses,
hasr
easonable visibility ov
er its op
por
tunity
port
folio and
, given
the nat
ure o
f capital
inves
tme
nt ne
ed
ed to sup
por
t the Gr
oup’
s
anti
cip
ated ra
te of grow
th, cove
rs i
nves
tme
nt
that i
n som
e cas
es re
qu
ires l
ong l
ea
d time
s
asa re
sul
t of the un
iqu
e natu
re an
d ca
pit
al
inten
sit
y of it
s tech
nol
ogy. A longe
r pe
rio
d of
assessment introduces grea
ter uncertaint
y
since the
variability of
pot
ential out
c
omes
inc
rea
se
s as the p
er
iod c
ons
ide
re
d exte
nds.
A sho
r
ter p
eri
od of a
sse
ss
me
nt imp
acts th
e
Gro
up’
s ab
ilit
y to pu
t the r
ight c
ap
aci
ty i
n
ther
ight p
lac
e on ti
me.
Assessing viabilit
y
The Group i
s considered t
o be viable if it
mai
nta
ins in
teres
t cover a
nd n
et bor
rowi
ngs
toEBITDA rati
os, as p
res
cri
be
d by its exi
stin
g
fina
nci
al c
ovena
nts a
nd pre
se
nted in th
e CFO
Rev
iew un
de
r ‘Debt f
aci
lit
y’ on p
age 42,
andi
fthe
re is avai
la
ble d
ebt he
ad
room to
fu
ndop
erat
ions.
The Direct
ors’
assessment of viability has
be
en ma
de wi
th refe
ren
ce to Zotefoam
s’
current posit
ion and pr
ospects, o
ur alignment
wit
h glo
bal tre
nd
s, our str
ateg
y
, the B
oard’s
ris
k ap
peti
te and Zotefoa
ms’ prin
cip
al r
isks
and h
owthe
se ar
e man
age
d, as de
tai
led
onpa
ges1 to 54.
The Board r
eviews
our int
e
rnal contr
ols
andr
is
k man
age
me
nt po
lic
ies a
s wel
l as
ourg
over
nan
ce str
uc
ture. It a
lso a
ppr
ais
es
and approv
es major financing and inv
estment
de
cis
ion
s as wel
l as the G
rou
p’
s per
for
man
ce
and p
ros
pec
ts as a w
hol
e. The B
oa
rd revi
ews
Zotefoams’ str
ategy a
nd ma
kes s
ign
ific
ant
capital inv
estment decisions
over
a
lon
ge
r
-term t
ime ho
ri
zon, bas
ed on th
e
Group
’
s strat
egic growth objectives,
individual
proj
ec
t inves
tme
nt retur
ns, th
e conti
nui
ng
per
formance o
f the b
usiness, the
quality of
its
por
tfolio o
f opportunities, it
s financing
arrangements and opportunities and
amul
ti-year a
ss
es
sme
nt of retu
rn o
n ca
pita
l.
Th
e bot
tom-up fi
ve-yea
r pl
an is re
viewe
d
atle
ast t
wi
ce a
nnu
all
y by the D
ire
ctors. I
n
as
ses
si
ng the f
utu
re pros
pe
cts of th
e Grou
p
and achiev
ability of t
his plan,
the Group has
con
sid
ere
d the p
otentia
l ef
fe
ct of r
isks th
at
could ha
ve a
significant financial impa
ct under
sever
e but plausible
scenarios. The risks
considered w
ere identified
from the
Group
’
s
pri
nci
pal r
is
ks and u
nc
er
t
ainti
es a
sse
ss
me
nt.
While testing
against each individual scenario,
the Boar
d has also
considered the
impact
ofacom
bin
atio
n of the sc
en
ar
ios ove
r the
as
ses
sm
ent p
er
iod. T
his wa
s in ord
er to
stre
ss-test a
n agg
reg
atio
n of sever
e but
plausible risks
occurring that
should repr
esent
the gr
eatest
pot
ential financial i
mpactbo
th in
the short
-t
er
m and lon
ger
-term
viability period.
The Direct
ors considered mit
igating
factors
thatc
oul
d be em
pl
oyed wh
en rev
iew
ing th
es
e
scenarios and the
effectiveness of a
ctions
atthe
ir di
spo
sa
l. The
se in
clu
de ex
per
ie
nce
s
ands
uc
ces
se
s rel
ated to cos
t and c
ap
ita
l
expenditure
management during 2
020 in
thefa
ce of the C
OVID
-
19 pande
mi
c,
ade
qua
teinsu
ran
ce cove
rag
e, the unw
ind
ing
ofwork
in
g ca
pit
al in a d
owntu
rn a
nd ce
as
ing
some activit
ies.
We are sati
sfie
d that we h
ave robu
st
mitigating
actions in
place. W
e recognise,
howeve
r
, that th
elon
g-term v
iab
ili
ty of th
e
Gro
up co
uld a
lso b
eimp
acted by oth
er
,
asyetu
nfore
se
en, ri
sks o
rthat th
e miti
gatin
g
acti
ons we h
ave put i
n pla
ce co
uld tu
rn o
ut
tobe le
ss ef
fe
cti
ve tha
n inten
de
d.
Scenarios t
ested
The follo
wing downside
scenarios hav
e
be
eneva
luate
d:
Scenario 1
:
Pandemic disrupt
ion. W
e applied our
exp
eri
en
ce
s of the 2020 pa
nde
mic a
nd
thec
osta
nd ca
sh s
avin
g acti
vi
ties we
succes
sfully implemented to
stress-t
e
st for
Gro
up reve
nue l
evels t
hat bre
ac
h ban
ki
ng
cove
na
nts.
Read more Principal risk:
Operational
disruption
pag
e 48; E
x
ter
na
l pa
ge 54.
Scenario 2
:
Significant operat
ional disrupt
ion ov
er a long
pe
rio
d. Thi
s ris
k foc
use
s on th
e ex
trem
e
sce
na
ri
o of a fire at the C
roydon, U
K pla
nt
requiring a significant
rebuild ov
er a period
inexce
ss of a ye
ar
.
Read more Principal risk:
Operational
disruption
page 48;
G
lobal capacity manage
ment page 50
.
Scenario 3:
Business per
formance risks
. These include
both
Poly
olefin Foams
and High-Performance
Product
s gro
w
th a
t rat
e
s significant
ly below
those i
ncluded within t
he five-
year plan.
Read more Principal risk:
T
e
chnology
dis
pl
ac
em
en
t pag
e 5
1
; E
x
ter
na
l pag
e 54.
Scenario 4
:
Los
s of a key custom
er in H
PP
. T
hi
s sce
na
rio
reflects
losing the
Footwear busi
ness.
Read more Principal risk:
Operational
disruption
page 48;
G
lobal capacity manage
ment page 50
;
Customer concentration 53
.
Scenario 5
:
Ster
lin
g retur
nin
g to 20-yea
r hig
hs of t
wo US
dollars t
o one pound
sterling
. This scenario
eval
uates th
e ca
sh im
pact o
n the G
roup a
s a
result of
forecast gr
owth coming increasingly
from US-denomina
ted sales.
T
he euro
impact
is no
t considered ma
terial giv
en the na
tural
he
dge of e
uro sa
le
s aga
ins
t raw mate
ria
ls
andt
he op
erat
ing c
osts of th
e Pola
nd pl
ant.
Read more Principal risk:
Ex
te
rn
al pa
ge 5
4.
Confirmation of
longer-
term
viabilit
y
Based on t
he assessment explained
above,th
eDire
ctor
s con
firm th
at they h
ave
ar
easonable expectat
ion that
the Gro
up will
continue
to
operate
and meet it
s liabilities
,
asth
ey fal
l due,over th
e nex
t fi
ve year
s.
56
Zot
efoams plc
An
nua
l Re
por
t 2021
Env
ironmental, so
cial and go
vernance
(ESG
) repor
t
Ou
r pur
pos
e is to provi
de opti
ma
l mater
ial
solutions
for the
benefit of
society
, reflectin
g
our belief
that
, used appr
opriately
, plastics
aref
req
uen
tly th
e bes
t sol
uti
on for th
e
sophisticat
ed, long
-t
erm applications
t
ypi
ca
llyd
eli
vere
d by our c
ustom
er
s.
Over the
past cent
ur
y
, mat
e
rials manufactur
ed
using Zo
tefoams
’ unique t
hree stage pr
ocess
have he
lpe
d cu
stome
rs s
ave ene
rgy by
ins
ulati
ng an
d have re
duc
ed th
e ca
rbo
n
emissions of
countless cars,
planes and
trai
nsby red
uci
ng we
ight w
hic
h lowe
rs f
uel
consumpti
on. Our
core process uses
only
temp
era
ture, pre
ss
ure an
d nitr
oge
n bor
rowed
from t
he atmospher
e for
expansion,
creating
mat
erials that
are uniquely pur
e and durable
and w
hi
ch us
e le
ss po
ly
mer t
han
ks to thei
r
sup
er
ior p
er
fo
rm
anc
e to weig
ht rati
o.
Re
Zorc
e
®
mono-mat
erial barrier packaging
technology
, current
ly in dev
elopment,
presents an
oppor
tunity to
increase recy
cling
rates i
n con
sum
er pa
cka
gin
g, redu
cin
g waste
and creat
ing the
pot
ential f
or circularity
.
St
eve Goo
d
Non-Executive
Chair
I
n
2
0
2
1
,
s
u
s
t
ain
a
bi
l
i
t
y
w
a
s
c
e
nt
r
a
l t
olo
ng-
t
e
r
m s
t
r
a
t
e
g
y
d
i
s
c
u
s
s
io
n
s
. F
ol
lo
w
i
ng a
d
o
pt
io
n
o
f t
h
e S
A
S
B f
r
a
m
e
w
o
r
k i
n 2
0
2
0
,
t
h
e Bo
a
r
d s
e
t c
l
e
a
rt
a
r
g
e
t
s
a
i
m
e
d a
t o
pt
i
m
i
s
i
ng t
h
e u
s
eo
f
r
a
w
m
a
t
eri
al
s
,
mini
mi
s
in
g
w
a
s
t
e
a
n
d i
m
p
r
o
v
i
ng r
e
c
y
c
l
a
b
i
l
i
t
y
. W
e
w
i
l
l c
o
nt
i
n
u
e t
o w
o
r
k h
a
r
d t
o
be
c
o
m
e
m
o
r
e
su
s
t
a
i
n
a
b
le
a
nd
t
o b
e mo
r
e t
r
a
n
s
p
a
r
e
nt a
bo
u
t
o
u
r a
c
t
i
v
i
t
i
es i
n t
h
i
s s
p
a
c
e
57
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Zotefoams p
rod
ucts f
req
ue
ntly fo
rm pa
r
t of
the en
vironmental sust
ainability agenda for
our cust
ome
rs.
Building sustainability in
to
ourow
n bus
ine
ss m
od
el both e
nh
anc
es
operational
resilience and enables us
to
he
lpkee
p the ri
se in g
lob
al tem
pe
rature
s
toamini
mum.
On pa
ge 62, we incl
ude o
ur fir
st re
spo
nse
to
the
T
ask Force on
Climat
e-relat
ed Financial
Disclosures (TCF
D)
. The combination
of S
ASB
and TCFD re
po
r
ting i
s in li
ne wi
th the Fi
na
nci
al
Repor
ting Council
’
s recommendations t
o
listed businesses.
Our strengthened ES
G frame
wor
k
Zo
tef
oams considers tha
t managing
environmental
, social and gov
ernance (ES
G)
imp
acts c
ontr
ibu
tes to lon
g-term va
lue
creation
, suppor
ts resilience
, enhances the
Gro
up’
s rep
utat
ion a
nd he
lps s
afe
gua
rd the
business’
s future in
an ev
olving business
environment
. Our first E
SG report,
published
in 2020, expl
ain
ed Zotefoa
ms’ app
roac
h to
ESG. In 2021
, we b
uil
t on thi
s by:
X
Forming a
Group Sustai
nability Steering
Committee t
o pro
v
ide go
vernance and
setth
e dire
cti
on for m
at
ters re
lati
ng to
the
long-
term sustainabi
lity of the
Group
X
Intr
oducing challenging sus
tainability
targ
ets a
ris
ing f
rom ou
r SASB a
ss
es
sme
nt,
page 6
1
X
Pro
viding fuller disclos
ures compliant
wit
htheTCFD, page 62
X
Running cust
omer focus group
s on
sustainability and using
the da
ta garnered
to guid
e strate
gy
. Th
is exerci
se ev
ide
nc
ed
tha
t,
given di
f
ferin
g end
-users
’ concerns
,
sustainability was
defined differently acr
oss
a var
iet
y of cu
stome
rs a
nd ge
og
rap
hie
s.
Suppor
ting cus
tomers,
including by
providing
evidence that challenges a
public
perception
of plast
ics as a
non-sustainable
mater
ia
l, now for
ms a key par
t of our
strate
gy
. We beli
eve that p
las
tic
s, use
d
appropriat
ely
, remain t
he opt
imal solution
both
functionally and
environmentally
for
our cust
ome
rs
’ needs.
Sustainabilit
y opportunit
ies
Zo
tef
oams considers tha
t sustainability
oppor
tunities arise
principally in two dist
inct
are
as. Fi
rstl
y
, i
n des
ign
ing p
rodu
cts va
lue
d by
our cust
ome
rs for
their use-phase
resource
ef
fic
ie
ncy (a con
ce
pt defi
ned by S
ASB as a
prod
uct t
hat thro
ug
h its us
e ca
n be sh
own to
imp
rove ene
rg
y ef
fic
ien
cy
, e
lim
inate o
r lower
gre
enh
ous
e ga
s (GHG) e
mis
sio
ns, red
uc
e raw
mat
erials consumption
, increase product
longevity
, and/
or reduce wat
er consumption
).
Th
er
mal i
nsu
latio
n is a t
yp
ic
al exa
mpl
e of this.
Se
con
dly
, in re
duc
ing th
e ca
rb
on footp
rin
t of
our operat
ions.
Zotefoams p
rod
ucts a
re us
ed in m
any
different applications
and are
often combined
with o
ther mat
er
ials,
making it difficult t
o
measure our
environmental
impact direct
ly
.
Inset
ti
ng ta
rgets, we th
erefo
re foc
us on
thec
ar
bon fo
otpri
nt of the m
anu
fac
tur
ing
proc
es
s. Fur
th
er d
etai
ls of ou
r metr
ics a
re
onpa
ges 6
5 to 67
.
Carbon emissions
A par
all
el ac
co
untin
g meth
odo
log
y ha
s be
en
implemented
for the
ma
nufacturing
process
by pr
oduct it
em, which incorporat
e
s Scope 1
and 2 e
mi
ssi
ons. I
n orde
r to als
o con
sid
er
Sco
pe 3 e
mis
sio
ns, we ar
e work
in
g on a li
fe
cycl
e ass
es
sm
ent (LCA) temp
late wh
ich w
ill
be us
ed to cre
ate LCA e
xa
mpl
es fo
rmaj
or
products
and application segments
specific
toeach u
se. Ou
r Sc
ope 1 a
nd 2 e
mis
sio
ns
data i
s be
ing m
ade ava
ila
ble to ou
r
cust
omerst
o enable them
to
make
info
rme
dSc
ope 3 d
ec
isi
ons.
Our materials in
use (kno
wn as
Scope 3
emissions)
The vast
majority of Z
ot
efoams pr
oducts
area
ime
d at a low-c
ar
bo
n mar
ket. The
keyattr
ib
utes of fo
ams, a
nd ou
r foam
s
inpa
r
tic
ula
r
, are:
X
Li
ght wei
ght
X
Reduced mat
erial usage
X
Energy
saving
X
Reduced to
x
icity
.
Fur
the
r
, Zotefoam
s blo
ck fo
ams a
re ge
ne
rall
y
used for
solutions o
ther than single-use
applications.
Ou
tsid
e of foam
s, our M
EL bus
in
es
s als
o
ali
gns we
ll wi
th a low-c
ar
bo
n mar
ket, with
Re
Zorc
e
®
mono-mat
erial barrier packaging
inpa
r
tic
ula
r
, se
e page
s 8 an
d 9.
These sustainability benefits
are recognised
by our c
ustom
ers a
nd i
n som
e cas
es j
usti
f
y
apr
emium price for our
products
.
Du
rin
g the ye
ar
, we am
en
ded o
ur pr
odu
ct
development pr
ocess to further prioritise
sustainability and r
eflect input from
the
Boa
rdon a va
ri
et
y of clim
ate imp
act
sce
na
ri
os. As a re
sul
t:
X
The Product
Development St
eering
Committee considers t
he pot
e
ntial
sustainability impact
and benefit of
alln
ewini
tiati
ves
X
Sustainability fact
or
s cont
inually inf
orm
the
new product
development process
X
Product
s containing
recycled and
bio-
bas
ed ma
teri
als h
ave bee
n of
fe
red to
cust
omers
X
A num
be
r of devel
op
men
t proj
ects
aim
edat re
du
cin
g our c
ar
bon fo
otpr
int
areu
nde
r way
.
Our operations (known
as Scope
1
and 2 emissions
)
Specific t
o the
reduction o
f emissions
ino
uroperat
ions, maj
or initiat
ives during
202
1in
clu
ded:
X
A swi
tch to a supp
lie
r acc
red
ited u
nde
r
theRe
newa
bl
e Ene
rgy G
uar
ante
e of Or
igin
sch
em
e in the U
K. A re
newa
ble s
ourc
ed
electricity contract
has been agreed f
or
our Po
lan
d site f
rom 2022 as p
ar
t of o
ur
commitment t
o using electricity from
renewable
sources where
feasible
X
The business cases for
a
ll upgra
des in
infrastructur
e and capacity enhancements
considered the
need t
o reduce carbon
em
iss
ion
s. In H1 2
021
, we c
omp
leted a
major upgrade
of t
he st
eam generation
system a
t our U
K site, wh
ich we e
stim
ate
wil
l res
ult i
n ann
ual C
O
2
sav
ing
s of 535
metr
ic tonn
es. We al
so have a
n ong
oin
g
programme t
o improv
e energy efficiency
in pro
ce
ss h
eati
ng that we ex
pe
ctwi
ll
sig
nif
ic
ant
ly red
uc
e ene
rg
yusa
ge in 2022
X
Our new
sustainability targets
on page
61 will he
lp to red
uce o
pe
ratin
g cos
ts
by optim
isi
ng raw ma
teri
al us
e and
repurposing foam scraps.
Sustainabilit
y risk
s
Th
e SASB f
ram
ewor
k ado
pted in 2020
hasbeen implement
ed through t
he risk
man
age
me
nt fr
am
ework
. Thi
s en
sure
s
that
all
business risks r
elated t
o sustainability
are i
den
tifie
d, ass
es
se
d and, i
f above th
e
ris
kap
peti
te of the Com
pa
ny
, trea
ted (utili
sin
g
a Bus
ine
ss R
is
k Matr
ix) by th
e app
ropr
iate
Funct
ional Steering
Committees within t
he
Group
. F
ur
ther in
formation
about our risk
man
age
me
nt fr
am
ework c
an b
e fou
nd on
page45
.
Ou
r ES
G pe
r
fo
rma
nc
e a
nd p
la
ns
Zot
efoams’ sustainability strategy is based
ont
he follo
wing principles
:
1
.
We op
erate in m
ar
kets wh
ere th
e vast
majority of our
products
offer unique
sustainability advant
ages for t
he benefit
ofsoc
iet
y
2.
We seek to mi
nim
ise o
ur us
e of natur
al
res
ourc
es th
roug
h a se
rie
s of me
as
ure
s
suc
has re
duc
ing e
ne
rgy a
nd opti
mis
ing
polymer usage.
58
Zot
efoams plc
An
nua
l Re
por
t 2021
En
vironment
W
e use the governance provided b
y our
internal controls structure to ev
olve our
products to offer greater environmental
benefits to society while managing
thereduction of our carbon footprint
andwaste.
Gov
erna
nce
We mana
ge th
e SASB, TCFD an
d othe
r
sustainability requirement
s thr
ough our
int
ernal cont
rol
s frame
work
. An
independen
t
Group Sust
ainability Steering Committee
is
responsible f
or longer
-t
er
m E
SG planning
andfo
r ESG dis
clo
sure
s to sta
keho
lde
rs.
Bu
si
ne
ss m
od
el a
nd s
tr
at
eg
y
Our business model comprises
solutions wit
h
superior sustainability charact
e
ristics f
ocused
on pe
rm
an
ent a
ppl
ica
tion
s, see p
age 1
8.
Accreditations
We are acc
red
ited to ISO 4
5001
:20
1
8
(occup
ational health
and safe
ty)
, ISO
1
4001
:
20
1
5 (
envir
onmenta
l mana
gement
)
andI
SO 90
01
:201
5 (qu
ali
t
yman
age
me
nt).
Carb
on footp
rint
X
We have emb
ed
ded s
ystem
s that c
ons
ide
r
ca
rbo
n footp
rint i
n ever
y asp
ec
t of our
global operat
ions t
o drive
sustainability
initiat
ives thr
ough all ar
eas of t
he business
X
We are ca
lcu
lati
ng the c
ar
bon c
ost of
our fo
ams a
nd R
eZorc
e tech
nol
ogy. W
e
will be utilising this
information int
ernally
and wo
rk
ing w
ith s
ele
cte
d custom
er
s to
as
ses
s how th
is ca
n be u
sed c
ons
tru
ctive
ly
to
make
objective decision
s t
o st
eer our
own business
and guide our
customers
inchoosi
ng the
optimal
material sol
utions
for t
heir application
s
X
Renewable electricity:
a REGO-accr
edited
sup
pli
er h
as be
en a
ppo
inted i
n the U
K. A
renewable
sourced electricity cont
ract has
be
en ag
ree
d for ou
r Pola
nd s
ite from 2022
as part of our
commitment t
o use electricity
from r
enewable sour
ces wherever
feasible
X
T
arg
ets have be
e
n adopte
d in 2021
, se
e
pag
e61
.
Health an
d safe
t
y
We set inter
na
l tar
gets for i
mpr
oveme
nt on
occupational
health.
Our per
formance and
com
me
nta
r
y are s
hown o
n pag
e 65 an
d
benchmark
externally
against
rubber an
d
plastics manufacturing industr
y statistics.
https
:/
/w
w
w
.bls.
gov
/web/
osh
/
summ
1_00.
htm
We plan to de
velo
p a hol
isti
c app
roac
h to
em
ploye
e well
be
ing by fos
teri
ng a cu
lture of
health which recognises and supports bo
th
physical and
mental health
.
Environmental, social and gov
er
nance
Continued
59
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Social
W
e ena
ble our w
ork
force to operate
ina safe en
vironment, at home or
inthefactory
, and a
re guided by
strongethic
al pr
inciples that
informouractivities.
W
orking pra
ctices
X
A ble
nd
ed wor
ki
ng po
lic
y
, su
ppo
r
ted by
mental health
initiativ
es and recognising
new ways of wo
rk
ing, wa
s introd
uc
ed
intheU
K in 2021
X
Sub
jec
t to leg
al re
qui
rem
ents i
n force
inthe g
eo
gra
phi
es i
n whi
ch we op
er
ate,
the Gr
oup has in
place policies r
elating t
o
mat
ernit
y
, pa
ternity
, adopt
ion and par
ental
le
ave, as well a
s time of
f for de
pe
nda
nts’
sickness
and ber
eav
ement
X
A performan
ce mana
gement
sys
tem
is
in place
, designed t
o encourage high
employee
engagement with t
heir line
manager thr
ough thoro
ugh, t
houghtful
and r
egu
la
r disc
us
sio
ns. Th
e syste
m
aim
s are: a) to provi
de em
ploye
e-
ce
ntri
c
development
plans, b
) to
monitor
and
deve
lop p
er
fo
rm
anc
e in ord
er to ad
dres
s
sk
ills g
ap
s and c) to sup
por
t ef
fec
tive
succession planning
X
Zotefoams h
as i
n plac
e ethi
cs a
nd di
gni
t
y
at w
ork policies proh
ibiting child
and for
ced
labour
, discrimination, harassment and
abuse and supporting collective bargaining
ar
ran
ge
men
ts whe
re it i
s leg
al to do s
o.
Remuneration
X
The Company
compensates it
s staff in
lin
ewith m
ar
ket rates a
nd ta
ki
ng ac
cou
nt
of
regulat
or
y guidance,
which includes
payi
ng em
ploye
es a
t or ab
ove the rate
s
published b
y the
Living Wage
Foundat
ion
in the U
K. In ot
her g
eo
gra
phi
es, th
e rate
ofpay for Zotefoa
ms e
mpl
oyee
s is ab
ove
the minimum
wage applicable locally
.
Eth
ics
X
Policies
and int
ernal control
s are in
place,
and a
re mo
nitore
d by the B
oard, o
n
he
alth a
nd s
afet
y
, mo
de
rn s
laver
y
, ethi
cs,
anti-co
rru
ption and br
iber
y
, anti-fraud,
whistleblowing and
equal oppor
tunities.
ht
tp
s:/
/zo
te.inf
o/3x
0
de78
X
Biennial compliance trai
ning programmes
are d
eli
vere
d glo
bal
ly to rel
evant s
taf
f o
n
modern
slav
er
y
, ant
i-br
ibery and co
rrupt
ion,
anti-
fraud, anti
-money la
undering, insider
trad
ing a
nd dat
a protec
tion. A
ll st
af
f are
req
uire
d to ack
nowl
ed
ge that t
hey have
read and
understand policies applicable
tothem, w
hic
h are tra
nsl
ated a
s nec
es
sa
r
y
for st
af
f wh
o do not s
pe
ak En
glis
h.
Suppliers
X
A con
sist
ent,
mat
erial impr
ov
ement
patt
ern
has b
ee
n noted i
n our p
ayme
nt pr
acti
ces,
wit
h the aver
age s
et
tlem
ent p
er
iod i
n
the U
K bei
ng re
duc
ed f
rom 50 d
ays in
201
9 to 30 d
ays du
rin
g 202
1
. ht
tps:/
/
check
-payment
-practices.
ser
vice.
gov
.uk/
company
/02
7
1
4645/r
epor
ts
X
Compliance requir
ements are
in place
to
ensure k
ey suppliers are ali
gned with
Zo
tef
oams’
standards on e
thics, modern
slave
r
y
, a
nti-fr
aud a
nd an
ti-br
ibe
r
y a
nd
cor
ru
ptio
n requ
ire
men
ts. Zotefoam
s has
volu
nta
ril
y add
ed its d
eta
ils to the M
ode
rn
Slave
r
y St
ateme
nt Re
gis
tr
y to sha
re the
pos
iti
ve steps i
t has t
aken to tac
kl
e an
d
pre
vent
modern sla
very
. The
regis
try
enhances transparency
and accessibility
and a
llow
s use
rs s
uch a
s con
sum
er
s,
inves
tors a
nd ci
vil s
oci
et
y to scr
utin
ise
the ac
tion
s Zotefoam
s is ta
kin
g to ide
ntif
y
and a
ddre
ss m
ode
rn s
lave
r
y ri
sks in i
ts
operations
.
zote.info
/3NtUoei
60
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Go
vernance
W
e ma
nage Zot
efoams by embedding
robust corpor
ate go
vernance systems
andpr
inciples within our busines
s.
W
ea
reled bya div
er
se and independent
Board andoper
ate under an effec
tiv
e
andprincipled management team.
Diversity and Inclusion
The Board a
dopt
ed a new
diversity policy
in2021
. ht
tps:/
/zote.info/3wRSYEL
An Equal Opportunities P
olicy is in pla
ce
andc
anb
e vi
ewed o
n our we
bsi
te.
ht
tp
s:/
/zo
te.inf
o/36
D
v
3y
a
More in
formation
on diversity and inclusion
atZotefoam
s may be fo
und i
n our Pe
opl
e
se
ctio
n on pag
es 72 an
d 73 and in ou
r
Nomination
Committee report on page
8
7
.
Stakeholder
s
Considering all st
akeholders when making
ke
y business decisions is
f
undamental t
o our
abi
lit
y to cre
ate valu
e over th
e lon
ge
r term.
Se
e our s
1
72(
1
) dis
clo
sure
s on p
age 7
4. Ou
r
plans for
202
2 include
canvassing t
he views
of our
shareholders on sust
ainability and ot
her
matters t
hrough in
teract
ion with t
he Company
Cha
ir
. Zotefoa
ms wi
ll co
ntinu
e to work w
ith
cust
omers and suppliers on
improving
the
sustainability charact
eristics o
f our pr
oducts.
UK Corporate
Gov
ernance
Cod
e2
018
The Group complies
with the
requirement
s of
the U
K Cor
por
ate Gover
na
nce C
od
e and h
as
due r
ega
rd to bes
t pra
ctic
e in gove
rn
anc
e
ma
t
te
rs
.
In pa
r
ticu
la
r:
X
7
1
% of the B
oard i
s ind
ep
end
ent, w
ith
29
% ex
e
cutive
representation
, supporting
ef
fe
ctive s
tewards
hip of th
e Co
mpa
ny’
s
as
sets. A
ll Bo
ard c
omm
it
tees a
re fu
lly
independe
nt
X
Boa
rd an
d com
mit
tee m
em
be
rs in p
ost
atyea
r en
d atte
nde
d 1
0
0% of al
l me
eting
s
in 2021 (2020: 1
0
0%
)
X
Progression
to
wards
greater
gender
dive
rs
it
y is note
d in se
nio
r rol
es:
X
2
1
% of sen
ior m
an
age
rs a
re fem
ale
X
29% of the Bo
ard is fe
ma
le, wit
h fema
le
Board Committees repr
esentation
amo
unti
ng to 45% o
ver
all. A Bo
ard
dive
rs
it
y po
licy wa
s ado
pted in 2021
X
An a
nnu
al p
er
fo
rma
nc
e evalu
atio
n is ca
rr
ie
d
out fo
r the B
oard a
nd i
ts com
mit
tee
s wi
th
the support of
the Compan
y Secretary
.
Th
eres
ults a
re dis
cus
se
d by the Bo
ard
anda
ctio
ns ag
ree
d for th
e foll
owin
g year
X
A for
mal p
roc
es
s is in pl
ace fo
r the B
oard
tocons
ide
r rel
evan
t mat
ters u
nd
er s
1
72(
1
)
of t
he Companies Act
2006
X
An extended quest
ionnaire f
or assessing
the e
xternal audit
or’
s effectiveness and
independence in
accordance with
FRC
gui
da
nce wa
s imp
lem
en
ted in 2021
.
Th
is evi
de
nce
d that th
ere i
s ca
ndi
d and
complete
dia
logue between t
he Ex
ternal
Audit
or and t
he Audit Committ
ee
X
Th
e Boa
rd’
s wo
rk
ing a
rr
ang
em
ents we
re
revi
ewed i
n 202
1 to ens
ure tha
t an opti
mal
mix of i
n-p
ers
on a
nd vi
r
tua
l me
eting
s was
in place
X
Ar
t
icl
es of as
so
ciat
ion we
re la
st am
end
ed
in 2020 to allow hy
br
id ge
ne
ral m
eet
ing
arrangements and comply
with current
be
st pra
ctic
e. Th
e Boa
rd inten
ds to
extend
digital inclusion b
y broadcasting
the2022 AGM on t
he Inve
stor Me
et
Company pla
tform
X
Thoughtful employee engagement
supports effective go
vernance. The
Board
stri
ved to en
ha
nce th
e em
ploye
e voic
e in
the boar
droom during
the y
ear through
both
informal engagement
during plant
vis
its a
nd Bo
ard re
pre
se
ntatio
n on th
e Joi
nt
Consultativ
e Committee
, which adop
ted
new
term
s o
f re
feren
ce.
Executive
remunerat
ion
The Remuneration
Committee set
s ex
e
cutive
remuneration in
light o
f prev
ailing conditions
and t
akes i
nto acc
ount w
id
er wor
k
forc
e pay
and conditions
. E
xecutiv
e remunerat
ion is
lin
ked to ESG metri
cs. S
ee ou
r Di
rec
tors’
Remuneration
repor
t on
page 88.
Environmental, social and gov
er
nance
Continued
61
Zote
foams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
K
e
y targets
Our sustainability targe
ts f
ocus on
there
duc
tion of o
ur Sc
op
e 1 and 2
ca
rbo
nem
iss
ion
s.
In pa
ral
lel w
ith th
es
e spe
ci
fic Sc
ope 1 a
nd 2
targ
ets, we have c
al
cul
ated the c
ar
bon c
ost
ofa rep
res
enta
tive se
le
ctio
n of our fo
am
s
(refer
red to as “ca
rb
on ac
cou
ntin
g”) an
d
Re
Zorc
e
®
mono-mat
erial barrier packaging
technology
. We ar
e utilisin
g this
informati
on
inter
na
lly a
nd wor
ki
ng w
ith se
le
cted
cus
tomer
s to ass
es
s how thi
s ca
n be us
ed
constructiv
ely to
make
objective
decisions
tosteer o
ur own b
usi
ne
ss a
nd gu
ide o
ur
cust
omers in choosing
the opt
imal mat
er
ial
sol
utio
ns for t
hei
r app
lic
atio
ns. We are a
lso
developing
Life Cycle
Assessments (L
CA)
for
our product
s in use
, giving us visibility
ofSco
pe 3 e
mis
sio
ns on a c
as
e stud
ybas
is.
TA
R
G
E
T
1
:
Improv
e purchase-to-product
(ma
ss ba
la
nc
e) of A
ZOTE
®
polyolefin f
oam
products.
We
purchase mor
e polymer than
we sel
l as foa
m, wi
th los
se
s in the c
urr
ent
man
ufa
ctur
in
g proc
es
s. Th
is is wa
ste
mater
ia
land wa
ste en
erg
y whi
ch, wi
th som
e
inves
tme
nt, can b
e red
uce
d. By th
e end of
2026, we plan tohave h
al
ved the p
ol
yme
r
purc
ha
sed th
at is not i
nthe p
rodu
ct (i
ntern
al
waste an
dover
size
d mater
ia
ls)
. T
o sup
por
t
this, i
n2022
, we wi
ll fin
anc
ial
ly a
nd
ope
rati
ona
lly p
la
n theinve
stm
ents re
qu
ired to
ach
ieve ou
r2026targ
et. Addi
tion
all
y
, we a
im
to
implement impro
vements t
o reduce t
he
pol
ym
er wa
ste rate dur
ing m
anu
fac
ture a
nd
are ta
rge
ting a 2.5
% wa
ste red
ucti
on fo
r 2022
.
T
arg
ets an
d ach
ieve
men
ts forinte
rme
di
ate
yea
rs wi
ll be p
ubl
ish
ed o
nourwe
bsi
te.
TA
R
G
E
T
2
:
Re-purp
ose polymer w
aste,
tha
t ca
nno
tbe p
reven
ted
, fr
om ou
r
UK
manufacturing process.
Inherent t
o
ach
iev
ing l
ong
evi
ty a
nd li
ght we
igh
t in our
foam
s is a ma
nu
fact
uri
ng step, kn
own as
crosslinking, which
modifies the polymer
.
Crosslinking is no
t practically
reversable
andt
here
fore u
tilis
ing th
is mo
difi
ed p
oly
me
r
tomanufa
cture foa
ms requ
ires di
f
fere
nt
tech
niq
ue
s than w
he
n de
ali
ng wi
th
unmodified polymer
. As w
e develop
these
tech
niq
ue
s, we are ab
le tore-
inc
orp
ora
te
thism
odi
fie
d pol
ym
er inth
ema
nuf
actu
re
ofce
r
tai
nprod
uct
s.
By th
e end of 2022, we pla
n to
:
X
Have deve
lo
ped A
ZO
T
E pro
duc
ts that w
ill
all
ow us to re-i
nco
rp
orate in
to our foa
ms
50% of sol
id po
lym
er wa
ste prod
uc
ed at
our UK sit
e
X
Fin
d app
lic
atio
ns that r
eus
e 90% of a
ll
A
ZO
TE foa
m was
te produ
ce
d at the UK s
ite.
T
A
RG
ET 3
:
Zo
tef
oams products
have
hist
orically been designed t
o use less ma
terial
and l
ast l
ong
er
. We wi
ll fu
r
the
r deve
lo
p our
product portfolio by designing and
developing
new product
s which offer our cust
omer
s
more sust
ainable solutions
. By t
he end o
f
2026, 5
% ofo
ur reve
nue w
ill b
e ge
ner
ated
from new
products designed and de
veloped,
after 20
22
, for use-phase
resource e
f
ficiency
.
T
arg
ets an
d ach
ieve
men
ts for inte
rme
di
ate
yea
rs wi
ll be p
ubl
ish
ed o
n our we
bsi
te.
TA
R
G
E
T
4
:
We
continually s
trive
to
reduce
the
energy consumed in
the manufact
ure
ofour p
rodu
cts. A
s we prod
uce g
reate
r
quantities
of pr
oducts acr
oss multiple
manufacturing sit
es, the
energy we
consume
increases. Addit
ionally
, cer
tain product
s we
develop which
offer use-phase resource
efficiencie
s can r
equire grea
ter energy
per unit
volu
me to man
ufa
ctur
e. Set
ting a t
arg
et whi
ch
accommodates
growth and the
changing
prod
uct m
ix i
s dif
fi
cul
t, but we have
com
mit
ted t
hat by 2026 we wil
l red
uce th
e
en
erg
y con
sum
ed p
er un
it reve
nue by 10
%.
Details of t
his target will be published on
ourwe
bsi
te.
62
Zote
foams plc
An
nua
l Re
por
t 2021
Environmental, social and gov
er
nance
Continued
Gov
erna
nce
Th
e Boa
rd sets th
e strate
gic a
ims of th
e Gro
up, ensu
res th
at the n
ec
es
sar
y res
ourc
es a
re in p
lac
e to achi
eve the G
roup’
s o
bje
ctive
s an
d
review
s management performance. The Boar
d has o
versight o
f climat
e-related ma
tters (which
include risks
and opportunities)
and is
updat
ed on these
matters as
necessa
ry through
:
X
The Audit
Committee, which
is responsible
for k
ee
ping under
review t
he adequacy
and effectiveness of
the Gr
oup
’
s internal con
trol and
risk
management syst
ems, which consider cl
imate-r
elated
risks by
the appropriat
e Contr
ol Committees (
se
e page
45)
; and
X
Bi-annual business
unit presentat
ions,
which consider bo
th the
physical and
transition
risks o
f climat
e change and opportunities arising fr
om
cli
mate ch
an
ge a
nd ar
e mad
e by the exec
uti
ve fu
nc
tion h
ea
d to the Bo
ard. For ex
am
ple
s of how we i
nteg
rate su
sta
ina
bi
lit
y a
nd cl
ima
te cha
nge
co
nsi
de
ratio
ns in
to our st
rateg
y
, s
ee p
age
s 1
8, 20, 24 (
su
sta
ina
bil
it
y an
d cl
imate c
han
ge) an
d 27 (be
st e
ner
gy s
avin
g ap
pli
cati
on).
Strategy
Risks
Our risk e
xposure t
o climate
change is partly miti
gated
through
operating f
oam manufacturing
facilities
in countries
with high r
egulat
or
y standards
and t
hrou
gh the i
mpl
em
ent
ation of we
ll-
est
ab
lish
ed e
nvi
ronm
ent
al ma
nag
em
ent sy
stems i
n all l
oc
ation
s. Th
e ris
k ma
nag
eme
nt f
ram
ewor
k on
pag
e 45 ai
ms to ass
es
s the G
roup’
s p
rin
cip
al ri
sks a
nd e
nsur
e the
se are e
f
fec
tive
ly ma
nag
ed a
cros
s the e
ntire b
usi
nes
s.
RISK
MITIGA
TION
Inc
rea
sed u
se of e
ner
gy to
satisfy operational
needs or an
inc
rea
se in e
ne
rgy p
ric
es o
r
ta
xati
on
An e
nvi
ronm
ent
al ma
nag
em
ent sy
stem is i
n pla
ce to ens
ure th
at system
s fu
ncti
on in a
n en
erg
y ef
fic
ie
nt
manner and facil
ities only operat
e when required and
use the
minimum amount
of energy necessar
y
.
Use of ex
ter
na
l con
sul
tant
s to
:
X
Give early warnings o
f forthcoming regulat
or
y changes on energy pricing
X
Analyse consumpt
ion patt
erns and identify opportunities t
o reduce
usage without a
f
fecting
operational
per
formance.
Increased w
ater
consumption
An env
iron
men
tal m
ana
ge
men
t system i
s in pl
ace to mo
nitor c
ons
umpti
on in o
rde
r to asse
ss wa
ter
usagee
f
ficiency and i
dentify improvement
opportunities by
implementing t
e
chnical,
people or building
management contr
ols.
Inc
rea
sed l
evel
s of waste
Waste red
ucti
ons i
niti
ative
s are i
n pla
ce. Se
e pag
e 66.
Poor
public percept
ion of
pla
stic
sca
usi
ng ade
ma
nd sh
if
t
We
believe
this percep
tion is
primarily relat
e
d t
o single-use and/
or non-recyclable
plastics.
We
plan
toimpl
em
ent a c
omm
uni
cati
ons s
trateg
y rel
ating to the s
ust
ain
abi
lit
y of o
urus
eof pla
stic
s an
d its
con
trib
uti
on tothelow-
car
bo
n ec
ono
my
. Re
Zorce
®
mono-mat
erial barrier packaging
is our
le
adin
gini
tiati
ve. See p
age 8 fo
r fur
the
r deta
ils.
Adve
rse we
ath
er eve
nt cau
si
ng
disruption
to
manufacture
or
supply chain
A supplier management
process is in
place which assesses and mitigat
es risk through
supplier selection
and second sour
cing for
ke
y mat
erials and components
.
Enhanced reporting obligat
ions
Each funct
ional st
eering committee is r
esponsible for
active
monitoring
of k
ey business risks as
they
relat
e
to the ach
ieve
me
nt of the G
roup’
s st
rategi
c obj
ec
tive
s, the co
ntrol
s and a
ctiv
iti
es i
n plac
e to miti
gate the
m,
the key ac
tion
s requ
ire
d and t
hei
r timi
ngs. T
his i
ncl
ude
s mo
nitor
ing l
eg
al a
nd reg
ul
ator
y ch
ang
es w
hic
h
may im
pact t
he Gro
up’
s r
isks.
Oppor
tunities
Short-t
erm:
Our busi
ness model is cent
red around
sustainability
. Theopportunities a
vailable t
o Zot
efoams are de
tailed on pa
ges 1
6 t
o 1
9.
Det
ail
s of our S
trateg
ic Ob
jec
tive
s, inc
lud
ing s
ust
ain
abi
lit
y a
nd cli
mate ch
ang
e, are pr
ovid
ed on p
age 24
.
Medium and
long-term:
We be
lieve t
he be
nefi
ts of pla
sti
cs wi
ll be re
co
gni
se
d and s
ca
rce re
sou
rce
s wil
l be ma
nag
ed to en
sure o
ptima
l
use.
The processing o
f polymers uses less energy compar
ed to
ma
ny
other ma
terials which
, with
our t
echnology benefit of
producing
light
er
, longer
-lasting product
s using less
material and
which hav
e inherent
thermal insulat
ing performance, repr
esents a
significant
opportunit
y as
sustainability increases in
importance.
Risk management
Re
fer t
o our r
i
sk m
an
age
me
nt f
r
am
ewor
k o
n
page 45
and
sustainability and climate
change risk on
page
49.
Metrics and
targets
Th
e SASB f
ram
ewor
k provi
de
s pe
r
for
man
ce m
etri
cs for o
ur f
unc
tion
al ste
er
ing c
omm
it
tee
s to impl
eme
nt. Se
e fur
the
r deta
ils o
n pag
es 67 to 69.
Ou
r Sco
pe 1 an
d 2 metr
ic
s are d
iscl
ose
d on p
age 6
6. The r
is
ks arem
ana
ge
d throu
gh ou
r ris
k ma
nag
em
ent f
ram
ewor
k det
ail
ed onp
age 4
5.
Ou
r targ
ets are d
eta
ile
d on pa
ge 61
.
We are co
mmi
tte
d to resp
ond
ing to the C
DP qu
esti
on
nai
re in 2022. CDP is a not-for
-p
rofit ch
ar
it
y that r
un
s the gl
oba
l dis
clo
sure sy
stem
for
invest
ors, companies,
cities, st
ates
and regions t
o manage their
environmental i
mpacts.
https
:/
/w
w
w
.cdp
.net/
en
T
ask Force
on Climate-related
Financial Disclo
sures (“T
CFD”)
response
Zotefoams i
s alr
ead
y well p
os
itio
ned to su
ppo
r
t the l
ong
-term go
al of re
duc
ing c
ar
bon e
mis
si
ons, w
ith foa
m prod
uc
ts del
ive
rin
g hig
h
pe
r
for
man
ce, ins
ula
tion a
nd re
duc
ed we
igh
t and of
f
eri
ng th
e potenti
al for c
ar
bo
n emi
ssi
ons r
edu
ctio
n in exce
ss of th
e ca
rbo
n em
iss
ion
s req
uire
d
to manu
fac
ture th
eprod
uct. We are i
mprov
ing o
ur en
erg
y inte
nsi
ty a
nd m
ateri
al co
nsu
mpti
on an
d ada
pting o
ur pro
duc
t ran
ge to ente
r new
mar
kets wh
ere th
es
e be
nefit
s are cl
ea
rl
y und
er
stood a
nd val
ue
d. Mea
sur
eme
nt of e
ner
gy co
nsu
mptio
n an
d pol
ym
er us
age, w
hic
h ge
ner
ate
ca
rbo
n em
iss
ion
s, are mo
ni
tored mo
nthl
y an
d we have cl
ear a
ctio
nsto imp
rove the
se as d
es
cri
be
d fur
the
rin thi
s repo
r
t.
Th
e tab
le be
low s
hows ou
r cur
re
nt prog
res
s aga
ins
t the TCFD re
com
me
ndati
ons.
63
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Safety
, Health
& Envir
onment (SHE)
Zo
tef
oams considers tha
t the
management of
SHE m
at
ters fo
rms a key e
le
men
t of ef
fec
tive
governance.
Separate
policies relating
to
SHE
are i
n plac
e. Th
e Com
pany i
s ce
r
tifi
ed to
acc
red
ited st
and
ard I
SO 450
01
:20
1
8 fo
r
He
alth a
nd S
afet
y
, fol
lowi
ng a mi
grat
ion f
rom
O
H
S
AS
180
01
:20
07
,
a
n
d
I
SO
140
01:201
5,
the
Int
ernational Standard
for E
nvironmental
Ma
nag
eme
nt S
ystem
s, and is r
egu
la
rly
audited
by certification
bodies t
o ensure t
hat
the Compan
y complies with
those s
tandards.
Follo
wing an int
egrated surveillance audit
ca
rr
ied o
ut in 2021
, Zotefoams U
K was
grant
ed ongoing certification
. The audit
or
commended the pr
ogress and ma
turity of t
he
man
age
me
nt sys
tems, the h
ig
h deg
ree of
execu
tive over
si
ght a
nd the h
igh l
evel of fo
cus
on s
afet
y en
gag
eme
nt. Th
e Com
pany i
s als
o
ce
r
tifi
ed to acc
red
ited st
and
ard IS
O 90
01
:
Quality Management.
The Board has
ultimat
e responsibility for
SHEp
oli
cy an
d per
for
man
ce a
nd rec
ei
ves
qua
r
ter
ly re
por
ts on G
roup S
HE is
sue
s.
Th
eBoa
rd ha
s set a ver
y low r
isk a
ppe
tite
forhe
al
th an
d safet
y m
atte
rs. A
nnu
al
per
formance objectiv
es are a
greed by
the
Boa
rd an
d pe
r
for
man
ce ag
ain
st the
se i
s
mon
itore
d as pa
r
t of its q
uar
terl
y rep
or
ti
ng
programme
. RIDDORs (lo
st time
accidents
reportable under the Reporting o
f Injuries,
Diseases and Dangerous Occurrences
Regulations 2
0
1
3) are
recorded immediat
ely
and a
re su
bje
ct to a thoro
ug
h root ca
use
ana
ly
sis rev
iewe
d by the Bo
ard, w
ith
appropriat
e foll
ow-
up actions
agreed with
management.
Additionally
, the Boar
d has
adeta
il
ed rev
iew of SH
E pe
r
for
man
ce,
targets
, metrics and
approach thr
ough
monthly updat
es.
The Group C
EO is
directly r
esponsible t
o
theB
oard fo
r SHE p
er
fo
rm
anc
e. Grou
p
committees on SHE
normally meet once
per
qua
r
ter to co
nsi
der a
ll SH
E mat
ter
s and a
re
over
see
n by stee
ri
ng co
mmi
tte
es, c
hai
red by
the Gr
oup CEO
(or
appropriat
e responsible
person in subsidiary companies)
. The st
e
ering
committees consider o
verall performance
andt
he im
pact of c
ur
rent a
nd im
pe
ndi
ng
legislation
.
On j
oin
ing th
e Grou
p, all em
ploye
es re
ce
ive
induction t
raining on SHE
matters, including
the Gr
oup
’
s SHE policies,
and re
fresher
trai
nin
g is prov
ide
d, as a
ppro
pri
ate, to ensure
em
ploye
es re
ma
in ab
rea
st of an
d fam
ilia
r wi
th
SHE m
at
ters. Em
ploye
es a
re mad
e aware th
at
eac
h an
d ever
y o
ne of th
em ha
s a par
t to
playi
n ens
ur
ing th
e safet
y of th
ems
el
ves
andt
hei
r col
le
agu
es at wo
rk. Em
ploye
es
aree
nco
ura
ged to re
por
t to their m
an
age
rs
any un
safe, or p
otenti
all
y uns
afe, acts
orcondit
ions.
Senior managers are
responsible f
or ensuring t
hat SHE
policies are
imp
le
men
ted in the
ir a
rea
s, that th
eir te
ams
are i
nfor
med of th
e de
par
tme
ntal S
HE
req
uire
me
nts an
d that e
mpl
oyee
s rec
ei
ve and
understand training on environmental issues
and s
afe wor
k
ing pr
acti
ce
s. Re
gul
ar au
dits
are c
ond
ucte
d to ensu
re pol
icy a
nd
procedure i
mplementation i
s appropriat
e.
Th
e Grou
p ta
kes the re
po
r
ting of a
ll SH
E
incidents v
er
y seriously and requires
employees t
o repor
t all incidents
, including
any ne
ar m
is
ses, a
s well a
s da
mag
e to plan
t
or equipment which has
not r
esulted in
personal injury
. The Group considers t
he
rep
or
tin
g of ne
ar mi
ss
es to be as e
qu
all
y
imp
or
ta
nt as a
ctu
al in
cid
ents, s
inc
e it ra
ise
s
situati
ons t
o management tha
t could cause
,
or mi
ght h
ave cau
sed, h
arm. It t
hen e
nsu
res
app
rop
riate c
orr
ecti
ve act
ion c
an b
e take
n to
eli
min
ate or mi
nimi
se th
e ris
k. Th
e Gro
up al
so
ens
ure
s that a
ppro
pr
iate safe
ty p
rac
tice
s ar
e
inc
lud
ed in s
tan
da
rd ope
rati
ng pro
ce
dure
s to
red
uce th
e ri
sk of SH
E inc
ide
nts oc
cur
ri
ng.
Few co
ntroll
ed s
ubs
tan
ce
s are us
ed in t
he
man
ufa
ctur
e of our fo
ams, b
ut wh
ere th
ey are,
the Gr
oup has established
procedures, i
n
whi
ch th
e rel
evant e
mpl
oyee
s are tr
ain
ed, to
ens
ure th
at the stor
age a
nd ha
nd
ling of s
uch
sub
sta
nce
s are s
afe a
nd in ac
co
rdan
ce w
ith
regulat
ory requirements.
The manufacturing
proc
es
s invol
ves m
anu
al h
and
lin
g and
proc
es
si
ng of mate
ria
ls. W
hen n
ew or a
ltere
d
equ
ipm
ent o
r mate
ria
ls ar
e introd
uc
ed, an
d at
reg
ula
r pe
rio
ds th
ere
af
ter
, th
e ris
ks to the
processes are assessed and impro
vements
made where
ver possible
, such as
to
the
de
sig
n of the e
quip
me
nt, to reduc
e or
eliminat
e the
risks identified
.
Th
e mos
t stri
ctly c
ontr
oll
ed pa
r
ts of the
Group
’
s sit
es are where
high-pressure
gas
isus
ed. T
he hi
gh-p
res
sure a
utoc
laves a
re
sub
jec
t to the Pre
ssu
re Sys
tems S
afet
y
Re
gul
ation
s 200
0 in th
e UK
, OSHA
(Occupat
ional Saf
ety and Health
Admi
nis
tratio
n) in the US
A and th
e Jou
rn
al of
Law
s of the Re
pub
lic of Po
lan
d, Dz. U. 2
022
poz. 68. T
ightl
y de
fine
d proc
ed
ure
s and
operational
controls
are in
place t
o manage
the s
afet
y of the
se pre
ss
ure sy
stems. Fa
il-s
afe
me
cha
nis
ms, k
nown a
s pre
ss
ure re
lief va
lve
s
and b
ur
sting d
isc
s (wh
ich a
ct li
ke fuse
s in a
n
electrical syst
em)
, are
included in t
he design
of the pr
es
sure sy
stems w
hic
h, wh
en
trigger
ed,
allow sa
fe dep
ressurisa
tion
of
se
ctio
ns of the sy
stem a
nd preve
nt any f
ur
t
her
ris
ks. Op
er
ation of t
hes
e fai
l-saf
e mec
ha
nis
ms
rel
eas
es h
ar
mle
ss n
itro
gen g
as in
to the
atmo
sph
ere. T
he ai
r we bre
athe is c
om
pos
ed
of 78
% n
itro
ge
n.
Al
l SHE in
cid
ent
s are inve
stig
ated by
appropriat
e lev
els of
management t
o
asc
er
t
ain t
he root c
aus
e of the in
cid
ent a
nd,
wherever
possible,
working pract
ices and
procedures are
improv
ed to
minimise the
ris
kof rec
ur
renc
e. In 2021
, th
ere we
re no
prosecutions
, fines or
enforcement
actions
take
n as a re
sul
t of non
-co
mpl
ian
ce w
ith SH
E
legislation
(2
020
: none
)
.
Health an
d safe
t
y
Th
e COVID
-
1
9 pa
nde
mi
c rem
ain
s a thre
at
andc
onti
nui
ng to protec
t the he
al
th of all
Group employ
ees is paramount
. Throughout
the ye
ar
, Zotefoa
ms ma
inta
ine
d a ra
nge of
anti-CO
VID measures
designed to
mitigat
e
the r
isk of tr
ans
mis
sio
n. Th
ese c
onti
nue
toappl
y in a
ll lo
cati
ons in a
ddi
tion to a
ny
governmental
restrictions
in force.
Health
sur
veil
lan
ce p
rogr
amm
es a
lso p
rovid
e at-risk
employees Group-
wide with medical
monitoring
and support to
ensure t
hat
work
-relat
ed medical conditions
are ident
ified
and addressed p
romptly
through
the
app
rop
riate ref
er
ral to me
dic
al s
pec
ia
lists. T
he
cha
ng
e in wor
k
/
life b
ala
nc
e imp
ose
d by the
pan
de
mic h
as al
so be
en r
eco
gn
ise
d and a
num
be
r of well
bei
ng in
itia
tive
s have be
en
launched in r
esponse. F
ur
ther details
are
provi
de
d in ou
r Peop
le se
cti
on on p
age 70.
Foster
in
g a safet
y c
ultu
re has a p
os
itive
impact on
risk and performance.
Management focus
remains on
developing
safety leadership
, using v
arious engagement
meth
ods to in
cre
ase G
roup
-wid
e aware
ne
ss
of ha
za
rd id
enti
fica
tion a
nd c
ontrol, a
s
deta
il
ed in th
e ca
se stu
dy b
elow.
On
e of our c
ore pr
io
riti
es i
n 202
1 was to
revi
ew the r
isk a
ss
es
sme
nt pro
ce
ss a
roun
d
our e
qu
ipm
ent to en
sure th
at mac
hi
ner
y was
en
gin
ee
red in a way th
at min
imi
se
s the ri
sk
ofinj
uri
es to op
erator
s, reg
ard
le
ss of leve
ls
ofsk
ills a
nd ex
pe
rie
nc
e. All n
ew ca
pit
al
inves
tme
nt proj
ec
ts have be
en a
nd a
re
cur
ren
tly su
bje
ct to a de
sig
n sta
ge
occupational
health and saf
ety risk
assessment.
64
Zot
efoams plc
An
nua
l Re
por
t 2021
CASE STUD
Y
Sa
fet
y st
a
r
t
s from t
h
e top
A programme
of e
xecut
ive-level
, quar
terly
, high-
visibilit
y
toursh
as b
ee
n in pl
ace fo
r a num
be
r of year
s. Ba
sed o
n a
pre
deter
min
ed s
che
du
le, the ai
m of the
se tour
s is to foster
dire
ct e
nga
ge
men
t with t
he wor
k
forc
e on s
afet
y be
havi
our
,
ha
za
rd an
d con
trol me
as
ure
s. Fur
the
rkey ini
tiati
ves
und
er
t
aken th
is ye
ar in
clu
de fie
ld-
level h
a
za
rd as
ses
sm
ents,
where tasks
that
have
evolv
ed int
o ‘
common practice
’
or‘lo
cal k
now
le
dge’ but w
hi
ch have i
nsu
f
fici
ent c
ontro
ls
inpl
ace, a
re ide
ntifi
ed. We have al
so ado
pted in
cid
ent
ando
bse
r
vati
on ba
sed s
of
t
ware to mo
nitor tre
nds, a
lo
ng
wit
h metho
do
log
ies to e
sta
blis
h root c
aus
es of i
nci
den
ts,
considering for
example pr
ocess gaps, h
uman fact
ors
andt
he vi
sua
l env
iron
me
nt.
Th
ese i
niti
ative
s, am
ong s
evera
l othe
rs, c
ontr
ibu
ted to
ared
ucti
on inm
ino
r inc
ide
nts of 40% fr
om 4
7 (2020)
to2
7(202
1
).
CASE STUD
Y
Reducing
open blade
riskGroup-
wide
Op
en bl
ade
s are u
se
d in ma
ny ope
rati
ons a
nd thu
s co
nsti
tute a
safe
ty r
isk w
ith
in Zotefoam
s. A Gro
up-w
ide b
est p
rac
tice r
evie
w
was c
arr
ie
d ou
t by the SHE te
am a
nd le
d to an op
en bl
ade
elimination
project a
t our manufact
uring sit
es. The US
sites
took
thele
ad i
n the as
se
ss
men
t and b
est p
rac
tice wa
s the
n sh
are
d
across our
UK, P
oland and China
sites.
Using t
he ‘hierar
chy o
f contr
ol’
principle,
each activity was
as
ses
se
d, and th
e use of b
lad
es e
lim
inated by u
sin
g alte
rn
ative
equ
ipm
ent, su
bsti
tuti
ng the u
se of an o
pe
n bla
de wi
th a saf
ety
cut
ter o
r ce
ram
ic bl
ade o
r cre
ating b
et
ter sa
fe system
s of wor
k.
Af
ter ex
ten
sive tr
ia
ls, 84
% of op
en b
lade t
ask
s acro
ss th
e Grou
p
were s
ucc
es
sf
ull
y imp
roved up
on by at le
as
t one s
tep of the
‘hierar
chy o
fcont
rol’
, contributing
to
a significant
reduction
inop
enb
lad
e ris
k.
Environmental, social and gov
er
nance
Continued
65
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Health and Saf
et
y performance
The primary metric used t
o monitor
the
number of
reportable lost time
injuries is
RID
DOR
. In 2021
, we ar
e ver
y p
le
ase
d to
rep
or
t th
at the
re were n
o RIDD
OR i
nci
den
ts
acro
ss th
e Grou
p (2020: 1
)
. Th
e Gro
up ha
s
not exp
er
ie
nce
d any fa
tal
it
y am
ong
st staf
f
orco
ntra
ctors a
s a con
seq
ue
nce of a
work
-relat
ed incident
.
Th
e Grou
p al
so us
es me
tric
s dev
ise
d by
theUn
ited S
tates D
ep
ar
tm
ent of L
ab
or
tomea
sure s
taf
f a
bse
nce
s re
sul
ting f
rom
wor
kpl
ace i
nci
de
nts an
d acc
ide
nts. T
his
allows
comparison with
a large
, relev
ant
pe
ergro
up a
nd al
so prov
ide
s an e
sta
bl
ish
ed
methodology with
which we can benchmark
our p
er
fo
rm
anc
e an
nua
lly. In202
1
, th
ere wa
s
a sli
ght d
ecr
eas
e in Day
s AwayFrom Work
(DAF
W
) a
nd a sl
ight i
ncre
as
e inDays Away
Re
stri
cted o
r T
ran
sfer
red (
DART
). T
o c
omb
at
this i
n 2022, we will co
ntinu
e the p
rogr
amm
e
of inc
rea
sin
g ris
k an
d ha
za
rd aware
ne
ss,
whi
ch is a
lso l
inke
d to the con
tinu
atio
n of
expa
ndi
ng th
e new sa
fet
y eng
ag
eme
nt
proc
es
s. In bot
h cas
es, th
e metr
icsa
re
com
par
ed wi
th the l
atest b
en
chm
ar
kdata
forRu
bbe
r an
d Pla
stic
s Proc
es
sor
s. Go
od
per
formance a
gainst t
his benchmark w
as
noted in b
oth 2020 and 2021
.
Ye
a
r
20
21
2020
2
019
Industry
(latest
published
figures)
RIDDOR
0
1
1
n
/a
DAF
W
1.
2
1.
3
1
.1
1.
2
DAR
T
1.7
1.
6
1.
3
2.3
Environmental
per
formance
An i
ncre
as
e in Gro
up e
ner
gy us
ag
e of 5,
4
79
MWh mainly arose
through incr
eased output
leve
ls in ou
r ma
in USA s
ite (up by 2
,
7
4
1 MW
h)
and commencement of
production
in P
oland
(up by 1
,4
77 MW
h)
. T
he m
ain re
as
on for t
his
inc
rea
se was i
ncre
as
ed ac
tiv
it
y at the
se s
ites.
Th
ere we
re no si
gni
fic
ant e
nviro
nm
enta
l
inc
ide
nts du
ri
ng the ye
ar (2020: non
e)
.
Previ
ous ye
ar
s have be
e
n ana
lys
ed ag
ain
st
anin
tern
al c
atego
ris
atio
n intro
duc
ed in 201
8,
guided by
the En
vironmental reporting
gui
de
line
s at
ht
tps:/
/zote.info/36LLN69
.
Leve
l 1
–
Re
por
te
d to Enviro
nme
nt Age
ncy
(e
.g.
polluting incident)
Leve
l 2
–
Re
por
te
d to loca
l au
thor
it
y
(e.g. waste c
on
c
er
ns)
Leve
l 3
–
Inter
na
l rep
or
t on
ly (e.g
. sm
all
granule spills)
In 2021
, no i
nci
de
nts were r
epo
r
ted at Leve
l
1or 2, mea
nin
g no si
gni
fica
nt im
pact to th
e
environment
. The Company ensur
es that
all
rep
or
ts a
re take
n se
rio
usl
y an
d inves
tigate
d
and t
hat the r
esp
ons
es g
iven a
re ap
pro
pri
ate
to
their le
vel o
f impact or
pot
ential i
mpact.
Nin
etee
n inter
nal
ly re
por
ted Leve
l 3 inc
ide
nts
(2020: 2
4) relati
ng to min
or ma
chi
ne oi
l spi
lls,
plastic granule spills and thermal oil spills were
rec
orde
d du
rin
g the ye
ar
. T
he in
cid
ents a
re
captured
by daily
inspections and
actioned
asre
qui
red. T
he de
cre
ase i
s at
trib
uted to a
significant increase in
safety observations,
employee
education and
early-stage
imp
le
men
tatio
n of the 5S m
etho
d to
reducew
aste
and increase product
ivit
y
.
At our s
ite in Kentu
ck
y
, USA we s
uf
fe
red
ane
qui
pme
nt fa
ilur
e in ou
r sil
enc
er sy
stem
which regulat
es noise from
par
t of
our
proc
es
s. Arep
lac
em
ent sy
stem wa
s inst
all
ed
qui
ck
ly toall
ow our p
roc
es
ses to re
sta
r
t
andn
ois
e tobe ma
nag
ed. Al
tho
ugh th
is
newsys
tem me
ets al
l env
iron
me
ntal a
nd
loc
alre
qu
irem
ents f
or no
ise, the
re was a
notic
ea
blec
ha
nge f
rom th
e prev
iou
s system.
Ou
r team inKe
ntuc
k
y ha
s lia
ise
d wi
th the
local may
or
, residents and
authorities and
we
have
c
ommissioned the
design of
a
be
spo
ke sile
nc
ersy
stem to fur
the
r redu
ce
loc
al n
ois
e emi
ss
ions. T
hi
s is exp
ec
ted to
beim
ple
me
nted in H1 2022
.
Specific Energy
Consumption
(S
EC) – UK
In Oc
tobe
r 200
9, the Com
pany e
ntere
d into
aCli
mate Cha
ng
e Lev
y (CCL
) agre
em
ent
whi
ch invo
lve
s me
eting s
pe
cifi
c tar
gets to
reduce energy cons
umption
. Pr
ovided the
Com
pa
ny mee
ts the re
qui
rem
ents of th
e
CCLag
ree
me
nt, itre
cei
ves a re
bate on i
ts
electricity bills and i
s also e
xempt
from t
he
Carbon Reduction
Commitment Scheme
.
SHE: K
ey me
trics
20
21
2020
2
019
2
018
2
0
17
Group
: Repor
table lost t
ime injuries
0
1
1
4
6
Int
ernally r
ecorded
envi
ronmen
tal i
nciden
ts
Level
1
0
0
0
0
0
Level
2
0
0
0
0
0
Company me
trics
Energy usage
(MWh)
49,4
3
3
48
,40
5
44,
570
52,
2
25
49,0
8
5
Energy consump
tion (kWh/kg
)
9.
22
*
9.89
*
11
.
6
0
*
11
.
0
3
*
11
.
0
5
Grou
p metri
cs
Energy usage
(MWh)
6
8
,
219
6
2
,
74
0
56
,45
3
63,4
6
9
5
5,35
4
*
Ca
lcu
la
tio
n sh
own a
s mi
x-ne
ut
ral a
s
se
ss
me
nt of e
ne
rg
y us
age p
er kg o
f po
ly
me
r pro
ce
ss
ed
.
The Company
measures energy efficiency
bytak
ing e
ne
rgy c
ons
umpt
ion a
nd di
vid
ing i
t
by the am
oun
t of mater
ia
l (in kg) that pa
ss
es
through
high-pressure
autocla
ves.
The
increase in pr
oduction of
our HPP
foams,
which generally require mor
e processing
energy than poly
olefin foams,
prompt
e
d us
toupda
te thes
e metr
ics to be p
rodu
ct-mix
neu
tra
l in 201
8. In 2021
, ou
r adj
usted e
ne
rgy
efficiency measure Specific Ener
gy
Consumption
(SEC)
has decreased t
o
9.22kWh
/
kg (2020
: 9.89 kW
h/
kg)
, th
e lowe
st
rec
orde
d si
nce 201
5. In 201
9, the Com
pany
completed
its second
assessment under the
Energy Saving
Oppor
tunity Scheme (ESO
S)
andr
emained compliant in
202
1
.
66
Zot
efoams plc
An
nua
l Re
por
t 2021
Th
e SEC v
al
ue h
as be
e
n rep
or
te
d in t
he A
nn
ua
l Re
po
r
t as a mi
x-ad
ju
ste
d val
ue s
in
ce 2018 to refle
ct t
he gr
ow
th of F
oot
we
ar
an
dtosh
ow the e
n
erg
y ef
fi
ci
en
cy im
pr
ove
me
nts m
ade
.
In o
rde
r to be
ne
fit f
rom a C
CL exe
mp
tio
n, th
e Co
mp
any h
as e
nte
re
d into C
lim
ate C
ha
ng
e Agr
ee
me
nts (
CCA
s) as se
t ou
t by
the D
e
par
t
me
nt fo
r Bu
si
ne
ss, E
ne
rg
y an
d Ind
us
tri
al S
tr
ateg
y. A CCA is a vo
lu
nta
r
y sc
he
me s
et
ti
ng ta
rg
ets to i
nc
re
ase e
ne
rg
y
ef
fic
ie
nc
y an
d re
duc
e c
ar
bon d
iox
id
e (CO
2
) emissions.
For the plast
ics sector
, the scheme
is run b
y BPF
Energy Limited,
to
wh
ic
hun
adj
us
ted S
EC fig
ure
s a
re re
po
r
ted q
ua
r
ter
ly. Th
e sch
em
e wi
ll r
un u
p to 2025.
Environmental, social and gov
er
nance
Continued
Mi
x-adj
us
ted S
EC K
W
h/
kg 1
2m ro
ll
CCL T
arget
Corporate
T
arget
Specific Energy
Consumption (
SEC)
Gr
o
up
: ca
r
bo
n em
i
ss
io
n
s (CO
2
ton
nes)
20
21
2020
20
19
2
0
18
2
0
17
Scope 1 E
missions (
direct emissions
from
our operations
which includes fuel)
7,
4
1
8
7,
0
7
8
5,626
6,
6
61
5,
561
Scope 2 E
missions (indirect
emissions,
primarily electricity)
6
,79
2
7,
4
6
4
6
,7
8
7
8
,1
4
8
10
,
8
4
9
To
t
a
l
14
,
2
10
14
,
5
4
2
12
,
413
14
,
8
0
9
1
6
,
410
Carbon emissions
(k
g) per
material
gassed (k
g)
1.
5
1.
6
1.
6
1.7
2
.1
14.0
2015
2016
2017
2018
2019
2021
2020
9.5
KWH/KG PRODUCT
10
.0
10.5
11
.0
11.5
12
.0
12.5
13
.0
13.5
9
.0
Carbon emissions
globally
Zo
tef
oams products
are used in applica
tions
glo
bal
ly to imp
rove pe
opl
e’
s live
s an
d red
uce
energy consumpt
ion,
primarily through
insulation
a
nd w
eight reducti
on. The
proc
es
se
s we em
ploy to cre
ate the
se foa
ms
all
ow us to use l
es
s raw mate
ria
l an
d prod
uce
light
er foams
than competit
ive pr
ocesses,
both of wh
ic
h are be
ne
fici
al for c
ar
bon
red
ucti
on. In ma
k
ing th
esefo
am
s, ene
rgy
(both g
as a
nd el
ec
tri
cit
y) isth
e ma
in so
urce
ofca
rbo
n em
iss
ion
s fro
m ourfa
cil
itie
s.
Th
e ef
fic
ien
cy wi
th wh
ich we u
se e
ner
gy to
proc
es
s po
lym
er i
s me
asu
red by the we
ig
hted
specific energy consump
tion.
In 2
02
1
, our UK
site
, which processed approximat
e
ly 80%
of
Group polymer b
y t
onnage during
the y
ear
,
reduced the
weight
ed specific energy
con
sum
ption by a
lmo
st 7%. Over
all c
ar
bon
em
iss
ion
s for 2021 were 1
4,2
1
0 m
etri
c tonn
es
(2020: 1
4,542 metri
c tonne
s)
, wi
th the ma
in
cha
ng
es b
ein
g due to the c
ha
nge i
n the
conversion
factor
for electricity to
CO
2
asUKg
en
era
tion sw
itch
es f
rom co
al
to
renew
ablesand
nuclear
.
In 2021
, 97
.7
% (2020: 93.2%
) of the G
rou
p
’
s
ca
rbo
n em
iss
ion
s aros
e fro
m our u
se of
electricity and gas,
primarily in processing
pol
ym
er bu
t wi
th som
e use i
n fac
ili
ty h
eati
ng
andc
oo
lin
g. Dire
ct c
arb
on e
mis
sio
ns f
rom
othe
r sou
rce
s were mi
nim
al (2.3
% of Gro
up
em
iss
ion
s) as we do not o
per
ate our ow
n
fle
etof vehi
cl
es.
Th
e meth
odo
log
y we have us
ed is i
n
accordance with
the guidance published
bythe De
pa
r
tme
nt for E
nviro
nme
nt, Food
andR
ura
l Af
fa
irs i
n Jun
e 201
3. We have o
nly
inc
lud
ed e
mis
sio
ns for w
hi
chwe are d
ire
ctl
y
responsible.
We hav
e not
included emissions
for ac
tiv
itie
s over w
hic
h we have no d
ire
ct
control
. For e
xample,
we ha
ve included
business mileage on
a Company
van and
mileage claimed b
y employ
ees in the
U
K,
butn
ot othe
r form
s of bus
ine
ss t
ravel, su
ch
astrave
l mad
e by emp
loye
es e
lsew
he
re in
the
Group or
trav
el using publi
c transport
orai
rtravel.
We
are committed
to
using rene
wable
electricity where feasible
. Our UK
site
swi
tched s
upp
ly d
uri
ng 2021 and is now
supplied with
1
00% REGO
electricity
, with our
Poland
site s
witching
to
renewable
electricity
fro
m the st
ar
t of 2022.
Water a
n
d was
te
Wh
ile no
ne of ou
r si
tes are l
oc
ated in re
gio
ns
whe
re water i
s sca
rce, we re
cog
nis
e that
us
age of water i
s a key env
iron
men
tal m
etri
c
supporting our sustainability pr
oposition
. The
amo
unt of wa
ste prod
uce
d is a key ta
rget
upd
ated in 2021 to minim
ise o
ur im
pac
t
onthe e
nvi
ronm
ent a
nd fo
rms p
ar
t of o
ur
cor
po
rate obj
ect
ives. Water u
sag
e de
cre
ase
d
by 2% acros
s the G
roup i
n 202
1
. Ou
r water
con
sum
ption i
s meter
ed an
d we have sp
ec
ific
programmes t
o improv
e efficiency and reduce
water us
age. T
he m
ain wate
r usa
ge is at o
ur
UK sit
e,
the largest
of our
manufacturing sit
es,
where we
implemented
specific initiat
ives t
o
preve
nt le
aks a
nd mi
nim
ise wate
r usa
ge,
inc
lud
ing re
lin
ing o
urwater s
torage p
it.
T
otal wa
ste acro
ss th
e Grou
p was 3,
1
24
tonnes
for t
he year wit
h more t
han 856
tonnes
be
ing re
cycl
ed. At ou
r mai
n site in th
e UK,
wecon
tinu
e to work w
ith pa
r
tne
rs w
ho so
r
t
our was
te
, recy
cle significant portions and
recov
er energy thr
ough incinerat
ion. The
qua
ntit
y q
uoted as r
ecyc
led i
s kn
own to
beun
de
rst
ated as o
ur pa
r
tne
r for no
n-foam
waste is c
urr
entl
y una
bl
e torepor
t this re
li
abl
y
,
the
refore we h
ave not rep
or
te
d this a
s
rec
ycle
d. Dur
ing 2021
, we fu
r
the
r deve
lop
ed
outl
ets for o
ur foa
m sc
rap, thema
jor
it
y of
whi
ch is n
ow re-
pur
pos
ed in
to tur
f-und
er
lay
and b
lo
cks of pa
r
tic
le foa
m.
In 2022, we will e
mba
rk on a n
umb
er of
lon
ge
r
-term i
niti
ative
s to redu
ce o
ur was
te,
inpa
r
tic
ula
r the was
te that ca
nn
ot be
rec
ycle
d.Thi
s inc
lud
es inve
stm
ent i
n
machiner
y
to
improv
e our cir
cularity by
all
owin
gscr
ap po
ly
me
r from o
ur pro
ce
ss
tobere-i
nc
orp
orate
d as the b
ase m
ater
ial
inthem
an
ufac
ture of o
ur foa
m prod
uc
ts.
SE
C ha
s
de
c
re
as
ed t
o 9.
2
2
kW
h
/kg
, th
e lo
wes
t
ever r
eco
rd
ed
67
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Water a
n
d was
te: G
lob
al
Wat
er consumption
(000m
3
)
20
21
2020
Note
s
X
UK sit
e
79.3
8
1.
5
X
USA sit
e
5.2
4.7
X
Other sit
es
1.
9
1.
8
Global consumpt
ion
86.4
8
8.0
Wast
e recycled (
tonnes
)
856
787
Th
e qua
ntit
y q
uoted as re
cyc
led i
s und
er
stated a
s ou
r par
tn
er fo
r
non
-foam was
te is cur
ren
tly un
ab
le to repo
r
t thi
s.
T
ot
a
l Wa
st
e (to
n
ne
s)
3
,1
2
4
2,6
3
6
To
p
i
c
Accounting metric
Categor
y
Un
i
t of m
ea
su
r
e
Code
Supporting disclo
sure
Greenhouse
gas emissions
Gross global Scope
1 emissions,
percen
tage
cov
ered
under
emissions-limiting
regulations
Qu
antit
ative
Metr
ic ton
nes (t) C
O
2
Per
centa
ge (
%
)
R
T-
C
H
-
11
0
a
.1
S
ee G
r
oup c
ar
b
on
emissions table
pag
e66
Discussion of
long-
term and
sho
r
t-
ter
m strateg
y or p
lan to
manage Scope 1
emissions,
emissions reduct
ion target
s,
anda
n an
al
ysis of p
er
fo
rm
anc
e
against those targets
Discussion
anda
na
lys
is
n
/a
R
T
-
C
H
-11
0
a
.
2
S
ee G
r
oup c
ar
b
on
Emissions section on
page 66
Air quality
Ai
r emi
ssi
ons of t
he fol
lowi
ng
pollutants:
(
1
) NO
X (e
xcluding
N
2
O)
,(2) SO
X, (3) vol
atil
e orga
nic
compounds (VOCs
)
, and (
4
)
haz
ardous air pollutants (HAPs
)
Qu
antit
ative
Metric t
onnes
R
T-
C
H
-1
2
0
a
.1
S
ee G
r
oup c
ar
b
on
emissions table
pag
e66
Energy
management
(
1
) T
ota
l en
erg
y con
sum
ed,
(2
)percentage
grid electricity
,
(3)perc
ent
age re
newa
bl
e,
(
4)
to
tal self
-generat
ed energy
Qu
antit
ative
Gigajoules (GJ)
,
Per
centa
ge (
%
)
R
T-
C
H
-
1
3
0
a
.1
S
ee S
EC t
ab
le
page 66
Wat
er
management
(
1
) T
ota
l water wi
thdr
awn, (2) t
ota
l
water co
nsu
me
d, perc
ent
age of
eac
h in re
gio
ns wi
th hi
gh or
ex
trem
el
y hig
h bas
eli
ne water
stres
s
Qu
antit
ative
Thousand cubic
m
e
te
r
s
(m
³
),
Per
centa
ge (
%
)
RT
-
CH-
1
40
a.
1
S
ee w
ate
r da
ta t
ab
le
page 6
7
Zot
efoams’
main
manufacturing sit
es
arel
oca
ted in ar
eas
oflow tomed
ium
waterstre
ss.
Number of
incidents o
f
non-compliance associat
e
d
wit
hwater qu
ali
ty p
er
mi
ts,
standards and r
egulation
Qu
antit
ative
Number
RT
-
CH-
1
40
a.2
None
De
scr
ipti
on of wate
r
man
age
me
ntri
sks a
nd
dis
cus
sio
nof strate
gie
s an
d
practices t
o mitigate
those risks
Discussion
anda
na
lys
is
n
/a
RT
-CH
-
1
40a.3
Wa
ter
consumption
ismo
nitore
d an
d is
aconsi
deration when
ma
kin
g inve
stm
ent
decisions.
S
ee w
ate
r da
ta t
ab
le
page 6
7
Sustainability Ac
counting
Standards Board
(SA
SB) di
sclosures
SASB S
tan
da
rds id
enti
f
y the s
ubs
et of Envi
ronm
ent
al, So
cia
l an
d Gover
na
nce (
ESG) iss
ue
s reas
on
abl
y like
ly to have a mate
ria
l imp
act o
n the
financialperformance of
the typical company i
n an indust
r
y
. The fol
lowing table
summarises our response
to
the sect
or
-specific standar
ds for
chemicalscompanies.
68
Zot
efoams plc
An
nua
l Re
por
t 2021
Environmental, social and gov
er
nance
Continued
To
p
i
c
Accounting metric
Categor
y
Un
i
t of m
ea
su
r
e
Code
Supporting disclo
sure
Hazardous
waste
management
Amount of
ha
zardous
wastege
ne
rated a
nd
percen
tage
r
ecycl
ed
Qu
antit
ative
Metric t
onnes (t)
,
Per
centa
ge (
%
)
RT
-CH-
1
50
a.
1
Zotefo
ams
doe
s not
produce significant
quantities
of hazardous
wast
e.
Wast
e classified as
hazardous (de
fined in
the
UK by Di
rec
tive 20
08/9
8/
EC, other si
tes fol
low lo
ca
l
regulation
s)
is managed
collected and
treat
ed,
including recy
cling, b
y
ar
esponsible servic
e
provi
de
r
. Th
e weig
ht
ofha
za
rdo
us was
te is
notcu
rre
ntly re
co
rde
d.
S
ee w
as
te da
ta t
a
ble
pag
e67
Community
relations
Discuss
ion o
f engagemen
t
proc
es
se
s to man
age r
isks
andopportunities associa
ted
with
community inter
ests
Discussion
anda
na
lys
is
n
/a
R
T
-
C
H
-
2
1
0
a
.1
See Peop
le sect
ion
page
7
1
W
orkforce
health and
safety
1
) T
ota
l rec
orda
bl
e inci
de
nt rate
(
TR
IR) an
d (2
) fata
li
ty r
ate for
(a)dire
ct em
ploye
es a
nd
(b
)cont
ractemplo
yees
Qu
antit
ative
Ra
te
R
T
-
C
H
-
3
2
0
a
.1
S
ee S
HE ke
y met
r
ics t
a
bl
e
page 65
Th
e Grou
p ha
s not
experi
enced an
y f
atali
ty
amongst sta
f
f or con
tract
ors
as a co
nse
qu
enc
e of a
work
-relat
ed incident
.
De
scr
iptio
n of ef
fo
r
ts to ass
es
s,
monitor
a
nd reduce
exposure
of
employees and
contract
workers
tolong
-term (chro
nic) he
al
th ris
ks
Discussion
and analysis
n
/a
R
T-
C
H
-
3
2
0
a
.
2
S
ee H
ea
lt
h an
d Sa
fe
t
y
per
formance section
pag
es6
3 to 65
Product design
for use-phase
effic
iency
Revenue
from product
s designed
for use-phase
resource
efficie
ncy
Qu
antit
ative
Repor
ting currency
RT
-CH-4
1
0a.
1
Zot
efoams pr
oducts
havehi
stori
cal
ly b
ee
n
designed t
o use less
mat
erial and last longer
,
which is our
c
ompetit
ive
adva
ntag
e. Se
e the
‘KeyT
a
rge
ts’ secti
on
onpa
ge 61 formetr
ic
s.
Safety and
environmental
stew
ardship
of
chemicals
(
1
) Perc
en
tage of p
rodu
cts th
at
contain
Globally Harmo
nized
System
of Classificat
ion and
Labe
lling of
Chemic
als (GHS
)
andC
atego
r
y 1 an
d 2 He
alth
andE
nviro
nme
nta
l Ha
z
ardo
us
Substances, (2
) perce
ntage
ofsuc
h prod
uc
ts that have
undergone a
haz
ard assessment
Qu
antit
ative
Per
centa
ge (
%
)
byreven
ue,
Per
centa
ge (
%
)
Nil
RT
-CH-4
1
0
b
.
1
3.4
% of reve
nu
e
wasf
rompro
duc
ts
con
tai
nin
g a Catego
r
y 1
substance.
The hazardous
sub
sta
nce i
sa flam
e
ret
ardant
addit
ive and
hasb
ee
nas
se
sse
d
asnon
-hazardous in
the
finished products
whe
n bo
und i
nto the
pol
ym
er m
atri
x.
Dis
cus
si
on of str
ategy to (1
)
manage chemicals o
f concern
and (2) deve
lop a
lter
nati
ves w
ith
reduced human and/
or
environmental impact
Discussion
and analysis
n
/a
RT
-CH-4
1
0b.2
We have deve
lop
ed
alte
rn
ative fla
me ret
ard
ed
products
that do
not
contain t
he GHS Ca
tegory
1 substance. While
maintaining per
formance
sta
nda
rds d
oes n
otall
ow
complete
substitution
,
ef
for
ts are m
ade to
min
imi
se the u
seof GH
S
Categ
or
y 1su
bst
anc
es.
Sustainability Ac
counting
Standards Board
(SA
SB) di
sclosures
69
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
To
p
i
c
Accounting metric
Categor
y
Un
i
t of m
ea
su
r
e
Code
Supporting disclo
sure
Genetically
modified
organisms
(GM
Os)
Perc
enta
ge of pro
duc
ts by
reven
uetha
t con
tain G
MO
s
Discussion
anda
na
lys
is
nil
R
T
-CH-4
1
0c.
1
n
/a
Management
oft
h
e le
ga
l
and
regulator
y
environment
Discussion of
corporat
e position
relat
ed to
government r
egulations
and/
or policy pr
oposals that
address envir
onmental and
social
fact
ors affecting the
industry
Discussion
and analysis
n
/a
RT
-CH-530a.
1
Zotefoam
s fol
lows a
ll
localregulat
ions relati
ng
toHea
lth, Safe
ty a
nd
Envi
ronm
ent a
s wel
l
asso
cia
l fac
tors. We
havealow-r
isk a
pp
etite
t
o
w
a
r
d
s
s
a
f
e
t
y.
Se
e
page 63
Operational
safety
,
emergency
preparedness
&
response
Process Sa
fety Inciden
ts
Cou
nt(PSI
C)
, Proc
es
s Safe
ty
T
otalI
nci
den
t Rate (PSTIR
)
,
andP
roce
ss S
afet
y In
cid
ent
Seve
rit
y R
ate (PSISR)
Qu
antit
ative
Number
, rate
RT
-
CH-540
a.
1
S
ee o
ur DA
RT a
ndDA
F
W
fig
ur
es o
n
page 65
Number of
transport incidents
Qu
antit
ative
Number
RT
-CH-540
a.2
Zotefoams h
ad no
reportable transport
incidents
Production by
repor
table
segment
n
/a
Qu
antit
ative
Cub
ic me
ters (m³
) or
metric t
onnes (t)
RT
-CH-000
.A
8,
1
0
9 tonn
es of A
ZOTE
®
pol
yole
fin foa
m an
d 1
,5
1
1
tonne
s of HPP we
re
manufactured
.
Th
ere is a l
ag be
twe
en
manufacturing and
sale.
Sustainability Ac
counting
Standards Board
(SA
SB) di
sclosures
70
Zote
foams plc
An
nua
l Re
por
t 2021
The volat
ile envir
onment creat
ed by global
economic uncer
tainty has required
increased
flexi
bil
it
y
. N
ew wor
ki
ng pra
ctic
es a
ime
d at
stri
ki
ng a ba
lan
ce b
etwe
e
n bus
ine
ss
requirements
and personal needs e
volved
rap
idl
y in 2021
. T
he
se in
clu
de
d rem
ote,
flexi
ble a
nd d
if
fe
rent way
s of work
in
g.
T
ec
hno
log
y was l
evera
ged to co
ntin
ue
toeng
age su
cc
es
sfu
lly w
ith c
ustom
er
s,
suppliers and colleagues a
t times
when
face-to-
fac
e contact was difficult or
impossible,
and we
upgraded the
IT
supportinfrastructur
e t
o ensure
seamless
per
formance during remo
te w
orking.
Ma
nag
ers we
re e
nco
urag
ed to deve
lo
p
sk
illse
ss
ent
ial fo
r bui
ldi
ng an a
gil
e
wor
k
force,s
uch a
s ada
ptab
ili
ty
,
collaboration
and communica
tion.
Work
–
life balance challenges arising
f
rom
the
se new way
s of work
in
g were re
co
gni
sed.
In add
iti
on to conti
nui
ng to provi
de a
n
employee
assistance programme
available
2
4h
our
s a day a
nd seve
n days a we
ek i
n our
two l
arg
es
t sites i
n the U
K and th
e USA
, a
num
be
r of well
bei
ng in
itia
tive
s were la
unc
he
d.
Managers were
educated
on the comple
x
iss
ue of m
enta
l he
alt
h throu
gh HR b
ri
efing
s
and m
ent
al h
eal
th aware
ne
ss c
our
se
s were
made a
vailable t
o all employees t
hrough an
online t
raining platform
. Mental health
first
aid
er
s were a
lso d
ep
loyed to of
fe
r emoti
ona
l
sup
por
t to empl
oyee
s in any Zotefoa
ms
location e
xperienc
ing mental
distress and
to
signpost
them t
owar
ds appropriat
e internal
and ex
te
rna
l res
ourc
es.
Zo
tef
oams attract
s pro
fessionals at
the
be
gin
nin
g of thei
r ca
ree
r and we a
cti
vely
manage a pipeline
of future talent
. A positiv
e
em
ploye
e expe
ri
en
ce an
d tra
inin
g an
d car
ee
r
development
oppor
tunities
are k
ey t
o
max
imising t
he lev
el of
employee r
eten
tion
required t
o suppor
t our knowledge-based
business. Ho
wev
er
, while
a positive
e
mploy
ee
exp
eri
en
ce is u
sef
ul to aid re
tentio
n, the
imp
act of st
af
f tur
nove
r may on
ly be m
iti
gated
effectively by
the codifica
tion o
f knowledge
and p
roc
es
ses to su
ppo
r
t ef
fe
cti
ve
succession planning.
The 20
22 people
strate
gy wi
ll foc
us on t
hes
e are
as.
Org
ani
sati
ona
l deve
lop
me
nt rem
ain
s a key
component of
our continued e
xpansion in
market
s, pr
oducts and
geographies. In t
he
wake of the p
and
em
ic an
d Brex
it, stru
ctu
ral
cha
ng
es in th
e jo
b mar
ket dur
in
g the
year
cr
eat
ed a
challen
ging
recruit
ment
env
iron
me
nt whi
ch re
qui
red u
s to adapt o
ur
strat
egy to address localised skills shor
tages.
Ou
r peop
le st
ra
tegy
We are a kn
owl
edg
e-b
ase
d bu
sin
es
s and
strongly
believe
that r
ecognising the
value
inou
r pe
opl
e wil
l all
ow our G
roup to c
reate
lon
g-term va
lue fo
r our s
ha
reh
old
er
s and
alignment with
other
stakeholders.
Through
our p
eo
ple s
trateg
y
, we foc
us ou
r ef
fo
r
ts on
the at
tra
ctio
n, retentio
n an
d trai
nin
g of the
right people
, role
model leadership and
evolut
ion of
a corporat
e culture designed
toguid
e our b
usi
ne
ss in th
e preva
ili
ng
environment
. The success of our
people
strate
gy is eva
lu
ated thro
ugh th
e
measur
ement
of
employ
ee experien
ce,
retenti
on rate a
nd pe
r
for
ma
nce.
De
live
r
y o
f ou
r peo
pl
e st
r
at
eg
y
Our people str
ategy
is delivered
through
ourHuman Resour
ces (HR) t
e
am,
which
wasref
res
he
d and a
ugm
ente
d in 2021 by
the
addition
of a
Poland Business P
a
rtner to
ser
ve t
he needs o
f the ne
wly commissioned
Brzeg manufacturing
plant locally
. The UK
HRsys
tem was u
pgra
de
d to offe
r em
ploye
es
acc
es
s to a more u
ser-
fr
ien
dl
y
, intu
iti
ve
pla
tfo
rm. In 2022, a pla
n is in p
lac
e to
accelerate
the digitalisation
of HR
ser
vices
bymovi
ng to a HR cl
oud-
bas
ed sys
tem
to
drive standardisation,
digitalisation
andaut
omation of
cur
rently
time-consuming
proc
es
se
s acro
ss a
ll HR a
rea
s. Th
is wil
l all
ow
ourH
R team to fu
ll
y focu
s on su
ppo
r
tin
g
lin
eman
age
rs a
nd im
prov
ing th
e
emplo
yee
e
xperience
.
People
policies
Our UK and
US sit
es hav
e in place
policies
relating
to mat
e
rnity
, pat
ernit
y
, adoption
andp
are
nta
l leave, as we
ll a
s time of
f fo
r
dependants
’ sickness and bereav
ement.
Wecomp
ly w
ith lo
ca
l gover
nm
ent g
uid
anc
e
in al
l othe
r loc
atio
ns.
Our people
Culture is especially impor
tant in moments that mat
ter
. Since
early 2
020, th
e impact of CO
VID
-
1
9 has challenged ever
y par
t
ofour business, but on an individual le
vel it has also test
ed the
resilience of our people
. These challenges were met head-on by
employ
ee
s who ha
ve conti
nued to e
x
emplif
y Zot
efoams
’ Bra
nd
V
alues: T
rust
wor
thy
, Responsive
, Pioneering and Reliable.
Theconsolidation of n
ew w
orking pr
actices in 2021 t
ook int
o
account emplo
yees
’ mental, social and professional nee
ds and
increa
sed employment flexibility
, extending our ge
ogr
aphic
reach and increas
ing access to k
ey talent. Our 2022 focus
willbe on embedding Z
otef
oams’ cult
ure and these
workingpractices.
Our Cul
ture P
illars
We live the B
ra
nd Value
s
We
hold ourselves
accountable
We unde
rs
tan
d how we co
ntri
bute
to Zot
efoa
ms’ suc
ce
ss
We are a le
ar
nin
g orga
nis
atio
n
We
constructiv
ely challenge
ourselves
and others
We value p
eo
ple a
nd re
co
gni
se
our successes
Our Brand
Values
Our Purpose
Optimal
material
solutions
for the
benefit of
society
T
r
ust
wor
thy
Responsive
Reliable
Pioneering
71
Zotef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Four d
ec
ad
es a
nd c
ou
nt
in
g – a
career characterised b
y change
and challenge
Senior T
echnolo
gist P
eter
Winnicki joined
Zotefoams a
s a ch
emi
str
y g
radu
ate stra
igh
t
from King
’
s College,
London in
December
1
978. In the inter
veni
ng 43 ye
ar
s, Peter ha
s
seen significant changes in product
s, mark
ets
and the
business itself
.
Du
rin
g the 1
98
0s he a
dde
d new p
rodu
ct
development t
o his original mat
erials testing
role
, then commissioned
a raft of
new
high-pressure
autocla
ves powered
by t
hermal
oil, in
stead of s
team, as p
revi
ous
ly
. Th
is was
ahug
e step; hig
her te
mpe
ratu
res m
ea
nt the
ability to
produce lo
wer
-density polyeth
ylene
foam
s an
d, eventu
all
y
, to proc
es
s en
gin
ee
rin
g
pol
ym
er
s at lowe
r den
siti
es a
nd in th
ic
ker
she
ets. It a
lso m
ea
nt hig
he
r prod
uct
ivi
t
y;
Our cul
ture
The pandemic has changed
our social
int
eractions and
impact
ed the w
ay decision
s
are made
. Throughout thi
s period of
unc
er
t
ain
ty
, we have re
cog
nis
ed th
e
impor
tance of
continuing t
o provide dir
ection
and s
upp
or
t to ou
r work
force t
hrou
gh a
people-first leadership
approach,
c
onscious
that of
fi
ce
-bas
ed e
mpl
oyee
s req
uire
d to
wor
kremote
ly in o
rde
r to limit C
OVID
-
19
tran
smi
ss
ion r
isk
s will h
ave exp
er
ien
ce
d the
pandemic differently from our
factory-based
staf
f
. Wh
ile th
ere m
ay be a gre
ater a
ppr
eci
atio
n
and u
nd
ers
tan
din
g of eac
h othe
r’
s l
ive
s as
of
fic
e and h
ome h
ave inter
t
w
ine
d, the lo
ss of
commonality is a risk
which may
impact t
he
Gro
up over th
e lon
g term. We al
so re
cog
nis
e
the importance of aligning
Zot
efoams’
culture
wit
h its pu
rpo
se; our va
lue
s an
d ha
bits s
er
ve
as a roa
dma
p to dri
ve the di
rec
tion of th
e
business and achie
ve our
objectives.
The
outp
ut of p
er
fo
rma
nc
e revi
ews an
d em
ploye
e
feedback during
the y
ear included a cult
ural fit
as
ses
sm
ent w
hic
h wil
l all
ow us to ide
ntif
y the
cha
ng
es we ne
ed to ma
ke in 2022 to res
pon
d
to an evol
vin
g env
iron
me
nt.
Employ
ee engagemen
t
Zo
tef
oams recognises that
employee
en
gag
eme
nt is a key e
nab
le
r of our p
ur
pose.
In the
UK, our J
oint Consulta
tive Committ
ee,
which comprises an employ
ee representativ
e
fro
m eac
h de
par
t
men
t and a B
oard
rep
res
enta
tive, me
ets qu
ar
ter
ly to co
nsi
de
r
awid
e ran
ge of m
atte
rs af
fe
cti
ng em
pl
oyees’
cur
ren
t and f
utu
re inter
ests. N
ew ter
ms of
refer
ence emphasising the
importance of the
employee
’
s voice were
adopted in
November
202
1
. Em
ploye
e en
gag
eme
nt me
etin
gs a
re
he
ld mo
nthl
y in the US
A. Fe
ed
bac
k is el
ici
ted
fro
m leave
rs i
n are
as su
ch as key i
nflue
nc
ing
fact
ors in t
heir decision t
o leave
, whether
suf
ficient r
esources were
made a
vailable
tothem, th
e perc
ei
ved ef
fec
tive us
e of the
ir
skills, r
emuneration and
recognition
. New
employees ar
e also consult
ed on their
views
on the
organisation
.
Emp
loyee s
afet
y re
mai
ns the fo
cus of o
ur
he
alth a
nd s
afet
y stra
tegy
. Ove
r the pa
st
twoye
ar
s, we have su
cc
ess
fu
lly n
avig
ated
COVID
-
1
9 r
isks a
nd re
str
icti
ons by
implementing measur
es that
kept
our
employees saf
e during the
pandemic.
Employ
ees’
salaries, benefits and
conditions
rem
ain u
nde
r rev
iew to prom
ote a posi
tive
emplo
yee
experien
ce.
Th
e res
ults of th
e mos
t rec
ent e
mp
loyee
en
gag
eme
nt su
r
vey in th
e UK we
re dis
cus
se
d
by dep
ar
tm
ent
al re
pre
sen
tative
s an
d revi
ewed
by the E
xec
utive te
am. Key find
ing
s, lin
ked to
are
as of im
prove
men
t, were as fo
llows:
X
Com
mu
nic
atio
n at the r
ight ti
me a
nd by the
right people is
ke
y
. Employ
ees appreciat
e
the business
briefings provided
to
them
by
managem
ent
. A
recent
presenta
tion
on the
Group
’
s sustainability st
rat
egy was
particularly
well
receiv
ed
X
De
cis
ion
s sho
uld b
e mad
e at the r
igh
t level
and w
ith a
ppro
pr
iate auton
omy g
iven to
staf
f
. Th
e ab
ilit
y to ‘chal
len
ge up’ is pr
ized
and p
erc
ei
ved a
s a sig
nif
ic
ant c
ontr
ibu
ting
fac
tor to build
ing a c
oll
abo
rati
ve work
envir
onment
X
It is im
por
tan
t to set be
havi
our ex
pe
ctati
ons
cle
ar
ly a
nd e
nco
urag
e staf
f to rais
e any
behavioural concerns
, in line
with t
he
Dignity at W
or
k policy
, where sit
uations
warran
t it
.
Zotefo
ams and its communiti
es
In ea
ch of its g
lob
al lo
cat
ions, Zotefoa
ms
con
trib
utes to lo
ca
l emp
loy
men
t level
s an
d
the lo
ca
l ec
ono
my
. A
s our s
ites a
re loc
ated
clo
se to res
ide
ntia
l are
as, we u
nde
rst
and t
hat
building str
ong relat
ionships supports our
soc
ia
l lic
enc
e to ope
rate. The G
rou
p has i
n
place a con
tact mechanism f
or stak
eholders
to reac
h out to the b
usi
ne
ss on i
ssu
es of
concern
. Our
environm
ental
and hea
lth
and
safe
ty re
co
rd is so
und, w
ith any i
ssu
es
handled by
proactively engaging
the local
community
, and Group-
wide policies will
be
revi
ewed i
n 2022 to inco
rpo
rate co
mmu
nit
y
engagement considera
tions
.
the
new generat
ion of
high-pressure
autoc
lave
s can h
old 6
0
0
–
8
0
0 she
ets,
compared with
a maximum of 2
0
0 previously
(and ju
st 27in the e
ar
lie
st mo
del
s stil
l in
production
when Pe
ter joined
Zo
tef
oams)
.
Wi
th acti
vit
y a
cce
le
ratin
g over th
e pas
t two
decades, including
fur
ther e
xpansion in t
he
USA, entry int
o Asia, the
construction o
f the
Polish
manufacturing plan
t and mo
ves int
o
new mark
ets
, things
have
changed
sig
nifi
ca
ntly s
inc
e Peter’
s firs
t day at
Zo
tef
oams. Though product
prot
e
ction,
construction
and marine ha
ve r
emained core
mar
kets over th
e yea
rs, ne
w and exci
ting
sectors
include foo
twear and avia
tion.
Aske
d wha
t has ke
pt him at Zotefoa
ms,
Peterrep
lie
s: “I have
n’
t had t
he sa
me jo
b for
43 yea
rs – i
t’
s cha
ng
ed eve
r
y thre
e or fo
ur
.
I’ve never ha
d time to ge
t bore
d be
cau
se
som
ethi
ng new a
lways c
ome
s al
ong. At th
e
moment
, we
’
re exploring
new t
e
chnology for
asig
nifi
ca
nt new m
ar
ket. So, yes, there a
re
alway
s cha
nge
s an
d ch
all
eng
es – th
at’
s the
Zotefoams way
.
”
72
Zotef
oams plc
An
nua
l Re
por
t 2021
Our peop
le
Continued
Organisat
ion de
velopment
Significant pr
ogress was ma
de during t
he year
aga
ins
t the HR s
trateg
y es
tab
lis
hed i
n 2020 to
und
er
pin o
ur ta
le
nt grow
th a
gen
da. A
s well a
s
planned organisat
ional development
, we ar
e
constantly
monitoring
and react
ing t
o changes
in ou
r bus
ine
ss e
nvi
ronm
ent, wi
th key sk
ills a
nd
labour shortage
s being particularly prev
alent
rec
entl
y
. I
n the UK
, we de
live
red a
n
organisational
development
plan t
o impro
ve
our new
product implementa
tion pr
ocess and
proactiv
ely str
engthened our supply
chain,
production
and procurement t
e
ams t
o meet
the demands o
f an increasingly comple
x
glo
bals
upp
ly c
hai
n. Thi
s focu
sed o
n key role
s,
impro
ving the c
ustomer s
er
vices function
capabilit
y and creating a
standalon
e logistics
function t
o address import
/
expor
t challenges.
In a cl
imate of e
ndu
rin
g sk
ills s
ho
r
tag
es in b
oth
Pola
nd an
d the US
A, o
ur ter
ms an
d con
dit
ions
were re
al
ign
ed to loc
al m
ar
ket nor
ms an
d key
hire
s were m
ade i
n the US
A man
ufa
ctur
in
g
leadership structur
e. T
-FIT
®
insulation
products
rem
ain a key st
rategi
c opp
or
tu
nit
y to grow a
nd
enrich our product
mix over
the medium t
e
rm
and t
he ca
lib
re an
d size of the H
PP bus
ine
ss
uni
t acc
ord
ingl
y co
ntinu
ed to be a
n are
a of
focu
s in 2021
. O
ur tea
m in Kun
sha
n, Chi
na
was stre
ng
the
ned by th
e ap
poi
ntme
nt of t
wo
new business de
velopment managers
in 20
2
1
.
Th
e T
-FIT te
am ha
s expa
nd
ed ge
og
rap
hic
al
ly
to cover mo
re gro
und a
nd ac
ce
ss ne
w
cus
tomer
s in ex
isti
ng ma
rkets. A f
ur
th
er
increase in
headcount is
planned for 2
022
.
As wor
ki
ng pr
acti
ce
s deve
lop, we pla
n to
implement a ne
w blended working
policy
dur
ing 2022. Th
is is pa
r
tly i
n res
pon
se to
continuing
restriction
s on certain employees
at
tendi
ng the wo
rk
pl
ace i
n var
iou
s
jurisdictions and also recognises the evolving
exp
ect
atio
ns of our c
ur
rent a
nd pote
ntia
l
em
ploye
es. O
ur ob
jec
tive i
s to maint
ain a
pos
iti
ve envi
ronm
en
t to attra
ct an
d reta
in
tal
ente
d staf
f a
nd ha
s the a
dde
d potenti
al
benefits o
f enabling a
wider geographical
recruitment pool
, reducing the
impact on
our
ca
rbo
n footp
rint f
rom c
omm
uti
ng an
d als
o
sup
por
ting a wo
rk pat
ter
n an
d wor
k–li
fe
bal
anc
e wh
ich wo
uld, fo
r exam
ple, al
low the
rec
ru
itme
nt of em
ploye
es w
ith c
hil
d-c
are
obligations
.
Performance managemen
t
Aligning t
o one o
f Zot
efoams
’ cultural pil
lars
“we are a l
ea
rn
ing o
rga
nis
ation”
, we la
unc
he
d a
new performance management sys
tem in
the
UK, Po
lan
d, Chi
na an
d Ind
ia in 2021
. T
hi
s is
designed t
o encourage higher
employee
en
gag
eme
nt, wit
h more f
req
ue
nt fee
dba
ck an
d
coaching thr
oughout the y
ear
, leading t
o
detailed personal t
raining plans
. Managers
conducted
an initial
objective assessment o
f
employees
’ per
formance in or
der to
establish
abas
eli
ne of co
mp
etenc
e acro
ss th
e bus
ine
ss
wit
h the du
al ob
je
ctive
s of add
res
sin
g sk
ill
s
gap
s by ide
ntif
yin
g le
ar
nin
g and d
evel
opm
ent
opportunities and supporting good succession
planning.
Key
data on
organisational
per
formance against
corporat
e objectiv
es
wil
lbe an
al
yse
d in 2022. This i
s sim
ila
r to
thepr
oce
ss
es a
lrea
dy e
mbe
dd
ed wi
thi
n
ourmain
subsidiaries in t
he USA, in
formed
byloc
al p
racti
ce.
People dev
elop
ment
The importanc
e of
retaining
and managing
staff effectively was
emphasised during the
pan
de
mic a
nd re
mai
ns a pr
ior
it
y in a g
lob
al
env
iron
me
nt af
fe
cted by sk
il
ls sh
or
ta
ge
s. As
ale
arn
ing o
rga
nis
atio
n, Zotefoams h
as al
ways
fost
ered employee
development thr
ough a
var
iet
y of in
itiat
ives to e
quip t
hem w
ith key
job
-rel
ated sk
il
ls al
ign
ed to the f
ulfi
lme
nt of
theG
roup’
s o
bje
ctive
s an
d we ma
inta
ine
d
thisa
ppr
oach i
n 2021
.
UK Graduate Scheme
Ou
r two
-year G
rad
uate Sc
hem
e is ai
me
d
at
increasing the or
ganisation
’
s technical
capability and enables us t
o develop y
oung
talent which un
derstands the business
. The
sch
em
e com
pr
ise
s two o
r thre
e deve
lop
me
nt
role
s for e
ac
h indi
vi
dua
l. Gra
duate
s und
er
t
ake
a programme
of learning
and hands-on
exposure
to
all major funct
ions in
the
business, to
build broad
business insight
andg
ive th
em th
e expe
ri
en
ce that w
ill e
na
ble
the
m to progre
ss i
n the
ir ch
ose
n ca
ree
r path.
2020’
s gr
adu
ates were a
sked to s
hare
the
irins
igh
ts wit
h the E
xec
utive te
am. In
add
itio
n toiden
tif
y
ing a n
umb
er of a
rea
s for
development
, graduat
e
s valued
being given
responsibilities
that allo
wed them t
o see
the
irco
ntri
buti
on to the bu
sin
es
s an
d to gain
commercial insigh
ts thr
ough the
dif
ferent
roles
they ex
pe
rie
nc
ed as p
ar
t of th
e sch
em
e.
Th
esch
em
e is be
ing d
evel
ope
d to incl
ude a
more f
ormal approach t
o learning out
comes,
briefing managers on
expectations
for each
pla
ce
men
t and ex
ten
din
g the nu
mb
er of
me
ntors to inc
lud
e me
mbe
rs of th
e se
nio
r
man
age
me
nt tea
m. From 2022, the sche
me
wil
l ope
n to potenti
al bu
sin
es
s and I
T
grad
uate
s. The t
hre
e grad
uates w
ho
com
pl
eted the s
che
me i
n 202
1 are n
ow
infu
ll-tim
e role
s as a Pro
ce
ss En
gin
ee
r
,
aT
ec
hno
log
ist a
nd a Se
nio
r Cus
tome
r
Ser
vice Representative
.
T
raining and de
velopment
Since the i
ntroduction
of an
online training
lib
rar
yin 2020, more th
an 1
,97
0 cou
rse
s
havebe
en c
omp
lete
d in are
as a
s dive
rs
e as
compliance,
occupational
health and saf
ety
,
and personal interests
such as mindfulness
and t
ravel ph
otogra
phy
. Al
l staf
f a
re req
uir
ed
to ack
nowl
edg
e that th
ey have re
ad an
d
understand policies applicable
to
them,
whi
cha
re tran
sla
ted as ne
ce
ss
ar
y for
em
ploye
esw
ho are n
ot profic
ie
nt in En
gli
sh.
T
o bui
ld the f
utu
re le
ade
rs
hip of th
e Grou
p,
som
e ind
iv
idu
als i
den
tifie
d as key ta
le
nt are
stud
yi
ng MBA
s or ta
ki
ng othe
r ad
vanc
ed
qualifications
at
a world-class
university
,
sup
por
ted by Zotefoams. T
he i
nter
nal
“Ma
nag
em
ent A
cad
emy
” est
abl
ish
ed in 2020
focuses on
equipping our
people managers
wit
h a broadr
ang
e of sk
ill
s, inc
lud
ing
performance
managemen
t
, mo
tiv
ati
ng t
eams,
dealing with
disciplinary matters and
behavioural safe
ty
.
LEAD Operational Business
T
oolbox
Ou
r LE
AD p
rogr
am
me, whi
ch c
overs
commercial,
project management
and
le
antec
hni
que
s, is in
tende
d to give a b
road
ran
ge ofe
mpl
oyee
s the sk
il
ls to ide
ntif
y a
nd
address inefficiencies as w
ell as enhance
cross-
f
unctional t
eamwork thro
ugh int
egrat
ed
trai
nin
g and p
roje
cts. I
n 202
1
, the
se p
roje
cts
were re
sc
ope
d to refle
ct new wo
rk
ing
practices,
with production
and t
echnical
dep
ar
tme
nts pa
r
ticip
ants re
sumi
ng
programmes suspended during
the init
ial
COVID re
str
icti
ons. A p
rog
res
s ass
es
sm
ent
wil
l be c
arr
ie
d out i
n 2022.
Diversit
y
Th
e Boa
rd is awa
re that di
ver
si
ty w
ith
out
inclusion will
fail t
o generate t
he essential
connections t
hat attract
and,
crucially
, retain
dive
rs
e tal
ent to fos
ter the i
nnovati
on key to
business gro
w
th
. Our new
Board Diversity
Policy
is
accessible on our w
ebsite
:
https:/
/zo
te.
i
nfo/
3wRSYEL. It demonstrat
es
our commitment
to
fost
e
ring an incl
usive
cul
ture, wh
ere eve
r
y p
ers
on is e
nc
our
age
d to
con
trib
ute to the org
an
isati
on ir
re
spe
cti
ve of
their ra
ce, e
thnicity
, gender
, sexual orientat
ion,
marital status, disability
, age or religious
be
lief
s. Th
e org
ani
sati
on ha
s reg
ard, in
par
ticular
, to
female and et
hnically diverse
rep
res
enta
tion i
n its wor
k
forc
e an
d
management.
We expe
ct ou
r wor
k
force to refl
ec
t the wor
ld
and l
oc
al co
mmu
ni
ties i
n wh
ich we o
pe
rate
and r
eco
gn
isin
g this f
orm
s par
t of our p
eo
ple
strate
gy
. Ou
r pri
nci
pal s
ite, with 6
4
% of G
roup
em
ploye
es, is l
oc
ated in S
outh Lo
ndo
n an
d
36% ofthe wor
k
forc
e is f
rom a no
n-whi
te
ethn
ic gro
up; this is a c
los
e refle
cti
on of the
local demographic and a much
higher
non-whit
e ethnicity than t
he UK as
a whole.
We see s
imil
ar l
oca
ll
y influ
enc
ed p
at
terns
inothe
r lo
cati
ons, pr
in
cipa
ll
y in the U
SA,
where our
employee demographic
reflects
local ethnicity in
Nor
thern K
entucky and
theB
oston, MA a
nd T
ul
sa, O
K
metro
pol
ita
nare
as.
73
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
<30
84
3
0
–
4
0
141
41
–
5
0
12
2
≥
51
1
5
2
Gender
Male
Female
Rol
e by ge
nd
er
1
Fema
le
Male
Female
Male
20
21
20
21
2020
2020
Non-Ex
ecutiv
e Dir
ecto
r
2
3
2
3
Director
–
2
–
2
Executiv
e t
eam
2
1
5
2
5
Direct report t
o
Executiv
e t
eam
8
31
7
31
Other staff
11
0
3
37
99
328
121
378
110
369
400
300
20
19
2020
2021
200
1
00
0
UK
US
China
Pol
and
India
Group-
wide
Asian
50
–
35
–
9
94
Black
53
1
–
–
–
54
Hispanic or Latino
–
20
–
–
–
20
Mi
xe
d
6
–
–
–
–
6
Wh
i
te
19
6
88
1
25
–
3
10
Oth
er
4
–
–
–
–
4
Unknown
11
–
–
–
–
11
No
n-w
h
ite e
t
hn
ic
i
t
y
36%
19
%
10
0%
0%
10
0%
3
4%
Estimate of
non-white
et
h
ni
ci
t
y i
n th
e c
ou
nt
r
y
14
%
3
9%
10
0%
6%
10
0%
–
1
In calculating
headcount, w
e take
into
account all self
-identified genders, including
non-binary and intersex.
St
af
f ar
e al
so pr
ovi
de
d wi
th th
e op
tio
n of ‘Pr
efe
r not to s
ay’ o
n th
e eq
ua
l opp
or
t
un
iti
es f
or
m.
2
Fo
ll
owi
ng t
he de
pa
r
tu
re of th
e HR D
ir
ec
tor i
n 2021
, the H
R fu
nc
tio
n wa
s re
org
an
is
ed w
ith a f
em
al
e He
ad of H
R rep
or
t
in
g
di
rec
tl
y to the G
ro
up CE
O.
Age
Age e
qua
lit
y fo
rms p
ar
t of o
ur
commitment t
o equal opportunit
y in
em
ploy
men
t and we h
ave a goo
d spr
ead
of age g
roup
s acro
ss th
e bus
ine
ss.
Th
e avera
ge ag
e of our e
mpl
oyee
s is 43.
30% of ou
r work
fo
rce i
s age
d 5
1 or ove
r
.
Ethnicity distribut
ion o
f to
tal wor
k
force
Gender
Aro
und 25
% of the tota
l work
force i
s
female.
W
e recognise
that
, in pr
oduction
env
iron
me
nts, the s
hif
t p
at
tern
s and p
hysic
al
natu
re of the wor
k pre
se
nt a ch
all
en
ge to
at
tract
ing wo
men a
nd th
is is so
meth
ing w
hic
h
is li
kely o
nly to ch
ang
e over th
e lon
ge
r term.
Acro
ss the b
usi
ne
ss, we a
lso se
e a ge
nd
er
imbalance at
managerial and pro
fessional
leve
ls of the b
usi
ne
ss, wh
ich we w
ill a
ddre
ss
over tim
e thro
ugh th
e rec
ru
itme
nt an
d inter
na
l
deve
lop
me
nt of more j
uni
or st
af
f wh
o wil
l
increase t
he proportion of
female emplo
yees
progressing i
nto
these r
oles. Our new
ble
nded
wor
kin
g pol
icy i
s als
o expe
cted to he
lp u
s
attract a
great
er number o
f pro
fessional
women,
with mor
e flexible
working
arrangements i
ncreasing t
he pool o
f
ca
ndi
dates w
ith c
ar
ing a
nd
/
o
r fam
ily
responsibilities
.
Ou
r Ge
nde
r Pay Gap h
as fa
lle
n si
gni
fica
ntl
y
sin
ce 201
7 an
d stood a
t 5.
4
% i
n Ap
ril 2021
,
be
low a UK ave
rag
e of 7
.9%. Ou
rrepo
r
t ca
n
be ac
ce
sse
d at ht
tps:/
/zote.info/3iR
X
A
5y
Looking for
war
d
In the c
omi
ng ye
ars, we ex
pe
ct f
ur
th
er
expa
nsi
on of ou
r bus
ine
ss g
lob
all
y as we
ll
asaco
ntin
uati
on of su
ppl
y cha
in a
nd othe
r
challenges, including
shortages of talent
ed
employees i
n the de
veloped economies
whe
rewe op
er
ate. Zot
efoa
ms w
ill e
mbe
d the
cha
ng
es it h
as m
ade in wo
rk
ing p
rac
tice
s an
d
con
tinu
e to devel
op po
lic
ies a
nd p
roce
du
res to
at
tract a
nd ret
ain t
heri
ght e
mpl
oyee
s. Wewill
promot
e a culture
w
here people con
structively
cha
lle
ng
e the
mse
lve
s and oth
er
s an
d whe
re
suc
ce
ss isva
lu
ed a
nd rec
og
nis
ed.
T
o c
em
en
t the a
ugm
en
ted T
-F
IT tea
m, a tea
m bu
il
din
g exer
cis
e ai
me
d at en
co
ur
agi
ng a c
oll
ab
or
ati
ve sp
iri
t wa
s
un
de
r
ta
ken in O
cto
be
r 2021 at Su
zho
u Wes
t La
ke, Ha
ng
zho
u, Ch
ina
. Th
e exer
cis
e was w
el
l rec
ei
ved b
y sta
f
f an
d
Gl
oba
l Co
mm
erc
ia
l He
ad Pa
ul M
ar
t
y co
mm
en
ted: “
Th
is tea
m ac
tiv
it
y wa
s a gre
at o
pp
or
tu
ni
ty to c
on
ne
ct o
n a
de
ep
er p
er
so
na
l leve
l. A
he
ad of a bu
sy Q4, i
t gave a
ll of u
s a ch
an
ce to ta
ke sto
ck in b
ea
uti
fu
l su
rro
un
di
ngs
.
”
74
Zot
efoams plc
An
nua
l Re
por
t 2021
Th
e Boa
rd is re
qui
red to ca
rr
y o
ut i
ts
statu
tor
ydu
t
y to act in a way w
hic
h it
con
sid
er
s, in go
od fa
ith, wou
ld be m
ost l
ikely
to promote the s
uc
ce
ss of the C
om
pany fo
r
the b
ene
fit ofitsm
em
ber
s as a w
hol
e, and
indo
ing s
o havere
gard to:
X
Th
e likel
y co
nse
que
nc
es of a
ny dec
isi
on
inthel
ong te
rm
X
Its environmental impact
X
Ke
y stak
eholders (including emplo
yees,
cust
omers, suppliers and
communities)
a
nd
X
Ma
inta
ini
ng a rep
uta
tion fo
r hig
h sta
nda
rds
of busi
ness conduct.
Th
e Boa
rd ha
s stri
ved to em
be
d thes
e
considerations
in its
decision-making process
and made it
s first
repor
t on
compliance in the
201
9 A
nn
ual R
ep
or
t.
Decision-making
The Board
delegates
day
-t
o-day management
and d
ec
isi
on-m
ak
ing to the E
xe
cut
ive tea
m,
but m
ain
tai
ns over
sig
ht of the G
rou
p
’
s
per
formance and r
eser
ves for
itself specific
matters f
or appro
val,
including signifi
cant new
business initia
tives.
The Board ensur
es that
man
age
me
nt is a
ctin
g in ac
cord
anc
e wi
th,
and m
ak
ing p
rog
res
s on, the a
gre
ed Gr
oup
strate
gy thr
oug
h reg
ula
r Boa
rd me
etin
gs.
Supported by
informat
ion packs
circulat
ed in
adva
nc
e to enab
le ef
fec
tive pre
pa
ratio
n and
discussion,
these meeti
ngs are t
he principal
forum f
or discussing t
he mont
hly reporting
of
business performance and direct
engagemen
t wit
h the Ex
ecutiv
e team
ande
mp
loyee g
roup
s. A Boa
rd me
mb
er
repr
esent
ing w
ork
for
ce enga
gement
also
attends t
he UK Join
t Consultat
ive Committ
ee,
whi
ch re
pre
se
nts wor
k
forc
e view
s. Proc
es
ses
are i
n plac
e to ens
ure tha
t the Bo
ard re
ce
ive
s
relevan
t informa
tion which
enables sound
de
cis
ion
s to be mad
e in sup
po
r
t of the
Gro
up’
s lon
g-term s
ucc
es
s.
Key Boar
d d
eci
si
on
s in 2
0
21
Considering all st
akeholders when making
ke
ybusiness decisions
is fundamental t
o
oura
bil
it
y to crea
te value ove
r the l
ong
er
term.Int
hemi
dst of re
cove
rin
g fro
m a
glo
balp
and
em
ic, 202
1 wasfo
cus
ed o
n
balancing the
needs ande
x
pectations
of our
stakeholders –
ourc
ustomers,
s
hareholders,
em
ploye
es a
ndsu
ppl
ier
s an
d the wi
de
r
com
mun
iti
es we op
er
ate in – in li
ne wi
th
ourpurpose
, “op
timal ma
terial solut
ions
for
the benefit
of socie
ty”
.
Decision
Inves
t
in
g in t
he R
eZo
rc
e
®
mono-material
barrier
pac
kag
in
g sol
ut
io
n – t
he fi
rs
t b
evera
ge c
ar
ton fo
r
the circular economy
Co
nt
ex
t
In 2020, the B
oa
rd app
roved a R
eZo
rce ma
rket a
ss
es
sm
ent fo
cu
sin
g
primarily on cartons for
aseptic liquid
packaging while
maintaining the
optionality o
f exploring
alternativ
e opportunities.
In 2021
, the G
rou
p:
X
Commissioned a pilo
t line
for e
xtrusion trials and
a st
erile car
ton
pac
kag
ing m
ac
hin
e to test th
e she
et’s cap
abi
lit
y to be fo
rm
ed i
nto
aca
r
ton an
d se
ale
d to the re
qu
ire
d ind
ustr
y sta
nda
rds
X
Commissioned trial s
terilisati
on and carton packing
equipment
X
Aligned with p
otent
ial cust
ome
rs and t
rial partners to
test p
roduct
oncommer
cial equipment
Stakeholder
considerations
Shareholders
Significant po
tential
opportunities exist
offering sustainable,
profitable
grow
th ove
r the m
ed
ium te
rm. T
his p
rovi
de
s fu
r
the
r evi
de
nc
e that
Zotefoa
ms’ ESG pla
nni
ng fo
rms p
ar
t of i
ts bu
sin
es
s mo
de
l.
Employ
ees
Lea
de
rs w
ith ma
rket-re
leva
nt exp
er
ie
nc
e were h
ire
d dur
in
g 2020 and
2021 t
o in
cre
ase t
he ca
pa
bil
it
y of the M
EL tea
m an
d sup
por
t the
realisation
of t
he ReZor
ce opportunity
.
Environment
Our ReZor
ce product
line is
planned to
b
e made
with incr
easing
am
ount
s of rec
ycle
d pl
asti
c co
ntent a
nd, as i
t is c
las
si
fie
d as a
mono-mat
erial, can be
readily r
ecycled t
o suppor
t a ci
rcular economy
.
Th
e pro
duc
t won a nu
mb
er of awa
rds i
n 2021
, i
ncl
udi
ng th
e
Br
itis
hPla
sti
cs Fe
de
rati
on an
d Ho
rne
rs B
ot
tle
ma
ker’
s Award, B
es
t
NewC
onc
ept a
t the U
K Pack
agi
ng Award
s an
d a Gre
en A
pp
le
Envi
ron
me
nta
l Award, as we
ll a
s bei
ng s
hor
t
lis
ted for s
ever
al
inn
ovatio
n,rec
ycli
ng a
nd en
viro
nm
ent
al awa
rds.
Str
ategic
actions
su
pp
or
ted by
th
e Bo
ar
d
Supported an IP r
egistration
programme
Inve
sted £1
.9m i
n ca
pi
tal a
ss
ets an
d deve
lo
pme
nt co
sts
Diverted resources
from the
MEL licensing
business t
o support
ReZo
rcea
nd fo
cus
ed th
e lat
ter o
n exi
stin
g cus
tome
rs o
nly
Impact
of t
he
se
actions on
the long-term
success
of the
Company
ReZorce
mono-mat
erial barrier packaging
offers society at
ruly circular
option
using e
xisting r
ecycling in
frastructure
. The st
rongly negat
ive
pub
lic p
er
cep
tion of p
la
stic i
s be
com
in
g more n
ua
nce
d be
yond th
e
environmental
impact o
f ill-considered
, single-use
plastic used
predominantly
in consumer pa
ckaging.
The significant pr
ogress
ach
ieve
d in 2021 is a step f
or
wa
rd in cr
eati
ng va
lue f
rom R
eZor
ce
ca
r
tons. I
n 2022, we will e
nga
ge w
ith pa
r
tn
er
s to devel
op th
e
technology and
commercial opportunity fur
ther and
consider a number
of bus
in
es
s mod
el
s whi
ch c
an d
eli
ver v
alu
e to ourst
ake
hol
de
rs
s
1
72(
1
) statemen
t
Our shareh
olders and stak
eholde
rs
75
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Decision
Agreeing
sustainabilit
y targets
Co
nt
ex
t
Info
rm
ed by a gl
oba
l co
mmi
tme
nt to ac
hieven
et ze
ro ca
rb
on em
is
sio
ns by 205
0, Zotefoam
s’ susta
in
abi
lit
y
strat
e
gy aims
to
minimise the
use of nat
ural resources
in Group
operations.
The sustainability targe
ts agreed
in2021 focu
s on th
e red
ucti
on of o
ur Sc
op
e 1 and 2 c
ar
bo
n em
iss
io
ns (see p
age 61
).
In pa
ral
le
l wit
h the
se sp
ec
ifi
c Sco
pe 1 a
nd 2ta
rge
ts, we have c
alc
ul
ated th
e car
bo
n co
stof ou
r foa
ms
(refer
re
dto as “car
bo
n acc
ou
ntin
g”) an
d Re
Zorce m
on
o-m
ater
ial b
ar
ri
er pa
ck
agi
ng so
lut
ion. We ar
e usi
ng
thi
sinfo
rma
tion a
nd wo
rk
in
g with s
el
ec
ted cu
stome
rs to a
sse
ss h
ow thi
s ca
n be us
ed c
ons
tru
cti
vel
y to make
objective
decisions that
steer us and our
customers t
owards
choosing the
optimal mat
erials for
their soluti
ons.
Stakeholder
considerations
Environment
Zot
efoams products
deliver high performance, insulat
ion and reduced w
eight,
which offers the
potent
ial
forc
ar
bone
mi
ss
ion
s red
ucti
on
s in exce
ss ofth
eca
rb
on e
mis
sio
ns re
qu
ired to m
anu
fac
ture o
ur p
rodu
cts
inad
diti
on to oth
er be
ne
fits to so
cie
ty.
Cus
tomer
s
Our product
s, when us
ed appropriat
ely
, remain t
he opt
imal solution
both
functionally and en
vironmentally f
or
ma
ny of our c
ustom
er
s’ nee
ds. We have t
he tec
hni
ca
l exp
er
ti
se to id
enti
f
y ways to re
duc
e ou
r cus
tome
rs’
ca
rb
on foot
pri
nts a
nd in
cre
ase m
ater
ia
l ef
fic
ie
ncy.
Str
ategic actions
su
pp
or
ted by t
h
e Boa
r
d
Agreed tar
gets on
reducing w
aste
and recyclabil
ity
.
Intr
oduced new r
epor
ting a
gainst the
recommendations
of t
he T
ask Force on
Climat
e-relat
ed Disclosures.
Ove
rs
aw a nu
mbe
r of su
sta
ina
bi
lit
y in
iti
ative
s. Se
e ou
r ESG rep
or
t o
n pag
e 56.
A bank r
efinancing faci
lity commenced late
202
1 and complet
ed in March 2
022
includes ES
G commitment
s.
Impact of these
ac
ti
on
son t
he l
on
g-te
rm
success of the Company
We view t
he tra
ns
itio
n to a lower c
ar
bo
n ec
ono
my as a
n op
por
t
uni
t
y to dem
ons
trate ou
r co
mpe
titi
ve adva
nta
ge
through
the nat
ure o
f the
existing
business and t
he proact
ive pursuit
of opportunities wit
h outstanding
sustainabilit
y credentials.
Decision
Changing w
ays of
working
while impro
ving emplo
yee engagement
Co
nt
ex
t
A le
gac
y of the pa
nd
em
ic wi
ll be a c
ha
ng
e inhow p
eo
ple wo
rk. E
nforc
ed wo
rk
in
g fro
m hom
e req
uir
em
ents h
ave
als
o bro
ugh
t new c
hal
le
nge
s an
d du
tie
s on th
e em
ploye
r aro
und e
mp
loye
e wel
far
e. New wor
k
ing p
rac
tic
es,
aim
ed a
t stri
ki
ng a ba
la
nce b
et
wee
n bu
sin
es
s re
qui
rem
ents a
nd p
eo
ple n
ee
ds, evo
lve
d ra
pid
ly in 20
2
1
.
Stakeholder
considerations
Employ
ees
Add
res
sin
g ch
all
en
ge
s ar
isi
ng f
rom ne
w waysof wor
ki
ng re
qu
ire
s the c
ons
ide
rati
on ofe
mp
loyee
s’ men
tal,
social and pr
ofessional
needs.
Amplif
ying the
employee
voice t
o suppor
t good go
vernance arrangeme
nts
.
Shareholders
Ou
r pe
opl
e are a key a
ss
et. Ini
tiati
ves s
upp
or
t
ing th
e deve
lo
pme
nt of th
e tal
ent p
ip
eli
ne a
nd st
af
f rete
ntio
n
co
ntri
bute to the v
alu
e of the b
usi
ne
ss.
Str
ategic actions
su
pp
or
ted by
th
e Bo
ar
d
Work
/l
ife ba
la
nc
e cha
ll
eng
es a
ri
sin
g fro
m the
se n
ew ways of wor
k
ing we
re re
co
gni
sed. I
n add
iti
on to con
tinu
ing
to provi
de a
n emp
loye
e as
sis
ta
nce p
rog
ram
me, avai
la
ble 24 hour
s a day a
nd s
even d
ays a wee
k in o
ur t
wo
la
rge
st si
tes in t
he UK a
nd th
e USA
, a nu
mbe
r of wel
lb
ein
g ini
tiat
ive
s were l
aun
ch
ed. Fur
t
her d
eta
ils a
re pr
ovid
ed
in our
People section
on page
7
0.
We con
sol
ida
ted new wo
rk
in
g pra
ctic
es i
n 2021
, i
ncl
ud
ing re
mote, flex
ibl
e an
d dif
fere
nt ways o
f work
in
g.
Able
nd
ed wo
rk
ing p
ol
icy fo
r UK e
mpl
oyee
s was fi
na
lise
d an
d co
mmu
ni
cated to a
ll st
af
f, set
ting o
ut ho
w
thep
ost-COV
ID wor
ki
ng e
nvi
ronm
en
t wil
l loo
k at Zotefoa
ms.
A Boa
rd di
ver
si
ty p
ol
icy wa
s intro
du
ced to l
ead f
rom th
e top in m
at
ters of d
ive
rs
it
y an
d inc
lus
io
n.
The UK Join
t Consultat
ive Committee
, att
ended by
J Carling,
the Board Direct
or assigned responsibility for
em
ploye
es, w
as re
lau
nch
ed w
ith i
ncr
eas
ed re
pr
ese
nta
tion by d
ep
ar
tm
en
tal d
el
eg
ates a
nd new te
rm
s of
reference highl
ighting the
importanc
e o
f the emplo
yee voice
.
Wh
en p
er
mit
ted u
nd
er pr
evai
lin
g COVID r
estr
ic
tio
ns, se
ni
or ma
nag
er
s wer
e intro
duc
ed to th
e
Bo
a
rd
fo
r i
nfo
r
m
al
dis
cus
si
ons ove
r lu
nch.
An u
pda
ted on
lin
e pe
r
for
ma
nce e
valu
ati
on pro
ce
ss wa
s lau
nc
he
d dur
in
g the ye
ar in t
he UK
, ai
med a
t imp
rovi
ng
the Gr
oup
’
s ability to
help its emplo
yees dev
elop in l
ine with
business needs.
Im
pac
t of t
he
se a
ct
io
ns
on t
he l
on
g-te
rm
success of the Company
A moti
vated wo
rk
fo
rce w
hos
e inte
res
ts are a
lig
ne
d wi
th thos
e of the b
us
ine
ss.
A wid
er g
eo
gra
ph
ic
al re
ach to in
cre
as
e our a
cc
es
s to key tale
nt.
76
Z
otefoams
plc
An
nua
l Re
por
t 2021
s
1
72(
1
) statement
continued
Decision
Meeting global
su
pply chain challen
ges
Co
nt
ex
t
Th
e COVID
-
1
9 cr
isi
s ha
s exac
er
bated th
e ch
all
en
ge
s of ma
nag
ing ex
te
nde
d su
ppl
y ch
ain
s, wi
th Brex
it c
aus
ing
add
iti
ona
l lo
gis
tica
lan
d adm
ini
stra
tive i
ssu
es fo
r UK m
anu
fac
tur
er
s as wel
l as i
ncre
as
ed c
osts
.
Stakeholder
considerations
Shareholders
Achieving
revenue
targets
and profit
ability required significant
ma
nagement ti
me and act
ivity to mit
igate
supply
cha
in c
ha
lle
ng
es. A
sa con
se
que
nc
e, the G
roup m
ai
ntai
ne
d its st
rong fi
na
nci
al p
osi
tio
n in 2021 and pa
id b
oth
afina
l 2020 di
vi
den
d in J
une 2021 an
d an in
teri
m 2021 divi
de
nd in O
ctob
er 2021
.
Employ
ees
New l
ead
er
s, wi
th im
prove
d sk
ill s
ets, wer
e hire
d in p
rocu
re
men
t and s
up
ply c
ha
in. ASa
le
s an
d Op
erat
ion
s
Pla
nni
ng (S&O
P) Ma
nag
er wa
s hi
red, fo
r the fir
st ti
me at Zotefo
ams, to ma
na
ge th
e glo
bal c
ha
lle
ng
es a
ri
sin
g
from running
a more
integra
ted busi
ness across t
hree main manufact
uring sit
es. The supply
chain function
was
res
tru
ctu
red to prov
id
e a cle
ar
er di
sti
ncti
on b
et
wee
n cus
tome
r se
r
vi
ce a
nd lo
gis
tic
s ma
nag
em
ent a
nd im
prove
employee
satisfact
ion. Sta
f
f benefit
ed from
new job
oppor
tunities
and enhanced training
.
Cus
tomer
s
A rest
ructured supply
chain function w
as launched in
Q4 202
1
, followin
g months
of t
rials with
selected
cus
tome
rs, to im
prove th
e cus
tome
r exp
er
ie
nce. A
n in
cre
ase
d foc
us o
n log
isti
cs m
an
age
me
nt he
lp
ed se
cu
re
road a
nd c
ont
ain
er f
rei
ght i
n a time
ly f
as
hio
n, und
er c
hal
le
ngi
ng c
ircu
mst
anc
es, to e
nsu
re tim
el
y de
live
ri
es.
Environment
A number o
f sustainability init
iatives
were i
mplemented in
202
1 t
o mitigat
e the impact
of Z
otefoams
’ supply
cha
in o
n the e
nvi
ronm
en
t. Seeo
ur ESG re
por
t onpa
ge 56.
Supply chain partner
s
Mo
nitor
in
g the e
nd-to-
end s
up
ply c
ha
in was a key c
ha
lle
ng
e in 2021
. Me
asu
re
s were p
ut in p
lac
e to keep t
rac
k
of the l
oc
atio
n and s
tatu
s ofinve
ntor
y
, fore
ca
st cu
stom
er d
ema
nd a
ccu
ratel
y
, a
nd m
oni
tor aflu
ctu
ating
transportcapacity
.
Str
ategic actions
su
pp
or
ted by
th
e Bo
ar
d
Co
ntinu
ed a s
ec
ond
-so
urci
ng a
ppro
ach f
or key su
ppl
ie
rs in l
in
e with o
ur r
isk m
an
age
me
nt pr
oce
ss.
Mo
nitore
d raw m
ater
ia
l and f
rei
ght c
ost i
nc
rea
se
s and m
ade s
al
es p
ri
ce in
cre
as
es w
he
re con
si
der
ed
appropriate
.
Oversaw mit
igation plans
put in place t
o address supply chain
issues.
Reorganised the
procurement
and cust
omer
-facing
functions.
Im
pac
t of t
he
se a
ct
io
ns
on t
he l
on
g-te
rm
success of the Company
Th
e flex
ibi
lit
y a
nd re
sil
ie
nce of t
he Gr
oup p
rovi
ded c
on
fide
nc
e in the fi
na
nci
al s
tab
ili
t
y ofthe bu
si
ne
ss an
d
all
owed i
t to con
tinu
e itsi
nvest
me
nt pro
gra
mm
e in su
ppo
r
t of fu
tur
egrow
th.
77
Zot
efoams plc
An
nua
l Re
por
t 2021
Strategic Repor
t
Gov
ernance
Financial
Statement
s
Decision
La
un
ch
in
g pr
od
uc
t
ion i
n Pola
n
d
Co
nt
ex
t
Bui
ld
ing o
ur Pol
and m
an
ufa
ctu
rin
g pl
ant wa
s par
t of the s
trateg
y to inc
rea
se g
lob
al c
apa
cit
y a
nd opt
imi
se
se
r
vi
ce le
vels f
or cu
stome
rs i
n co
ntin
ent
al Eur
ope. C
ons
tru
cti
on of th
e fac
ili
ty b
eg
an i
n Feb
rua
r
y 201
9 a
nd
pro
duc
tio
n sta
r
ted in Fe
br
ua
r
y 2021
. Th
is ma
rks t
he cu
lmi
nati
on ofam
ulti
-year i
nves
tme
nt pro
gra
mm
e that
als
oinc
re
ase
d ca
pac
it
y in th
eUKa
nd US
A and r
epr
es
ents a
n over
all i
nc
rea
se of 6
0% com
par
ed tothe
pos
iti
onatth
e en
d of 201
7
.
Stakeholder
considerations
Shareholders
Add
itio
na
l ca
pac
it
y an
d a Europ
ea
n lo
cati
on w
ill e
na
ble t
he Gr
oup to me
et i
ts me
diu
m-term g
row
th t
arg
ets.
Cus
tomer
s
The Poland
plant o
f
fers on-
site s
torage
for up
to
1
5,
000
m
3
of foa
m. Th
epla
nt’s loca
tion i
n Br
zeg, b
ei
ng cl
ose to
tra
ns-Eu
rop
ea
n road a
nd ra
iln
et
wor
ks, of
fe
rs exce
ll
ent s
er
v
ic
e tomany of o
ur cu
stom
er
s in co
ntin
ent
al Eu
rope.
Zotefoa
ms al
so ha
s si
gni
fic
ant fo
ampr
odu
cti
on ca
pa
bil
it
y in th
e USA a
ndU
K, in
cre
as
ing th
e ab
ili
ty to s
er
ve
our
customers glob
ally
.
Em
pl
oyee
s an
d loc
al c
omm
u
nit
y
The site
provides further employment opportunities t
o the local community
.
Str
ategic actions
su
pp
or
ted by
th
e Bo
ar
d
Inve
stme
nt of £
23m ove
r a pe
rio
d of thre
e ye
ars f
or a str
ateg
ica
ll
y loc
ated m
an
ufa
ctur
in
g and d
ist
rib
uti
on si
te
wi
th 1
5% of Zotefoam
s’ annu
al G
rou
p foam ex
pa
nsi
on c
apa
ci
ty.
Im
pac
t of t
he
se a
ct
io
ns
on t
he l
on
g-te
rm
success of the Company
The eight hectar
e site
is large enough t
o accommodate
future e
xpansion. W
e believe t
hat near
-shoring wil
l
co
ntinu
e to be a key co
ns
ide
rati
on fo
r our Eu
rop
ea
n cus
tome
rs i
n lig
ht of gl
oba
l sup
pl
y cha
in c
hal
le
ng
es, a
nd
the locat
ion of
our new
plant will
increase fle
xibility and responsiveness t
hrough in
tegrat
e
d global
capacity
.
David Stirling
Group CEO
Appointed
September 1997 (Finance Director)
and May 2000 (Group CEO)
Skills
Global leadership, strategy and
commercial experience, with
a specific skillset in intellectual
property
, business development,
finance and manufacturing. He
has over 20 years’ plc board
experience.
Experience
David started his career with KPMG
inScotland, where he qualified
as aChartered Accountant. He
has worked for Price W
aterhouse
in the USA and Poland and with
BICC plc. David is a graduate of
Glasgow University and has an
MBA from W
arwick University and
an MSc inFinance from London
BusinessSchool.
External appointments
None
Douglas Robertson
Senior Independent Director
A
N
R
Appointed
August 2017
Skills
Extensive multinational
experience in both public and
private companies, strategic
planning, acquisitions and
divestments.
Experience
Doug was Group Finance
Director of SIG plc until his
retir
ement in January 2017.
Prior to joining SIG, Doug had
been Group Finance Dir
ector
ofUmeco plc and Seton House
Group Limited, having spent his
early career with Williams plc in
a variety of senior financial and
business roles.
External appointments
Non-Executive Director
, Chair of
the Audit Committee, member
of the Remuneration and
Nomination Committees, HSS
Hire Gr
oup plc. Non-Executive
Director
, Chair of the Audit
Committee, member of the
Remuneration and Nomination
Committee, Mpac plc.
Alison Fielding
Non-Executive Director
A
N
R
Appointed
May 2020
Skills
Experienced entrepr
eneur and
Non-Executive Director
, with
significant expertise in strategy
development and implementation
for start-ups, AIM/main
market listed and not-for
-profit
organisations.
Experience
Alison spent 13 years with IP
Group plc as Chief T
echnology
Officer
, Chief Operating Officer and
latterly as Director of Strategy and
IP Impact and brings extensive
investment, strategy development
and execution experience in
fast-growing, science-based
businesses. Alison has a PhD in
Organic Chemistry from Glasgow
University
.
External appointments
Non-Executive Director and Chair
of the Remuneration Committee
of Nanoco plc, Non-Executive
Director and Chair of the
Remuneration Committee of Maven
Income and Growth VCT plc.
Uniting
the skills
to take us
forward
Board of Directors
78
Zot
efoams plc
An
nua
l Re
por
t 2021
Steve Good
Non-Executive Chair
N
R
Appointed
October 2014 (Board) and April
2016 (Chair)
Skills
Strong and r
elevant international
experience in the speciality
chemicals and plastics industries,
manufacturing and diverse
industrial markets which enables
him to give both guidance and
challenge to management. He
also has significant plc board
experience.
Experience
Steve was Chief Executive of Low
& Bonar plc between September
2009 and September 2014. Prior
to that role, he was Managing
Director of its technical textiles
division between 2006 and 2009,
Director of new business between
2005 and 2006 and Managing
Director of its plastics division
between 2004 and 2005. Prior to
joining Low & Bonar he spent 10
years with BTP plc (now part of
Clariant) in a variety of leadership
positions managing international
speciality chemicals businesses.
He is a Chartered Accountant.
External appointments
Senior Independent Director
, Chair
of the Remuneration Committee
and member of the Nomination
Committee, Elementis plc. Chair
,
Chair of the Nomination Committee
and member of the Remuneration
Committee, Devro plc.
Gary McGrath
Group CFO
Appointed
December 2015 (Executive Director)
and February 2016 (Group CFO)
Skills
Diverse international experience
across a range of manufacturing
businesses. He has a track recor
d
ofbuilding world-class finance
organisations and delivering
commercial finance support and
effective contr
ol environments
toachieve board strategies.
Experience
Gary is a Chartered Accountant,
qualifying with Arthur Andersen.
He spent 11 years with RMC Group
plc before joining Koch Industries
Inc, where he spent several years
in various positions, including
Global Finance Director of INVIST
A
Apparel and EMEA Vice President
of Finance, Planning and Analysis
at Georgia Pacific. Before joining
Zotefoams, Gary was CFO of GC
Aesthetics Limited. He has worked
across public, private and private
equity environments in the UK,
Belgium, Germany
, the USA and
the Republic of Ireland.
External appointments
None
Jonathan Carling
Non-Executive Director
A
N
R
Appointed
January 2018
Skills
Extensive engineering,
manufacturing, operational and
business experience at board
level, having led the development
and production of a number of
luxury cars and aero engines.
Experience
Jonathan was previously the CEO
of T
okamak Energy Limited, a
technology business developing
a faster route to fusion power
,
COO for Civil Large Engines at
Rolls-Royce plc, COO at Aston
Martin Lagonda Limited, and
Chief Engineer with Jaguar Land
Rover Limited. Jonathan has
extensive engineering, operational
and business experience. He was
also a Non-Executive Director
of Aga Rangemaster Group plc
between 2011 and 2015.
External appointments
None
Catherine Wall
Non-Executive Director
A
N
R
Appointed
May 2020
Skills
Skilled independent Chair and
Non-Executive Director for
private equity owned, quoted
and family companies. Sectors:
industrials, business services,
consumer
.
Experience
Catherine has 30 years’
experience in the private equity
industry
, primarily with Equistone
Partners Europe, wher
e she
led numerous management
buy-outs and later became UK
Portfolio Partner supervising
the management of all the
business’
s UK investments.
Catherine also has extensive
industrial markets and Non-
Executive Director experience,
working with and helping
develop many management
teams to deliver ambitious
growth plans
External appointments
Chair of Mortgage and Surveying
Services Limited. Until 31
December 2020, she was also
Non-Executive Director and
Chair of the Audit Committee
of Mobeus Income & Growth
VCT plc.
Chair of Committee
A
Member of the Audit Committee
R
Member of the Remuneration Committee
N
Member of the Nomination Committee
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
79
Zot
efoams plc
An
nua
l Re
por
t 2021
80
Zot
efoams plc
An
nua
l Re
por
t 2021
Dear Shareholder
Th
e Boa
rd re
co
gni
se
s the im
po
r
tan
ce of b
ei
ng
awel
l-ma
nag
ed b
us
ine
ss i
n the i
ntere
sts of o
ur
shareholders and stak
e
holders and is
c
ommitted
to
the highest
standards o
f corporat
e
governance
.
In re
spo
ns
e to the co
ntin
uin
g cha
ll
eng
es c
au
sed
by COVID
-
1
9, the Bo
ard d
isc
uss
ed w
ith th
e
E
xecu
tive te
am h
ow the im
pac
t of the p
and
em
ic
woul
d be m
itig
ated a
cros
s th
e Grou
p’
s cu
rre
nt
an
d lon
ge
r
-ter
m op
era
tion
s, hav
ing re
ga
rd to
the
macroeconomic envir
onment and
related
uncertainties.
Our purpose
, “
optimal
material sol
utions f
or the
be
nefi
t of so
ciet
y
”
, is c
ore to the a
r
tic
ul
atio
n of
our sustainability st
rat
egy
. Significant progress
was m
ade i
n ESG mat
ter
s in 2021
. Det
ail
s are
prov
ide
d in o
ur ESG re
por
t on pa
ge
s 56 to 69.
Ou
rpur
po
se al
so dr
ive
s an
d dete
rm
ine
s how
ween
gag
e wi
th our d
if
fe
re
nt sta
keh
old
er
s.
Key are
as of s
take
hol
de
r foc
us for 20
2
1
included:
X
Th
e con
se
r
vati
on of re
sou
rce
s by set
ti
ng
sustainabilit
y targets aimed at
reducing
pol
ym
er wa
ste in th
e ma
nuf
act
uri
ng pr
oce
ss
X
The support of cust
omers by commissioning
a P
oland plant k
ey to
increasing fle
xibility
andr
esponsiveness through
int
egrated
global
capacity
X
Emp
loye
e en
gag
em
ent, wi
th a ref
ra
min
g of
the Join
t Consultat
ive Committee
’
s t
erms
of
refer
ence to
emphasise the
importance
ofthe e
mp
loyee vo
ic
e and n
ew op
po
r
tun
iti
es
for st
af
f to me
et the B
oa
rd info
rm
all
y
.
Fu
r
th
er d
et
ai
ls ma
y be fo
un
d in o
ur s1
72(1)
st
ate
me
nt o
n
page 7
4.
I am p
lea
se
d to pres
en
t the re
po
r
t on c
orp
ora
te
gove
rn
anc
e on b
eh
alf of t
he Bo
ard.
St
a
te
me
n
t of co
m
pl
ia
n
ce w
it
h t
h
e 2
018
UKC
or
po
r
at
e Gov
er
na
n
ce C
od
e
Co
rpo
rate gove
rn
an
ce p
lays a
n es
se
ntia
l par
t
inth
e lon
g-term s
uc
ce
ss of th
e Gro
up a
nd the
Board and
I are
committed t
o upholding
the
hig
he
st st
and
ard
s of gove
rn
an
ce in o
ur wor
ld
wi
de
operations
. Throughout t
he financial y
ear ended
31 Dece
mb
er 2021
, the B
oa
rd has c
on
sid
ere
d
the c
onte
nts an
d req
uir
eme
nts of th
e Co
de a
nd
confirms tha
t the
Group has
been compliant with
the p
rovis
io
ns of th
e Cod
e, wit
h the exce
ptio
n of
Pro
vision 38 and
company pension
contributions
for th
e inc
umb
en
t Gro
up CEO, wh
ere a
n
exp
lan
atio
n of ou
r pro
gre
ss to date a
nd ou
r pl
ans
towards b
ri
ngi
ng th
e Com
pa
ny into li
ne wi
th the
Co
de ar
e set ou
t on p
age 8
8 of the D
ire
ctor
s’
Remuneration report.
T
he C
od
e ca
n be d
own
loa
de
d he
re
https:/
/bi
t.ly
/2AKGq
T
m.
Fu
r
th
er d
et
ai
ls a
re p
rov
id
ed i
n th
is r
epo
r
t a
nd
int
he Bo
ar
d C
om
mit
t
ee r
ep
or
t
s th
at f
oll
ow
on
p
age
s 81 to 1
0
3.
The disclosures requir
ed by
Disclosure and
T
ra
nsp
are
ncy R
ul
es DTR 7
.2.6R have b
ee
n
prov
ide
d in th
e Di
rec
tors’ rep
or
t.
Board
and C
ommittee comp
osition and
diversity
The Board
maintained 29
% female membership
in 2021
. Th
e Boa
rd ac
kn
owl
edg
es t
he be
ne
fits
ofdi
ver
sit
y
, inc
lu
din
g that of g
en
de
r and e
thni
ci
ty
an
d is co
mmi
t
ted to set
tin
g an a
ppro
pr
iate
‘ton
efro
m the top’ in su
ch m
atte
rs. H
avin
g
notedth
e as
pir
atio
na
l targ
ets s
et by the
Ha
mpton-A
lex
and
er re
vie
w and t
he Par
ker
revi
ew, the Boa
rd ha
s ado
pted a Bo
ard d
ive
rsi
t
y
policy which in
forms the
Board recruitment
pro
ce
ss. T
he di
ver
si
t
y pol
icy i
s mir
rore
d in
Zotefoa
ms’ wid
er re
cr
ui
tme
nt stra
tegy a
nd i
s
having a
positive impact
on the
talent pipeline
in
what has his
torically been
a
male-dominated
industry
.
Ap
poi
ntme
nts to th
e Boa
rd ar
e ulti
mate
ly
proposed b
y the
Nomination
Committee and
ap
prove
d by the Bo
ard. N
ew ap
poi
ntm
ents a
re
made on
merit against object
ive crit
eria, taking
acc
ou
nt of the s
pe
ci
fic sk
il
ls an
d exp
er
ie
nce,
independence and kno
wledge needed t
o
en
surea ro
un
de
d Boa
rd an
d the b
en
efits
ea
chca
nd
ida
te can b
ri
ng to the ove
ral
l Boa
rd
composition.
Se
arch consult
ants select
ed
byZotefoam
s are r
equ
ire
d to cas
t the
ir
se
arc
hsuf
fici
ent
ly bro
adl
y to ide
nti
f
y the b
es
t
ca
ndi
date
s, reg
ard
le
ss of ba
ckgro
und. C
are
ista
ken to en
sur
e that a
ppo
inte
es, a
s wel
l
asth
eexis
tin
g Dir
ecto
rs, have s
uf
fi
ci
ent ti
me
todevote to thei
r rol
es.
M
or
e de
ta
il
s ca
n be fo
un
d in O
ur p
eo
pl
e on
pag
es 70 to 73
, and our
Nomination Committee
re
po
r
t ca
n be f
ou
nd o
n
page 8
7
.
The Board
members have
gained their busi
ness
exp
er
ie
nce a
cro
ss a bro
ad ra
ng
e of ind
ust
rie
s,
resulting
in significant col
lective knowledge
ofbus
in
es
s pra
ctic
es w
ith a h
ig
h deg
re
e of
int
ernational exposur
e.
The Board also
benefits
from t
he broad
cultural
, educational
and
prof
essional backgr
ounds of
its members,
whichcollect
ively include
industrial,
engineering,
energy
, technology
, intellectual
propert
y and
financial ser
vices.
The structur
e,
diversity and composition
oftheB
oar
d rem
ain u
nd
er rev
iew to e
nsu
re
thatweh
ave the a
pp
ropr
iate m
ix of s
kil
ls a
nd
exp
er
ie
nce to be
st s
er
ve a d
yn
am
ic, grow
in
g
int
ernational company
.
Director
T
en
u
re a
t 31 D
ec
em
b
er 2
0
21
S Go
od
7 ye
ar
s an
d 3 mo
nths
J Car
li
ng
4 y
ears
A Fielding
1 year a
nd 7 m
onth
s
G McGrat
h
6 yea
rs a
nd 1 mo
nth
D Robertson
4 ye
ar
s and 4 m
ont
hs
D Stirling
2
4 yea
rs a
nd 4 m
onth
s
C Wa
ll
1 yea
r an
d 7 mont
hs
Board le
adership and effectiveness
In li
ne wi
th th
e Cod
e, we con
du
cted a
n inte
rna
l
review
of Boar
d effectiveness with
the object
ive
of assessing
whether the
Board’
s composition,
operations
and structur
e remained e
f
fective
for
the Gr
oup and its
busine
ss envir
onment,
both
inth
e sho
r
t an
d lon
g ter
m.
Th
e revi
ew co
nfir
me
d that t
he Bo
ard a
nd i
ts
Committees remained e
f
fective
and cont
inued
toful
fil th
eir re
mi
t, that th
e mat
ter
s res
er
ved fo
r
the B
oar
d were u
p to date an
d that a
ppr
opr
iate
Co
mmi
tte
es’ ter
ms of ref
ere
nc
e were i
n pla
ce.
Furthe
r information
relating to the
evaluation
pr
oc
es
s ca
n be f
ou
nd o
n
pag
es 81 an
d 82.
Accountabilit
y
The Board
acknowledges its r
esponsibility to
giv
e a fai
r
, bal
an
ce
d and u
nd
er
sta
nda
bl
e vi
ew
of
the financial
position and
future pr
ospects
ofthe b
usi
ne
ss. O
n be
ha
lf of the B
oa
rd, at
the
recommendation
of the
Audit Committee,
Ico
nfir
m that we b
el
ieve th
at the 2021 An
nua
l
Re
por
t p
re
sen
ts a fai
r
, ba
la
nce
d an
d
understandable assessment
of t
he Group
’
s
position
, its
per
formance and it
s prospects
,
aswe
ll as i
ts bu
sin
es
s mo
del a
nd s
trateg
y
.
Annual General Meeting
Gi
ven th
e UK g
over
nme
nt re
str
ict
ion
s on pu
bli
c
gath
er
ing
s du
e to COVID
-
1
9 a
nd to prote
ct th
e
he
alt
h and we
ll
bei
ng of o
ur sh
are
ho
lde
rs a
nd
othe
r at
tend
ee
s, the B
oa
rd de
cid
ed to ho
ld a
clo
se
d me
etin
g for th
e 2021 A
GM. S
har
eh
old
er
s
were g
ive
n the o
ppo
r
tu
nit
y to pre
-re
gis
ter th
eir
que
sti
on
s ahe
ad of th
e me
etin
g for th
e Boa
rd
toaddr
es
s any su
ch q
ue
stio
ns du
ri
ng th
e
proceedings. A
separate
vir
tual presentat
ion,
ope
n to all ex
is
ting s
ha
reh
old
er
s an
d othe
r
sta
keho
ld
er
s, als
o took p
lac
e pos
t AGM on th
e
Inv
estor Meet
Company pla
tform:
https:
/
/ww
w
.
invest
orme
et
company
.
com/zo
tef
oams-plc/
reg
iste
r
-
inves
tor
. It i
s our i
ntent
ion th
is ye
ar to
hol
d the A
nn
ua
l Ge
ner
al M
eeti
ng i
n per
so
n. Th
e
opp
or
tu
ni
ty to li
sten toth
e AGM pro
ce
edi
ng
s
an
d sub
mit q
ue
sti
ons i
n rea
l tim
e to the Boa
rd
wil
l al
so be o
pe
n to both exi
stin
g sh
are
hol
de
rs
an
d othe
r sta
keho
ld
er
s on the I
nves
tor Me
et
Company pla
tform. F
urther information
is
prov
ide
d in o
urNot
ice of th
e 2022AGM.
Th
e Di
rec
tors a
nd I ar
e loo
ki
ng fo
r
ward o
nce
aga
in to wel
co
min
g sha
re
hol
de
rs to the m
ee
ting.
S P Goo
d
Chair
6 Ap
ril 20
22
Corporate go
vernance
Commit
ted to t
he h
ighes
t st
an
da
rd
s
of corporate g
o
v
ernance
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
81
Zotef
oams plc
An
nua
l Re
por
t 2021
The Boa
rd an
d it
s Commit
tees
Th
e Boa
rd’
s rol
e is to prov
id
e the e
ntre
pre
neu
ri
al
le
ade
rs
hip of t
he Gr
oup w
ith
in a fr
am
ewor
k of
prudent and e
f
fective
control
s that
enables risk
to be as
se
sse
d an
d ma
nag
ed. T
he B
oard s
ets
the s
trateg
ic a
ims of th
e Gro
up, ens
ure
s that t
he
ne
ce
ss
ar
y re
so
urc
es a
re in pl
ac
e to achi
eve th
e
Group
’
s objectives
and revie
ws management
pe
r
for
ma
nce. T
he B
oa
rd’
s r
ole i
s to act as t
he
repr
esenta
tive
of th
e shar
eholders
and o
ther
sta
keho
ld
er
s and f
ocu
s on th
e gove
rna
nc
e
oftheG
rou
p. Mana
ge
me
nt is d
ele
ga
ted to
theE
xe
cuti
ve Di
rec
tors a
nd th
e E
xecu
tive te
am.
As pa
r
t of th
eir ro
le a
s me
mbe
rs of a u
ni
tar
y
Board,
the Non
-Executive Dir
ectors
constructiv
ely challenge and de
velop propo
sals
on str
ategy
. The Non
-Executive Dir
ectors
scruti
nise
the
performance o
f managemen
t
inme
eti
ng ag
ree
d go
als a
nd o
bje
cti
ves a
nd
monitor
the r
epor
ting o
f performance. They
satisfy themselves on
the integrity of
fina
ncial
informat
ion and t
hat financial con
trols
and
syste
ms of r
isk m
an
age
me
nt ar
e robu
st a
nd
defensible
. They ar
e responsible f
or det
e
rmining
ap
prop
ri
ate leve
ls of re
mun
er
atio
n of E
xecu
tive
Di
rec
tors a
nd have a p
ri
me rol
e in a
ppo
inti
ng
an
d, whe
re ne
ce
ss
ar
y, remov
ing E
xe
cuti
ve
Directors
and in succession
planning.
Three principal
Committees report into
the
Board,
functioning within
defined T
e
rms of
Reference.
These are the
Audit,
Remuneration
and Nominat
ion Committees.
The T
e
rms of
Reference
for these
Committees are a
vailable
ont
he Group
’
s website
, ww
w
.zot
efoams.
com.
Th
e Boa
rd ha
s pu
t in pl
ace a s
ch
edu
le of
matters t
hat are
reser
ved f
or its
determinat
ion
orw
hic
h ne
ed to be re
po
r
ted to the B
oa
rd.
Th
issc
he
dul
e is rev
iewe
d re
gul
ar
ly a
nd was
las
tup
dated i
n Aug
ust 2021
.
Ch
ai
r a
nd G
r
ou
p CE
O
The Chair is
responsible f
or the
leadership of t
he
Boa
rd, en
sur
in
g its ef
fec
tive
ne
ss o
n all a
sp
ec
ts
of its ro
le a
nd se
tti
ng it
s age
nd
a. Th
e Ch
air i
s
also responsible
for ensuring
that
the Direct
or
s
receive accur
ate
, timely and clear in
formation
.
The Chair fa
cilitat
es the e
f
fective
contribution
ofthe N
on-
E
xecu
tive D
ire
ctor
s an
d ens
ure
s
const
ructiv
e engagemen
t betw
een Execu
tive
and Non-Executiv
e Direct
ors.
Th
e Boa
rd co
ns
ide
rs th
at S Go
od h
as su
f
fic
ie
nt
tim
e to devote to his rol
e as C
ha
ir of the G
rou
p.
S Go
od is c
ur
rent
ly a No
n-E
xe
cut
ive D
ire
ctor
ofEle
me
ntis p
lc a
nd Ch
ai
r of Dev
ro plc.
The Group C
EO is
responsible for
the running
ofthe G
rou
p’
s bus
in
es
s. He is s
up
por
te
d by
theG
rou
p CFO an
d the E
xe
cut
ive tea
m.
Board bal
ance and
independence
Th
e Boa
rd cu
rre
ntl
y com
pr
ise
s t
wo E
xecu
tive
Directors
, four
independent Non-Executiv
e
Directors
and the
Non-Executive
Chair
. D
Robertson
was
appoin
ted
Senior Ind
ependent
Di
rec
tor at the AGM h
el
d on 16 May 20
1
8. T
he
Boa
rd co
ns
ide
rs D R
obe
r
ts
on to be
independent.
S Good is
also Chair
of t
he Nomination
Committee and a
me
mber of
the Remunerat
ion
Committee.
Only the r
espective Committee
Cha
ir
s an
d mem
be
rs a
re en
titl
ed to be p
res
ent
at me
etin
gs of th
e Re
mun
er
atio
n, Audi
t an
d
Nomination
Committees, but
others ma
y att
end
at t
he invita
tion o
f the Committ
ee Chair
. During
the y
ear
, the
Chair met
with the
Non-Executive
Directors
regularly without
the Executiv
e
Directors
present and
the Non-Executiv
e
Di
rec
tors m
et wi
thou
t the C
ha
ir pre
se
nt to ca
rr
y
out a r
evi
ew of the C
ha
ir’
s pe
r
fo
rma
nc
e, in lin
e
with t
he principles o
f the
Code.
Information and
professional de
velopment
Eac
h mo
nth, al
l Dir
ecto
rs re
ce
ive m
ana
ge
me
nt
rep
or
ts a
nd b
rie
fing p
ap
er
s in re
lati
on to Boa
rd
mat
ter
s in a ti
mel
y ma
nn
er to en
sure t
hey h
ave
due t
ime to co
ns
ide
r the i
nfor
mat
ion a
nd ac
t
acc
ord
ing
ly
. Ne
w app
oin
tme
nts to the B
oa
rd
receive an
induction and
, where appropriat
e,
tra
ini
ng. Th
e Di
rec
tors h
ave acc
es
s to the
Company Secretary and independe
nt
profe
ss
io
nal a
dv
ise
rs, at t
he Gr
oup’
s ex
pe
ns
e,
ifre
qui
red f
or the f
ur
t
he
ran
ce of th
eir d
uti
es.
Th
e Di
rec
tors a
lso u
nde
r
ta
ke CPD ac
tiv
iti
es
through
the year t
o suppor
t dev
elopment areas
identified t
hough the
Board ev
aluation
process.
Board e
valuation
A for
mal r
evi
ew of the p
er
for
man
ce of th
e Bo
ard
an
d its Co
mm
it
tee
s is ca
rr
ie
d ou
t eac
h yea
r
. T
he
revi
ew of th
e Cha
ir’s per
fo
rm
anc
e is l
ed by th
e
Senior
Indepen
dent Di
rect
or
, t
oget
her wit
h t
he
other
Non-Executive
Directors i
n consultat
ion
with t
he Executive
Directors
. The ot
her
Non-Executive
Directors
’ per
formance is
evaluat
ed by the
Cha
ir in
consultation
with
theE
xe
cuti
ve Di
rec
tors. T
he E
xe
cu
tive tea
m’
s
pe
r
for
ma
nce i
s eval
uate
d by the Re
mu
ne
rati
on
Committee in
conjunction wit
h the
Group CEO
(except in t
he c
ase of th
e Gro
up C
EO, when t
he
Gro
up CEO i
s not p
res
ent).
Th
e Boa
rd co
ns
ide
red t
he me
ri
ts of ret
ain
ing t
he
se
r
vi
ce
s of an ex
ter
na
l fac
ili
tator a
nd c
onc
lud
ed
that, gi
ven t
he Gr
oup’
s s
ize a
nd the B
oa
rd’
s
ne
eds, t
his wa
s not a
ppro
pr
iate. T
he ma
tte
r
wil
lbe ke
pt und
er re
vie
w in 2022.
Th
e 2021 Board e
valu
atio
n cove
red a
ll a
spe
cts
of t
he Board
’
s structure
, composition and
ope
rat
ion, B
oar
d inter
acti
on
s (exter
na
l an
d
inte
rna
l) a
nd bu
si
nes
s str
ateg
y
, r
isk
s and
priorities.
Th
e Di
rec
tors’ at
tend
an
ce at m
eeti
ngs o
f the Bo
ard a
nd C
omm
it
tee
s is a
s foll
ows:
Attendance at meeting
Board
Meetings
Audit Committee
Meetings
Remuneration Committee
Meetings
Nomination Committee
Meetings
Eligible
Attended
Eligible
Attended
Eligible
Attended
Eligible
Attended
J C
arling
11
11
4
4
4
4
2
2
A F
ielding
11
11
4
4
4
4
2
2
S Go
od
11
11
–
–
4
4
2
2
G McGrath
11
11
–
–
–
–
–
–
D R
ober
tson
11
11
4
4
4
4
2
2
D Stirling
11
11
–
–
–
–
–
–
C Wa
ll
11
11
4
4
4
4
2
2
82
Zot
efoams plc
An
nua
l Re
por
t 2021
Th
e pro
ce
ss invo
lve
d the fo
llo
win
g step
s:
X
Completion
of a
combined qualitativ
e
questionnaire
for the
B
oard
and its
Committees
X
A skills matrix
X
Individual interviews and a group
discussion
and
X
For th
e firs
t tim
e in 2021
, fee
dba
ck f
rom th
e
E
xecu
tive te
am o
n the
ir inte
rac
tio
n wit
h the
Bo
ard.
The main observations
from t
he evalua
tion w
ere:
X
Go
od ar
ra
ng
eme
nts we
re in p
lac
e for th
e
administra
tion o
f the
Board’
s business
(including t
he flow
and av
ailability of
informat
ion, t
he conduct o
f meetin
gs and
int
eractions wit
h Executive
Directors
and the
Executive team)
. Face-t
o-face int
eraction
is va
lue
d by Di
rec
tors a
nd mo
re in
-pe
rso
n
me
etin
gs wi
ll b
e arr
an
ge
d in 2022, subj
ec
t
togover
nm
ent re
str
ic
tio
ns
X
Th
e sk
ill
s matr
ix ev
id
en
ced a s
tron
g mi
x
of sk
ill
s, exp
er
ie
nce a
nd k
now
le
dge, w
ith
developing
knowledge in en
vironmental,
soc
ia
land g
over
na
nc
e (ESG) mat
te
rs
X
A positiv
e Board
culture
enabled each
Di
rec
tor to cont
rib
ute fu
ll
y and e
f
fec
tive
ly
toBoa
rd de
bate
X
Th
e E
xecu
tive te
am va
lue
d Bo
ard i
npu
t
an
d sou
ght to leve
ra
ge in
div
id
ua
l Dir
ecto
rs’
exp
er
ti
se to info
rm exe
cut
ive ac
tio
n. Fur
the
r
en
gag
em
ent i
s pla
nn
ed i
n that re
sp
ec
t in 2022
X
The Board
had clear sight
of it
s objectiv
es,
wi
th a goo
d ba
lan
ce b
et
wee
n a sh
or
t a
nd
long-t
er
m focus
.
The out
come of
the re
view highlight
ed that t
he
Boa
rd an
d its C
om
mit
tee
s ar
e ef
fe
cti
ve and we
ll
ru
n and t
hat a
ll Di
rec
tors c
ontr
ib
ute ef
fe
cti
vel
y
and pro
vide appropriat
e commitment t
o
their
role.
Th
e Boa
rd co
ns
ide
rs th
at it i
s fu
ncti
on
ing we
ll
and tha
t its
current composition
contains an
ap
prop
ri
ate bal
an
ce an
d di
ver
sit
y of v
iew
s,
qua
li
fica
tion
s, sk
ill
s, exp
er
ie
nce a
nd p
er
son
al
at
tri
bute
s ne
ce
ss
ar
y to ca
rr
y ou
t its du
tie
s an
d
responsibilities
.
Re-elect
ion of
Directors
The Code requir
es Direct
ors t
o submit f
or
re-election annually
at the
AGM
. The Company
imp
le
me
nted th
is pr
acti
ce i
n 201
2 a
nd w
ill
co
ntinu
e to obs
er
ve i
t.
Remunerat
ion Committee and e
xecutive
remuneration
A rep
or
t o
n the wo
rk of th
e Re
mun
er
atio
n
Committee is
contained within
the Direct
ors’
Remuneration report.
T
he r
ep
or
t c
an b
e fo
un
d on
pa
ge
s 88 to 9
9.
Financial
repor
ting
The Direct
ors’
responsibilities
for preparing
the
fina
nc
ial s
tate
men
ts are s
et ou
t in th
e Sta
teme
nt
of Dir
ectors
’ responsibilities.
T
he s
ta
tem
en
t ca
n be f
ou
nd o
n
page 1
03.
Au
di
t Co
mm
i
t
te
e an
d Au
d
it
or
The Audit
Committee report provides
details
of
the r
ole and act
ivities of
the Committ
ee and
its
relationship
with the External Audit
or
.
T
he r
ep
or
t c
an b
e fo
un
d on
pa
ge
s 84 to 8
6.
Relations with
shareholder
s
Our communication
strat
eg
y with
shareholders
is gu
id
ed by the p
ri
nci
pl
e of ef
fe
cti
ve and
tran
sparen
t enga
gement
.
Meetings wit
h instit
utional shareholders
are
usu
al
ly he
ld t
wi
ce a ye
ar fo
llo
win
g the
an
nou
nce
me
nt of th
e Gro
up’
s i
nter
im an
d
pre
lim
ina
r
y re
su
lts, in A
ugu
st an
d Ma
rch
res
pe
cti
vel
y
. O
the
r me
eti
ngs a
re he
ld at
institut
ional shareholders
’ request
. In
202
1
, these
me
etin
gs co
ntin
ue
d to be he
ld v
ir
tu
all
y thro
ug
h
video conferencing
technology
. T
o ensure t
hat
the Boar
d, particularly the
Non-E
xecutive
Di
rec
tors, u
nde
rs
tan
ds th
e vi
ews of th
e
shareholders, t
he Group
’
s corporat
e brok
er
s
provide
summar
y feedback
from t
he inv
estor
me
etin
gs, in p
ar
ti
cul
ar f
rom th
e me
etin
gs h
eld
foll
owi
ng th
e inter
im a
nd pr
eli
min
ar
y r
esu
lts
announcements. The Chair
and the Senior
Ind
ep
en
de
nt Di
rec
tor
, as we
ll a
s the oth
er
Non-Executive
Directors
, are
available
to
meeti
nstitutional
shareholders if r
equested.
Th
e Boa
rd al
so re
co
gni
se
s the im
po
r
ta
nce of
engaging with individual shareholders and the
Executive Direct
o
rs now
hold presentat
ions
through
the In
vest
or Meet Compan
y digital
platform at
least twice per y
ear
. The platform
prov
ide
s in
div
id
ua
l inves
tors w
ith th
e sa
me
opp
or
tu
ni
ty f
or t
wo-way e
nga
ge
me
nt as
institut
ional inv
estors
through
live,
interactive
pre
se
ntati
ons, a
s pa
r
t of the i
nves
tor road
sh
ow
.
Th
e An
nua
l Re
por
t, the AGM an
d the c
or
por
ate
websit
e ww
w
.zot
efoams.
com also support
communication
with inv
e
st
ors. The Chairs
of t
he
Board Committees
will normally be
available
atthe AGM to a
nswe
r que
sti
on
s.
Internal control
Th
e Boa
rd ha
s ap
pli
ed th
e 201
8 Co
de by
establishing procedures to manage risk,
over
se
ein
g the i
nter
nal c
on
trol f
ram
ewor
k, a
nd
dete
rm
ini
ng the n
atur
e and ex
te
nt of th
e pri
nci
pa
l
ri
sks th
e Gro
up is w
ill
ing to ac
ce
pt in o
rde
r to
achieve
its long-
term st
rategic
objectives.
The
Boa
rd re
gul
ar
ly re
vie
ws the p
roc
es
s, wh
ich h
as
be
en i
n pla
ce th
roug
hou
t the ye
ar to th
e date
ofap
prova
l of this r
epo
r
t an
d wh
ich i
s in
accordance with
the Financial Reporting
Council’
s Guidance on Risk
Ma
nagement
,
Int
ernal Control
and Relat
ed Financial and
Business Reporting. The Boar
d is r
esponsible
for th
e Gro
up’
s sy
stem of i
nter
nal c
ont
rol a
nd for
revi
ewi
ng i
ts ef
fe
cti
ven
es
s. Suc
h a sys
tem is
designed t
o manage,
rather
than eliminat
e, the
ri
sk of fa
ilu
re to ach
ieve b
usi
ne
ss o
bje
cti
ves a
nd
ca
n onl
y prov
id
e rea
son
ab
le a
nd not a
bso
lu
te
as
sur
anc
e ag
ain
st ma
teri
al m
iss
tatem
en
t or lo
ss.
In co
mp
lia
nc
e wit
h the 201
8 Co
de, th
e Boa
rd
regularly revie
ws the
effectiveness of
the Group
’
s
syste
m of inte
rna
l co
ntro
l, as wel
l as how i
t is
rep
or
te
d to the Bo
ard. T
he Bo
ard’s moni
tori
ng
covers
all contr
ols, in
cluding financial
,
operational
and compliance cont
rols and
risk
ma
nag
em
ent. It i
s bas
ed pr
in
cip
all
y on re
vie
win
g
reports from management
and the
Internal
Control
Committee t
o consider whether
significant risks
are ident
ified, e
valuat
ed,
managed and cont
rolled and
whether an
y
significant w
eakne
sses are
promptly
remedied.
Th
e Boa
rd ha
s al
so pe
r
for
me
d a sp
ec
ific
as
se
ssm
en
t for th
e pur
po
se of thi
s An
nua
l
Re
por
t. T
his a
ss
es
sm
ent c
ons
id
ere
d al
l the
significant aspects
of in
ternal cont
rol arising
dur
in
g the p
er
iod c
overe
d by the r
epo
r
t. Th
e
as
se
ssm
en
t als
o inc
lud
ed a ro
bu
st rev
iew of th
e
principal risks fa
cing the Gr
oup,
including those
that wo
uld t
hre
aten th
e Gro
up’
s b
usi
ne
ss mo
de
l,
future performance, solvency
and liquidity
.
The Audit
Committee assists
the Board
in
discharging it
s re
view responsibilit
ies.
Du
rin
g the c
our
se of i
ts rev
iew of th
e syste
m
ofinte
rna
l co
ntro
l and th
e pr
inc
ipa
l ri
sks f
aci
ng
the G
rou
p, the Boa
rd did n
ot id
enti
f
y
, nor wa
s
itad
vi
sed o
f
, any f
ail
ing
s or we
ak
ne
ss
es i
t
determined
to
be significant
. Therefor
e, a
confirmation
in respect o
f necessar
y actions
hasn
ot be
en c
ons
id
ere
d ap
prop
ri
ate.
Key el
eme
nts of t
he Gr
oup’
s s
ystem of i
nter
na
l
co
ntrol
s are a
s foll
ows:
Control en
vironment
The Group has
a
n appropria
te
organisational
structure
for planning
, executi
ng, con
trolling
andmonit
oring business operations
in order
to
achiev
e Group
objectives.
Overall business
obj
ec
tive
s are s
et by the B
oa
rd an
d
communicated t
hrough the
organisation.
Lineso
f responsibility and
delegations o
f
authority are document
ed.
Risk identification
Group management
is responsible
for the
ide
nti
fic
atio
n and e
valu
atio
n of key ri
sks
applicable t
o its
areas of
business. These risks
are a
ss
es
sed o
n a co
ntin
ua
l bas
is an
d may b
e
as
soc
iate
d wit
h a var
iet
y of in
tern
al o
r ex
tern
al
sou
rce
s.
The Group’
s risk management framework
isd
et
ai
le
d on
page 45.
Information and
communication
Th
e an
nua
l bud
get a
nd q
ua
r
terl
y for
ec
ast
upd
ates a
re a key pa
r
t of the p
la
nni
ng a
nd
per
formance management
process and the
Boa
rd rev
iew
s pe
r
for
ma
nce a
gai
nst t
hes
e.
Inad
diti
on, th
e Boa
rd re
ce
ive
s mon
thl
y
management reports, which highlight
financial
res
ult
s, pe
r
for
ma
nce a
ga
inst key p
er
for
man
ce
indicat
ors and significant
activities and
matters
of note du
rin
g the m
onth u
nd
er rev
iew.
Through t
hese mechanisms, t
he performance
ofthe G
rou
p is re
gul
ar
ly m
oni
tored, r
is
ks are
identified in
a timely
manner
, their
financial
implications assessed,
control
procedures
eval
uate
d and c
or
rec
tive a
cti
ons ag
re
ed a
nd
implemented
.
The Board a
nd its Committees
Continued
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
83
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Control procedures
The Group has
imple
mented
control
procedures
designed t
o ensure comple
te
and accurat
e
accounting
for financial
transactions
and t
o limit
the p
otenti
al ex
pos
ure to lo
ss of a
sse
ts or f
rau
d.
Measures tak
en include ph
ysical contr
ols,
se
gre
gati
on of du
tie
s an
d rev
iews by
management,
Int
ernal Audit and
the External
Audit
or
. The effectiveness o
f these
control
pro
ce
dure
s is te
sted by th
e Gro
up’
s In
ter
nal
Controls
C
ommittee (
which is chair
ed by
the
Group CE
O)
, the Audit
Committee and t
he Board
.
A pro
ce
ss of c
ontro
l se
lf-as
se
ss
men
t and
hierarchical reporting has been established,
wh
ich p
rovi
de
s for a do
cu
me
nted an
d au
dit
abl
e
tra
il of ac
cou
nta
bil
it
y
. Th
es
e proc
ed
ure
s are
rel
evan
t acro
ss th
e Gro
up a
nd prov
id
e for
suc
ce
ss
ive a
ssu
ra
nce
s to be gi
ve
n at
increasingly higher
levels
of management and
,
finally
, t
o the
Board.
Planned correctiv
e actions
are i
nde
pe
nd
entl
y mo
nito
red fo
r time
ly
completion
.
Monitoring and corrective action
There are
clear and consist
e
nt pr
ocedures
inpl
ac
e for mo
ni
torin
g the sy
stem of i
nter
na
l
financial and non
-financial con
trols.
T
he Audit
Committee normally meet
s not
less than t
hree
tim
es a ye
ar a
nd, wi
thin i
ts re
mit, rev
iew
s the
ef
fe
cti
ven
es
s of the G
rou
p’
s syste
m of inte
rn
al
financial contr
ols. The
Committee receives
reports from t
he Ex
ternal A
uditor
, Int
ernal
Audit
and management
.
Non-financial
controls
a
re r
eviewed
regularly
byexecu
tive m
an
age
me
nt, wh
ich re
po
r
ts an
y
is
sue
s an
d cor
re
cti
ve acti
ons t
ake
n.
84
Zot
efoams plc
An
nua
l Re
por
t 2021
Dear Shareholder
The Audit
Committee has re
viewed t
he cont
ents
of the 2021 An
nua
l Re
por
t and a
dv
ise
d the
Boa
rd th
at it c
ons
ide
rs t
he Re
po
r
t to be fa
ir
,
balanced
and underst
andable and
provides
the
informat
ion necessar
y for
shareholders to
assess the Gr
oup
’
s position and
per
formance,
bus
in
es
s mod
el a
nd str
ateg
y
.
The Committee r
emains responsible f
or k
eeping
und
er r
evi
ew the ad
eq
uac
y an
d ef
fe
cti
ven
es
s
ofthe G
rou
p’
s inte
rna
l co
ntro
ls an
d ri
sk
management syst
ems, which no
w incorporat
e
the considera
tion o
f climat
e
-relat
e
d risks
by
the
appropriat
e Contr
ol Committee and
a principal
risk on sus
tainability and climat
e change.
While the
Committee
’
s core duties w
ere
unc
ha
ng
ed in 2021
, th
ere wa
s par
ticu
la
r foc
us
on ensuring s
trong i
nternal financial
controls
to
support agile decision-making in
a fast
-evolving
environment t
hat presents
new global
challenges, including
multifaceted legal
and
compliance environ
ments,
integra
ted supply
cha
in
s, cyb
er s
ec
uri
t
y ris
ks a
nd un
pre
ce
de
nted
vola
tili
t
y
. Fur
the
r det
ail
s are p
rovi
ded i
n the r
is
k
ma
nag
em
ent s
ec
tion o
n pag
es 4
5 to 54.
Th
e env
iro
nme
nt in w
hi
ch Zotefoa
ms n
ow
operates also
prese
nts
emerging opportunities.
The Audit
Committee members hav
e offered
gui
da
nce a
nd a
dv
ice to ma
na
ge
men
t on th
e
ri
sks invo
lve
d an
d co
ntrol
s req
uire
d in th
e fu
r
the
r
development o
f ReZor
ce
®
Circular P
ackaging
tothe ma
rket. Fur
t
he
r deta
il
s on Re
Zorc
e are
prov
ide
d on p
age
s 8 an
d 9.
Challenging
the External Auditor’
s findings
The Audit
Committee challenged the
work done
by
the External Audit
or t
o test
management’
s
assumptions
and estima
tes.
Examples of these
cha
ll
en
ges a
re fo
und b
el
ow und
er th
e se
cti
on on
financial reporting and
significant financial issues.
In addition
:
X
The Committee specifically di
scussed the
degree of
rigour and challenge
applied
to
management judgements
in relat
ion
to the im
pai
rm
ent of i
nta
ngi
ble a
ss
ets in
MuCell Ex
trusion LL
C (MEL)
(a
key
audit
matter)
. TheCommitt
ee concluded tha
t the
cha
ll
en
geprov
id
ed by th
e E
x
tern
al Au
di
tor
in respect
of mana
gement’
s impairment
assessment was
robust
and its
assessment
inal
ig
nme
nt wi
ththa
t of ma
nag
em
ent i
n that
no impairment was required.
X
The Committee also
review
ed the
work
done b
y the External Audit
or to challenge
underlying assumptions supporting the
going
concern stat
ement and concluded
that t
he
challenge of
management forecast
s and
the
ir as
se
ss
me
nt of go
ing c
on
ce
rn ha
d be
en
ap
prop
ri
ate. It als
o noted t
he re
newa
l of the
Group
’
s banking facil
ities for
a further four
yea
rs, w
ith a o
ne-ye
ar ex
te
nsi
on opti
on, o
n
term
s mo
re favou
ra
ble th
an th
e exp
ir
ing f
aci
lit
y
X
While not
ing tha
t the
initial e
xternal audit scope
for t
he Group
complied with t
he Int
e
rnational
Standards on
Auditing
(UK), t
he Committee
,
hav
ing c
ons
id
ere
d the r
ate of grow
th of
operations
in P
oland and China,
held robus
t
discussions with
the Ex
ternal Audit
or in respect
of the l
evel of a
udi
t wor
k to be un
de
r
take
n
in respect o
f these
Group components
. It
was agr
eed that
these components
would
be subject t
o more audit
test
ing than i
nitially
proposed or
required under the
Int
ernational
Sta
nd
ard
s on Au
diti
ng (U
K
). Thi
s res
ulte
d in a
more in
-depth r
eview o
f these opera
tions t
han
previously pr
oposed.
Global control
The Audit
Committee review
ed the
internal
co
ntrol
s fra
mew
ork
, see p
age 4
5, to ass
es
s how
itha
dres
po
nde
d to cha
ll
eng
es b
rou
ght a
bou
t
bydis
ru
ptio
n to the gl
oba
l sup
pl
y cha
in a
nd
evol
vin
g sta
keh
old
er
s’ expe
ct
atio
ns in re
lati
on
toenvi
ron
me
ntal, s
oci
al a
nd g
over
nan
ce
matters.
The Committee sat
isfied itself
that
the
SASB frame
work, implement
ed through t
he
ri
sk ma
nag
em
en
t fra
mewo
rk, e
ns
ure
d that a
ll
business risks r
elating
to
sustainability
, including
cli
mate ch
an
ge r
isk
s, were i
de
ntifi
ed, as
se
ss
ed
an
d treate
d at ea
ch of th
e ap
prop
ri
ate Con
trol
Committees within
the Group
. The Committee
over
saw th
e em
be
ddi
ng of th
e new p
rin
cip
al r
isk
of sus
ta
ina
bil
it
y an
d cli
mate c
han
ge i
n 2021 and
foc
use
d on e
nsu
ri
ng tha
t the im
prove
d ESG
disclosures wer
e appropriat
e and supported
shareholder decision-making
. Details
of
Zo
te
foam
s’
strengt
hened E
SG frame
work
mayb
e foun
d on pa
ge 57
.
Group cyber
security arrangements
The Audit
Committee review
ed Group
cyber
se
cur
it
y ar
ra
ng
eme
nts, w
ith a p
ar
ti
cul
ar fo
cus
oncrit
ical security updates
used t
o combat
ma
lwar
e and r
ans
omwa
re in a
cco
rda
nc
e wit
h
the re
qu
ire
me
nts of the G
rou
p’
s C
yb
er Es
se
ntia
ls
Plus accr
editation
and employee
education.
T
he
Committee sat
isfied itself
that t
he lev
el of w
ork
pe
r
for
me
d by the G
rou
p
’
s IT d
epa
r
tm
ent, its
competence
, the
Group-wide
employee
training
pro
gra
mm
e in pl
ace a
nd th
e fu
ll an
nu
al
penetration
testing
, appropriately mitiga
ted
ther
isk of a m
al
ici
ou
s att
ack
.
Internal audit
Each year
, the
Audit Committee
reviews
the
ne
ed fo
r an in
tern
al a
udi
t fu
ncti
on a
nd, gi
ven th
e
size of t
he Gr
oup, con
tinu
es to b
e of the op
in
ion
that
the int
er
nal audit
function is
best performed
by an ex
ter
na
l aud
it fi
rm wi
th a bro
ad ra
ng
e of
competencies
that complements
the ser
vices
prov
ide
d by the E
x
te
rn
al Au
ditor
. As th
e Gro
up
co
ntinu
es to g
row
, the m
atte
r wi
ll be ke
pt und
er
revi
ew. Follow
ing a te
nde
r pro
ce
ss i
n 201
5,
Gra
nt T
hor
nton U
K LLP h
as c
onti
nue
d to be
use
d to prov
ide i
nter
na
l aud
it se
r
v
ice
s in 2021
.
The Committee agr
eed the scope
for t
he int
ernal
aud
it wo
rk pe
r
fo
rm
ed in 2021
, rev
iewe
d the
rep
or
t re
ce
ive
d an
d dis
cus
se
d the p
rop
osa
ls
made with
management.
Grant Thornt
on UK
LLP h
as n
ot und
er
t
ake
n any oth
er wo
rk fo
r
the
Group and
, there
fore
, the
Audit Committee
co
nsi
de
rs it to be i
nd
ep
end
en
t and o
bje
cti
ve
init
s jud
ge
men
t. The E
x
te
rn
al Au
ditor i
s aware
ofthe i
nter
nal a
udi
t ou
tso
urci
ng a
rra
ng
em
ents
and fully supports them.
In re
co
gni
tio
n of the in
cre
as
ed s
ize an
d
complexity of
the Group
, the
Audit Committee
req
ue
sted th
at ma
nag
em
en
t deve
lop a
mul
ti-yea
r rol
lin
g pro
gra
mm
e that c
over
s the
mos
t sig
ni
fica
nt r
isk
s not al
rea
dy mi
tig
ated
through
other
audit methods
a
nd certifications.
Working
closely with t
he Int
e
rnal Audit
or
, these
ri
sks we
re id
enti
fie
d, pre
se
nted to an
d app
roved
by
the Audit
Committee and con
verted int
o a
thre
e-ye
ar ro
lli
ng cyc
le of t
wo au
dits p
er ye
ar
,
be
gin
nin
g in 2022. A ful
l sc
opi
ng a
nd pl
an
nin
g
pro
ce
ss wi
ll b
e foll
owed fo
r ea
ch in
tern
al a
udi
t
pro
pos
al a
nd ta
bl
ed fo
r app
roval to th
e Audi
t
Committee.
During the
year
, the Audit
Committee
monitor
edt
he effective implementa
tion o
f
the
actions
arising from t
he 20
20 i
nternal audit
ofthePu
rch
ase
-to-Pay p
oli
cie
s, pr
oce
ss
es,
pro
ce
dure
s an
d co
ntrol
s in pl
ac
e in the U
K.
Du
echa
ll
eng
e was d
el
ive
red by th
e Co
mmi
tte
e
on areas r
equiring management act
ions.
Effective i
nterim s
olutions t
o the audit
findings
are i
n pla
ce bu
t pro
gre
ss i
n imp
le
me
ntin
g
longer
-t
erm sy
st
emic s
olutio
ns has
been
imp
ed
ed by th
e red
ep
loy
men
t of pro
cure
me
nt
resources required
to
tackle global supply
chaindi
sruptions and
Brexit
-relat
ed import
/
export compliance challenges. The
Audit
Committee has i
mposed a
rigid timet
able
for
the
implementation
of t
he contr
ol
imp
rovem
en
ts in 2022.
For 2
021
, the In
ternal A
uditor
per
formed an
all-subsidiary revie
w of
policies, pr
ocedures,
pro
ce
sse
s an
d co
ntrol
s in re
lati
on to the p
ayro
ll
fu
ncti
on. Its r
epo
r
t was p
re
sen
ted to the Au
dit
Co
mmi
tte
e in D
ec
emb
er 20
2
1 an
d due
challenge was
delivered b
y the
Committee
ona
rea
s req
uir
in
g man
age
me
nt ac
tio
ns,
wi
thane
mph
as
is on e
mb
ed
din
g glo
bal v
alu
es
around compliance
, control and
accountability
.
Followin
g agreement
, the
actions w
ere
ap
prove
dand a
re be
in
g imp
le
me
nted to
anappr
opriate
timetable
.
Th
e Com
mi
tte
e wil
l kee
p und
er r
evi
ew an
d
assess the continued independence and
ef
fe
cti
ven
es
s of inte
rna
l au
dit i
n 2022.
MEL capitalisation costs
The Committee has
considered the
as
se
ssm
en
ts mad
e in re
lati
on to the
ca
rr
y
in
gvalu
e of MEL
’s good
wi
ll, ta
ngi
ble a
nd
int
ang
ibl
e fixe
d as
sets o
n the ba
si
s of det
ail
ed
rep
or
ts r
ec
eive
d fr
om ma
nag
em
en
t outl
ini
ng
thetre
atm
ent of i
mpa
ir
me
nts, va
luat
ion
methodology
a
nd the
basis for capitalisat
ion
ofco
sts in l
ine w
ith I
AS 38. In o
rde
r to con
sid
er
the assump
tions r
elated
to
the current
ReZorce
ini
tiat
ive a
nd how th
e de
cis
io
n not to imp
air
hasb
ee
n de
term
in
ed on t
he ba
sis of t
his, th
e
Co
mmi
tte
e req
ue
sted are
po
r
t at th
e be
gin
nin
g
of 2021 t
o as
se
ss th
e ef
fe
cti
ve tre
atme
nt of
cos
ts, a pro
ce
ss w
hic
h invo
lve
d con
sul
tin
g
Audit C
ommittee repor
t
Maintaining financial con
trol
t
hroug
h v
olat
il
e t
imes
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
85
Zo
tef
oams plc
An
nua
l Re
por
t 2021
with
the External Audit
or
. The
Committee
hasr
ec
ei
ved re
gul
ar b
ri
efin
gs onth
e pro
je
ct
development
, has challenged management
an
dis sat
isfi
ed th
at the
se a
ssu
mpti
ons a
nd
thej
udg
em
ents a
nd e
sti
mates d
is
clo
sed i
n
the
financial stat
eme
nts
are appropria
te
.
Financial
Report
ing
Council (F
RC)
thematicre
view
Du
rin
g the s
ec
ond h
al
f of the ye
ar
, i
n lin
e wi
th
theFR
C’
s re
vi
ew fu
ncti
on of l
isted s
ec
ur
itie
s,
arevi
ew of Zotefoa
ms’ inte
rim fi
na
nci
al re
po
r
t
to30 Ju
ne 2020 was c
ar
ri
ed o
ut. I am p
le
ase
d
to adv
ise th
at, bas
ed o
n its rev
iew, ther
e were
noqu
es
tio
ns or q
ue
rie
s th
at the FR
C wis
he
d
torais
e wi
th the C
om
pany. Zot
efoa
ms h
as
committed t
o considering the poin
ts made
inth
eFRC’
s let
ter w
he
n pre
pa
rin
g thi
s and
fu
tures
ets of re
por
ts an
d acc
ou
nts.
It is i
mpo
r
ta
nt to note that th
e FRC’s lette
r
prov
ide
s no a
ss
ura
nc
e that th
e inte
rim fi
na
nci
al
rep
or
t i
s cor
re
ct in a
ll ma
teri
al re
sp
ec
ts as th
e
FRC’
s rol
e is n
ot to veri
f
y the i
nfor
mat
ion
provided
but t
o consider compliance
with
reporting requirements.
The Committee’
s responsibiliti
es
The Committee cont
inues t
o fulfil a
key
role in
theG
rou
p’
s gove
rn
anc
e fr
ame
wor
k, prov
idi
ng
valuable independent
challenge and ov
ersight
across t
he Group
’
s financial r
epor
ting
and
inte
rna
l co
ntro
l proc
ed
ure
s. In a ra
pi
dly e
volv
in
g
climat
e,
it seeks t
o ensure that
s
hareholders
’
long-
term
int
erest
s are
prot
ected an
d long
-t
erm
val
ue is c
rea
ted.
As a re
su
lt of its wo
rk d
ur
ing th
e yea
r
, th
e Aud
it
Committee has concl
uded that
it has act
ed in
acc
ord
an
ce wi
th its T
er
ms of R
efer
enc
e an
d has
assessed sa
tisf
act
orily t
he independence
and
objectivity of
the External Audit
or
. I am
available
to answe
r any q
ue
sti
ons yo
u may have a
bo
ut th
e
work o
f the
Committee. P
lease contact
the
Co
mpa
ny Se
cret
ar
y i
n thi
s reg
ard.
D G Rob
er
ts
on
Chair of
the Audit Committee
6 Ap
ril 20
22
Su
m
ma
r
y o
f t
he r
ol
e of t
h
e Au
di
t
Committee
The main r
esponsibilities of
the Audit
Committee
are:
X
T
o monitor sign
ificant financial reporting
issues and judgements
a
nd t
he clarity
and complet
eness of di
sclosures made
in connection
with the
preparation of
the
Group
’
s and Compan
y’
s financial stat
eme
nts
,
assumptions
for t
he going concern
and
vi
abi
lit
y s
tatem
ent
s, inter
im re
po
r
ts,
preliminary announcem
ents and
relat
ed
for
mal s
tate
men
ts, in
clu
din
g any m
at
ters
wh
ich th
e E
x
ter
nal A
udi
tor may w
ish to ra
is
e
X
T
o rev
iew a
nd ch
al
len
ge, w
her
e ne
ce
ss
ar
y:
the applicat
ion of significant
accounting
pol
ic
ies a
nd a
ny ch
ang
es to th
em; the
methods used
to
account for
significant
or unusual t
ransactions
where different
approaches are
pos
sible
; whether
the
Group has a
dopted
appropriate
accounting
policies and ma
de appropriat
e estima
tes
an
d jud
ge
men
ts, ta
kin
g into ac
co
unt th
e
Ex
ternal Audit
or’
s views on
the financial
stat
ements
; and the
cla
rity and complet
eness
of dis
cl
osu
res i
n the fi
nan
cia
l st
ateme
nts a
nd
the c
ontex
t in w
hi
ch st
ateme
nts a
re ma
de
X
T
o rev
iew o
n be
hal
f of the B
oa
rd the i
ntegr
it
y
of t
he Group
’
s internal financial
controls
an
d ass
es
s the s
co
pe an
d ef
fe
cti
ven
es
s of
the syst
e
ms established by management
to ide
ntif
y
, a
sse
ss, m
an
age a
nd m
oni
tor
financial and non
-financial risk
s and mak
e
recommendations
to
the Board
X
T
o kee
p un
der r
evi
ew the a
deq
ua
cy an
d
effectiveness of
the Group
’
s internal financial
co
ntrol
s and i
nter
na
l con
trol a
nd r
isk
managemen
t s
yst
ems
X
T
o rev
iew th
e Gro
up’
s sy
stem
s and c
ont
rols
for th
e preve
nti
on of br
ib
er
y a
nd re
ce
ive
reports on non-compliance
X
T
o rev
iew th
e ade
qu
acy a
nd se
cu
ri
ty of t
he
Gro
up’
s a
rra
ng
em
ents f
or its e
mp
loye
es to
rai
se c
onc
er
ns, in c
onfi
de
nc
e, abo
ut po
ss
ibl
e
wrongdoing i
n financial reporting or
other
ma
t
ter
s
X
T
o rev
iew th
e Gro
up’
s p
roc
edu
re
s for
detect
ing fraud
X
T
o co
nsi
de
r and a
pp
rove the re
mi
t of the
int
ernal audit function
and ensure
it has
adequate
resources and appropria
te access
to
informat
ion t
o enable it
to
per
form its
function
effectively
and in
accordance
with
the r
elevant pr
ofessional s
tandards, fr
ee from
management or o
ther rest
rictions
X
T
o co
nsi
de
r and a
pp
rove the re
mi
t of the
Group
’
s int
ernal audit function
a
nd t
o monitor
an
d revi
ew its e
f
fec
tive
ne
ss i
n the c
ontex
t of
the G
rou
p’
s over
all r
is
k man
ag
eme
nt sy
stem
X
T
o rev
iew a
nd ap
prove th
e ter
ms of
engagement of
the External Audit
or
, including
any e
nga
ge
me
nt let
te
r iss
ue
d at the s
tar
t
of ea
ch ex
ter
na
l aud
it a
nd the s
co
pe of
anya
udi
tbefo
re it b
eg
ins
X
T
o as
se
ss a
nnu
al
ly the q
ua
lifi
cat
ion, s
ki
lls
and resour
ces, effectiveness,
objectivity
an
dind
ep
end
en
ce of th
e E
x
tern
al A
udi
tor
X
T
o rev
iew tr
i-a
nnu
al
ly a po
lic
y in re
lati
on to
the p
rovis
io
n of non
-au
dit s
er
v
ic
es by th
e
E
x
tern
al Au
di
tor and t
he ap
prova
l by the
Co
mmi
tte
e of su
ch se
r
v
ice
s, in o
rde
r to avoid
any t
hreat t
o the External Audit
or’
s objectivity
an
d ind
ep
end
en
ce a
nd th
e imp
act th
at su
ch
ser
vices could ha
ve on
the audit
ed financial
state
me
nts, wh
il
e tak
in
g into ac
cou
nt any
rel
evan
t ethi
ca
l gui
da
nce o
n the m
at
ter
X
T
o re
por
t to th
e Boa
rd on h
ow it h
as
discharged its
responsibilities, including
making recommendations
, when necessary
,
on a
ny acti
ons o
r im
prove
men
ts req
ui
red.
The Audit
Committee’
s T
erms of Re
ference,
which are
available
on the
Group
’
s websit
e,
inc
lud
e al
l mat
ter
s ind
ic
ated by th
e Dis
cl
osu
re
an
d T
ran
sp
are
ncy R
ule 7
.
1 and t
he UK C
or
por
ate
Gove
rn
anc
e Co
de. T
he T
e
rm
s of Refe
re
nce a
re
review
ed annually b
y the
Audit Committee
to
ensure t
hat the
y remain appr
opriate
and reflect
curren
t best
practice
. The T
erms o
f Re
feren
ce
were l
ast r
evi
ewed i
n Aug
ust 2021
.
Co
mp
os
it
i
on o
f t
he A
ud
i
t Com
m
it
t
ee
In line
with t
he Code,
the Committee
comprises
the f
our independent Non-Execut
ive Direct
or
s
and ex
cludes the Company
Chair
.
The members of
the Audit
C
ommittee during
2021 were D Rob
er
tson (C
ha
ir), J Carl
ing, A
Fielding and C W
a
ll.
T
he
ir b
iog
r
ap
hi
es c
an b
e fou
nd o
n
pages 78
an
d79.
D Rob
er
t
son i
s a Fel
low of the I
nsti
tute of
Cha
r
ter
ed Ac
cou
nta
nts of En
gla
nd a
nd Wal
es
an
d was G
roup F
ina
nc
e Di
rec
tor of SIG p
lc un
til
Jan
ua
r
y 201
7
, hav
in
g prev
iou
sl
y he
ld tha
t
position a
t bot
h Umeco plc
and Set
on House
Gro
up L
imi
ted. In th
e opi
nio
n of the B
oa
rd, D
Rober
tson
has significant
, recent and
relevant
financia
l e
xperience t
o fulfil
the requ
iremen
ts
ofthe ro
le. A
ll cu
rre
nt me
mb
er
s of the A
udi
t
Committee ha
ve held
, or curr
ently hold
,
board-le
vel position
s in manufact
uring
industries
with int
er
national
reach.
The Audit
Committee’
s membership, as
a whole
,
has c
om
pete
nce r
ele
vant to th
e se
ctor in w
hi
ch the
Gro
up op
er
ates a
nd is a
bl
e to fun
ctio
n ef
fe
cti
vel
y
with t
he appropriat
e degree of challenge
.
Meetings
The Audit
Committee has a
planned calendar
,
lin
ked to even
ts in th
e Gro
up’
s fin
an
cia
l ca
le
nd
ar
.
The Audit
Committee met f
our times
in 20
2
1
.
Th
e Com
pa
ny Se
cret
ar
y a
cts a
s sec
ret
ar
y
to
the
Audit
Committee.
The Company Chair
,
Group CE
O
, Group
CFO
, Group
Financial
Co
ntrol
le
r and s
en
ior r
epr
ese
nta
tive
s of the
Ex
ternal Audit
or and Int
e
rnal Audit
or are invit
ed
to
attend r
elevant
meetings o
f the
Committee,
although t
he Committee r
eser
ves the
right t
o
req
ue
st anyo
f the
se in
div
id
ua
ls to with
dr
aw
.
Ateac
h me
etin
g, the E
x
ter
na
l Aud
itor i
s give
n
the opportunity to
raise matters without
management being present
. Other senior
ma
nag
em
ent m
ay be inv
ite
d to pres
ent s
uc
h
rep
or
ts a
s are r
equ
ire
d for th
e Co
mmi
tte
e to
dis
ch
arg
e its du
tie
s. Du
ri
ng th
e yea
r
, on a
n
informal b
asis, t
he Audit
Committee Chair liaises
wi
th se
nio
r rep
res
ent
ativ
es of bot
h the E
x
ter
na
l
Audit
or and In
ternal Audit
or to
discuss matters
outside t
he formal Committ
ee meetings
.
Ove
r
v
ie
w of t
h
e ac
t
io
ns t
ake
n by t
h
e Au
di
t
Co
mm
it
t
e
e to d
is
ch
a
rg
e it
s d
ut
i
es
Sin
ce th
e be
gin
nin
g of 2021
, the Au
dit
Committee has
:
X
Rev
iewe
d the fi
na
nci
al st
atem
ents i
n the 2020
Annual Report, including
the going
concern
and viabilit
y stat
ements and the st
ress-testing
of the v
ia
bil
it
y sta
teme
nt, an
d rec
ei
ved th
e
Ex
ternal Audit
or’
s repor
t on
the audit
of t
he
2020 A
nnu
al R
ep
or
t
X
Not
ed the
new mandat
or
y European Single
Electronic
Format (
ESEF) applicable t
o
consolidat
ed primary financial stat
ements f
or
financial periods beginning 1 January 202
1 or
late
r and s
atis
fie
d itse
lf t
hat th
e ESEF pro
ce
ss
had b
ee
n inte
grate
d into th
e An
nua
l Re
por
t
planning and appropriat
e testing ha
d been
ca
rr
ie
d out i
n anti
ci
patio
n of the 20
2
1 A
nnu
al
Repor
t’
s publicati
on. The
Audit Committee
also confirmed
with the
Ex
ternal Audit
or that
the
re was n
o UK re
qui
rem
en
t for th
em to
audit
the E
SEF f
ormat
86
Zot
efoams plc
An
nua
l Re
por
t 2021
X
Rev
iewe
d the I
nter
im Re
po
r
t is
sue
d in
Aug
ust2021 an
d rec
ei
ved th
e rep
or
t f
rom
the
Ex
ternal Audit
or on its
review
of the
Inter
imR
ep
or
t
X
Agre
ed a p
rog
ram
me of wo
rk fo
r 2021 t
o be
pe
r
for
me
d by the In
tern
al Au
di
tor an
d rec
ei
ved
the In
ternal Audit
or’
s reports on the
work
undertaken and management
’
s responses
to
the
recommendations
therein
X
Noted t
hat th
e FRC ha
d wr
it
ten to Zotefoa
ms
plc to ad
vi
se th
at it ha
d ca
rr
ie
d out a r
evi
ew
ofthe C
omp
any’s inter
im fin
anc
ia
l rep
or
t to 30
Jun
e 2020 an
d had n
o que
sti
ons o
r qu
er
ie
s
it wished t
o raise.
The Audit Committee
und
er
take
s to ens
ure th
e poi
nts ma
de in t
he
FRC’
s le
tte
r are c
ons
id
ere
d wh
en pr
epa
ri
ng
thi
s and f
utu
re se
ts of rep
or
ts a
nd ac
co
unts
X
Rev
iewe
d an
d agre
ed t
he sc
op
e of the au
di
t
wor
k to be un
der
take
n by the E
x
ter
na
l Aud
itor
X
Agre
ed t
he fe
es to be p
aid to th
e E
x
tern
al
Audit
or for
its audit
and work
on the
Annual
Repor
t and In
terim Report
X
Und
er
take
n an eva
lu
atio
n of the
independence, object
ivity and effectiveness
of t
he External Auditor
, including
reviewing
the
am
ount o
f non
-aud
it se
r
v
ice
s prov
id
ed by th
e
Ex
ternal Audit
or
X
Rev
iewe
d an
d app
roved a p
la
n for m
oni
tori
ng
the e
ng
age
me
nt of au
dit fi
rm
s prov
idi
ng no
n-
aud
it se
r
v
ic
es to en
sure t
hat th
e req
uir
eme
nt
for independence would no
t hinder future
Ex
ternal Audit
or tenders
X
Rev
iewe
d an
d app
roved a t
hre
e-yea
r rol
lin
g
int
ernal audit programme
X
Reviewed
Group-wide
cyber security
arrangemen
ts
X
Considered the
inven
tory management
andw
orking capital position
of the Gro
up
X
Considered the
risks impa
cting the
G
roup
,
its
customers
and the
economic environment
,
rel
atin
g to Brexi
t an
d the G
rou
p’
s pre
pa
ratio
ns
to miti
gate tho
se r
isk
s
X
Considered the
output fr
om the
Group-wide
pro
ce
ss us
ed to id
en
tif
y
, eval
uate a
nd mi
tig
ate
high-lev
el business risks
X
Co
nsi
de
red th
e vi
ews of bot
h the E
x
ter
na
l
andI
nternal A
uditor
on the
effectiveness
of
the
Group
’
s int
ernal financial cont
rols
X
Reviewed
and challenged the
effectiveness
of t
he Group
’
s internal cont
rols (includ
ing,
but not
limited t
o,
financial contr
ols and
me
asu
res f
or de
tecti
ng f
rau
d) to en
sure t
hat
they re
ma
in a
ppro
pr
iate a
nd ad
equ
ate as th
e
Gro
up gr
ows, hav
ing re
ga
rd in p
ar
ti
cul
ar to
the c
onti
nui
ng im
pac
t of COVI
D-
1
9 an
d Brex
it
i
n 2
0
21
X
Re
ce
ived r
ep
or
ts f
rom J Ca
rl
ing i
n rel
atio
n to
his e
ng
age
me
nt wi
th th
e Joi
nt Co
nsu
ltat
ive
Committee (
JCC)
, which comprises
an e
mpl
oyee r
epr
ese
nta
tive f
rom e
ach
de
par
tme
nt an
d me
ets re
gul
ar
ly to co
nsi
de
r
a wid
e ra
nge of m
at
ter
s af
fe
ctin
g the
em
ploye
es’ cu
rre
nt a
nd fu
tur
e inter
ests
X
Reviewed
the Gro
up’
s policies on et
hics,
anti
-br
ibe
r
y
, co
rr
upti
on an
d fr
aud a
nd
the a
rra
ng
em
ents i
n pl
ace fo
r em
ploye
e
s
to rais
e co
nce
rn
s, in c
onfid
en
ce, ab
ou
t
possible wrongdoing
in financial reporting
oroth
erm
atte
rs
X
Sati
sfie
d its
el
f that th
e req
ui
rem
ents of t
he
Re
gul
atio
ns ma
de u
nde
r se
cti
on 3 of th
e
Sma
ll B
usi
ne
ss, En
terp
ri
se an
d Emp
loy
me
nt
Act 201
5 re
lati
ng to pay
me
nt pra
cti
ce
s
rep
or
ti
ng ha
d be
en m
et, with a f
ocu
s on
maintaining a
high level o
f compliance with
sup
pli
er
s’ paym
ent te
rm
s in 2021
X
Co
nsi
de
red th
e prov
isi
ons of t
he 201
8 UK
Co
rpo
rate G
over
nan
ce C
od
e and th
e FRC
Guidance on A
udit Committees
X
Confirmed with
management that
Zotefoa
mspl
c and i
ts su
bsi
di
ari
es h
ave
paidall applicable tax in the jurisdictions
inwh
ic
h they o
pe
rate
X
Reviewed
its o
wn effectiveness by
c
onducting
a confident
ial evalua
tion t
hrough an
online
portal, the anon
ymised outcome o
f which
wasd
isc
uss
ed by th
e Bo
ard. It wa
s agre
e
d
that
the Committee
remained effective
, had
fulfilled its
remit and h
ad in pla
ce appropriat
e
T
erms of
Ref
erence
.
Financial
repor
ting and
significant
financial
issu
es
The Audit
Committee assesses whether suit
able
acc
ou
ntin
g pol
ici
es h
ave be
en a
dopte
d and
whether management
has made appr
opriate
estimat
es and judgement
s. The Committ
ee
revi
ews a
cco
unti
ng pa
pe
rs p
rep
are
d by
ma
nag
em
ent w
hic
h prov
id
e det
ail
s on th
e mai
n
financial reporting judgements
. The Committee
reviews
repor
ts by
the External Audit
or on
the
full-y
ear and half
-y
ear results which highligh
t any
is
sue
s wi
th res
pe
ct to the w
ork u
nd
er
t
aken o
n
the audit
or review
.
As the
Group
’s
closed defined benefit pension
scheme represent
e
d one
of t
he largest liabilit
ies
on the
consolidat
ed stat
e
ment o
f financial
pos
iti
on at £4.
7m as at 3
1 De
ce
mb
er 2021
, the
Audit Committ
ee assessed the appr
opriateness
of t
he k
ey assumpt
ions used b
y management
tovalu
e the p
ens
io
n lia
bil
it
y an
d is s
atis
fied t
hat
these are
appropriate
.
External audit tender
The Audit
Committee is a
ware o
f the requirement
for F
TS
E 350 c
omp
ani
es to pu
t to tend
er th
ei
r
ex
tern
al a
udi
ts at le
as
t onc
e eve
r
y ten ye
ar
s
(asset o
ut in t
he Co
mp
etiti
on a
nd Ma
rke
ts
Authority’
s Statut
or
y Audit Services for Large
Companies Market
Inv
estigation
(Mandatory
Useof C
om
peti
tive T
e
nd
er Pro
ce
ss
es a
nd Au
dit
Committee Responsibilit
ies) Or
der 20
1
4)
and for
audit committees t
o stat
e their
plans for
when
they a
re li
kely to c
ons
ide
r a ten
de
r proc
es
s if th
e
ex
tern
al a
udi
t ha
s not be
en p
ut to ten
de
r in the
past
five y
ears.
Th
e Gro
up is, by v
ir
tu
e of the F
RC Rev
is
ed
Ethic
al S
ta
nda
rd 201
9, sub
jec
t to the
req
uir
eme
nt to pu
t the a
udi
t to tende
r eve
r
y ten
yea
rs. Ate
nde
r pro
ce
ss fo
r the ex
ter
na
l au
dit fo
r
the G
rou
p was un
de
r
ta
ken in 2020, fo
llow
ing
wh
ich PK
F Li
t
tle
joh
n LLP (
PKF
) wa
s sel
ec
ted as
the External Audit
or
. The Committee int
ends t
o
monitor
PKF
’
s per
formance and det
er
mine t
he
mos
t ap
prop
ri
ate time to c
ar
r
y ou
t a new te
nde
r
pro
ce
ss in d
ue c
our
se, wh
ic
h wil
l be, at th
e
late
st, in 203
0. Give
n tha
t the r
ule
s on
ind
ep
en
de
nce m
ay pre
cl
ude a
n au
dit fi
rm f
rom
par
tic
ipati
ng in a te
nd
er if i
t ha
s prev
iou
sl
y
advised the
Group in
a non-aud
it capacity
,
areg
iste
r of fir
ms us
ed by th
e Gro
up for
non-audit
work is
maintained b
y the
Group CFO
,
Audit Committee repor
t
Continued
whoseaut
horisation is r
equired prior t
o engaging
any n
ew fir
m. Any f
utu
re tend
er w
ill b
e ca
rr
ie
d
out i
n lin
e wi
th the p
reva
ili
ng be
st p
ract
ice. T
he
2021 Audit wa
s PKF’s seco
nd a
nnu
al a
udi
t for
the G
rou
p and wa
s le
d by tw
o Audi
t Par
t
ner
s,
MLi
ng an
d J Arc
he
r
. J A
rch
er is th
e Re
sp
ons
ibl
e
Ind
iv
idu
al i
n cha
rge of t
he au
dit a
nd s
ign
s the
independ
ent a
udit
or’
s report t
o t
he memb
ers o
f
Zo
tef
oams plc on
behalf of
PKF Littlejohn LLP
.
The Committee confi
rms that
there w
ere no
contract
ual obligation
s that
acted
to
restrict t
he
Committee
’
s choice of
Ex
ternal Audit
or and that
the a
gre
eme
nt w
ith PK
F wil
l not re
str
ict t
he
shareholders’
choice of
audit
or in futur
e
ge
ne
ralm
eet
ing
s.
Ef
f
ec
t
iv
en
es
s of t
h
e E
x
te
r
na
l Au
di
to
r
The Audit
Committee assesses the e
f
fectiveness
of the ex
te
rna
l au
dit p
roc
es
s in a nu
mb
er of
ways. At le
as
t ann
ua
lly, the Ex
te
rn
al Au
ditor
presents a
report, which includes an
as
se
ssm
en
t and c
onfi
rm
atio
n of its
ind
ep
en
de
nce, a
s well a
s the a
cti
vit
ie
s that
theE
x
ter
na
l Aud
itor i
s und
er
t
ak
ing to e
nsu
re
compliance with
best practice
and regulat
ion.
At
the
conclusion of
the annual
audit,
the Audit
Co
mmi
tte
e un
der
take
s an a
ss
es
sme
nt of th
e
Ex
ternal Audit
or in relat
ion t
o its
fulfilment of
the
agreed audit
plan, t
he robust
ness and
perceptiv
eness of t
he Ex
ternal A
uditor
in
ha
ndl
ing key a
cco
unti
ng a
nd au
dit j
ud
gem
en
ts
and the
thoroughness o
f the
Ex
ternal Audit
or’
s
revi
ew of in
tern
al fi
nan
ci
al co
ntro
ls. As p
ar
t of
this assessment
, management’
s opinions
on
theE
x
ter
na
l Aud
itor a
re al
so co
nsi
de
red. A
n
extended questionnai
re aligned wit
h FRC
gui
da
nce w
as im
ple
me
nted i
n 2021 and
evi
de
nce
d tha
t the
re was c
an
did a
nd c
omp
lete
dialogue between t
he Ex
ternal A
uditor
and the
Committee.
The Committee also
considered the
pro
ce
sse
s pu
t in pl
ac
e by PKF L
it
tle
jo
hn LL
P
tomon
itor it
s qua
lit
y a
nd dr
ive i
mp
rovem
ents
consisten
tly
. The Committee n
oted
established
practices aimed at simplify
ing and standardising
pro
ce
sse
s, stro
ng s
upe
r
v
iso
r
y ar
ra
nge
me
nts at
all l
eve
ls of the o
rga
nis
ati
on an
d a go
od de
gre
e
of pr
ofessional scep
ticism applied
to
management judgements
.
In No
vember 20
20
, the
Committee updat
ed the
policy in
relation
to
the pr
ovision o
f non-a
udit
se
r
vi
ce
s prov
ide
d by the E
x
te
rna
l Aud
itor
. Th
e
policy requir
es that no
non-audit services will be
prov
ide
d by the E
x
te
rn
al Au
ditor w
ith
out t
he pr
io
r
ap
prova
l of the Au
dit C
om
mit
tee, w
hic
h wi
ll on
ly
be gr
ante
d in c
omp
lia
nc
e wit
h the FR
C Rev
ise
d
Ethic
al S
ta
nda
rd 201
9. Oth
er th
an th
e rev
iew of
the Gr
oup
’
s Interim
Repor
t,
the External Audit
or
did n
ot prov
ide a
ny no
n-au
di
t ser
vi
ce
s in 2021
.
The Audit
Committee, ha
v
ing conduct
e
d it
s
review
of t
he Ex
ternal
Auditor
, concluded t
hat
the External Audit
or has
per
formed in a
satisfact
or
y manner and cont
inues t
o be
obj
ec
tive a
nd in
de
pe
nde
nt a
nd, the
refo
re, has
rec
om
me
nde
d to the Bo
ard th
at a re
sol
uti
on
bepu
t to the s
har
eho
ld
er
s at the 2022 AG
M
tore-a
ppo
int PK
F as th
e E
x
ter
nal A
udi
tor
.
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
87
Zot
efoams plc
An
nua
l Re
por
t 2021
Dear Shareholder
I am p
lea
se
d to pres
en
t my rep
or
t o
n the
activities o
f the
Nomination
Committee in 2
021
.
Hav
ing s
ee
n tw
o addi
tio
ns to, and o
ne de
pa
r
ture
fro
m, the B
oard i
n 2020 du
rin
g a pe
ri
od wh
ere
phys
ic
al me
eti
ngs we
re avoi
de
d an
d sho
r
t-t
er
m
problem solving
took
prominence,
202
1 was
an
opportunit
y t
o develop the
Boa
rd
’
s teamw
ork
an
d focu
s fu
r
the
r on s
trateg
ic d
evel
opm
en
t.
While follo
wing the Group
’
s strict CO
VID-
1
9
gui
de
lin
es, th
e Bo
ard wa
s abl
e to me
et
physically on
several occasions and
interact
mor
e fre
qu
entl
y wi
th the E
xe
cuti
ve tea
m.
Th
iswas of p
ar
ti
cu
lar v
alu
e to the 2020 ne
w
ap
poi
ntee
s, A Fie
ld
ing a
nd C Wal
l, who b
rou
ght
fre
sh i
nsi
ghts to th
e Boa
rd an
d rei
nfor
ced i
ts
culture
of challenge
and innov
ation
.
The principle o
f diversity is
strongly
suppor
ted
an
d rec
ogn
ise
d by the B
oa
rd, wh
ich b
el
ieve
s
that
one of
its significant
benefits is
that
it
counters ‘
groupthink’
by in
forming debat
e
fro
maran
ge of p
er
sp
ect
ive
s. Fem
ale B
oa
rd
me
mbe
rs
hi
p of 29%, achi
eved i
n 2020,
rem
ai
ned i
n 2021 and pro
gre
ss c
ont
inu
es to
bem
ade w
ithi
n the G
rou
p wi
th rec
ru
itm
ent
offem
al
e gra
duate
s as p
ar
t of th
e gra
dua
te
rec
ru
itm
ent s
che
me. T
he B
oa
rd has a
ls
o
considered the
Park
er review
published in
November
202
0 and concluded
that it
s
find
ing
ssh
oul
d be ta
ken i
nto acc
oun
t in Bo
ard
succession planning.
The Board div
ersity
pol
icy,adopted i
n Jun
e 2021 and pu
bli
sh
ed on
Zotefoams’ webs
ite http
s:/
/zot
e.info/3wRSYEL,
aim
s to ens
ure th
at the B
oa
rd’
s me
mbe
rs
hip
refle
ct
s dive
rs
it
y in i
ts bro
ade
st se
ns
e. Ple
ase
se
e our d
ive
rs
it
y figu
re
s on pa
ge 73.
In li
ne wi
th th
e provi
si
ons of th
e UK C
or
por
ate
Gove
rn
anc
e Co
de, the C
om
pan
y Cha
ir’s t
er
m
ofof
fic
e is du
e to end i
n 2023. Foll
owi
ng an
as
se
ssm
en
t of the B
oard’s existi
ng s
ki
llse
ts
aga
ins
t tho
se re
qui
red to de
li
ver th
e stra
tegy,
arec
ru
itm
ent p
roc
es
s, le
d by the Se
ni
or
Independent Direct
or was
initiat
ed for
the
ap
poi
ntme
nt of a n
ew Co
mpa
ny Cha
ir i
n 2023.
Th
e pro
ce
ss wi
ll fo
cus o
n id
enti
f
yi
ng c
and
id
ates
from diverse
backgrounds
whose skills
co
mpl
em
ent th
os
e of the ex
isti
ng Bo
ard
me
mbe
rs, h
avi
ng re
ga
rd to the Co
mpa
ny’
s
stra
tegi
c vis
io
n and, i
n par
ticu
la
r
, to a sou
nd
understandi
ng of
sustainabilit
y matters.
Effective s
uccession planning for
the Board
and
the E
xe
cuti
ve Le
ade
rs
hip te
am a
nd a r
igo
rou
s
as
se
ssm
en
t of the ef
f
ec
tive
ne
ss of th
e Boa
rd
an
dits Co
mm
it
tee
s rem
ain key to th
e lon
g-ter
m
success of
the Group
. Key
position succession
pla
ns a
re in p
lac
e for E
xec
uti
ve rol
es a
nd th
eir
dir
ect r
epo
r
ts. T
he G
rou
p con
tinu
es to de
velo
p a
pipeline of
e
mploy
ees demonstrat
ing high po
tent
ial
through
a talent
pool initiat
ive.
Further details
are
prov
ide
d in o
ur pe
op
le se
ct
ion o
n pag
e 72
.
Th
e Boa
rd’
s an
nua
l eva
luat
ion p
roc
es
s in 2021
was l
ed by th
e Com
pa
ny Cha
ir a
nd fa
cil
itate
d by
the C
omp
any S
ec
reta
r
y wh
o is co
ns
ide
red a
suitable and
independent person t
o conduct t
his
pro
ce
ss. T
he eva
lu
atio
n has d
em
ons
trated t
hat
the B
oar
d col
le
cti
vel
y con
tinu
es to prov
id
e an
ap
prop
ri
ate bal
an
ce of sk
il
ls, k
nowl
ed
ge a
nd
exp
er
ie
nce to e
nsu
re the
re is ro
bu
st an
d
ef
fe
cti
ve ch
all
en
ge an
d stewa
rds
hip of th
e
Gro
up’
s p
urp
os
e and s
trate
gy
. Th
e Bo
ard a
lso
recognises the importance of
engaging with the
E
xecu
tive te
am a
nd in
terac
ts wi
th the
m at B
oard
meetings and
during strat
e
gic planning sessions.
Th
e Boa
rd eva
lua
tion p
roc
es
s was ex
te
nde
d in
2021 t
o as
se
ss th
e leve
l an
d qua
li
ty of i
ntera
cti
on
bet
we
en th
e Boa
rd a
nd me
mb
er
s of the
E
xecu
tive te
am. Ful
l det
ail
s of the B
oar
d’
s a
nnu
al
eval
uati
on p
roce
s
s, inc
lud
ing a
cti
on ta
ken on
prev
io
us fin
din
gs, a
re prov
ide
d in th
e co
rpo
rate
gove
rn
anc
e se
cti
on on p
age
s 81 and 82.
Recognising tha
t a people s
trat
egy sits a
t the
core
of the f
utu
re of the G
rou
p, the Hum
an R
es
ourc
es
fu
ncti
on i
s man
age
d thr
oug
h qu
ar
ter
ly H
R ri
sk
steering committ
ee meetings
which focus
on
them
itig
atio
n of ri
sks a
nd o
ptimi
sati
on of
opportunities which might
impact t
he Group
’
s
achievement
of it
s business objectiv
es. These
matters include
the consideration o
f diversity at
Gro
up le
vel, em
pl
oyee e
nga
ge
me
nt an
d ef
fe
cti
ve
succession planning.
The Executive
Committee
isal
so pr
ovid
ed w
ith re
gu
la
r upd
ates a
nd re
por
ts
are m
ade to th
e Boa
rd at le
as
t tw
ic
e a yea
r on
keyHR str
ateg
ic ma
tte
rs.
The Committee is
satisfied
that t
he separat
ion
ofE
xecu
tive a
nd N
on-
E
xecu
tive ro
le
s at the
he
ad of the G
rou
p ha
s be
en ma
int
ai
ned, w
ith
the
Company Chair
being responsible
for leading
the B
oar
d and th
e Gr
oup C
EO be
ing re
sp
on
sib
le
for th
e execu
tive l
ea
de
rsh
ip of th
e bus
in
es
s.
Fu
r
th
er d
et
ai
ls a
re p
rov
id
ed i
n th
e Boa
r
d an
d it
s
Committees section on
page
s 81 to 83.
The Committee will
continue
to
focus on
succession planning,
talent dev
elopment and
augmenting
the Company
’
s sustainability
exp
er
ti
se in 20
22.
S P Goo
d
Chair of
the Nomination
Committee
6 Ap
ril 20
22
Key ar
e
as o
f foc
u
s
The Nomination
Commit
tee curr
ently comprises
the C
hai
r an
d the fo
ur in
de
pe
nde
nt
Non-Executive
Directors
.
The Nomination
Commit
tee opera
tes wit
hin
defi
ne
d T
er
ms of R
efer
enc
e an
d is re
sp
ons
ibl
e for
putting in
place succession plans f
or the
Board,
revi
ewi
ng th
e co
ntinu
ati
on in of
fi
ce of th
e Di
rec
tors
an
d man
agi
ng th
e rec
ru
itm
ent of n
ew Bo
ard
me
mbe
rs w
ith
in cr
ite
ri
a set by th
e Boa
rd. Th
e
Committee met
twice in 20
2
1
. The Committ
ee is
supported by
the Compan
y Secretary in planning
its act
ivities, monit
oring best practice
and meeting
its
T
erms of
Ref
erence
.
The main r
esponsibilities of
the Committee are
t
o:
X
Eval
uate an
d rev
iew th
e str
uct
ure, si
ze and
composition o
f the
Board,
including t
he
bal
an
ce of s
kil
ls, k
now
led
ge, ex
pe
rie
nc
e an
d
div
er
sit
y of th
e Boa
rd, ta
ki
ng into ac
co
unt
theG
rou
p’
s ri
sk pro
file a
nd str
ateg
y
X
Identify and nominat
e suitable candidat
es for
appointment
to
the Board
, including Chair
of the B
oar
d and i
ts Co
mm
it
tee
s, aga
ins
t
a specification
of t
he role
and capabilities
required f
or the
position
X
Lead on
the annual
per
formance ev
aluation
ofthe B
oar
d and i
ts Co
mm
it
tee
s
X
Identify and manage an
y pot
ential conflicts
ofDi
rec
tors’ inte
res
ts
X
Rev
iew th
e ex
ter
nal i
ntere
sts a
nd ti
me
commitments
of t
he Direct
ors t
o ensure
that e
ac
h has s
uf
fi
cie
nt ti
me to ef
fe
cti
vel
y
discharge his/her duties
X
Manage succession planning
for the
Executive
team a
nd N
on-
E
xecu
tive D
ire
ctor
s an
d
X
Seek en
gagement
with shar
eholders
on
significant matt
ers relat
ed t
o the
Committee’
s
areas of
responsibilit
y when appr
opriate
to
do
s
o.
During 20
2
1
, the
Committee
:
X
Rev
iewe
d an
d upd
ated i
ts T
er
ms of R
efe
ren
ce
in li
ne w
ith cu
rre
nt b
est p
rac
tic
e
X
Ar
ra
nge
d for th
e Bo
ard to rev
iew d
ive
rsi
t
y
considerations
in succession planning
, having
reg
ard to th
e req
uire
me
nts of th
e Ha
mpton-
Al
exan
de
r revi
ew a
nd the Pa
rke
r revi
ew
X
Reviewed
the composit
ion of
the Boar
d
an
d its Co
mm
it
tee
s and a
ss
es
se
d whi
ch
additional skills
and/or
experience would
co
mpl
em
ent th
os
e of the ex
isti
ng me
mb
er
s,
hav
ing re
ga
rd to the G
roup’
s ri
sk pro
file
an
dstrate
gy
. Fol
low
ing th
at rev
iew, the
Committee prepar
ed a descript
ion of
the r
oleand
capabilities requir
ed for
the
ap
poi
ntme
nt ofan
ew Co
mpa
ny Cha
ir
X
Foll
owi
ng a ten
de
r proc
es
s, e
nga
ged Ko
rn
Fer
r
y exec
uti
ve se
arc
h con
su
lta
nts for t
he
rec
ru
itm
ent of a n
ew Co
mpa
ny Ch
air
, noti
ng
that i
t is a si
gn
ator
y of th
e volu
nta
r
y Co
de
of Co
ndu
ct on g
en
de
r di
ver
sit
y a
nd be
st
practice
https:
/
/ww
w
.gov
.uk
/
government/
publications/standard-
voluntar
y-code-
of
-conduct-e
xecutive-
search-
firms/
the-standard
-vol
untary-code-of-conduct
-
for
-executiv
e-search-
firms and accr
edited
by the H
ampto
n-Al
exa
nde
r Ste
er
ing G
rou
p
init
s2020 revi
ew
X
Co
nsi
de
red a
nd re
com
me
nd
ed to the B
oa
rd
the r
e-election of
each Director
a
head o
f their
re-election b
y shareholders at
the Compan
y’
s
20
21
AG
M
X
Continued t
o review
succession and
deve
lo
pme
nt pl
an
s for th
e E
xecu
tive te
am a
nd
wider
senior
managemen
t t
eam t
o ensur
e th
at
a suitable
talent pool r
emained in place
and
co
ntinu
ed to b
e nur
t
ure
d to meet t
he Gr
oup’
s
strat
e
gic objectives
X
Ensured t
hat
, at
least annually
, the
Non-
Executiv
e Direct
ors met wit
hout the
E
xecutiv
e
Dire
ctors pres
ent.
Nomination C
ommit
tee repor
t
Cult
iv
at
ing agilit
y
88
Zote
foams plc
An
nua
l Re
por
t 2021
Director
s
’ Remuneration repor
t
Du
ring 2
0
21
, des
pite a
noth
er c
hall
engi
ng year for Zotef
oams
,
our E
xecut
ive team cont
in
ued to ma
nage t
h
e bus
ines
s well
an
d deli
v
er p
rogr
ess on s
t
rateg
ic goals
. In lin
e wit
h t
he no
rmal
policy r
e
vi
e
w cycle, the Com
mit
tee wi
ll review in 2
02
2 t
he
Remunerat
ion P
olicy bo
t
h from a struc
tural and op
por
tu
nit
y
per
s
pec
t
ive to ensur
e it refl
ect
s t
he G
rou
p
’
s st
ra
tegic p
rior
it
ies
an
d th
e cal
ibr
e of E
x
ecut
ives in rol
e
Lon
g-
T
e
rm In
ce
nti
ve Pla
n (L
TI
P): 20
19 Plan
out
come
Regarding longer
-t
erm per
formance,
the Group
ach
ieve
d an e
ar
ni
ngs p
er s
har
e of 9.0
1p in 2021
an
d rel
ative TS
R pe
r
for
ma
nce of b
el
ow me
dia
n
aga
ins
t the F
T
SE Sm
all
Ca
p Ind
ex (exclud
ing
inv
e
stm
ent t
rusts
) ov
er the t
hree-
year
per
formance period
. In line
w
ith performance
de
live
re
d, the 201
9 Lo
ng-
T
e
r
m Inc
enti
ve Pla
n
award w
ill l
ap
se in f
ul
l.
In assessing whet
her the
outcomes generat
ed
by the a
nnu
al b
onu
s an
d L
TIP s
co
rec
ard
s were
fai
r in th
e con
text of b
road
er p
er
for
man
ce, th
e
Committee t
ook int
o account the
underlying
financial performance of t
he Group and
the
wider
stak
eholder
experien
ce (in
cluding
, but n
ot
lim
ited to, the s
har
eho
ld
er ex
pe
ri
enc
e) over th
e
cou
rs
e of the ye
ar
. Wh
ilst, a
s set ou
t ab
ove,
sig
ni
fica
nt pr
ogr
es
s has b
ee
n mad
e over t
he
yea
r to set Zotefoa
ms’ up to de
li
ver lo
ng-ter
m
success, the
Committee felt
that
the formulaic
outcome
was an
appropriat
e reflection
of Gr
oup
pe
r
for
ma
nce d
el
ive
red. It h
as, th
ere
fore, not
exerc
ise
d dis
cret
ion i
n rel
atio
n to inc
enti
ve
outc
ome
s du
ri
ng the ye
ar
.
Implementa
tion of
Remunerat
ion P
olicy
in2
0
2
2
Base salary
Bas
e sa
la
ri
es wi
ll in
cre
as
e by 4.0%
, in l
ine w
ith
the a
ntic
ipa
ted ba
se sa
la
r
y in
cre
ase
s for t
he
wid
er wo
rk
f
orce (of 4.0%
), to £344,31
8 for D
Sti
rli
ng a
nd £2
29,
1
9
0 for G M
cG
rath, ef
fec
tive
fro
m 1 Ap
ril 20
22.
Pension
The Committee has
continued t
o review
DSti
rli
ng’
s em
ploye
r’
s pe
ns
ion c
ontr
ib
uti
ons,
inli
ght of th
e 201
8 Co
rp
orate G
over
na
nce C
od
e
and dev
eloping shareholder e
xpectations ar
ound
the alignment
of Executive Dir
ector pension
contributions
w
ith t
hose pro
v
ided t
o the
majority
of the w
ide
r wor
k
for
ce, an
d is co
mm
it
ted to
aligning t
he Group C
EO employ
er’
s pension
contributions
w
ith t
he workforce
by t
he end
of2022.
As previously
disclosed, f
ollowing the
closure
ofthe D
efin
ed B
en
efit Pe
nsi
on S
che
me i
n 200
5,
D Sti
rli
ng ha
s be
en c
ontr
act
ual
ly e
ntit
led to a
pe
nsi
on c
ontr
ibu
tio
n of 1
8.7
5% of sala
r
y fr
om
Jan
ua
r
y 2021
, alo
ngs
id
e 27 active m
em
be
rs. Fo
r
2021
, i
n ack
now
le
dg
eme
nt of evo
lv
ing c
or
por
ate
Dear Shareholder
I am p
lea
se
d to pres
en
t the Re
mu
ne
rati
on re
por
t
for th
e yea
r en
ded 31 De
ce
mbe
r 2021
.
Introduction
Wh
ils
t 2021 was a mixe
d yea
r for Zotefoa
ms
financially
, a significant
revenue milest
one of
£1
0
0.8m wa
s ach
ieve
d in th
e ce
ntena
r
y ye
ar
(up22% on 2020). Howeve
r
, du
e to extre
me
ly
challenging conditions caused b
y a dif
ficult
supply chain en
vironment
, large s
wings in
product mix
and ongoing
pandemic restricti
ons,
profi
t befo
re ta
x re
du
ce
d by 1
6% to £7
.0m (2020:
£8.3m). In this c
on
text, Zotefoa
ms’ E
xecu
tive
team con
tinued t
o manage the business
effectively thr
oughout what
has been a difficult
an
d dem
an
din
g yea
r an
d con
tinu
ed to de
li
ver
onth
e Gro
up’
s lo
ng-te
rm str
ateg
ic ob
je
ctive
s,
hav
ing m
ade s
tron
g prog
re
ss on t
wo p
rio
ri
t
y
initiat
ives:
the £2
3m Poland
capacity expansion
was comple
ted on
time and
within budge
t and
the ReZ
orce
®
mono-mat
erial barrier packaging
deve
lo
pme
nt fa
cil
it
y in M
as
sac
hus
et
ts, USA wa
s
commissioned.
2021 incentive outcomes
Annual bonus
Co
nsi
de
rin
g the p
er
fo
rm
an
ce de
li
vere
d in 2021
an
d refle
cti
ng th
at 90% of th
e bo
nus i
s bas
ed o
n
financial KPIs
, the Committee de
termined tha
t
22.
0% an
d 1
6.0% of th
e ma
x
imu
m bon
us s
hou
ld
be pa
id to the G
rou
p CEO a
nd G
roup C
FO
respectively
, reflecting t
he stra
tegic pr
ogress
mad
e in th
e yea
r
. A det
ai
led d
es
cr
iptio
n of
pe
r
for
ma
nce a
ga
ins
t the ta
rge
ts is se
t out
onpa
ge
s 92 an
d 93.
gove
rn
anc
e req
ui
rem
ents a
nd th
e imp
or
t
an
ce
ofmov
ing towa
rds a be
st p
rac
tic
e app
roac
h,
DSti
rli
ng vol
unt
ar
ily a
cc
epted a r
edu
cti
on in
his
pension contributi
on t
o 1
5
% of pensionable
sa
lar
y for 2021 and h
as ag
re
ed to the s
am
e
red
uct
ion fo
r 2022. As par
t of the w
ide
r
Remuneration P
olicy Review
(see belo
w) the
Committee int
ends to r
eview t
he approach
topen
sio
ns go
in
g for
wa
rd an
d wil
l upd
ate
shareholders on its
proposed approach
as
par
tof the c
ons
ult
atio
n pro
ce
ss.
As communicat
ed in t
he Direct
ors’
Re
mun
er
atio
n rep
or
t l
ast ye
ar
, t
he Bo
ard
review
ed the
pension contribution
rate f
or the
wider workforce.
Reflecting on marke
t practice
,
the B
oar
d de
cid
ed to in
cre
ase t
he em
pl
oyer
co
ntri
but
ion fo
r al
l UK em
pl
oyee
s on th
e two
direct cont
ribution pension
schemes currently
ru
n by the C
omp
any th
at are n
ot rel
ated to
thep
revi
ous D
efi
ned B
en
efit S
ch
em
e by 1
%,
forth
ose m
ee
ting th
e ma
x
im
um em
pl
oyee
co
ntri
but
ion, w
ith ef
fec
t fro
m Ap
ril 202
2.
Ince
ntive award
s
Th
ere w
ill b
e no c
han
ge i
n award l
evel
s for th
e
Gro
up CEO a
nd G
rou
p CFO u
nde
r ou
r ann
ua
l
bon
us a
nd lo
ng-ter
m in
ce
ntive p
la
n, whi
ch a
re
cur
re
ntly s
et at 75
% a
nd 1
50% of ba
se s
ala
r
y
res
pe
cti
vel
y
. W
ith re
sp
ec
t to the lo
ng-ter
m
inc
en
tive, the C
om
mit
te
e is co
gni
sa
nt of ex
ter
na
l
vi
ews on w
ind
fa
ll ga
ins a
nd a
s suc
h, wh
ils
t it
does not
consider it appr
opriate
to
adjust a
ward
leve
ls, it w
il
l revi
ew ou
t-
tur
ns in t
heco
ntex
t of
sha
re pr
ic
e pe
r
for
ma
nc
e over th
e pe
rio
d
bet
we
en g
ran
t and ve
st. De
tai
ls of th
e metr
ic
s for
the 2022 a
nn
ual b
on
us ar
e set ou
t onp
age 9
0,
with 7
5
% of
the bonus
based on financial
metr
ic
s; 5
% bas
ed o
n safe
t
y rel
ated me
tri
cs;
5%-
1
0% bas
ed o
n pe
r
for
ma
nce a
gai
nst ESG
rel
ated m
etri
cs; an
d 1
0%-
15
% b
ase
d on oth
er
stra
tegi
c metr
ic
s. Th
e metr
ic
s an
d tar
gets fo
r the
2022 L
TI
P award a
re se
t out o
n pag
e 90. Fo
r the
2022 L
TI
P award, awa
rds w
ill b
e ba
sed 5
0% on
adj
uste
d EPS grow
t
h (as defi
ne
d on pa
ge 9
0);
20% on aver
age R
OCE (as d
efi
ned o
n pag
e 90
);
an
d 30% on re
lati
ve TSR a
gai
nst t
he F
TSE S
ma
ll
Cap I
ndex exc
lud
ing i
nves
tme
nt tr
usts.
Per
fo
rm
anc
e ta
rget
s for in
ce
ntiv
e pla
ns have
been set t
o reflect the
business plan f
or the
Gro
up ove
r the re
leva
nt pe
r
fo
rm
anc
e pe
ri
od an
d
extern
al e
xpectat
ions
of
performance
.
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
89
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Looking for
ward
In line
with t
he three-
year cy
cle,
the Committee
wil
l und
er
take a th
oro
ugh re
vi
ew of the
Remuneration P
olicy during 2
022
, both
from a
structural
and opportunity perspective,
to
ensure
it is
reflective
of t
he Group
’
s str
ategic
priorities
an
d the c
ali
bre of exe
cuti
ves i
n rol
e. Th
ree
keyare
as th
at ar
e cur
ren
tly a
rea
s of
consideration
include
:
X
Does the c
urrent struct
ure remain
fit for
pur
po
se in d
el
ive
rin
g on th
e Gro
up’
s s
hor
t
an
d lon
g-term s
trate
gic p
er
sp
ec
tive
s? The
Committee feels
that t
he thr
ee-year r
eview
cycl
e prov
ide
s th
e rig
ht op
po
r
tun
it
y to take
astep b
ack a
nd c
ons
ide
r wh
eth
er it r
ema
in
s
fit for
purpose going
forward
X
How can
sustainability be further embedded
wi
thin th
e in
ce
ntive f
ra
mewo
rk
? In 2021
,
sustainability was
central t
o our long-
term
stra
tegy d
isc
us
sio
ns a
nd ou
r firs
t res
po
nse
to
the
T
a
sk F
orce on C
limate-r
elated
Financial
Di
scl
osu
res (
TCFD) is in
clu
de
d on pa
ge 62.
Alongside this
, the
Committee has incr
eased
the ESG e
le
me
nt in th
e 2022 An
nu
al Bo
nu
s
fro
m 5
% to 1
0% fo
r the G
rou
p CEO a
nd wi
ll
fur
ther r
eview t
he inclusion o
f appropria
te E
SG
tar
gets fo
r ado
ptio
n in to any s
hor
t-
ter
m and
long-
term
incent
ive
arrangemen
ts a
s part o
f
the r
emuneration polic
y renew
al
X
Does the c
urrent remunerat
ion opportunity
reflect t
he size
and complexity o
f the
Group
’
s
ope
rat
ion
s and t
he ca
li
bre of in
di
vid
ua
ls in
role
? Reflecting on
the e
xternal conte
xt, t
he
Committee remains
mindful of
balancing
the n
ee
d to attr
act, ret
ain a
nd m
otiva
te our
E
xecu
tive D
ire
ctor
s an
d E
xecu
tive te
am to
en
sure p
rog
res
s ag
ain
st ou
r stra
tegi
c goa
ls
wi
th the i
ntere
sts of a
ll sta
keh
old
er
s, in
clu
din
g
shareholders and emplo
yees. The Committ
ee
is concerned tha
t,
despite implementa
tion o
f
the d
el
ayed in
cre
as
es l
ast ye
ar
, Zotefo
am
s’
overall
remuneration opportunity has fallen
sig
ni
fica
ntl
y be
hin
d ma
rket a
nd is n
ot
refle
ct
ive of th
e cal
ibr
e of the E
xe
cuti
ves.
Assu
ch, a
s par
t of the Re
mu
ne
rati
on Pol
icy
review
, the Committee in
tends t
o review
the
over
all re
mu
ne
rati
on lev
els to e
nsu
re they
are a
pp
ropr
iate i
n the co
ntex
t of the a
bove
an
d sup
por
t del
ive
r
y of th
e Gro
up’
s st
rateg
ic
priorities.
Th
e Com
mi
tte
e an
d I woul
d like to tha
nk yo
u for
your c
ont
inu
ed e
nga
ge
me
nt over th
e la
st ye
ar
an
d loo
k for
wa
rd to rec
ei
vi
ng you
r sup
po
r
t in
respect of
the Direct
ors’ Remunerat
ion report
atthe AGM
.
In the m
ea
nti
me, I wil
l be ava
ila
bl
e to answe
r any
que
sti
on
s you may h
ave.
A M
Fielding
Chair of
the Remuneration Committ
ee
6 Ap
ril 20
22
90
Zote
foams plc
An
nua
l Re
por
t 2021
Directors’ Remuneration report
Th
e Di
rec
tors’ Re
mun
er
atio
n rep
or
t h
as be
en p
rep
are
d in ac
co
rda
nc
e with t
he re
leva
nt prov
is
ion
s of the L
isti
ng R
ule
s, se
cti
on 42
1 of the C
om
pan
ie
s
Act20
0
6 and S
ch
edu
le 8 to the L
a
rge a
nd M
edi
um si
zed C
omp
an
ie
s and G
rou
ps (A
cco
unts a
nd R
ep
or
ts) (A
me
ndm
en
t) Reg
ula
tion
s 201
3.
Di
r
ec
to
r
s’ Re
mu
n
er
a
ti
o
n Pol
ic
y an
d Im
p
le
m
en
ta
t
io
n i
n 20
21
Th
e cur
re
nt Di
rec
tors’ Re
mun
er
atio
n Poli
cy (the “
Re
mun
er
atio
n Poli
cy”
) was a
ppr
oved at th
e 2020 AGM he
ld o
n 8 Jun
e 2020 an
d is inte
nde
d to rem
ain
inpl
ac
e unti
l the AGM th
at wi
ll be h
el
d in 2023. A su
mma
r
y of th
e Re
mun
era
tion Po
lic
y an
d how it w
ill b
e im
ple
me
nted i
n 2022 ha
s be
en se
t out b
el
ow
.
Th
e fu
ll ver
si
on may b
e fou
nd on p
age
s 58 to 63 of th
e 201
9 A
nnu
al Re
po
r
t. A copy of t
he 201
9 A
nnu
al R
epo
r
t may b
e fou
nd by fol
low
ing th
is li
nk:
https
:/
/zo
te.
info
/3Kar8ah
Element and
purpose/
li
nk t
o s
tr
a
te
g
y
Implementation for 2022
Salar
y
Positi
oned at a
level
needed to
recruit
an
d reta
in E
xec
uti
ve Dir
ec
tors of th
e
ca
lib
re req
uir
ed to deve
lo
p and d
el
ive
r
the business
strat
egy
.
In li
ne wi
th th
e app
roac
h for th
e wi
de
r wor
k
forc
e, the ba
se s
ala
ri
es fo
r the E
xe
cuti
ve Di
rec
tors w
ill b
e in
cre
ase
d
on 1 A
pr
il 2022 by 4
% to:
D Sti
rli
ng – £34
4,3
1
8
G Mc
Grat
h – £229,
190
Benefits
Pro
vide market
-competitive
b
enefits
for th
e E
xecu
tive D
ire
ctor
s, to ass
ist i
n
ca
rr
y
in
g out th
ei
r du
tie
s ef
fe
cti
vel
y
.
Be
nefi
ts to be prov
id
ed in l
in
e with a
pp
roved p
oli
cy
.
Retirement benefits
Provid
e comp
etitive p
ost-retireme
nt
benefits and
rewar
d sustained
contribution
.
D Sti
rli
ng – 1
5%
1
of sa
lar
y
G Mc
Grat
h – 6% of sal
ar
y
1
Following t
he closure
of t
he Defined
Benefit Pension
Scheme (the
“DB Scheme”)
, there
was a
commitment to
increase the
level of con
tribution t
o
the r
eplacement Defined Cont
ribution P
ension Scheme (
the “DC
Alternative
Scheme”) for t
he members o
f that
scheme (which
includes D Stirling
)
by 3% of pe
ns
io
na
bl
e sa
la
r
y eve
r
y fiv
e yea
rs
. Th
e mos
t re
ce
nt i
ncr
ea
se wa
s ap
pl
ic
ab
le f
rom 1 J
an
ua
r
y 2021. D Stir
lin
g ha
s co
ntr
ac
tua
ll
y wa
ive
d hi
s
en
tit
le
me
nt to a 3% in
cre
as
e fr
om 1 Ja
nu
ar
y 2
021 on a
n exi
sti
ng c
on
tri
bu
tio
n le
vel o
f 1
5.7
5% and h
as a
gr
ee
d to a red
uc
ti
on in t
he c
ont
ri
bu
tio
n le
vel
to1
5% sin
ce 1 J
an
ua
r
y 2021
.
As s
et ou
t in t
he l
et
ter f
rom t
he R
em
un
era
tio
n Co
mm
it
te
e Ch
air, as pa
r
t of th
e re
mun
er
ati
on r
evi
ew to b
e un
de
r
ta
ken i
n 2022, th
e Co
mm
it
tee i
nte
nd
s
to rev
ie
w the a
pp
roa
ch to p
en
si
ons g
oi
ng fo
r
wa
rd, a
nd wi
ll u
pd
ate s
ha
reh
ol
de
rs o
n its p
ro
po
sed a
pp
ro
ach a
s pa
r
t of th
e co
ns
ul
tati
on p
ro
ce
ss.
Annual bonus
Incentivi
se Executiv
e Dir
ectors
to
achiev
e specific financial
and
predet
ermined strat
e
gic goals
aligned
with t
he Group
’
s annual business
plan.
Deferred pr
opor
tion
of annual
variable
pay prov
id
es a re
tenti
on el
em
en
t and
alignment with
shareholders.
Ma
x
imu
m op
por
tuni
t
y – 7
5% of sala
r
y
.
25
% of t
he bo
nus i
s def
er
red i
nto sha
res i
n the C
omp
any fo
r thre
e yea
rs u
nd
er th
e defe
rr
ed bo
nu
s sha
re pl
an.
For 2022, the b
onu
s wil
l be a
sse
ss
ed a
gai
nst t
he fol
low
ing m
ea
sure
s for b
oth E
xec
uti
ve Di
rec
tors:
Measure
Weigh
ting –
D Stirling
%
Wei
gh
t
in
g – G Mc
G
ra
t
h %
Profit b
efo
re ta
x
60
60
Free c
as
h flow de
li
ver
y
15
15
Strat
egic financial
10
15
Sustainabilit
y
10
5
Safet
y
5
5
Th
e und
er
ly
ing p
er
for
man
ce t
arg
ets for t
hes
e me
as
ure
s have not b
ee
n di
scl
ose
d in ad
va
nce a
s they a
re
co
nsi
de
red to be c
omm
er
cia
lly s
en
sit
ive. Un
de
rl
yin
g ta
rgets w
ill b
e prov
id
ed, wh
er
e app
rop
ria
te, in nex
t ye
ar’s
Directors
’ Remuneration r
epor
t.
Long-
T
erm Incentive P
lan
T
o in
ce
ntiv
ise t
he de
li
ver
y of l
on
g-term
sustainable operat
ional performance
an
d the gr
ow
th poten
tia
l of the G
rou
p.
T
o al
ign i
ntere
sts of E
xe
cut
ive D
ire
ctor
s
and shar
eholders.
T
o at
trac
t an
d reta
in exec
uti
ves of t
he
ca
lib
re req
uir
ed to dr
ive th
e Gro
up’
s
long-t
er
m stra
tegic ambition
s.
Ma
x
imu
m op
por
tuni
t
y – up to 1
50% of s
al
ar
y.
Aw
ards grant
ed subject t
o a t
hree-year
per
formance period and a subsequent
two-year holding
period such
that n
o sh
are
s wil
l nor
ma
ll
y be re
le
ase
d unt
il the e
nd of ye
ar fi
ve.
Aw
ards will
be subject t
o three performance conditions
:
Measure
Weighting
Threshold
(0%
vesting)
1
Maximum
(1
0
0%
vesting)
1
Adjusted E
PS
3
50%
15
p
25
p
Av
erage Ret
urn on Capital
Employ
ed
20%
9%
15%
Relative
T
otal Shareholder Ret
urn
2
30%
Median
Upper quartile
1
Straight
-line vesting
occurs between threshold and
maximum.
2
R
el
ati
ve to th
e F
TSE S
ma
ll Ca
p In
dex e
xcl
udi
ng i
nve
stm
en
t tr
ust
s
3
D
ur
in
g both 2
020 a
nd 2021 th
e re
po
r
ted t
a
x rate h
as d
ev
iate
d si
gn
ifi
ca
ntl
y
, pr
im
ar
il
y du
e to reb
ate
s low
er
in
g the 2
020 ra
te an
d ac
cou
nt
ing
for f
ut
ure t
a
x ra
te inc
re
as
es a
dj
ust
in
g def
er
re
d ta
x pr
ovi
si
on
s in 2021. In lin
e wi
th th
e ap
pro
ac
h to the 2
021 L
T
IP aw
ard
, the C
om
mi
tte
e ha
s
the
re
for
e co
nsi
de
re
d it a
pp
rop
ri
ate to s
et an
d me
as
ure E
PS ta
rg
ets b
as
ed o
n a co
nst
an
t ta
x ra
te of 19%. Th
e Com
mi
t
tee re
ta
in
s the d
is
cre
tio
n
to ove
rr
id
e thi
s wh
er
e it c
ons
id
er
s it a
pp
rop
ri
ate.
Non-Executive Director fees
T
he No
n-E
xe
cu
tive D
ire
ctor
s (exclud
ing th
e Co
mpa
ny Ch
air) w
il
l rec
ei
ve a fee i
ncr
eas
e of 2.5
% e
f
fec
tive 1 A
pr
il
2022, in lin
e wit
h the ge
ne
ra
l sa
lar
y inc
rea
se th
at was g
ive
n to the Co
mp
any’s staf
f in th
e UK in 20
2
1
.
Followin
g a re
view o
f the Comp
any Chair’
s fee during t
he year
, the Committ
ee has agreed
to
increase the
Chair’
s
fee to £1
25,00
0 ef
fe
ctiv
e 1 Apr
il 2022 to re
flec
t the s
ize a
nd sc
al
e of the G
rou
p
’
s op
era
tion
s an
d the c
ali
bre of th
e
individual in role.
Director
s
’ Remuneration repor
t
Continued
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
91
Zot
efoams plc
An
nua
l Re
por
t 2021
Shareholding requirement
and
post cessation shareholding policy
Al
ign
s the i
ntere
sts of E
xec
uti
ve
Directors
and shareholders.
E
xecu
tive D
ire
ctor
s are r
equ
ire
d to hol
d sha
re
s in the C
om
pany e
qu
iva
le
nt to 200% of ba
se s
ala
r
y
.
E
xecu
tive D
ire
ctor
s are ex
pe
cte
d to retai
n the
ir f
ull s
ha
reh
old
ing r
equ
ire
me
nt for o
ne ye
ar p
ost c
es
sati
on
ofem
ploy
me
nt an
d 50% in th
e se
con
d yea
r af
ter l
eav
in
g.
The Committee considers
that t
he remunerat
ion framework
in place a
t the
Group appropria
tely a
ddresses the f
ollowing p
rinciples set out
in the
20
1
8
UKC
orp
ora
te Gover
na
nc
e Cod
e:
Clarit
y
Incentive
arrangements are
based on clearly de
fined financial,
non-financial
and personal performance objectives
which are
aligned with
the Group
’
s long-t
er
m st
rategy
.
Inc
ent
ive pay
me
nts o
per
ate thro
ugh
ou
t the G
roup (w
ith p
ar
ti
ci
pati
on in th
e L
TI
P bas
ed o
n sen
io
rit
y) to e
nsu
re that t
he
re is
alignment on k
ey priorities t
hroughout the
Group.
Simplicit
y
Remunerat
ion arrangements
are simple
, comprising t
he follo
wing k
ey elements
:
X
Fixe
d pay: c
omp
ri
ses b
ase s
al
ar
y, bene
fits a
nd pe
ns
ion.
X
Annual bonus
: bonus which
incentivises t
he delivery of financial
, non-
financia
l and
personal per
formance object
ives.
X
L
TIP
: which incentivises financial performance over
a three-
year period,
promoting
long-t
e
rm sustainable v
alue creation
fors
har
eho
ld
er
s. Award
s are su
bje
ct to a t
wo-ye
ar h
old
ing p
er
iod p
os
t vesti
ng.
Risk
Per
fo
rm
anc
e ta
rget
s for in
ce
ntiv
e pla
ns a
re de
sig
ne
d to reward o
utp
er
fo
rm
an
ce, wh
ile a
t the s
ame t
ime b
ei
ng ca
lib
rate
d
toens
ure th
at they d
o not e
nc
our
age exc
es
sive r
is
k tak
in
g by the E
xe
cut
ive D
ire
ctors
.
The Remuneration
Committee re
tains the
flexibility t
o re
view formulaic
outcomes under
incentive
plans t
o ensure
that t
hey
area
pp
ropr
iate i
n the co
ntex
t of the ove
ra
ll pe
r
fo
rma
nc
e of the G
rou
p.
Predictabilit
y
The R
emu
ne
rati
on Pol
icy s
ets ou
t the th
res
ho
ld ta
rge
ts an
d ma
x
imu
m leve
l of pay th
at the E
xe
cuti
ve Di
rec
tors m
ay ea
rn i
n
any g
ive
n yea
r
. Th
e act
ual i
nc
enti
ve ou
tcom
es wo
uld va
r
y d
epe
nd
ing u
po
n the le
vel of p
er
fo
rm
anc
e ag
ain
st pr
e-d
eter
mi
ne
d
per
formance measures
.
Proportionalit
y
The Committee is sa
tisfied tha
t the
remuneration
framework does
not re
ward
poor performance. Incentiv
es are dir
ectly aligned
tothe Gr
oup’
s s
trate
gic o
bje
cti
ves, w
ith p
er
f
orm
an
ce ta
rge
ts ca
lib
rated to re
ward o
utp
er
fo
rm
anc
e both ove
r the s
ho
r
t an
d lon
g
term
. Furthermore,
the Committee ret
ains the
discretion
to
adjust f
ormulaic out
comes under the
incentive
plans in t
he ev
ent that
it det
ermines that
the out
come
s do
not align
with individual
or Company
per
formance.
Th
e Com
mi
tte
e al
so ta
kes ac
co
unt of th
e pay an
d co
ndi
tio
ns for t
he wi
de
r wor
k
forc
e wh
en co
ns
ide
ri
ng exec
uti
ve rem
un
era
tion.
Alignment with
culture
Th
e Re
mun
era
tio
n Poli
cy ha
s be
en se
t in th
e con
text of th
e nat
ure, si
ze and c
om
plex
it
y of th
e Gro
up. It ha
s be
en de
si
gn
ed
tosup
por
t t
he de
li
ver
y of t
he Gr
oup’
s key s
trate
gic p
ri
ori
tie
s an
d is in t
he be
st i
ntere
sts of th
e Gro
up a
nd its s
take
ho
lde
rs.
Si
n
gl
e tot
a
l fig
u
re o
f re
m
un
er
a
t
io
n (au
d
it
ed
)
Th
e foll
owi
ng ta
bl
es se
t out t
he si
ngl
e fig
ure fo
r total re
mun
er
atio
n for D
ire
ctor
s for th
e 2021 and 2020 fin
anc
ia
l yea
rs.
Executive Directors
Salary
(£)
Benefits
(£)
Bonus
(£)
LT
I
P
1
(£)
CSOP
(£)
Pens
ion
(£)
To
t
a
l
fixe
d p
ay
(£)
To
t
a
l
variable
pay
(£)
To
t
a
l
(£)
D Stirling
2
021
324,258
1
4
,11
9
5
4,627
nil
nil
4
8,365
3
8
6
,
74
2
54,627
44
1,
369
2020
303
,000
14
,
6
4
2
63,630
6
2,
5
54
nil
4
7,
7
2
2
365,364
1
2
6
,1
8
4
491
,548
G McGrath
2
021
215
,
4
0
6
12
,
5
17
2
6,44
5
nil
nil
23
,05
4
250,977
26,4
45
2
7
7,
4
2
2
2020
200
,500
12
,
75
4
5
7,
1
4
3
4
2
,1
5
6
nil
2
1
,434
23
4,6
8
8
99
,299
333,
987
1
T
he p
er
fo
r
man
ce p
er
io
d fo
r the 2018 L
T
IP aw
ard (
gra
nte
d in M
ay 2018) end
ed o
n 31 Dec
e
mbe
r 202
0 an
d has b
e
en i
ncl
ud
ed i
n th
e 2020 c
om
par
ati
ve fi
gur
es a
bov
e. De
ta
ils o
n ou
t-tur
ns ag
ai
ns
t
thep
er
f
or
ma
nc
e ta
rge
ts ar
e se
t out o
n pa
ge 75 of th
e 2020 A
nn
ua
l Re
po
r
t. L
TI
P val
ue
s fo
r 2020 h
ave be
e
n res
ta
ted u
sin
g th
e sh
are p
ri
ce o
n th
e ves
tin
g da
te of 24 May 2021, bein
g £3.9
8. T
he LTIP
awa
rds m
ad
e in M
ay 2019 have be
en i
nc
lu
de
d in th
e 2021 ta
bl
e as t
he th
re
e-ye
ar p
er
f
or
ma
nc
e pe
ri
od e
nd
ed o
n 31 Dec
em
be
r 2021. As set o
ut o
n pag
e 93, t
he 2019 L
T
IP awa
rd
s, wh
ic
h ar
e not
du
eto ves
t un
til 20 M
ay 202
2, wil
l la
ps
e in f
ull a
s pe
r
fo
rm
an
ce a
chi
eve
d wa
s be
low t
he tr
ig
ge
r po
int.
Non-Executive
Directors
1,
2
Fe
es p
ai
d i
n re
s
pe
c
t of 2
0
21 (
£)
Fe
es p
ai
d i
n re
s
pe
c
t of 2
0
2
0 (£
)
J C
arling
3
7,
6
1
3
3
6
,70
0
S Go
od
85,
333
3
83,
886
D R
ober
tson
42,6
6
7
41,
9
4
3
A F
ielding
42,6
6
7
26,39
5
C Wa
ll
3
7,
6
3
8
23,
284
1
N
on-
E
xec
ut
ive D
ir
ec
tors w
ho a
ls
o ch
ai
r a Bo
ard C
om
mi
tte
e re
ce
iv
e an ad
di
ti
ona
l fe
e.
2
T
he N
on-
E
xec
ut
ive D
ir
ec
tor
s (excl
ud
ing t
he C
om
pan
y Ch
ai
r) wi
ll re
ce
iv
e a fe
e inc
re
as
e of 2.5% ef
fe
cti
ve 1 A
pr
il 202
2.
3
T
he fe
e of t
he Co
mp
an
y Cha
ir w
il
l be i
nc
rea
se
d to £1
25,00
0 ef
f
ec
tiv
e 1 Ap
ri
l 2022.
92
Zote
foams plc
An
nua
l Re
por
t 2021
Not
es to t
he t
a
bl
e (au
di
ted
)
Base salary and pension
contributions
Th
e Com
pa
ny op
erate
s a De
fine
d Co
ntri
bu
tion Pe
ns
ion S
ch
eme (
the “D
C Sc
hem
e”) o
r a cas
h co
ntr
ibu
tio
n equ
iva
le
nt. Whe
n pa
r
tic
ipa
ting i
n the D
C
Sch
em
e, ind
iv
idu
als m
ay el
ec
t to enter a s
al
ar
y s
ac
rifi
ce a
rr
ang
em
ent, w
he
reby th
eir s
al
ar
y i
s red
uc
ed a
nd the C
om
pan
y make
s a co
rre
sp
ond
ing
co
ntri
but
ion i
nto the
ir DC S
che
me. G M
cG
rath o
pted for t
he sa
la
r
y sa
cr
ific
e ar
ra
nge
me
nt an
d the a
mou
nts s
hown f
or hi
s bas
e sa
lar
y are a
f
ter sa
la
r
y
sac
ri
fic
e. Sim
ila
rl
y
, th
e am
ount
s show
n for p
en
sio
n inc
lu
de th
e amo
unts of s
al
ar
y t
hat we
re sa
cr
ific
ed. As a
t 3
1 De
ce
mb
er 2021
, the b
ase s
al
ar
y (
be
fore
sa
lar
y sac
ri
fic
e) for G Mc
Gra
th was £
220,37
5 p.a. (£
200,50
0 p.a. as at 31 De
ce
mbe
r 2020).
D Sti
rli
ng re
ce
ive
s a ca
sh co
ntr
ibu
tio
n in li
eu of p
ens
io
n con
tri
buti
on
s in ac
cor
dan
ce w
ith th
e ru
le
s of the Sc
he
me, wh
ic
h app
ly to al
l me
mb
er
s. As at
31Dece
mb
er 2021
, the b
ase s
al
ar
y f
or D Sti
rl
ing wa
s £331
,0
75 p
.a. (£30
3,00
0 p.a. as at 31 De
ce
mbe
r 2020).
Benefits
Be
nefi
ts in
clu
de a co
mp
any c
ar al
lowa
nc
e, pri
vate me
dic
al i
nsu
ran
ce a
nd th
e valu
e of the M
atchi
ng S
har
es (at da
tes wh
en awa
rde
d) a
cqu
ire
d dur
in
g
theye
ar u
nde
r the S
ha
re Inc
en
tive Pl
an (S
IP).
Annual bonus
2021
Th
e tar
gets fo
r the a
nn
ual b
onu
s for 2021 for D S
tir
lin
g and G M
cG
rath a
re as s
et ou
t in th
e bel
ow ta
ble:
Measure
Weig
hti
ng (% ma
x
)
Ta
r
g
e
t
s
Performance
achiev
ed
Pa
y-out
D Stirling
G Mc
G
ra
t
h
T
rigger point
Maximum
D Stirling
G Mc
G
ra
t
h
Profit b
efo
re ta
x a
nd any exc
epti
on
al
ite
m
s
1
60%
6
0%
£
7.
9
m
£9.3
m
£
7.
0
m
0%
0%
Me
et Gr
oup o
pe
ratin
g ca
shfl
ow
budget
15%
20%
£
7.1
m
£8.5m
£5.2m
0%
0%
Strat
egic financial – ME
L
10%
0%
See below
See below
See below
7.
5
%
n
/a
Strat
egic financial – S&
OP
planning
5%
0%
See below
Se
e below
Se
e below
5%
n
/a
Str
ategi
c fina
nc
ia
l – PLC costi
ng
model
0%
10
%
See below
Se
e below
Se
e below
n
/a
6%
Strat
e
gic financial
– Business
unitsegment
allocation
0%
5%
Se
e below
See below
See below
n
/a
5%
Sustainabilit
y
5%
0%
See below
Se
e below
Se
e below
4.
5%
n
/a
Safet
y
5%
5%
See below
Se
e below
See below
5%
5%
To
t
a
l
10
0%
10
0%
n
/a
n
/a
n
/a
22%
16%
1
T
he re
po
r
te
d PBT wa
s £7
.0m. T
h
ere w
ere n
o exc
ept
io
nal i
te
ms.
Th
e be
low ta
bl
e sets o
ut th
e targ
ets a
nd pe
r
fo
rm
anc
e for th
e E
xecu
tive D
ire
ctor
s.
Achiev
ed in full
or predominantly
achieved
Partially achie
ved
Not ac
hieve
d
St
r
at
e
gi
c fin
an
c
ia
l me
t
ri
cs – D B S
t
i
rl
in
g & G C Mc
G
ra
t
h
Measure
Weig
hti
ng (% ma
x
)
Obj
ect
ive
Performance
Scoring
D Stirling
G Mc
G
r
at
h
D Stirling
G Mc
G
r
at
h
Strat
egic financial
– MEL
10
%
0%
Pre
se
nt a str
ateg
y for Mu
Ce
ll (R
eZor
ce
®
product l
ine)
with an agr
eed implementation
plan and e
xecut
e t
o critical milest
ones.
Sati
sfa
ctio
n of ta
rget to b
e ass
es
se
d by
MEL R
eZorc
e wor
ki
ng gro
up a
gai
nst s
et
milestones
.
75
% at
ta
inm
en
t due to
milestones
not being
met
toanti
cip
ated tim
es
ca
le
s
n
/a
Strat
egic financial
– S&
OP planning
5%
0%
D
el
ive
r a syste
m to imp
rove de
cis
ion
making on Group
c
apacity
. Key
el
eme
ntsa
re:
X
A business simula
tion model
(using
Monte C
arlo analysis)
to all
owass
es
sm
ent of n
ew
opportunitiesand
existing
business
onG
roup c
ap
aci
t
y
. (2.5
%
)
X
A decision-making approach
which
exam
in
es th
e be
nefi
ts of inve
stin
g in
newc
ap
aci
ty v
s mi
x enr
ic
hme
nt ove
r
a5-yea
r ho
rizo
n (2.5
%)
Achieve
d
n
/a
Strat
egic financial
– PLC costi
ng mo
de
l
0%
10%
Develop and implement
an updat
ed
cos
tin
gmod
el at G
rou
p leve
l by Q4.
60% at
ta
inm
en
t due to
delayed
implementation
n
/a
Director
s
’ Remuneration repor
t
Continued
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
93
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Measure
Weig
hti
ng (% ma
x
)
Obj
ect
ive
Performance
Scoring
D Stirling
G Mc
G
r
at
h
D Stirling
G Mc
G
r
at
h
Strat
egic financial
– Business Unit
segment allocation
0%
5%
Reflecting on capacity in
vestments,
new
over
se
as as
set
s and a
ss
ets in th
e UK
,
agree approach
to
asset allocation
going
for
ward
Achieve
d
n
/a
Safet
y
5%
5%
Based on individual assessment,
achieve
>90
% compliance wit
h the
following
:
X
Conduct quarterly document
ed hi-
visibilit
y t
ours
X
Par
ti
cip
ate in Sa
fet
y Eng
ag
eme
nt &
Obse
r
vation revi
ews
X
Ensur
e Fiel
d Le
vel H
azard Assessmen
t
reviews
c
onduct
ed quarterly
X
Par
ti
cip
ate in qu
ar
te
rl
y Safe
ty F
ocu
s
Group
s
X
Par
ti
cip
ate in qu
ar
te
rl
y Safe
ty C
ul
ture
Maturity Assessments
Achieve
d
Sustainabilit
y
5%
0%
X
Al
ign i
nter
na
l con
trol sy
stem
s to SASB
framework and
set and
implement clear
tar
gets fo
r im
prove
men
t (2
.5%
)
X
Further dev
elop and implement
a wider
sustainability stra
tegy
, making use
a
s
ne
ce
ss
ar
y of th
e SAS
B fra
mewo
rk (2.5
%
)
90% at
ta
in
me
nt du
e to
onee
le
me
nt of th
e wid
er
sustainabilit
y strat
egy not
being
fully
implemen
ted
to
anticipat
ed timelines
n
/a
Th
e an
nua
l bon
us wa
s bas
ed o
n bas
e sa
la
r
y befo
re sa
la
r
y sa
cr
ific
e. Th
e ma
x
imu
m op
por
t
uni
t
y for th
e bon
us wa
s 7
5% of sala
r
y
. 25
% of t
he bo
nu
s is
defe
rr
ed in
to sha
res h
el
d in tr
ust fo
r thre
e yea
rs u
nd
er th
e Defe
rr
ed Bo
nu
s Sha
re Pl
an (D
BSP). Full d
eta
ils of th
e op
erat
ion of t
he DB
SP ar
e set o
ut in th
e
Directors
’ Remuneration P
olicy
.
20
21
Ca
sh b
o
nu
s (
£)
Deferred
bonus (£)
Tota
l b
on
us (
£
)
D Stirling
4
0
,
9
71
13
,
6
5
6
54
,627
G McGrat
h
19
,
8
3
4
6
,
6
11
26
,44
5
In as
se
ss
ing w
het
her t
he ou
tcom
e ge
ne
rated by th
e an
nua
l bo
nus wa
s fa
ir in th
e co
ntex
t of broa
de
r pe
r
for
ma
nce, th
e Com
mi
tte
e took i
nto acc
oun
t the
und
er
ly
in
g fina
nci
al p
er
fo
rm
an
ce of th
e Gro
up an
d the w
id
er st
akeh
ol
de
r expe
ri
en
ce (
inc
lud
ing, b
ut no
t lim
ited to, the sh
are
ho
lde
r ex
per
ie
nc
e) over th
e
cou
rs
e of the ye
ar
. Wh
ilst, a
s set ou
t ab
ove, sig
ni
fica
nt pro
gre
ss h
as b
ee
n mad
e over t
he yea
r to set Zotefo
ams u
p to del
ive
r lo
ng-ter
m suc
ce
ss, th
e
Committee felt
that t
he formulaic
outcome
was an
appropriate
reflection of
per
formance delivered
. It
has, t
herefore
, not e
xercised
discretion
in relation
toinc
enti
ve ou
tcom
es du
ri
ng th
e yea
r
.
LT
I
P
Th
e 201
9 L
TI
P award wa
s sub
je
ct to tw
o per
for
ma
nce c
on
diti
ons m
ea
su
red ove
r the th
ree fi
na
nci
al ye
ar
s en
ded 31 De
ce
mbe
r 2021
. 30% of the a
ward
was s
ubj
ect to re
lati
ve total s
ha
reh
old
er r
etur
n ag
ain
st the F
TSE Sm
al
lCa
p Ind
ex (exclud
ing i
nves
tme
nt tr
usts). 7
0% of the awa
rd was s
ubj
ec
t to an EPS
grow
th t
arg
et. Per
fo
rm
an
ce is m
ea
sur
ed ove
r a thre
e-ye
ar pe
ri
od a
nd th
e res
tri
cted s
har
es w
ill b
e rel
ea
sed to th
e par
tic
ipa
nt af
ter t
wo ye
ar
s, to the ex
tent
that TS
R an
d EPS ta
rgets ov
er th
e pe
rio
d have b
ee
n met, tog
ethe
r wi
th add
iti
ona
l sh
are
s that r
epr
es
ent th
e di
vid
en
ds th
at wou
ld have b
ee
n pa
id du
rin
g
the p
er
fo
rm
an
ce pe
ri
od o
n the re
str
icte
d sh
are
s that h
ave be
en re
le
as
ed.
Th
e total awa
rd ves
tin
g is the s
um of th
e award
s for TS
R and EP
S. Wh
ere p
er
f
orm
an
ce is b
el
ow the EPS t
rig
ge
r po
int, the
n no pa
r
t of th
e EPS awar
d
ves
ts. If pe
r
fo
rma
nc
e is be
low th
e TSR tr
ig
ge
r poi
nt, the
n no pa
r
t of the T
SR awar
d vest
s. Bet
we
en th
e tri
gge
r po
int a
nd th
e ma
x
imu
m, the awa
rd ves
ts
on a sl
idi
ng s
cal
e ba
sis.
Th
e tab
le b
elo
w sum
ma
ris
es th
e pe
r
for
ma
nc
e cri
ter
ia for t
he 201
9 awa
rd, whi
ch i
s due to ve
st on 24 May 2022.
T
rigger point
Maximum
Achiev
ement
Level of ves
ti
ng
(%
ma
ximum)
Performance
target
% of a
wa
rd
vesting
Performance
target
% of a
wa
rd
vesting
Relative
TSR
per
formance
Median
performance
against peer
group
6
Upper quar
tile
performance
against peer
group
30
Below
median
per
formance
against peer
group
0%
An
nua
li
sed EP
S grow
th
8%
14
22%
70
-19
%
0%
Bas
ed o
n the a
bove l
evel of p
er
fo
rm
an
ce, the 201
9 L
TIP w
ill l
ap
se in f
ull. T
he C
omm
it
tee c
ons
id
ere
d the fo
rm
ula
ic o
ut
tur
ns u
nde
r the L
TIP re
lat
ive to
Gro
up a
nd in
div
id
ual p
er
for
man
ce a
nd de
term
in
ed th
at no di
sc
retio
n sh
oul
d be exer
cis
ed.
94
Zot
efoams plc
An
nua
l Re
por
t 2021
Scheme interests
gr
anted
during 2021
(audited)
Th
e tab
le b
elo
w sets o
ut de
tai
ls of sc
he
me in
tere
st gr
ante
d to the E
xecu
ti
ve Dir
ecto
rs du
ri
ng 2021
:
Ty
p
e
of a
wa
rd
Date
of g
r
an
t
Number of
shares
granted
F
a
c
e
v
a
l
u
e¹
(£)
D Stirling
Deferr
ed
bonus
2
(Unconditional
sh
a
re
s)
0
8
.0
4
.
20
21
3,
678
15
,
9
2
6
G McGrat
h
3,30
3
14
,
3
0
2
Ty
p
e
of a
wa
rd
Date
of g
r
an
t
Number of
shares
granted
Fac
e va
lu
e
3
(£)
Fac
e va
lu
e
(% of s
al
a
r
y
)
Performance
condition
T
rigger point for
ves
t
i
ng (% o
f fa
ce
val
ue)
En
d o
f
performance
period
D Stirling
LT
I
P
4
(Condit
ional
sh
a
re
s)
26
.0
4.
2
021
11
5
,1
9
2
48
4,9
58
15
0
30% bas
ed o
n rel
ative
TSR gr
ow
th
5
. 50% on
an
nua
lis
ed EPS g
row
th
6
an
d 20% on Retu
rn o
n
Capital Emplo
yed
(ROCE
)
7
20% of ma
x
imu
m
award fo
r me
etin
g the
trigger point
s specified
in note
s 5, 6 and 7
be
low
3
1
.1
2
.
2
0
2
3
G McGrat
h
76,
676
3
22,
8
0
6
15
0
1
Fa
ce va
lu
e ca
lc
ul
ated u
si
ng t
he ave
ra
ge s
ha
re pr
ic
e fo
r the p
er
io
d 30 M
ar
ch 20
21 to 7 Apr
il 20
21 (£4.33). Th
e sh
are p
ri
ce w
as £4.
15 on 8 Ap
ri
l 2021.
2
Awa
rd
s ves
t on t
he th
ird a
nn
iv
er
sa
r
y of gr
an
t. Th
er
e are n
o pe
r
fo
rm
an
ce c
ond
it
io
ns fo
r the
se a
war
ds.
3
Fa
ce va
lu
e ca
lc
ul
ated u
si
ng t
he ave
ra
ge s
ha
re pr
ic
e fo
r the p
er
io
d 19 Apr
il 20
21 to 23 Apr
il 20
21 (£4.21
). T
he s
ha
re pr
ic
e wa
s £4.
16 on 26 Ap
ril 2
021
.
4
Awa
rd i
s sub
je
ct to a t
hre
e-y
ea
r pe
r
for
m
anc
e pe
r
iod a
nd
, sub
je
ct to p
er
f
or
ma
nce
, is re
le
as
ed a
f
ter a t
wo
-yea
r ho
ld
in
g pe
ri
od.
5
R
el
ati
ve TSR g
row
t
h is m
ea
sur
ed a
ga
ins
t th
e F
TSE S
ma
ll
Ca
p Ind
ex (exc
lu
din
g inv
es
tme
nt t
ru
sts). Th
e tr
ig
ge
r po
int f
or re
la
tiv
e TSR p
er
f
or
ma
nc
e is me
di
an p
er
f
or
ma
nc
e aga
in
st th
e pe
e
r gro
up, wh
er
e
6% of th
e awa
rd wi
ll ve
st, to u
pp
er q
ua
r
til
e pe
r
fo
rm
an
ce ag
ai
ns
t the p
ee
r gr
ou
p, whe
re th
e ma
x
im
um of 3
0% of th
e awa
rd w
ill v
es
t.
6
A
nn
ua
lis
ed E
PS gr
ow
th i
s fro
m th
e EPS fo
r 2020. T
he t
ri
gg
er p
oi
nt is 5% an
nu
al
is
ed g
row
th, w
he
re 10% of th
e awar
d wi
ll ve
st, to th
e ma
x
im
um of 15% ann
ua
lis
ed g
row
t
h, wh
ere 5
0% of th
e awa
rd
wi
llve
st.
7
R
OCE i
s de
fin
ed a
s op
era
tin
g pr
ofit b
efo
re exc
ep
tio
na
l ite
ms d
iv
id
ed by t
he ave
ra
ge s
um of e
qu
it
y, net de
bt a
nd ot
he
r no
n-c
ur
re
nt li
ab
il
iti
es
. Th
is m
ea
su
re exc
lud
es a
cq
ui
red i
nt
an
gib
le a
ss
ets a
nd t
he
ir
am
or
ti
sa
tio
n co
sts
. It is m
ea
su
re
d bas
ed o
n ave
ra
ge R
OCE. T
he t
ri
gg
er p
oi
nt is av
er
age R
OC
E of 8%, wh
e
re 4% of the awa
rd w
il
l ves
t. Ma
x
im
um ve
st
ing o
cc
ur
s for a
ver
ag
e RO
CE of 10%, wh
er
e 20%
of th
e awa
rd wi
ll ve
st.
T
otal pension entitlements (
audited)
Th
e Zotefoa
ms De
fine
d Be
nefi
t Pen
sio
n Sc
hem
e (the “
DB S
che
me”
) was cl
os
ed to fu
ture a
ccr
ua
l of be
ne
fits as f
rom 31 De
ce
mbe
r 20
05. At thi
s time, a
ll
acti
ve me
mb
er
s lef
t t
he DB S
ch
eme a
nd we
re gr
ante
d pre
se
r
ved p
en
sio
ns paya
bl
e fro
m the
ir no
rm
al ret
ire
men
t age (or i
mme
di
atel
y
, i
f the me
mb
er h
ad
reach
ed norma
l re
tir
ement a
ge)
.
Th
e foll
owi
ng D
ire
ctor was a m
em
be
r of the D
B Sch
em
e du
rin
g the ye
ar
.
Accrued
pension
at
31 De
c
em
be
r 2
0
21
(£ p
.a
.)
Gross increase
in pension
(£)
Increase
in accrued
pension
net o
f
CPI
inflation
(£)
Change in
value
ove
r t
he y
ea
r
(£)
D Stirling
2
2
,
418
112
0
0
Note
s
(1
) T
he p
en
si
on e
nti
tle
me
nt s
how
n is t
hat w
hi
ch wo
ul
d be p
ai
d an
nu
all
y on r
eti
re
me
nt at n
or
ma
l reti
re
me
nt ag
e (or i
mm
ed
iate
l
y upo
n la
te ret
ire
me
nt w
he
re a
ppl
ic
ab
le), ba
se
d on s
er
v
ic
e to 31 Dec
em
be
r
20
05 (t
he da
te th
e DB Sc
he
me w
as c
lo
sed to f
u
tur
e acc
ru
al
), pe
nsi
on
ab
le s
al
ar
y i
nc
re
ase
s to 31 Ma
rch 2
01
8 (
the d
ate s
al
ar
y l
in
kag
e ce
as
ed
) an
d in
cl
ud
ing s
ta
tuto
r
y in
cre
as
es to t
he ye
ar e
nd b
ut
excl
ud
in
g any f
ut
ure i
nc
re
as
es u
nde
r th
e Ru
le
s of th
e Sc
he
me.
(2)
A
s req
ui
red b
y the L
a
rge a
nd M
ed
iu
m-s
ize
d Co
mp
an
ie
s an
d Gr
oup
s (A
cco
un
ts a
nd Re
po
r
ts) (
Am
en
dm
ent) R
eg
ul
ati
on
s 201
3, th
e pe
ns
io
n inp
ut a
mo
un
t ha
s be
en c
al
cu
late
d us
in
g the m
eth
od s
et o
ut
in s
ec
tio
n 229 of t
he F
ina
nc
e Ac
t 20
04(a) w
he
re:
– “pe
ns
io
n in
pu
t pe
ri
od” i
s th
e yea
r en
de
d 31 De
ce
mb
er 20
21
; a
nd
– in th
e ap
pl
ic
ati
on of s
ec
ti
on 234 o
f the A
ct, th
e fig
ur
e 20 is s
ubs
ti
tute
d fo
r the fi
gu
re 16.
(3)
The follo
wing is
additional in
formation r
elating t
o the Direct
or’
s pension from
the DB
Scheme:
(a) Norm
al r
eti
rem
e
nt ag
e is 6
5.
(b)
On d
ea
th be
for
e ret
ire
me
nt, a s
po
use’s pe
ns
io
n is pa
yab
le of o
ne h
al
f of th
e me
mb
er’s pr
es
er
ve
d pe
ns
io
n at l
eav
in
g, rev
al
ue
d fro
m le
av
ing to t
he d
ate of d
ea
th. On d
e
ath i
n reti
re
me
nt, a sp
ou
se’s
pe
ns
io
n is pa
yab
le of o
ne h
al
f of th
e me
mb
er’s pe
ns
io
n at de
at
h, wi
tho
ut r
ed
uc
tio
n for a
ny p
ar
t of t
he me
m
be
r’s pen
si
on co
mm
ute
d fo
r ca
sh at r
eti
re
me
nt.
(c) Memb
er
s’ Gu
ar
an
tee
d Mi
nim
um P
ens
io
ns i
nc
rea
se a
t sta
tu
tor
y ra
tes
. Oth
e
r pe
nsi
on
s in
cre
as
e in p
aym
en
t at 5% p.a., or th
e in
cr
ea
se in t
he R
eta
il P
ri
ce
s Ind
ex i
f lowe
r.
(d)
From 1 J
an
ua
r
y 20
06
, act
ive e
mp
loy
ee m
em
be
rs we
re a
bl
e to pay c
on
tri
bu
tio
ns to t
he D
efin
ed C
on
tri
bu
ti
on Pe
ns
ion S
ch
em
e se
t up by t
he C
omp
an
y in or
de
r to re
ce
ive r
eti
rem
e
nt be
ne
fits
. Th
e
Co
mp
any a
ls
o co
ntr
ib
ute
s to thi
s ar
ra
ng
em
en
t. Det
ai
ls of t
he c
ont
ri
bu
tio
ns m
ade i
nto th
is S
ch
em
e hav
e be
en d
isc
lo
se
d in th
e si
ng
le fi
gu
re ca
lc
ul
ati
on a
nd a
re not i
nc
lu
de
d in th
e ab
ove d
is
clo
su
re.
Director
s
’ Remuneration repor
t
Continued
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
95
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Pay
m
en
ts m
a
de t
o pa
st D
i
re
c
to
rs (a
u
di
te
d
)
No pay
me
nts we
re mad
e du
rin
g 2021
.
Pay
m
en
ts f
or l
os
s of o
f
fi
ce (a
u
di
te
d)
No pay
me
nts we
re mad
e du
rin
g 2021
.
Statement of
Directors’ shareholding and
sha
re int
erests (audit
ed)
E
xecu
tive D
ire
ctor
s are r
equ
ire
d to hol
d sha
re
s in the C
om
pany e
qu
iva
le
nt to 200% of ba
se s
ala
r
y
, wi
th a five
-year p
er
io
d to buil
d up th
is ho
ldi
ng f
rom: (
1
)
ap
poi
ntme
nt to the B
oa
rd; or (2) the date of the 201
7 AGM (1
7 May 201
7) fo
r the cu
rr
ent E
xe
cuti
ve Di
rec
tors. T
he R
em
une
rat
ion Po
lic
y ado
pted at th
e
2020 AGM al
so re
qui
res 100% of the s
ha
reh
old
ing r
equ
ire
me
nt to be he
ld fo
r on
e yea
r foll
owi
ng ce
ss
ati
on of em
pl
oym
ent w
ith th
e Gro
up a
nd 50% of the
sha
re
hol
din
g req
uir
em
ent to be h
el
d for t
wo yea
rs fo
ll
owin
g ce
ss
atio
n of em
ploy
me
nt wi
th th
e Grou
p. The C
om
mit
te
e inten
ds to kee
p und
er r
evi
ew the
me
cha
ni
sm to enf
orce t
he po
st ce
s
sati
on sh
are
ho
ldi
ng re
qu
irem
en
t dur
in
g the c
our
se of 2022. Th
roug
ho
ut 2021
, D Sti
rli
ng co
mp
lie
d wi
th the Po
lic
y
,
hol
din
g 577% of base sa
la
r
y at 31 Dec
em
be
r 2021
1
. G Mc
Grat
h is ma
ki
ng pr
ogr
es
s toward me
eti
ng the r
equ
ire
me
nt an
d hol
ds 184
% of ba
se s
ala
r
y
at31Dece
mb
er 2021
1
.
1
I
ncl
ud
es s
ha
re
s own
ed o
ut
ri
ght a
nd i
nte
re
st in s
ha
re i
nce
nt
ive s
ch
em
es w
it
hou
t pe
r
fo
rm
an
ce c
on
dit
io
ns. C
al
cul
ate
d on t
he ba
si
s of th
e ave
rag
e sh
ar
e pr
ic
e ove
r the t
hre
e mo
nth
s to 31 Dec
em
be
r
2021 of £4.02.
Th
e tab
le
s be
low se
t out t
he D
ire
ctors’ in
tere
sts (i
ncl
udi
ng th
ose of t
hei
r co
nne
cte
d pe
rso
ns) in Zotefoa
ms s
ha
res a
s at 31 Dece
mb
er 2021
. T
he
re were
noch
an
ge
s in th
e Dir
ecto
rs’ inter
ests b
et
wee
n th
e yea
r end a
nd th
e date of th
is re
por
t.
Executive Directors
Shares o
wned outright
¹
Interest in share incentive
schemes without
performance condi
tions
2
Interest in share incentive
schemes
with performance
conditions
3
D Stirling
4
4
9
,
8
24
4
7,1
2
7
20
2,
8
6
6
G McGrat
h
6
1,
2
5
7
65,
20
6
13
4
,
6
9
1
1
I
ncl
ud
es P
ar
tn
er
sh
ip S
ha
re
s, Di
vi
de
nd S
ha
re
s and v
es
ted M
atch
in
g Sh
are
s u
nde
r th
e SI
P
.
2
C
om
pr
ise
s: ve
ste
d CSO
P awa
rd
s; DBS
P sh
ar
es; u
nve
ste
d Matc
hi
ng S
ha
res u
nd
er t
he SI
P an
d th
e unve
ste
d po
r
ti
ons o
f the 2
01
7 LTIP an
d the 2
01
8 L
TIP a
war
ds d
ue to ve
st 1 J
un
e 2022 a
nd 24 May
2022 respective
ly
.
3
C
om
pr
ise
s: un
ves
ted LTIP s
ha
res
.
Non-Executive
Directors
Shares o
wned outright
J Car
li
ng
3,323
A Fielding
9
,1
2
1
S Go
od
30,0
47
D Robertson
7,
3
0
2
C Wa
ll
7,
9
3
6
96
Zotef
oams plc
An
nua
l Re
por
t 2021
Scheme interests
(audited)
Th
e tab
le b
elo
w provi
de
s det
ail
s of the c
ur
rent p
os
itio
n of ou
tsta
nd
ing awa
rds m
ade to th
e E
xecu
tive D
ire
ctor
s wh
o se
r
ved i
n the ye
ar u
nde
r rev
iew:
Scheme
As a
t
31 De
c
2020
Da
te o
f
ex
ercise or
release
Granted
during the
year
Exercised
or released
Lapsed or
cancelled
As a
t
31 De
c
20
21
Ma
rke
t
pr
i
ce o
n
ex
ercise
date
Exercise
price
Date fro
m
which
ex
ercisable
Expir
y
date
D Stirling
L
TIP (2
01
7)
1
54,
434
0
8.
0
6
.
2
021
–
(3
6,29
0)
–
1
8
,1
4
4
£4
.7
7
–
0
1.
0
6
.
2
0
2
1
2
n
/a
LT
I
P
(
2
0
18
)
1
5
,
717
0
8
.0
6
.2
0
21
–
(5,239
)
–
10,
47
8
£
4.7
7
–
24
.
0
5
.
2
0
21
n
/a
LT
I
P
(
2
0
19
)
73
,070
–
–
–
–
73,
070
–
–
20.05.2022
n
/a
L
TI
P (2020)
8
7,
6
74
–
–
–
–
8
7,
6
7
4
–
–
2
1.
0
9
.
2
0
2
3
n
/a
LT
I
P
(
2
0
2
1)
–
–
11
5
,1
9
2
–
–
1
15,
192
–
–
2
6
.
0
4
.
2
0
24
n
/a
D
B
S
P
(
2
0
17
)
6,6
56
0
8
.
0
6
.
20
21
–
(6,65
6)
–
–
£4
.7
7
–
24
.0
5
.
2
0
2
1
n
/a
D
B
S
P
(
2
0
18
)
2,6
77
–
–
–
–
2,677
–
–
20
.05.20
22
n
/a
D
B
S
P
(
2
0
19
)
4
25%
11
,
8
3
5
–
–
–
–
11
,
8
3
5
–
–
20.04.20
23
n
/a
D
B
S
P
(
2
0
19
)
4
75%
3
5,50
8
0
8
.0
6.
2
0
21
–
(35,50
8)
–
–
£4
.7
7
–
Se
e below
5
n
/a
DB
SP (2020)
–
–
3,
678
–
–
3
,678
–
–
0
8
.
0
4
.
2
0
24
n
/a
SIP
3
609
–
10
5
–
–
7
14
–
–
–
n
/a
G McGrat
h
CSO
P
10
,
3
4
4
–
–
–
–
10
,
3
4
4
–
£
2.9
0
0
5
.
0
4.
2
0
19
0
5.0
4.
20
26
L
TIP (
20
1
7)
1
3
5
,7
19
0
8.
0
6
.
2
021
–
(
2
3
,
813
)
–
1
1
,906
–
–
0
1.
0
6
.
2
0
2
1
2
n
/a
LT
I
P
(
2
0
18
)
10,592
0
8
.
0
6
.
20
21
–
(3,531
)
–
7,
0
6
1
–
–
24
.
0
5
.
2
0
21
n
/a
LT
I
P
(
2
0
19
)
48
,3
52
–
–
–
–
48,3
52
–
–
20.05.2022
n
/a
L
TI
P (2020)
5
8
,
0
15
–
–
–
–
5
8
,
0
15
–
–
2
1.
0
9
.
2
0
2
3
n
/a
LT
I
P
(
2
0
2
1)
–
–
76
,6
76
–
–
76
,6
76
–
–
2
6
.
0
4
.
2
0
24
n
/a
D
B
S
P
(
2
0
17
)
4
,
419
0
8
.
0
6
.
20
21
–
(4
,
41
9
)
–
–
£4
.7
7
–
24.
0
5.
2
0
21
n
/a
D
B
S
P
(
2
0
18
)
2,4
97
–
–
–
–
2
,
497
–
–
20.
05.20
22
n
/a
D
B
S
P
(
2
0
19
)
4
25%
7
,444
–
–
–
–
7
,444
–
–
20.04.2023
n
/a
D
B
S
P
(
2
0
19
)
4
75%
22,
3
3
5
–
–
–
–
22
,335
–
–
See below
5
n
/a
DB
SP (2020)
–
3,30
3
–
–
3,30
3
–
–
0
8
.
0
4.
2
0
24
n
/a
SIP
3
561
–
10
6
–
–
6
67
–
–
–
n
/a
1
3
0% ba
se
d on re
la
tiv
e TSR
. 70% bas
ed o
n EPS g
row
th
. As se
t ou
t in th
e 2019 Ann
ua
l Re
por
t a
nd A
cc
ou
nts, t
hi
s awar
d ve
sted a
t 46.9
9% of m
a
xi
mum b
as
ed o
n pe
r
fo
rm
an
ce in t
he p
er
io
d en
di
ng
31Dec
em
be
r 2019.
2
A
s set o
ut i
n the C
om
mi
t
tee C
ha
ir’s cove
r le
t
ter of t
he 2019 Dire
c
tors’ R
em
un
er
ati
on re
po
r
t, th
e de
ci
sio
n on t
he ti
mi
ng of t
he ve
sti
ng o
f the 2017 award wa
s de
fe
rre
d fo
r a pe
ri
od of u
p to on
e yea
r by
the C
om
mi
t
tee. T
he C
om
mi
tte
e se
t an ex
erc
is
e date o
f 1 Ju
ne 2021 i
n 2020.
3
M
atch
in
g Sh
are
s un
de
r th
e SIP
. P
ar
ti
ci
pa
nts b
uy Pa
r
tn
er
sh
ip Sh
ar
es m
on
thl
y un
de
r the S
IP
. T
he C
om
pa
ny pro
vi
de
s on
e Matc
hi
ng S
ha
re fo
r eve
r
y fou
r Par
t
ne
rs
hi
p Sh
are
s pu
rc
ha
se
d. Th
es
e Ma
tchi
ng
Sh
are
s ar
e fir
st av
ail
ab
le f
or ve
sti
ng t
hre
e ye
ar
s af
te
r be
in
g awa
rde
d or o
n le
avi
ng i
f th
e pe
rs
on is c
on
si
de
re
d to be a “go
od l
ea
ver
”
.
4
N
on
e of the 2
01
9 bo
nu
s was p
ai
d in c
ash
. At the r
eq
ue
st of t
he E
xe
cu
tiv
e Di
rec
tor
s, th
e pro
po
r
ti
on of th
e bo
nu
s tha
t wou
ld n
or
ma
ll
y have b
e
en pa
id i
n ca
sh (
75% of the awa
rd
) was d
efe
r
red i
nto
sh
are
s fo
r a pe
ri
od of u
p to on
e ye
ar. The pr
op
or
ti
on o
f the b
on
us th
at wo
ul
d no
rm
all
y be d
ef
er
red i
nto s
ha
res (
25%
) wi
ll co
nti
nu
e as n
or
ma
l an
d wi
ll be r
el
ea
se
d af
te
r thr
ee ye
a
rs.
5
N
ot su
bj
ec
t to Go
od Le
ave
r/Ba
d Le
aver p
rov
is
io
ns a
s defi
ne
d un
de
r th
e DBS
P ru
le
s. M
ay not b
e exe
rci
se
d pr
io
r to 1 Ja
nua
r
y 20
21 and m
ust b
e exe
rci
se
d by 20 A
pr
il 20
23.
Director
s
’ Remuneration repor
t
Continued
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
97
Zot
efoams plc
An
nua
l Re
por
t 2021
De
ta
i
ls o
f Di
r
ec
to
r
s’ se
r
v
ic
e c
on
tr
a
ct
s a
nd a
p
po
in
t
me
nt l
et
te
r
s (un
au
d
it
ed
)
Th
e foll
owi
ng ta
bl
e sets o
ut th
e deta
il
s of the se
r
v
ic
e con
trac
ts an
d app
oi
ntme
nt le
tte
rs fo
r the D
ire
ctor
s as at 31 Dec
em
be
r 2021
:
Director
Da
te o
f cu
r
re
n
t se
r
v
ic
e co
n
tr
a
ct
or appointment
let
ter
Unexpired
terms at
31 Dece
mber 2021
J Car
li
ng
1
0 Aug
us
t 2020
1 yea
r an
d 5 mon
ths
A Fielding
1
9 M
ar
ch 2020
1 ye
ar a
nd 5 m
onth
s
S Go
od
4 Sep
tember 2
01
9
5 mon
ths
G McGrat
h
1
5 A
pr
il 201
9
–
D Robertson
6 Aug
us
t 2020
1 yea
r an
d 5 mon
ths
D Stirling
1
3 M
ay 201
9
–
C Wa
ll
1
9 M
ar
ch 2020
1 ye
ar a
nd 5 m
onth
s
Copies of
the Direct
ors’ service contracts
and appoint
ment letters ar
e av
ailable for
inspection at
the Company’
s regist
ered office.
External appointments
Du
rin
g 2021
, E
xe
cu
tive D
ire
ctor
s did n
ot rec
ei
ve any fe
e
s from ex
te
rn
al a
ppo
intm
ent
s.
Ch
an
g
e in r
em
u
ne
r
at
i
on o
f Gr
ou
p D
ir
e
ct
or
s a
nd e
mp
l
oye
es (u
n
au
di
t
ed
)
Th
e tab
le b
elo
w illu
str
ates th
e pe
rce
ntag
e ch
ang
e in s
al
ar
y a
nd be
ne
fits fo
r the G
rou
p Dir
ecto
rs f
rom th
e pri
or ye
ar c
omp
are
d to the ave
rag
e pe
rce
ntag
e
change for
the UK
workforce.
Th
e em
ploye
e su
bse
t con
sis
ts of an ave
rag
e of the U
K wor
k
forc
e em
pl
oyee
s for th
e pe
rio
d un
der r
evi
ew
.
Th
is gro
up h
as be
en s
el
ec
ted as th
is e
mpl
oyee r
epr
ese
nta
tive g
roup i
s the l
arg
es
t grou
p of em
ploy
ee
s wit
hin th
e org
an
isa
tion. T
he N
on-
E
xecu
tive
Directors
receive no
taxable benefits or annual
bonus.
% ch
a
ng
e in
base salary
(202
1 t
o 20
20)
% ch
a
ng
e in
taxable benefit
(202
1 t
o 20
20)
% ch
a
ng
e in
annual b
onus
UK e
mployees
only
(202
1 t
o 20
20)
% ch
a
ng
e in
base salary
(2020
to
201
9)
% ch
a
ng
e in
taxable benefit
(2020
to
201
9)
% ch
a
ng
e in
annual b
onus
UK e
mployees
only
(2020
to
201
9)
D Stirling
7.
0
-3.5
-1
4
.1
0
1
2
.1
-
24
.
5
G McGrat
h
7.
4
-1
.
9
-
5
3
.7
0
10
.
2
7.
8
J Car
li
ng
2.5
n
/a
n
/a
0
n
/a
n
/a
S Go
od
1.7
n
/a
n
/a
0
n
/a
n
/a
D Robertson
1.7
n
/a
n
/a
0
n
/a
n
/a
A Fielding
6
1.
6
1
n
/a
n/a
n/a
n
/a
n
/a
C Wa
ll
6
1.
6
1
n
/a
n/a
n/a
n
/a
n
/a
Avera
ge em
pl
oyee
2.5
0
4.7
0
0
300
1
A F
ie
ldi
ng a
nd C Wa
ll we
re a
pp
oi
nted to t
he B
oa
rd in M
ay 2020
. Th
ei
r inc
re
as
es r
efle
ct t
hat t
hey w
er
e onl
y pa
id t
he
ir re
sp
ec
ti
ve fe
es fo
r pa
r
t of th
e pr
io
r yea
r.
Th
e UK e
mpl
oyee
s’ sal
ar
y r
evi
ew is ne
goti
ated w
ith th
e un
ion
s and a 2.5% incre
as
e was ag
ree
d in re
lati
on to 2021
. For 2022, a sal
ar
y inc
rea
se of 4.0%
has b
ee
n ag
ree
d for U
K em
ploye
es
.
Th
e me
an st
af
f bo
nu
s in the U
K was 1
.0
7% of bas
e sal
ar
y in re
lati
on to 2021 (
2020: 3.
1
5% of base s
al
ar
y).
CEO p
ay r
a
t
io
Co
mpa
nie
s wi
th mo
re tha
n 250 emp
loye
es a
re re
qui
red to pu
bli
sh th
e CEO to em
ploy
ee pay r
atio. Th
e rati
o co
mpa
res t
he total r
emu
ne
rati
on of th
e Gro
up
CEO ag
ai
nst th
e rem
un
era
tion of t
he me
di
an e
mpl
oyee, a
nd em
pl
oyee
s in th
e lowe
r and u
pp
er qu
ar
t
ile
s. Th
es
e pay ra
tios fo
rm p
ar
t of th
e info
rm
atio
n that
is prov
id
ed to the C
om
mit
te
e on bro
ade
r em
pl
oyee pay p
ol
ici
es a
nd pr
acti
ce
s. Th
e Co
mmi
t
tee ha
s co
nsi
de
red th
e pay da
ta an
d co
ncl
ude
d tha
t the
cur
re
nt rati
o is pr
opo
r
tio
nate an
d al
lows th
e bus
in
es
s to retai
n hi
gh ca
lib
re in
div
id
ua
ls ca
pa
ble of d
el
ive
rin
g the g
row
th st
rateg
y
.
Th
e rati
os we
re ca
lcu
late
d usi
ng th
e Opti
on A me
thod
ol
og
y
, wh
ic
h use
s the p
ay an
d be
nefi
ts of all U
K em
pl
oyee
s as it p
rovi
de
s the m
ost a
ccu
rate
info
rm
atio
n and r
epr
es
ent
atio
n of the ra
tios. T
he e
mp
loye
e pay da
ta us
ed wa
s bas
ed o
n the tota
l rem
une
rati
on of a
ll Zotefoa
ms p
lc’
s f
ul
l-time e
mp
loye
es
as at 31 Dec
em
be
r 2021
. T
he G
rou
p CEO’
s total re
mu
ne
rati
on ha
s be
en t
aken f
rom th
e si
ngl
e total fi
gure of r
emu
ne
rati
on fo
r 2021
, a
s dis
clo
se
d on
pag
e91
.
The Committee considers
that t
he median CE
O pay
ratio
is consist
e
nt wit
h the
relative
roles and
responsibilities o
f the
Group CE
O and t
he identified
em
ploye
es. B
as
e sa
lar
ie
s of al
l em
ploye
es, i
nc
lud
ing o
ur E
xec
uti
ve Di
rec
tors, a
re set w
ith re
fere
nc
e to a ran
ge of fa
ctor
s, inc
lud
ing m
ar
ket pr
acti
ce,
location
, experience and
per
formance in r
ole.
The Group CE
O’
s remunera
tion package
is w
eighted t
owards v
ariable pay
(including t
he annual bonus
,
L
TI
Pand D
BSP) d
ue to the n
atu
re of the ro
le, wh
ic
h mea
ns th
at the r
atio i
s like
ly to flu
ctu
ate dep
en
din
g on th
e outc
ome
s of in
ce
ntive p
la
ns in e
ac
h yea
r
.
Th
e red
uct
ion i
n total pay r
atio a
t the 50
th an
d 75
th pe
rc
enti
le
s in co
mpa
ri
so
n to 2020 is due to a re
du
ctio
n in th
e valu
e of the L
TIP aw
ard fo
r 2021
.
98
Zot
efoams plc
An
nua
l Re
por
t 2021
Ye
a
r
Met
hod
25th percentile
pa
y ra
t
io
50th percentile
pa
y ra
t
io
75th
percentile
pa
y ra
t
io
2021 – Base s
al
ar
y
O
ptio
n A
11:
1
9
:1
7:1
2021 – T
ot
al pay
15:
1
12
:1
10
:1
2020 – T
ota
l pay
17:1
14
:
1
10:1
201
9 – T
ota
l pay
2
1:
1
17:1
13
:1
Pay
data (£’00
0)
Base salary
To
t
a
l
p
a
y
CEO’
s remu
nerati
on
3
24,
25
8
4
41,
3
6
9
UK e
mpl
oyee
s 25th perc
en
tile
29,
342
29,5
39
UK e
mpl
oyee
s 50
th pe
rce
ntil
e
35,6
9
4
3
5,
8
61
UK e
mpl
oyee
s 75th perce
nti
le
4
5
,
74
4
4
6
,11
2
Historical TSR
p
erformance and Group
CEO remuneration o
utcomes (
unaudited)
Th
e gra
ph b
elow c
om
par
ed th
e TSR of Zotefoa
ms a
gai
nst th
e F
TSE S
ma
llC
ap In
dex (exclu
din
g inve
stm
ent tr
us
ts)
, wh
ich i
s co
nsi
de
red th
e mos
t
ap
prop
ri
ate cho
ic
e of ind
ex by the R
emu
ne
rati
on C
omm
it
tee d
ue to the G
rou
p’
s size a
nd m
em
ber
sh
ip of th
is in
dex.
Zotefoams
FTSE SmallCap Index
600
400
500
300
200
100
0
800
700
Dec 21
Dec 20
Dec 19
Dec 18
Dec 17
Dec 16
Dec 15
Dec 14
Dec 13
Dec 12
Jan 12
Wo
rkforce alignment
While it r
emains important t
o set
base salaries on a
market
-competitive
basis reflect
ive o
f the si
ze and
complexity of
the business,
the Committee
has
considered alignment
of e
xecutiv
e remunerat
ion with
workforce rew
ard st
ructures.
Th
e tab
le b
elo
w illu
str
ates th
e Gro
up CEO’s singl
e fig
ure fo
r total re
mun
er
atio
n, ann
ua
l bon
us pay-
out, L
T
IP ve
stin
g as a p
erc
ent
age of m
a
xi
mum
opp
or
tu
ni
ty, the EPS an
d the ave
rag
e sha
re pr
ic
e for th
e fina
l qu
ar
te
r for th
e sa
me ten
-year p
er
iod.
G
ro
u
p C
E
O’s
si
n
gl
e fig
u
re o
f
remuneration (£)
Annual
bo
nu
s p
ay-
o
ut
(% of m
a
xi
mu
m)
L
TIP v
esting
(% of m
a
xi
mu
m)
EP
S (
p)
Av
erage share
pr
i
ce f
or t
h
e fin
a
l
quarter (p)
2
021
44
1
,369
22
.0
0.0
9.0
4
02
.0
2020
49
1
,548
28.0
23.5
14
.
9
415
.
5
2
0
19
6
37
,473
3
7.
1
4
7.
0
14
.
9
3
75.
4
2
0
18
794,
9
0
5
3
5
.1
10
0
.
0
18
.7
570.
5
2
0
17
67
6
,
8
16
8
4.4
58
.0
16
.
6
1
38
9.
2
2
016
49
7
,545
55.0
3
7.
7
13
.7
252.
5
2
0
15
418
,
5
6
8
44.4
5
0.0
11
.1
344.
3
2
0
14
439,
452
44.0
6
6.0
10
.7
2
3
7.
8
2
0
13
270,6
87
–
24
.
8
8.0
18
2.
4
2
0
12
4
9
0
,7
15
6
2.
0
8
4.0
11
.
8
202.
2
1
Whil
e ba
si
c ea
rn
in
gs p
er s
ha
re be
for
e exce
pti
on
al i
tem f
or 201
7 wa
s 1
6.0
4p, the R
em
un
er
ati
on C
omm
it
te
e de
ci
de
d to el
imi
na
te the i
mp
ac
t on d
efe
rr
ed ta
x (
the n
et o
pe
rat
in
g los
se
s wh
ic
h ar
e ca
rr
ie
d
for
w
ard
) of th
e ch
an
ge i
n exp
ec
ted f
u
tur
e US co
rp
or
ate ta
x r
ate
s, wh
ic
h re
su
lte
d in a
n EPS of 16.59
p be
in
g us
ed fo
r ca
lc
ul
ati
ng th
e sa
tis
fac
ti
on of t
he EP
S tar
ge
t for t
he ve
sti
ng o
f the 2015 L
T
IP aw
ard
s.
Director
s
’ Remuneration repor
t
Continued
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
99
Zo
tef
oams plc
An
nua
l Re
por
t 2021
Re
la
t
ive i
m
po
r
t
an
c
e of s
pe
n
d on p
ay (u
na
u
di
te
d
)
The below
table illustr
ates
the year
-on-year change
in t
otal Executiv
e Direct
ors
’ remunerati
on and Executiv
e Direct
ors’
remuneration
compared with
profit
af
ter t
a
x an
d dis
trib
uti
ons to s
har
eho
ld
er
s for 2021 and 2020.
% change
2020
/20
21
20
21
£’
000
2020
£’
000
T
otal remu
nerati
on
¹
10
.
8
22,
0
4
0
19
,
9
0
0
Executive
Directors
’ remuneration
-1
3
.
4
719
830
Profit a
f
ter ta
x
-3
9.0
4,
376
7,
1
6
3
Shareholder distributions
2
2
14
.
6
3
,
0
74
977
1
S
oc
ial s
ec
ur
it
y c
ost
s pa
id by t
he G
rou
p hav
e be
en exc
lu
de
d fr
om th
is fi
gur
e.
2
S
ha
reh
ol
de
r di
str
ib
uti
on
s ref
er to th
e di
vi
de
nd
s pa
id d
ur
ing t
he ye
ar.
Committee role
a
nd advisers
(unaudited)
The Group has
e
stablished a
Remuneration Committ
ee, which
is const
ituted
in accordance wit
h the
recommendations
of the
UK Corporate Go
vernance
Co
de. A Fi
eld
ing, S G
oo
d, D Rob
er
ts
on, J Ca
rl
ing a
nd C Wal
l were m
em
be
rs of th
e Com
mi
tte
e dur
in
g 2021 t
o the d
ate of thi
s rep
or
t. Al
l the m
em
be
rs a
re
ind
ep
en
de
nt No
n-E
xec
uti
ve Di
rec
tors, w
ith th
e exce
ptio
n of S Goo
d, wh
o was in
de
pe
nde
nt on a
pp
oin
tme
nt as C
ha
ir of the C
om
pany. The C
omm
it
tee
was c
hai
red by A F
ie
ldi
ng thr
oug
hou
t the ye
ar
. Th
e Co
mmi
t
tee’
s T
e
rm
s of Refe
re
nce w
ere l
ast u
pda
ted in Au
gu
st 2021 and may b
e fou
nd o
n the G
roup’
s
websit
e.
Non
e of the C
om
mit
te
e mem
be
rs h
ave any p
er
son
al fi
nan
cia
l inte
res
t (other t
han f
ee
s pai
d as d
isc
los
ed o
n pag
e 91 and as s
har
eho
ld
er
s) in the C
omp
any
,
nor d
o they h
ave any i
ntere
sts th
at may c
onfl
ic
t with t
hos
e of the G
rou
p, such a
s cros
s di
rec
tors
hip
s. Non
e of the C
om
mit
tee m
em
be
rs a
re invo
lve
d in the
day
-t
o-d
ay
management of
the business.
The Committee mak
es recommendation
s t
o the
Board on r
emuneration ma
tters. No
Director
is in
volved i
n any
decision concerning his
or her o
wn remunerat
ion.
Th
e Re
mun
era
tio
n Com
mi
tte
e met fo
ur tim
es i
n 2021 with f
ull at
te
nda
nc
e at ea
ch me
eti
ng. Th
e Co
mpa
ny Se
cre
tar
y acts a
s se
cret
ar
y to th
e Co
mmi
tte
e.
In 2
02
1
, the Remunerat
ion Committee carried out
the fol
lowing w
ork:
X
Completed
a re
view of
the r
emuneration arrangements
for t
he Executive
Directors
and the
wider workforce and
consulted
with the
Group
’s
la
rgest
sha
re
hol
de
rs in r
el
atio
n to propo
sa
ls a
ris
ing o
ut of th
e rev
iew
X
Ap
prove
d the 2020 D
ire
ctor
s’ Remu
ne
rati
on re
po
r
t
X
Co
nsi
de
red a
nd ap
prove
d the a
nn
ual b
onu
s for th
e E
xec
uti
ve team
X
Co
nsi
de
red a
nd ap
prove
d the g
ran
t of award
s un
der t
he Lo
ng-
T
e
r
m Inc
enti
ve Pla
n an
d the D
efe
rre
d Bo
nus S
ha
re Pla
n in 2021 and th
e ves
ting of
award
s mad
e in 201
8 u
nde
r the L
ong-
T
er
m In
ce
ntive P
lan
X
Co
nsi
de
red th
e sa
lar
y revi
ews of th
e E
xecu
ti
ve team a
nd c
onc
lud
ed th
at no i
nc
rea
se wou
ld b
e award
ed a
bove th
e sal
ar
y revi
ew ap
pli
ca
bl
e to the
general workforce
X
Co
nsi
de
red th
e sa
lar
y revi
ew of th
e Com
pa
ny Se
cret
ar
y a
nd awa
rde
d a pay in
cre
as
e com
me
nsu
rate wi
th ma
rket r
ates of p
ay and
X
Co
nsi
de
red th
e pe
r
for
ma
nce t
arg
ets fo
r the 2021 Exe
cu
tive D
ire
ctor
s’ bonu
s an
d Long
-
T
e
rm In
ce
ntive P
lan a
ward
s.
De
loi
t
te LLP (D
el
oit
te) was e
ng
age
d in 201
6 to as
si
st an
d prov
ide a
dv
ice to th
e Rem
un
era
tion C
om
mit
te
e in re
lati
on to Di
rec
tors’ rem
un
erat
ion. T
hey
continued t
o work with
the Committ
ee through
202
1 in r
espect of general r
emuneration a
dvice. Deloitte
is a member
of the
Re
muneration
Consultants
Group and
adheres t
o its
Code on e
xecutiv
e remunerat
ion consulting
in the UK. The
Committee is comf
ortable that Deloitte
does not
have
connections
wi
th Zotefoam
s pl
c that m
ay imp
air i
ts ob
je
ctiv
it
y a
nd in
de
pe
nde
nc
e. De
loi
tte p
rovi
ded n
o othe
r se
r
vi
ce
s to the Co
mp
any
.
T
ota
l fee
s for a
dv
ice p
rovi
de
d to the Co
mmi
t
tee am
oun
ted to the fo
llow
ing:
20
21
(£)
2020
(£)
Deloitte LLP
24,
3
0
0
24
,
5
0
0
To
t
a
l
24,30
0
24,5
00
Shareholder v
oting (
unaudited)
Th
e tab
le b
elo
w sets o
ut th
e res
ults o
f the votes r
ec
eive
d on t
he 2020 Di
rec
tors’ Re
mu
ne
ratio
n rep
or
t a
t the 2021 AGM as we
ll as th
e prev
io
us D
ire
ctor
s’
Re
mun
er
atio
n Poli
cy (app
roved at t
he 2020 AGM):
Direc
tors’ Remuner
ation
Policy
%
An
n
ua
l R
ep
or
t on
remuneration
%
Vot
es i
n favou
r
20,5
42,091
8
9
.76
30,5
1
4,
306
98.93
V
otes
against
2,33
1
,595
1
0
.1
9
320,4
8
4
1.
0
4
Dis
cretio
n
12
,
6
9
9
0.05
9,0
40
0.03
T
ota
l votes
22,886,385
1
00.
00
30,
843,
830
1
00
.00
V
ot
es withheld
4,520
–
250
–
10
0
Zot
efoams plc
An
nua
l Re
por
t 2021
Director
s
’ repor
t
The D
ire
ctor
s pr
ese
nt t
heir A
nn
ua
l Repor
t an
d
audited cons
olidated financial
statements for
t
he year end
ed 3
1 Dec
emb
er 2
0
2
1
Results
and dividends
Pro
fit attributable t
o shareholders for t
he year
am
ounte
d to £4
.4m (2020: £7
.2m). An inte
rim
div
id
en
d of 2.
1
0
p (2020: 2.
03
p) per s
har
e
waspa
id o
n 8 Oc
tobe
r 2021
. T
he D
ire
ctor
s
rec
om
me
nd tha
t a fina
l di
vid
en
d of 4.40p
(2020:4.2
7
p) per s
ha
re be pa
id o
n 1 Jun
e 2022
to sha
reh
old
er
s wh
o are o
n the C
omp
any’s
reg
iste
r at the c
los
e of bu
sin
es
s on 6 M
ay 2022,
res
ult
ing i
n a total di
vi
de
nd of 6.50
p pe
r sh
are
forth
e yea
r (2020: 6.30
p)
. For f
ur
th
er i
nfor
mati
on
onth
e pe
r
for
ma
nce of t
he Co
mpa
ny refe
r to the
Strat
egic Report on pages 1 t
o 77
, which should
be re
ad as f
orm
ing p
ar
t of t
he D
ire
ctors’ re
por
t.
Dire
ctor
s
The app
oint
ment
, r
eplacemen
t and
pow
ers o
f
the Dir
ectors are
governed by
the Company
’
s
Ar
ticles o
f Association
(the
“
Ar
ticles”)
, the UK
Corporate
G
ov
ernance Code, t
he Companies
Act 2
006, prev
ailing legislat
ion and r
esolutions
pas
se
d at the A
nn
ua
l Ge
ne
ral M
eet
ing (
AGM)
oroth
er g
ene
ra
l me
etin
gs of th
e Com
pa
ny
.
Det
ail
s of Di
rec
tors w
ho we
re in of
fi
ce du
ri
ng th
e
yea
r an
d up to the d
ate of sig
nin
g of the fi
na
nci
al
state
me
nts ar
e set o
ut on p
age
s 78 and 79.
Th
e Ar
t
icl
es g
ive th
e Dir
ec
tors pow
er to ap
poi
nt
an
d rep
lac
e Di
rec
tors. U
nde
r the T
er
ms of
Reference
of the
Nomination Committee
, any
ap
poi
ntme
nt mu
st b
e rec
omm
en
de
d by the
Nomination
Committee for
approv
al by
the
Boa
rd of D
ire
ctor
s. Th
e Ar
ti
cl
es a
lso re
qu
ire
Di
rec
tors to reti
re an
d, if the
y so wi
sh, su
bmi
t
the
mse
lve
s for e
le
cti
on at th
e fir
st AGM fo
llow
ing
the
ir ap
po
intm
ent a
nd n
orm
al
ly eve
r
y thr
ee ye
ar
s
the
rea
f
ter
. S
inc
e 201
2, the Boa
rd ha
s req
uire
d
Directors
to
stand for
a
nnual re-election
ea
chye
ar
.
D Sti
rli
ng a
nd G Mc
Gra
th, the E
xe
cuti
ve Di
rec
tors,
have
ser
vice cont
racts which
are t
erminable
ont
wel
vemo
nths’ wr
it
ten n
otic
e. All th
e othe
r
Di
rec
tors h
ave let
ter
s of ap
poi
ntme
nt w
hic
h
are
terminable on
six month
s’
written not
ice.
The Company
maintained Direct
or
s
’ and
Of
ficers’ Liability Insurance
cover t
hroughout
2021
. T
he C
om
pany h
as is
su
ed D
ee
ds of
Ind
em
nit
y i
n favou
r of all D
ire
ctor
s. T
hes
e De
ed
s
were i
n forc
e thro
ugh
ou
t the ye
ar e
nd
ed 31
De
ce
mbe
r 2021 and re
ma
in in fo
rce a
s at the
date of th
is re
por
t. T
he
se D
ee
ds, as we
ll a
s the
ser
vice contr
acts and
the Company
’
s Ar
ticles o
f
Association
, are a
vailable for inspecti
on during
normal business hours
at the
Company’
s
reg
iste
red of
fi
ce a
nd w
ill b
e avail
ab
le at th
e AGM.
Conflicts of interest
All Direct
ors submit de
tails t
o the
Company
Se
cret
ar
y of a
ny new s
itu
atio
ns, o
r cha
ng
es to
exi
stin
g one
s, wh
ic
h may gi
ve ri
se to an ac
tua
l
orpote
ntia
l co
nfli
ct of in
tere
st wi
th tho
se of
the
Company
.
Wh
ere a
n act
ual, o
r poten
tial, c
onfl
ict i
s
ap
prove
d by the Bo
ard, th
e Bo
ard w
ill no
rm
al
ly
authorise t
he situat
ion on t
he condition
that
the
Director concerned abstains from par
ticipating
in
any discussion
or decision affected
by t
he
conflict
ed matter
. Authorisati
on of
a conflict
is
onl
y gi
ven to D
ire
ctors w
ho a
re not i
ntere
sted
inth
e mat
ter
. N
o new c
onfl
ict
s of inter
est we
re
noted d
ur
ing 2021 or be
tw
ee
n the ye
ar e
nd an
d
the d
ate of sig
nin
g of the fi
na
nci
al st
atem
ents
.
Am
e
nd
m
en
t to t
he A
r
ti
c
le
s of A
ss
oc
ia
t
io
n
The Company
’
s Ar
ticles of
Association ma
y
onl
ybe a
me
nde
d by a sp
ec
ia
l res
olu
tio
n of the
sha
re
hol
de
rs pa
ss
ed i
n gen
er
al m
eeti
ng a
nd
were l
ast a
me
nd
ed in M
ay 2021
.
Corporate go
vernance report
The corporate go
vernance report on
page 80
sh
ou
ld be r
e
ad a
s for
m
ing p
ar
t of th
e
Directors’
report.
Employ
ees
T
o en
sur
e emp
loye
e wel
far
e, the Gr
oup h
as
documented
and well-
publicised policies on
occupational
health and saf
ety
, the en
vironment
an
d trai
nin
g. Th
e Gro
up op
er
ates a
n equ
al
opportunities, single-s
tatus,
employment polic
y
an
d an op
en m
an
age
me
nt st
y
le.
Zot
efoams operates
an equal opportunities
policy and
we belie
ve div
ersit
y (
ethnicity
, age,
gender
, language
, sexual orien
tation
, gender
re-orientation
, religion
, socio-economic status
,
personality and ability) o
f the
employees
promot
e
s a be
tter working envir
onment, which
in
turn leads t
o innova
tion and
business success.
Applications
for employment
by
disabled
pe
rso
ns a
re al
ways fu
ll
y con
sid
ere
d an
d, in th
e
even
t of an e
mpl
oyee b
ec
omi
ng d
isa
bl
ed, eve
r
y
ef
fo
r
t is ma
de to en
sure t
hat th
eir e
mp
loy
me
nt
wi
th Zotefoam
s co
ntin
ue
s and t
hat a
ppro
pr
iate
tra
ini
ng is p
rovi
ded w
he
re ne
ce
ss
ar
y
. Zotefo
ams’
pol
icy i
s that t
he tra
ini
ng, c
are
er d
evel
opm
en
t
and promo
tion of
disabled persons should,
as
far a
s po
ssi
bl
e, be id
enti
ca
l to that of oth
er
employees.
Zo
tef
oams places considerable v
alue on t
he
involv
ement of
its people
and holds f
ormal and
informal meet
ings t
o brief them on
matters
af
fe
cti
ng the
m as e
mp
loye
es a
nd on th
e var
io
us
fact
ors (including fi
nancial and economic fa
ctors
)
af
fe
cti
ng the p
er
for
man
ce of th
e Gro
up; it al
so
en
sure
s tha
t the
ir vi
ews a
re ta
ken in
to acco
unt
inma
ki
ng d
eci
si
ons w
hic
h ar
e likel
y to af
fe
ct th
eir
inte
res
ts. In the U
K, th
ere i
s a Jo
int C
ons
ult
ative
Committee (
JCC)
, which comprises
an employ
ee
repr
esenta
tive
from each
depar
tmen
t.
The J
CC
me
ets re
gul
ar
ly a
nd co
ns
ide
rs a w
ide r
an
ge of
mat
ter
s af
fe
cti
ng th
e emp
loye
es’ cu
rre
nt an
d
fu
ture i
ntere
sts. Fro
m Jan
ua
r
y 201
9, J Car
lin
g
has a
tte
nde
d me
eti
ngs of th
e JC
C in hi
s
ca
pac
it
y as B
oar
d rep
res
ent
ative, to prov
id
e
em
ploye
es w
ith a
n op
por
tuni
t
y to eng
age w
ith
the B
oar
d and a
llo
w the Bo
ard to have r
eg
ard
to
employ
ees’
views in
their decision-making
.
In ord
er to e
nco
ura
ge e
mpl
oyee
s to sha
re in t
he
suc
ce
ss of Zotefo
am
s, an a
ll-e
mp
loye
e sh
are
inc
en
tive sc
he
me wa
s es
tab
lis
he
d in 201
5 in
theU
K. Un
de
r the s
che
me, e
mpl
oyee
s ca
n
purchase shar
es each month
directly from t
heir
salar
y
. For
every four shares
bought,
one fur
ther
sha
re is aw
ard
ed. T
he sh
are
s ves
t on th
e thi
rd
an
nive
rs
ar
y of award a
nd a
re nor
ma
ll
y exempt
fro
m ta
x af
te
r five ye
ar
s.
Th
e Com
pa
ny op
erate
s to a num
be
r of
recognised industry standards, including Quality
(ISO 9
0
01
)
, Env
iron
me
nta
l (ISO 1
40
01
) and
Oc
cup
atio
nal H
ea
lth a
nd S
afet
y (IS
O 450
01
).
Further details of our
cer
tifications are provided
in o
ur S
HE se
c
ti
on on
pag
e 63.
Relationships with o
thers
Th
e Boa
rd ha
s had r
ega
rd to the fo
ster
in
g of the
Group
’
s business relat
ionships wit
h suppliers,
cust
omers and ot
hers in its
decision-making
pro
ce
ss in o
rde
r to ach
ieve g
ood
-qu
al
it
y
out
comes.
Further inf
ormation on
this t
opic can be found
onpa
ge
s 7
4 to 77 of the S
trate
gic R
ep
or
t (th
e
s
1
72(
1
) sta
teme
nt), whic
h is in
co
rp
orate
d into
thi
sDire
cto
rs’ rep
or
t by cr
oss
-refe
ren
ce.
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
101
Zot
efoams plc
An
nua
l Re
por
t 2021
Human rights
Zotefoa
ms do
es n
ot, at pre
sen
t, have a sp
ec
ific
pol
icy o
n hu
man r
ig
hts; howeve
r
, it b
el
ieve
s in
rec
og
nis
ing a
nd re
sp
ec
ting a
ll h
uma
n ri
ghts a
s
defined in
internat
ional conv
entions.
This belief i
s
em
be
dde
d wi
thin t
he or
gan
is
atio
n’
s val
ue
s an
d
ethical pol
icies. W
e conduct e
very aspect of our
business with
honesty
, integrity and openness,
res
pe
cti
ng hu
ma
n rig
hts a
nd the i
ntere
sts of o
ur
em
ploye
es, c
usto
mer
s an
d othe
r sta
keh
old
er
s,
according t
o the principles set out
in our E
thics
Poli
cy
, w
hi
ch cov
ers:
X
Ens
uri
ng o
ur em
pl
oyee
s have th
e fre
ed
om to
join a
union, associa
te or
bargain collectively
wi
thou
t fea
r of di
scr
im
inat
ion a
ga
inst t
he
ex
ercising o
f such freedoms
X
Not usi
ng forced
labour or child
la
bour and
X
Re
spe
cti
ng th
e ri
ghts of p
ri
vacy of o
ur
em
ploye
es a
nd p
rotect
ing a
cce
ss a
nd u
se
of
their personal
information
.
The Company
operates
an Equal Opportunities
Poli
cy an
d a Di
gni
t
y at Work Po
lic
y
, w
hic
h
pro
mote the r
igh
t of ever
y em
ploye
e to be
trea
ted wi
th di
gni
t
y and r
es
pec
t an
d not be
ha
ras
se
d or bu
lli
ed. We wor
k ha
rd to ens
ure
thatg
oo
ds an
d se
r
vi
ce
s are f
rom s
ourc
es t
hat
do not j
eo
pa
rdis
e hum
an r
igh
ts, saf
et
y or th
e
env
iro
nme
nt, an
d exp
ect o
ur s
upp
lie
rs to
obser
ve
business principles consist
e
nt wit
h
ourow
n.
Business
ethics
Zotefoa
ms is c
omm
it
ted to hi
gh st
and
ard
s of
business conduct and
aims t
o maintain
these
sta
nd
ards a
cro
ss a
ll of ou
r ope
rat
ion
s
throughout t
he world
. Under our E
thics P
olicy
,
we sta
te that we wi
ll:
X
Op
era
te with
in th
e law
X
Not t
olerate an
y discriminat
ion or harassment
X
Not mak
e any political
donations
or grant
public donat
ion for
the purpose
of pol
itical
advo
ca
cy of any k
in
d
X
Not ma
ke or re
ce
ive b
rib
es
X
Av
oid situa
tions t
hat might
give rise
to
conflicts
of
int
erest
X
Not e
nter in
to any ac
tiv
it
y that m
ig
ht be
considered ant
i-competitiv
e
X
Aim t
o be a
responsible compan
y within
our
local communities and
X
Support and encourage our employ
ees
to
report, in
confidence,
any suspicions
of
wrongdoing.
Supporting our Et
hics Policy
, we ha
ve policies
ona
nti-b
rib
er
y and c
or
ru
ptio
n, anti-f
rau
d,
anti-compet
itive
behaviour
, emplo
yee share
trading
and whistleblowing
.
In 2020, we intr
odu
ce
d a de
cla
rati
on of
adherence t
o the principles laid
out in t
he
Ant
i-B
rib
er
y and C
or
ru
ptio
n, Anti
-Frau
d an
d
Ethics
policies in t
he business dealings
of all
new
suppliers. Suppliers
’ ethical ma
tters were
fur
ther
revi
ewe
d in 2021 throu
gh th
e ana
ly
sis of th
e top
50 su
ppl
ie
rs by tu
rnove
r as p
ar
t of th
e wor
k
tocom
pil
e our m
od
er
n slave
r
y st
atem
ent:
https:/
/w
w
w
.zotefoams.com/wp-c
ontent/
uploads/2
02
1
/06/
202
1
061
5-Modern-Slavery-
Act
-statement
-FINAL.
pdf.
Supplier
s
’ ethi
cal
dis
clo
su
res w
ill re
ma
in u
nde
r rev
iew.
Substa
ntial shareholdings
In ac
co
rda
nce w
ith th
e Di
scl
osu
re an
d
T
ra
nsp
are
ncy R
ul
es DTR 5, the C
om
pany,
asat5 A
pr
il 2022, had re
ce
ive
d noti
ce
s of
thefo
llow
in
g mater
ia
l inte
res
ts of 3% or
mor
einthei
ss
ue
d ordi
na
r
y sh
are c
ap
ita
l:
Ordinary
shares
of
5.0p
Percentage
of
issued
share
capital
Schroders plc
6
,03
6,0
9
6
12
.
41
Inves
co Ltd
4
,
0
0
7,
9
1
0
8.29
Premier Mit
on
Gro
uppl
c
2
,629,
1
29
5
.
41
BlackRoc
k, Inc
2,
5
6
9,
3
37
5
.27
Highclere In
ternational
Inv
estors LLP
2,4
5
5,
5
61
5.05
Canaccord Genuity
Group
, Inc
2,3
1
7
,33
4
4.9
0
Cla
ire a
nd M
arc
Downes
2,
10
2,0
9
0
4.3
2
Nicholas Adrian
Beaumont
-Dark
1
,938,35
2
3.9
9
A
X
A Inves
tme
nt
1,
7
5
3
,
9
3
4
3
.61
Pershing Securities
Limited
1,7
3
5
,
6
2
0
3.
57
D
ir
ec
to
r
s’ sh
ar
eh
ol
din
gs a
re s
ho
wn in t
he
Director
s’
Remuneration repor
t on
pages 95
an
d96.
Research
and dev
elopment
Th
e amo
unt s
pe
nt by th
e Grou
p on R&
D in
theye
ar wa
s £80
6k (2020: £1
,01
4k
). In the
opi
ni
on of the D
ire
ctor
s, £627k (2020: nil)
ofthi
sexpe
nd
itu
re met t
he re
qui
rem
ent
s
forc
api
ta
lis
atio
n un
der I
AS 38, w
hil
e £1
79
k
(2020:£1
,01
4k) di
d not a
nd was c
on
seq
ue
ntly
exp
ens
ed i
n the c
ons
oli
date
d inc
ome s
tate
me
nt.
Share capital
and reserves
The Company
has one class
of or
dinar
y shares,
wh
ich h
as no r
ig
ht to fixed i
nc
ome. E
ach s
ha
re
ca
rr
ie
s the r
igh
t, on a pol
l, to one vote at g
ene
ra
l
me
etin
gs of th
e Com
pa
ny
. T
he
re are n
o sp
ec
ific
res
tri
cti
ons o
n the s
ize of a ho
ldi
ng no
r on th
e
tra
nsfe
r of sh
are
s, wh
ich a
re bot
h gove
rne
d by
the g
en
era
l prov
isi
on
s of the A
r
tic
le
s of
Association
and prev
ailing legislat
ion. The
Di
rec
tors a
re not awa
re of any a
gre
em
ent
s
bet
we
en h
old
er
s of the C
omp
any’s sha
res th
at
may re
sul
t in re
str
ic
tion
s on th
e tra
nsfe
r of
se
cur
iti
es o
r on votin
g ri
ghts. N
o pe
rs
on ha
s any
special rights
of cont
rol o
ver t
he Company’
s
sha
re c
api
ta
l and a
ll is
su
ed s
ha
res a
re fu
lly p
ai
d.
At 3
1 De
ce
mb
er 2021
, the Zotefo
am
s
Employ
ees’ Benefit
T
rust (EBT) held 1
96,888
sha
re
s (app
roxim
atel
y 0.4
% of is
sue
d sh
are
ca
pit
al
) (2020: 459,20
1 sh
are
s) to satis
f
y
sha
repl
an
s as de
sc
ri
be
d in the D
ire
ctor
s’
Re
mun
er
atio
n rep
or
t. Du
ri
ng the y
ear
, the EBT
rel
ea
se
d 262
,31
3 sh
are
s in re
sp
ect of t
he
se
sha
re pl
an
s. In ac
co
rda
nce w
ith b
es
t pra
ctic
e,
the voti
ng r
ight
s on th
e sha
res h
el
d in th
e EBT
are n
ot exerc
ise
d an
d the r
ight to re
ce
ive
div
id
en
ds ha
s be
en wa
ive
d.
At the AGM h
eld o
n 26 May 2021
, au
thor
it
y wa
s
giv
en to the D
ire
ctor
s to all
ot uni
ss
ued s
ha
res
inth
e Com
pa
ny up to a ma
x
imu
m am
oun
t
eq
uiva
le
nt to ap
proxi
mate
ly t
wo-thi
rds of th
e
issued share capital
of t
he Company
. Authority
was a
lso g
ive
n to the Di
rec
tors to a
llot e
qui
t
y
securities in t
he Company
for cash
without
reg
ard to th
e pre
-e
mptio
n prov
is
ion
s of the
Companies Act
2006. Bot
h authorities
expire
atthe AGM to b
e he
ld on 25 May 2022.
TheDirect
ors seek new authorit
ies for a
fu
r
the
ryea
r
, in l
ine w
ith m
ar
ket pra
cti
ce.
Th
e Com
pa
ny was g
ive
n auth
or
it
y at th
e 2021
AGM to purc
ha
se up to 4,862,
1
23 of i
ts ord
ina
r
y
sha
re
s. Th
is au
tho
rit
y w
ill a
lso ex
pi
re on 25 May
2022 an
d, at the d
ate of this R
ep
or
t, ha
d not
be
en u
sed. I
n acc
ord
an
ce wi
th no
rm
al pr
acti
ce
for li
sted c
om
pan
ie
s, a sp
eci
al re
so
lut
ion w
ill b
e
pro
pos
ed at th
is ye
ar’s A
GM to se
ek a n
ew
aut
hor
it
y to ma
ke mar
ket pu
rch
ase
s up to a
ma
x
imu
m of 1
0% of the is
su
ed s
ha
re ca
pit
al
ofthe C
omp
any.
10
2
Zot
efoams plc
An
nua
l Re
por
t 2021
Director
s
’ repor
t
Continued
Subsidiaries and
branches
Det
ail
s of the j
oin
t ventu
re
s, sub
sid
ia
rie
s an
d
bra
nc
he
s wit
hin th
e Gro
up a
re gi
ven in t
he
financial stat
eme
nts
.
T
reasur
y and
fina
ncial
instruments
Informat
ion in r
espect of t
he Group
’
s policies on
financial risk management
objectives,
including
pol
ic
ies f
or he
dg
ing, a
s well a
s an i
ndi
cat
ion of
exp
osu
re to fina
nci
al r
is
k, is gi
ven i
n note 21
tothe fin
anc
ia
l state
me
nts.
Fu
ture de
velopmen
ts
Informat
ion on fut
ure dev
elopments f
or the
Gro
up ha
s be
en s
et ou
t in a
n Intro
duc
tio
n fro
m
our C
ha
ir an
d the G
rou
p CEO’
s rev
iew on p
ag
es
30 to 37
.
Greenhouse gas emissions
Informat
ion on t
he Group
’
s greenhouse gas
em
iss
io
ns may b
e fou
nd in th
e ESG rep
or
t
onpa
ge 6
6.
Pension schemes
Refer t
o the post
-employment benefits
section
ofthe G
rou
p CFO’
s revi
ew an
d note 23 to the
financial stat
eme
nts
for in
formation
related
totheCo
mpa
ny’s pens
ion s
che
me
s.
In the U
K, Zotefo
am
s plc r
uns a n
um
be
r
of
defined cont
ribution pension
schemes.
Newj
oin
er
s are e
li
gib
le to joi
n the Zotefo
ams
Stakeholder P
e
nsion Scheme
.
Finance
costs capitalised
Refe
r to note 6 to the fin
an
cia
l sta
teme
nts
fordetails
of borrowing cost
s capitalised
bytheG
rou
p.
Ev
ents after the
repor
ting period
Refe
r to note 27 to the fina
nci
al s
tatem
ent
s for
det
ail
s of any eve
nts af
ter the r
epo
r
tin
g pe
ri
od
affecting the
Group
.
Disclosure of
informat
ion t
o Auditor
Th
e Di
rec
tors w
ho he
ld of
fi
ce at th
e date of
ap
prova
l of this D
ire
ctor
s’ repo
r
t co
nfir
m tha
t,
inso f
ar a
s they a
re ea
ch awa
re, the
re is
nore
leva
nt au
dit i
nfor
mat
ion of w
hi
ch th
e
Company’
s E
xternal Audit
or is
unaware
, and
ea
ch Di
rec
tor ha
s ta
ken al
l the ste
ps th
at they
oug
ht to have ta
ken a
s a Di
rec
tor in or
der to
ma
ke them
se
lve
s aware of a
ny re
leva
nt au
dit
informat
ion and t
o establish that
the Compan
y’
s
Ex
ternal Audit
or is aw
are o
f that
informat
ion.
Independent A
uditor
A resolut
ion t
o re-appoint
PKF Littlejohn
LLP as
the Compan
y’
s Audit
or will
be proposed
at the
forthcoming A
GM.
On b
eh
alf of t
he Bo
ard.
G C McG
r
at
h
Director
6 Ap
ril 20
22
Strat
egic Repor
t
Gove
rn
an
ce
Financial Stat
e
ments
10
3
Zot
efoams plc
An
nua
l Re
por
t 2021
Statement of
Directors’ responsibili
ti
es
in re
spe
ct of t
he fi
nanc
ial s
ta
teme
nts
The Directors consider the Annual Repor
t
, tak
en
as a who
le, to be fair
, bala
nced a
nd u
nd
er
st
an
da
ble
The Direct
ors are r
esponsible for
preparing the
An
nua
l Re
po
r
t and t
he fin
an
cia
l sta
teme
nts in
accordance with
a
pplicable law
a
nd r
egulation.
Co
mpa
ny law re
qu
ire
s the D
ire
ctor
s to prep
are
financial stat
eme
nts
for each
financial year
.
Und
er th
at law, the Di
rec
tors h
ave pre
pa
red th
e
Group and
Company financial
stat
ements in
accordance with
UK-
adopt
ed int
ernational
accounting
standards.
Under company
law
,
theD
ire
ctor
s mus
t not a
pprove t
he fin
an
cia
l
state
me
nts un
le
ss th
ey are s
ati
sfie
d that t
hey
giv
e a tru
e and f
air v
ie
w of the st
ate of af
fa
ir
s
ofthe G
rou
p and C
om
pany a
nd of th
e profi
t or
los
s of the G
rou
p an
d Com
pa
ny for th
at pe
ri
od.
In pre
pa
ri
ng the fi
na
nci
al s
tatem
ent
s, the
Dire
ctors are requ
ired to
:
X
Select suitable
accounting
policies
an
dthe
napp
ly th
em c
ons
iste
ntly
X
Stat
e whether
applicable UK
-adopt
ed
inte
rna
tion
al a
cco
unt
ing st
an
dar
ds have b
ee
n
follow
ed subject t
o any mat
er
ial departures
disclosed and
explained in
the financial
statements
X
Make ju
dg
em
ents a
nd a
cco
unti
ng e
stim
ates
that
are reasonable
and prudent and
X
Prepare
the financial
stat
ements on t
he going
concern basis unless it
is inappropriate
to
pre
sum
e tha
t the G
roup a
nd C
om
pany w
ill
continue in
business.
The Direct
ors are r
esponsible for
safeguarding
the a
sse
ts of the G
rou
p an
d Com
pa
ny and
hence for
taking reasonable st
epsfor t
he
preve
nti
on an
d dete
cti
on of f
rau
dand oth
er
irregularities.
The Direct
ors are r
esponsible for
keeping
ade
qu
ate acc
ou
ntin
g rec
ords t
hat a
re su
f
fici
en
t
to show a
nd ex
pla
in th
e Gro
up’
s a
nd Co
mpa
ny’s
transactions
a
nd disclose
w
ith
reasonable
accuracy
at any
time t
he financial posit
ion of
the
Group and
Company and
enable them t
o ensure
that
the financial s
tatement
s and t
he Direct
ors’
Remuneration
repor
t comply
with the
Companies Act
2006.
The Direct
ors are also
responsible for the
maintenance
and int
egrity of the
Company’
s
websit
e. L
egislation in
the Unit
ed Kingdom
governing t
he preparat
ion and dissemination
offina
nc
ia
l state
me
nts may d
if
fe
r fro
m
legislation
in o
ther jurisdict
ions.
Directors’ confirmations
The Direct
ors consider tha
t the
Annual
Re
por
t, ta
ken a
s a wh
ole, is f
ai
r
, bal
an
ce
d and
understandable and pr
ovides the
informat
ion
ne
ce
ss
ar
y fo
r sh
are
hol
de
rs to as
se
ss th
e
position and
per
formance,
busine
ss model
an
dstrate
gy of th
e Gro
up a
nd Co
mpa
ny
.
Eac
h of the D
ire
ctor
s, wh
ose n
am
es a
nd
fu
ncti
on
s are li
sted o
n pag
es 78 an
d 79 of
theA
nn
ual R
ep
or
t, co
nfir
m that, to the b
es
t
ofthe
ir k
now
led
ge:
X
The Consolidat
e
d and
Company financial
state
me
nts, wh
ic
h have be
e
n pre
pare
d in
accordance with
UK-
adopt
ed int
ernational
acc
ou
ntin
g sta
nda
rds, g
ive a tr
ue a
nd fa
ir v
iew
of t
he assets
, liabilit
ies, financial posit
ion and
profi
t of the G
rou
p and C
om
pany a
nd
X
Th
e Gro
up CEO’s review i
ncl
ud
es a fa
ir rev
ie
w
of the d
evel
opm
en
t and p
er
for
man
ce of th
e
business and t
he position
of t
he Group and
Co
mpa
ny
. A d
es
cr
iptio
n of the p
ri
nci
pal r
is
ks
an
d unc
er
t
ain
tie
s fac
ed by th
e Gro
up a
nd the
Co
mpa
ny is pr
ovid
ed o
n pag
es 47 t
o 54.
Independ
ent auditor’
s repor
t to
the members of Z
otef
oams
plc
Opinion
We have au
dite
d the fin
an
cia
l sta
teme
nts of Zotefo
ams p
lc (th
e ‘pare
nt co
mpa
ny’) an
d its s
ubs
id
iar
ie
s (the ‘gro
up’) for the ye
ar e
nd
ed 31 Dec
em
be
r
202
1 which comprise
the Consolida
ted I
ncome Stat
ement,
the Consolida
ted Sta
tement
of Comprehensiv
e Income
, the
Consolidated
Stat
ement of
Fin
an
cia
l Posi
tio
n, the C
omp
any S
tatem
ent o
f Fin
anc
ia
l Posi
tio
n, the Co
nso
li
dated S
tate
me
nt of Cas
h Fl
ows, the C
om
pany S
tate
men
t of Cas
h Fl
ows,
the C
ons
oli
date
d state
me
nt of Ch
ang
es i
n Equ
it
y an
d the C
omp
any S
tatem
ent o
f Cha
ng
es in Eq
ui
ty a
nd n
otes to the fi
nan
ci
al st
ateme
nts, i
ncl
udi
ng
significant account
ing policies.
The financial r
epor
ting framew
ork tha
t has been applied
in their
preparation
is applicable la
w and UK
-adop
ted in
ternational
acc
ou
ntin
g sta
nda
rds a
nd a
s reg
ard
s the pa
re
nt co
mpa
ny fin
anc
ia
l state
me
nts, as a
pp
lie
d in ac
co
rda
nce w
ith t
he prov
is
ion
s of the C
omp
an
ie
s Act 20
06.
In our
opinion:
X
the fi
nan
ci
al st
ateme
nts g
ive a tr
ue a
nd fa
ir v
iew of th
e state of th
e gro
up’
s a
nd of th
e par
ent c
omp
any’s af
fai
rs as a
t 3
1 De
ce
mb
er 2021 and of t
he
gro
up’
s pr
ofit for t
he ye
ar th
en e
nde
d
X
the gr
oup financial st
atements
have been properly pr
epared in
accordance with
UK
-adopted
internat
ional account
ing standards
X
the p
are
nt co
mpa
ny fin
anc
ia
l state
me
nts have b
ee
n pro
pe
rl
y pre
par
ed in a
cc
orda
nc
e wi
th UK-adopte
d inter
nat
ion
al ac
co
unti
ng st
and
ard
s an
d as
ap
pli
ed in a
cc
ord
anc
e wi
th the p
rovi
sio
ns of th
e Com
pa
nie
s Act 20
0
6 an
d
X
the fi
nan
ci
al st
ateme
nts h
ave be
en p
rep
are
d in ac
co
rda
nce w
ith th
e req
ui
rem
ents of t
he Co
mp
ani
es Ac
t 20
06.
Basis for
op
inion
We
conducted
our audit i
n accordance wit
h Int
e
rnational
Standards on A
uditing (UK) (IS
As (UK)) and
applicable law
. Our r
esponsibilities under
those
standards ar
e further described in the
Audit
or’
s responsibilities
for t
he audit o
f the
financial stat
eme
nts
section of
our repor
t.
We
are independent o
f the
gro
up an
d par
ent c
om
pany i
n acc
ord
an
ce wi
th th
e ethi
ca
l req
uire
me
nts th
at are r
ele
vant to ou
r au
dit of th
e fin
anc
ia
l state
me
nts in th
e UK
, inc
lud
ing
the FR
C’
s Eth
ic
al S
tan
dar
d as ap
pl
ied to li
sted p
ubl
ic in
tere
st e
ntiti
es, a
nd we h
ave ful
fill
ed o
ur oth
er eth
ic
al re
sp
ons
ibi
lit
ie
s in ac
cor
dan
ce w
ith th
es
e
req
uir
eme
nts. We be
li
eve tha
t the au
di
t evid
en
ce we h
ave obta
in
ed is s
uf
fi
cie
nt a
nd a
ppro
pr
iate to prov
ide a b
asi
s for o
ur op
ini
on.
Conclusions relating t
o going
concern
In au
dit
ing th
e fina
nc
ia
l state
me
nts, we have c
on
clu
de
d that th
e dir
ecto
rs’ use of t
he go
ing c
on
ce
rn ba
sis o
f acc
oun
ting i
n the p
rep
ara
tion of t
he fin
an
cia
l
state
me
nts is a
pp
ropr
iate. O
ur eva
lua
tion o
f the di
rec
tors’ as
se
ss
me
nt of the g
rou
p
’
s an
d par
ent c
om
pany’s abil
it
y to co
ntinu
e to ado
pt the g
oin
g con
ce
rn
bas
is of ac
co
unti
ng in
clu
de
d:
X
checking the ma
thematical a
ccuracy o
f the
spreadsheet used t
o model future
financial performance, agreed t
he underlying cash flo
w project
ions t
o
ma
nag
em
ent-ap
prove
d fore
ca
sts, re
ca
lcu
lati
ng th
e imp
act o
n ban
ki
ng c
oven
ants a
nd li
qu
idi
ty h
ea
dro
om for th
e ba
se ca
se s
ce
nar
io
X
eval
uati
ng th
e as
sum
ptio
ns re
gar
din
g the lo
ss i
n reven
ue a
nd as
so
ci
ated EBI
TDA im
pac
t, the as
soc
iate
d poten
tia
l cos
t sav
ing
s and t
he pote
ntia
l
de
cre
as
e in wor
ki
ng c
api
ta
l leve
ls tha
t cou
ld b
e ach
ieve
d in th
e down
si
de sc
en
ar
io
X
as
se
ssi
ng th
e imp
act of th
e mi
tig
ating f
acto
rs ava
ila
ble to m
ana
ge
me
nt in re
sp
ec
t of the a
bil
it
y to res
tri
ct ca
pi
tal ex
pe
nd
itur
e, cas
h pay
men
ts
associated
with dividends,
bonus and
share opt
ions
Bas
ed o
n the wo
rk we h
ave pe
r
for
me
d, we have not i
de
ntifi
ed a
ny mate
ri
al un
ce
r
ta
inti
es re
lati
ng to eve
nts or c
ond
iti
ons th
at, ind
iv
idu
al
ly or c
ol
le
ctive
ly,
may c
ast s
ign
ifi
ca
nt dou
bt on th
e gro
up’
s o
r pare
nt c
omp
any’s abil
it
y to con
tinu
e as a g
oin
g con
ce
rn fo
r a pe
ri
od of at l
ea
st t
wel
ve mon
ths fr
om wh
en th
e
fina
nc
ial s
tate
men
ts are a
uth
or
ise
d for is
su
e.
In re
lati
on to the e
ntit
ie
s rep
or
ti
ng on h
ow they h
ave ap
pli
ed th
e UK C
orp
or
ate Gove
rna
nc
e Co
de, we have n
othin
g mate
ri
al to add o
r draw a
tte
ntio
n to in
relation
to
the dir
ectors
’ statement
in the
financial stat
eme
nts
about whether t
he direct
ors considered it appropria
te t
o adopt t
he going
concern basis of
accounting
.
Our responsibilit
ies and the
responsibilities
of t
he direct
ors with
respect t
o going concern ar
e described in t
he relev
ant sections
of t
his report.
Our application of
materialit
y
Th
e sco
pe of o
ur au
dit w
as infl
ue
nc
ed by ou
r ap
pli
cati
on of m
ater
ial
it
y
. We set ce
r
ta
in q
uan
tita
tive th
res
ho
lds fo
r mate
ri
ali
ty. The
se, toge
the
r wit
h
qua
li
tati
ve co
nsi
der
atio
ns, h
elp
ed u
s to deter
mi
ne the s
co
pe of ou
r au
dit a
nd th
e natu
re, timi
ng a
nd ex
tent of o
ur a
udi
t pro
ced
ure
s on th
e in
div
id
ual
fina
nc
ial s
tate
men
t lin
e item
s an
d dis
clo
sur
es a
nd in ev
alu
atin
g the ef
fec
t of mis
st
ateme
nts, b
oth ind
iv
idu
al
ly a
nd in a
ggre
ga
te on the fi
nan
ci
al st
atem
ents
as a w
hol
e.
10
4
Zot
efoams plc
An
nua
l Re
por
t 2021
Based on our
prof
essional judgement,
we de
termined mat
er
iality for
the financial s
tatement
s as a
whole as f
ollows
:
Group financial
stat
ements
Company financial
stat
ements
Overall mat
eria
lity
£
350
,000
(
20
20
: £
400
,000)
£
3
1
5
,
000 (
20
20
: £3
60,
000)
Performance mat
erialit
y
£2
45
,000
(2
02
0: £
2
40
,000)
£220,50
0 (2020: £
21
6,00
0)
Basis of
materiality
5% of profit be
fore ta
x (“PBT
”)
5
% of PBT ca
pp
ed at 9
0% of gro
up
Rationale
Th
is is th
e pr
ima
r
y key pe
r
fo
rm
anc
e
ind
ic
ator us
ed by ma
na
ge
men
t in as
se
ss
ing
the p
er
fo
rm
an
ce of th
e grou
p. As a profi
t
generating gr
oup
, we
c
onsider the
use
rs of
thefi
nan
ci
al st
ateme
nts, s
uch a
s inve
stor
s,
wil
lal
so co
nsi
de
r PBT to be a key me
tric.
Th
is is th
e pr
ima
r
y key pe
r
fo
rm
anc
e ind
ic
ator
use
d by ma
nag
em
en
t in as
se
ss
ing th
e
pe
r
for
ma
nce of t
he co
mp
any
. As a p
rofit
generating comp
any
, we
consider the
users
ofthe fi
nan
ci
al st
atem
ents, s
uc
h as inve
stor
s,
wil
lal
so co
nsi
de
r PBT to be a key me
tric.
For each
component in t
he scope o
f our
group audit
, we allocat
e
d a
materiality tha
t is less
than our o
verall
group mat
er
iality
. The range o
f mat
eriality
all
oc
ated ac
ros
s co
mpo
ne
nts wa
s bet
we
en £6
8,00
0 an
d £31
5,0
00 (2020: £1
45,00
0 a
nd £3
60,00
0). Cer
tai
n co
mpo
ne
nts wer
e aud
ited to a lo
ca
l sta
tutor
y
audit mat
er
iality that
was also
less than our
overal
l group
materiality
. W
e agreed wit
h the
Audit Committee t
hat w
e would
report to
them misstat
eme
nts
ide
nti
fie
d dur
ing o
ur a
udi
t ab
ove £1
7
,50
0 (gro
up au
dit) a
nd £1
5,7
50 (co
mpa
ny au
dit) a
s well a
s mi
sst
atem
ents b
el
ow tho
se am
ou
nts tha
t, in our v
iew,
war
ran
ted re
por
ting fo
r qu
ali
tati
ve re
aso
ns.
Ou
r ap
p
roa
ch to t
h
e au
di
t
As pa
r
t of de
si
gn
ing o
ur au
dit, we d
eter
min
ed m
ater
ial
it
y an
d as
se
sse
d the r
is
k of mate
ria
l mi
sst
atem
ent i
n the F
ina
nci
al S
tatem
en
ts. In pa
r
tic
ul
ar
, we
loo
ked at a
re
as invo
lv
ing s
ign
ifi
ca
nt acc
ou
ntin
g est
imate
s an
d jud
ge
me
nt by the d
ire
ctor
s and c
on
sid
ere
d fu
tur
e event
s that a
re in
her
entl
y un
ce
r
tai
n
suc
h as th
e im
pai
rm
ent of i
nta
ngi
ble a
ss
ets an
d as
sum
ptio
ns us
ed i
n ca
lcu
lati
ng th
e defi
ned b
en
efit p
en
sio
n sc
he
me. We als
o add
res
se
d the r
is
k of
ma
nag
em
ent ove
rr
id
e of inter
na
l co
ntrol
s, inc
lu
din
g amo
ng oth
er m
at
ters c
on
sid
er
atio
n of whe
the
r the
re was ev
id
en
ce of bi
as th
at re
pre
se
nted a r
isk
ofmate
ria
l mi
sst
atem
ent d
ue to fr
aud.
The Group has
nine trading companies
(including join
t vent
ures)
within t
he consolidat
e
d financial s
tatement
s, one
based in t
he UK, one
base
d in
Euro
pe, fou
r in As
ia a
nd thr
ee in t
he US
A. We id
enti
fie
d fou
r sig
nifi
ca
nt co
mp
one
nts, th
e pa
rent c
om
pany, Z
otefoa
ms In
c, Mu
Ce
ll E
x
tru
si
on LLC (ME
L)
an
d Zotefoam
s Pola
nd S
p.z.
o.o
., whic
h were s
ubj
ec
t to a ful
l sco
pe au
di
t by a team w
ith re
lev
ant s
ecto
r expe
r
ien
ce u
nde
r
ta
ken f
rom o
ur of
fic
e ba
sed
in Lo
ndo
n. We have vi
site
d the U.S. com
po
ne
nts for th
e au
dit a
nd we e
nga
ge
d the a
ss
ista
nc
e of PKF n
et
wor
k firm
s to ass
ist w
ith i
nven
tor
y co
unt
pro
ce
dure
s as we we
re n
ot abl
e to vis
it th
e som
e of the ove
rs
ea
s com
po
ne
nts du
e to the COVI
D trave
l res
tri
ctio
ns in p
la
ce
In ad
diti
on, we i
den
tifi
ed co
mp
one
nts w
hic
h wer
e mater
ia
l bu
t not si
gni
fic
ant to th
e grou
p an
d pe
r
for
me
d an au
di
t of spe
ci
fic ac
co
unt ba
la
nc
es a
nd
cla
ss
es of tr
an
sac
tio
ns to ens
ure th
at ba
la
nce
s wh
ic
h were m
ater
ial to th
e grou
p wer
e sub
je
ct to aud
it pr
oce
du
res, i
ncl
udi
ng:
X
Reve
nu
e, cost of s
al
es a
nd ba
nk i
n Zotefoam
s Op
er
atio
ns Ltd
X
Prop
er
t
y
, pl
ant a
nd e
qui
pme
nt, inve
ntor
y
, cre
di
tors, re
venu
e, cos
t of sa
le
s and ex
pe
ns
es in Zotef
oam
s T
-FI
T Mate
ri
al T
e
chn
ol
og
y (Kuns
ha
n) Co. Ltd
X
Inve
ntori
es, re
venu
e, cos
t of sa
le
s an
d expe
ns
es i
n Zotefoam
s Mid
we
st LLC and
X
Inve
ntori
es, re
venu
e an
d co
st of sa
le
s in T
-
FIT In
sul
atio
n So
luti
on
s Ind
ia Pr
ivate Ltd.
Th
e com
po
ne
nts id
enti
fie
d as n
ot sig
nifi
ca
nt an
d not m
ater
ial we
re su
bje
ct to rev
iew p
roc
ed
ure
s und
er
take
n by the s
am
e aud
it tea
m.
Th
e app
roa
ch gave t
he au
dit te
am th
e fol
lowi
ng c
overa
ge:
Coverage of PBT
Full
Specific
Analytical
Coverage of gross assets
Full
Specific
Analytical
Strat
egic Repor
t
Gov
ernance
Financial Statements
10
5
Zot
efoams plc
An
nua
l Re
por
t 2021
Key aud
it m
at
t
er
s
Key aud
it m
atte
rs a
re tho
se ma
tte
rs th
at, in ou
r profe
ss
ion
al j
udg
me
nt, were of m
ost s
ign
ifi
ca
nce i
n our a
ud
it of the fi
na
nci
al s
tatem
ent
s of the cu
rr
ent
pe
rio
d an
d inc
lud
e the m
ost s
ig
nifi
ca
nt as
se
ss
ed r
isks of m
ater
ia
l mis
sta
teme
nt (w
heth
er o
r not du
e to fra
ud) we i
de
ntifi
ed, in
cl
udi
ng tho
se w
hic
h had t
he
gre
ates
t ef
fe
ct on: the ov
era
ll au
di
t strate
gy
, the a
llo
ca
tion of r
eso
urc
es i
n the au
di
t; and di
rec
tin
g the ef
for
ts of th
e en
gag
em
en
t team. T
he
se m
atte
rs we
re
add
res
se
d in th
e con
text of o
ur au
di
t of the fi
nan
ci
al st
ateme
nts a
s a who
le, a
nd in fo
rm
ing o
ur op
in
ion th
ere
on, a
nd we d
o not prov
id
e a se
par
ate opi
nio
n
on these
matters.
Key a
ud
i
t ma
t
te
r
How o
u
r sc
op
e a
dd
r
es
s
ed t
h
is m
at
t
e
r
Imp
air
me
nt of in
tan
gib
le as
se
ts in M
EL (se
e note
s 1
2 a
nd 26)
The Group
’
s consolidat
ed statement
of financial
position
as at 31 Dec
em
be
r 2021 incl
ude
s int
an
gib
le as
se
ts wit
h a
ca
rr
y
in
g valu
e of $6.9
m (2020: $5.9m) in re
sp
ec
t of its c
as
h
ge
ne
ratin
g un
it, MEL, a
nd a
re com
pr
ise
d of go
od
wil
l that a
ros
e
on th
e acq
uis
iti
on of ME
L in a pre
vio
us ac
co
unti
ng pe
ri
od a
nd
capitalised dev
elopments cost
s relat
ing t
o a ne
w opportunity
derived
from
the
MuCell
®
technology called
ReZorce
®
.
MEL h
as hi
stor
ica
ll
y be
en lo
ss m
ak
ing a
nd h
as c
onti
nue
d
to incu
r lo
sse
s in 2021
. T
he Re
Zorc
e sol
uti
on is n
ot yet fu
ll
y
deve
lo
ped a
nd i
s see
k
ing to be a n
ew br
ea
k
thro
ugh p
rod
uct
for an established market
.
Go
odw
ill i
s req
uir
ed to be te
sted fo
r imp
air
me
nt a
nnu
all
y an
d
Inta
ng
ibl
e As
sets a
re re
qui
red to be te
sted fo
r im
pai
rm
ent w
he
n
an in
di
cati
on of im
pa
irm
en
t exis
ts an
d the l
oss
es b
ei
ng in
cur
red
in MEL a
re a
n exam
pl
e of a potent
ial i
mpa
ir
me
nt tri
gg
er
.
Th
e imp
air
me
nt rev
iew
s und
er
t
ake
n req
uire a s
ig
nifi
ca
nt
am
ount o
f esti
mate
s an
d jud
ge
men
ts to be ma
de by
ma
nag
em
ent, ma
ny of wh
ic
h are n
ew in th
e cur
re
nt yea
r
giv
enth
e deve
lop
me
nt of the R
eZo
rce tec
hn
olo
gy.
We have as
se
sse
d thi
s to be a key au
dit m
at
ter du
e to the
financial significance o
f the
balance and the
level of
judgement
an
d esti
mati
on re
qu
ire
d in co
nsi
de
ri
ng the b
al
anc
es
rec
over
abl
e am
oun
t.
Th
ere i
s no ch
an
ge in t
he ri
sk p
rofile f
rom t
he pr
io
r yea
r
.
Ou
r wor
k in thi
s are
a in
clu
de
d:
X
Obt
ain
ing a
nd re
vie
win
g the M
EL go
odw
ill i
mpa
ir
me
nt as
se
ss
men
t pre
par
ed by
Management
X
Gaining an understanding o
f the ReZ
orce technology through
discussions with k
ey
ma
nag
em
ent a
nd u
nde
rs
tan
din
g how i
t lin
ked tothe o
rig
ina
l Mu
ce
ll tec
hno
lo
gy
.
X
Ga
ini
ng an u
nd
er
sta
ndi
ng of th
e poten
tia
l mar
ket si
ze for th
e ReZo
rce s
olu
tio
n, how
ma
nag
em
ent a
re ai
min
g to brea
k into th
e ma
rket a
nd pote
ntia
l cu
stome
rs a
pp
etite fo
r
Re
Zorc
e
X
Ens
uri
ng th
at the
re wa
s a boa
rd ap
prove
d pla
n in p
lac
e for th
e deve
lo
pme
nt of
ReZo
rce a
nd th
at su
f
fici
en
t fu
ndi
ng was i
n pl
ace fo
r itsd
evel
opm
en
t and
X
Challenging management on the
development o
f ReZor
ce and obt
aining supporting
evi
de
nce t
her
eof th
rou
gh vi
si
ting M
EL an
d se
ein
g evi
de
nce of a
gre
em
ent
s for tr
ial r
un
s
with po
tent
ial cust
omers.
Ke
y observations
Th
e imp
air
me
nt c
ons
ide
rati
on
s cha
ng
ed du
ri
ng th
e yea
r to refle
ct th
e stag
eof the
development o
f ReZor
ce.
Re
sou
rce
s have b
ee
n all
oc
ated to Re
Zorce a
nd b
oar
d app
roved d
eve
lop
me
nt is in p
lac
e
with funding
committed.
Th
e Com
pa
ny has m
ad
e deve
lop
me
nt pro
gre
ss a
nd h
ave eng
ag
ed w
ith pa
r
tne
rs f
or
collaboration
and trial runs
.
Bas
ed o
n the wo
rk p
er
fo
rm
ed we d
o not co
ns
ide
r the
re to be a
n imp
air
me
nt.
Pens
io
n as
sum
ptio
ns (se
e note
s 23 an
d 26)
The group
’
s closed defined benefit pension
scheme
represents
one of
the largest
liabilities on
the consol
idated
state
me
nt of fin
anc
ia
l pos
iti
on at £4.
7m as at 3
1 De
ce
mb
er
2021 (2
020: £8.9
m)
. Th
e valu
ati
on of th
e sch
em
es li
ab
ili
tie
s
req
uir
es ma
na
ge
men
t to use th
eir j
ud
gme
nt in m
ak
in
g a
num
be
r of key as
sum
ptio
ns, be
in
g the ra
te of inflat
ion (C
PI and
RPI), thedi
sco
unt r
ate an
d the li
fe exp
ec
ta
ncy of th
e sch
em
e
members
.
While hist
oric assumptions
are not
e
d as
being within
acceptable ranges
, the
liability is highly s
ensitive t
o small
cha
nge
s.
Given the
financial significance and
the inherent
e
stimat
ion
wi
thin th
e ca
lc
ulat
ion th
is h
as be
en a
ss
es
se
d as a key au
dit
matt
er
.
Th
ere i
s no ch
an
ge in t
he ri
sk p
rofile f
rom 20
20.
Ou
r wor
k in thi
s are
a in
clu
de
d:
X
An a
ss
es
sme
nt of th
e ind
ep
en
de
nce a
nd c
omp
eten
ce of m
ana
ge
me
nt’s actua
r
y to
calculate
the pension scheme liability
X
An a
ss
es
sme
nt of th
e ap
prop
ri
aten
es
s of the key a
ssu
mpti
ons u
se
d by man
ag
eme
nt
to
value t
he pension liability
X
A co
mpa
ris
on of key a
ss
umpti
ons to b
en
chm
ar
ks pe
r
for
me
d by the PK
F Act
uar
ia
l tea
m
X
Obtaining con
firmations
and contr
ol reports from t
he inv
e
stment
manager and
cust
odian to
c
onfirm pension
assets
X
T
es
ting e
mp
loye
e dat
a use
d by the a
ctu
ar
y
X
T
esting contributions and pa
yments/claims paid
to bank
statements
X
An a
ss
es
sme
nt of w
heth
er a
deq
uate d
isc
los
ure
s have b
ee
n inc
lud
ed i
n the a
nnu
al
rep
or
t a
nd ac
co
unti
ng in l
ine w
ith I
AS 1
9.
Ke
y observations
We are sa
tisfi
ed th
at the ove
ra
ll me
tho
dol
og
y is ap
pro
pri
ate an
d the a
ssu
mpti
ons a
pp
lie
d
in re
lati
on to dete
rm
ini
ng th
e pen
si
on val
uati
on a
re wi
thi
n an ac
ce
ptab
le r
ang
e.
Th
e dis
cou
nt ra
te has in
cre
as
ed f
rom 1
.
2% in 2020 pa to 1
.8% pa in 2021
. We are
comfortable that
the prop
osed increment is
reasonable and not
e tha
t an assumpt
ion of
1
.8% pa is towar
d the mo
re pr
ud
ent e
nd of th
e sc
al
e.
Th
e RPI as
su
mpti
on is d
er
ive
d fro
m the B
ank of E
ngl
an
d’
s i
mp
lie
d RPI in
flati
on cu
r
ve
s
wi
th a de
duc
tio
n of 0.3% t
o refl
ec
t the “i
nflati
on r
isk p
rem
iu
m”
.
Bas
ed o
n the ave
rag
e sc
he
me du
rati
on of 1
6 yea
rs, a
nd a
llow
ing f
or the a
dju
stm
ent, th
e
proposed assump
tion,
based on fi
nancial conditions
as at 3
1 December 20
2
1
, is
within
the r
ang
e that i
s exp
ec
ted at th
is date.
CPI ha
s be
en d
er
ive
d as 1
% le
ss th
an R
PI unti
l 2030 a
nd 0% l
es
s tha
n RPI the
re
af
ter
(equ
iva
len
t to a redu
cti
on of 0.5% pa to the RPI as
su
mptio
n). This i
s a cha
ng
e in
ap
proa
ch f
rom th
e yea
r end
ed 31 De
ce
mbe
r 2020 wh
en C
PI was se
t as 1
% le
ss th
an
RPI at a
ll fu
tur
e term
s. Th
is is a m
ore p
ru
de
nt ap
proa
ch th
at refl
ect
s RPI Re
form
s by the
UK T
re
as
ur
y a
nd S
tati
stic
s Aut
hor
it
y an
d is w
ithi
n the r
ang
e exp
ec
ted.
No is
su
es we
re note
d that i
ndi
cate th
e val
uati
on of th
e grou
p’
s pe
ns
ion s
ch
eme a
ss
ets
are mat
eriall
y misstat
ed.
Independent audit
or
’
s repor
t to the members of Zotef
oams plc
Continued
10
6
Zot
efoams plc
An
nua
l Re
por
t 2021
Other information
The ot
her informat
ion comprises the
information included
in the
annual report, o
ther than
the financial
stat
ements and o
ur audit
or’
s report thereon.
The
direct
ors are r
esponsible for
the o
ther inf
ormation cont
ained within t
he annual r
epor
t.
Our opinion on
the gr
oup and par
ent company
financial stat
eme
nts
doe
s not c
over t
he othe
r in
for
mati
on an
d, except to th
e ex
tent oth
er
w
is
e expl
ici
tly s
tated i
n ou
r rep
or
t, we do n
ot exp
res
s any fo
rm of a
ssu
ra
nce
conclusion ther
eon.
Our responsibility is
to
read t
he ot
her informat
ion and
, in doing
so
, consider whet
her the o
ther inf
ormation
is mat
erially inconsist
ent with
the financial
state
me
nts or o
ur k
now
led
ge o
btai
ne
d in th
e cou
rs
e of the au
di
t, or othe
r
wi
se ap
pe
ar
s to be mate
ri
all
y mis
st
ated. If we i
den
tif
y s
uc
h mater
ia
l
inc
on
sis
tenc
ie
s or ap
pa
rent m
ater
ia
l mis
sta
teme
nts, we a
re req
uir
ed to dete
rm
ine w
het
her t
his g
ive
s ris
e to a mater
ia
l mis
st
ateme
nt in t
he fin
an
cia
l
state
me
nts th
ems
el
ves. I
f, based o
n the wo
rk we h
ave pe
r
for
me
d, we co
ncl
ude t
hat th
ere i
s a mater
ia
l mi
sst
ateme
nt of th
is oth
er in
for
mati
on, we ar
e
req
uir
ed to rep
or
t th
at fa
ct.
We have noth
ing to re
por
t in th
is re
gard.
Op
in
io
ns o
n ot
he
r mat
ter
s p
re
sc
ri
be
d by th
e Co
mpa
n
ies Ac
t 2
0
0
6
In ou
r opi
ni
on the p
ar
t of t
he di
rec
tors’ rem
un
era
tion r
ep
or
t to be au
di
ted ha
s be
en p
rope
rl
y pre
pa
red i
n acc
ord
an
ce wi
th th
e Com
pa
nie
s Act 20
0
6.
In ou
r opi
ni
on, ba
sed o
n the wo
rk u
nde
r
ta
ken i
n the c
our
se of th
e aud
it:
X
the i
nfor
mati
on g
ive
n in the s
trate
gic re
po
r
t an
d the d
ire
ctor
s’ repo
r
t for th
e fina
nc
ial ye
ar f
or wh
ic
h the fin
an
cia
l sta
teme
nts a
re pre
pa
red i
s con
sis
tent
with t
he financial sta
tements
; and
X
the s
trateg
ic re
po
r
t an
d the di
rec
tors’ re
por
t h
ave be
en p
rep
are
d in ac
co
rda
nc
e with a
pp
lic
ab
le le
ga
l re
qui
rem
ents
.
Ma
t
te
rs o
n wh
ic
h we ar
e r
eq
ui
re
d to re
po
r
t by exce
pt
io
n
In the l
ig
ht of the k
now
le
dge a
nd u
nde
rs
ta
ndi
ng of the g
rou
p an
d the pa
re
nt co
mpa
ny an
d the
ir env
iro
nm
ent o
btai
ne
d in the c
ou
rs
e of the au
di
t, we have
not i
dentified mat
e
rial misstat
eme
nts
in the
strat
e
gic report or t
he direct
or
s
’ report.
We have noth
ing to re
por
t in re
sp
ect o
f the fo
llow
ing m
at
ters i
n rel
atio
n to whi
ch th
e Co
mpa
nie
s Ac
t 200
6 re
qui
res u
s to repo
r
t to you if, in ou
r op
ini
on:
X
ade
qu
ate acc
ou
ntin
g rec
ords h
ave not b
ee
n kept by th
e par
ent c
om
pany
, or re
tur
ns ad
eq
uate for o
ur au
di
t have not b
ee
n re
cei
ved f
rom b
ra
nch
es n
ot
visited
by us
; or
X
the p
are
nt co
mpa
ny fin
anc
ia
l state
me
nts an
d the p
ar
t of th
e dir
ec
tors’ rem
une
rat
ion re
po
r
t to be au
dite
d are n
ot in ag
ree
me
nt wi
th th
e acc
oun
ting
records and
returns
; or
X
cer
tain disclosur
es of
directors
’ remuneration
specified by
law are
not
made;
or
X
we have n
ot rec
ei
ved a
ll the i
nfor
mat
ion a
nd ex
pla
nat
ion
s we req
uir
e for ou
r aud
it.
Corporate go
vernance statement
Th
e Li
stin
g Rul
es re
qu
ire u
s to revie
w the di
rec
tors’ st
ateme
nt in r
ela
tio
n to goin
g co
nce
rn, l
ong
er-
ter
m vi
abi
lit
y a
nd th
at par
t of the C
or
por
ate Gove
rn
anc
e
Stat
ement relati
ng t
o the
group
’s
and parent
company’
s compliance with t
he pro
visions of
the UK
Corporate
Governance Sta
tement
specified for our
review.
Bas
ed o
n the wo
rk u
nde
r
ta
ken a
s par
t of our a
udi
t, we have co
nc
lud
ed th
at ea
ch of th
e foll
owi
ng el
em
en
ts of the C
or
por
ate Gove
rna
nc
e Sta
teme
nt is
mat
erially consistent
with t
he financial sta
tements
or our
knowledge obtained
during the
audit:
X
Directors
’ stat
ement with r
egards the
appropriat
eness of adop
ting the going
concern basis o
f accounti
ng and an
y mat
erial uncer
tainties
identified,
set
out o
n pag
e 43 a
nd note 2.
1
i of thi
s ann
ua
l rep
or
t;
X
Di
rec
tors’ exp
lan
atio
n as to it
s ass
es
sm
ent of t
he gro
up’
s p
ros
pec
ts, th
e per
io
d thi
s ass
es
sm
ent c
over
s an
d why th
is pe
ri
od is a
pp
rop
ria
te, set ou
t on
pag
e 55 of thi
s an
nua
l rep
or
t;
X
Directors
’ stat
ement on whet
her they
have
a reasonable
expectation
that t
he group
will be
able to
continue
in operati
on and meet
its liabilit
ies set out
on
pag
es 4
3, 55 an
d note 2.
1
i of th
is an
nua
l re
por
t;
X
Di
rec
tors’ state
me
nt tha
t they c
ons
id
er th
e ann
ua
l rep
or
t a
nd th
e fina
nc
ial s
tatem
en
ts, take
n as a w
hol
e, to be fai
r
, ba
la
nce
d an
d und
er
sta
nd
ab
le se
t
out o
n pag
e 1
03 of th
is a
nnu
al re
po
r
t;
X
Boa
rd’
s co
nfir
mati
on th
at it h
as c
ar
rie
d ou
t a rob
ust a
ss
es
sme
nt of th
e em
erg
ing a
nd pr
in
cip
al r
isk
s set ou
t on p
age 82 of t
his a
nnu
al re
po
r
t;
X
Th
e se
ctio
n of the a
nn
ual r
epo
r
t th
at de
scr
ib
es th
e rev
iew of ef
f
ec
tive
ne
ss of r
isk m
an
age
me
nt an
d inte
rn
al co
ntro
l syste
ms se
t out o
n pag
e 82 of thi
s
an
nua
l rep
or
t; an
d
X
Th
e se
ctio
n de
sc
rib
ing t
he wor
k of the a
ud
it co
mm
it
tee se
t out o
n pag
e 84 to 86 of th
is a
nnu
al re
po
r
t.
Responsibilities of
directors
As explained
more fully
in the
statement
of d
irectors
’ responsibilities,
the dir
ectors
are responsible
for t
he preparat
ion of
the gr
oup and par
ent company
fina
nc
ial s
tate
men
ts an
d for b
ein
g sati
sfie
d tha
t they g
ive a tr
ue a
nd fa
ir v
iew, and for s
uch i
nter
na
l con
trol a
s the d
ire
ctor
s deter
mi
ne is n
ec
es
sa
r
y to
enable the
preparation
of financial
stat
ements tha
t are fr
ee from ma
terial missta
tement
, whether
due t
o fraud or
e
rror
.
In preparing
the gr
oup and par
ent company
financial stat
e
ments
, the
directors
are responsible
for assessing
the group
’
s and the p
arent company
’
s ability
to cont
inu
e as a go
in
g con
ce
rn, di
sc
los
ing, a
s app
li
cab
le, ma
tte
rs re
late
d to goin
g co
nce
r
n and u
sin
g the g
oin
g co
nce
rn b
as
is of ac
cou
nti
ng un
le
ss th
e
dir
ecto
rs ei
the
r inte
nd to liq
ui
date the g
rou
p or th
e par
ent c
omp
any o
r to cea
se op
er
atio
ns, or h
ave no re
al
isti
c al
tern
ativ
e but to do s
o.
Strat
egic Repor
t
Gov
ernance
Financial Statements
107
Zot
efoams plc
An
nua
l Re
por
t 2021
Aud
it
or
’s res
po
ns
ib
il
it
ie
s for t
h
e au
dit o
f t
he fi
na
nc
ial s
t
at
eme
nt
s
Our objectiv
es are t
o obtain reasonable
assurance about whet
her the financial
stat
ements as
a whole are
f
ree from
material misstat
ement,
whether due
to
fra
ud o
r er
ror
, a
nd to is
sue a
n au
ditor’s repo
r
t tha
t inc
lud
es o
ur op
in
ion. R
ea
son
abl
e as
su
ran
ce is a h
ig
h leve
l of as
sur
anc
e bu
t is not a g
ua
ran
tee tha
t an
aud
it c
ond
ucte
d in ac
co
rda
nce w
ith I
SAs (
UK
) w
ill a
lways d
etec
t a mate
ria
l mi
sst
atem
ent w
he
n it ex
ists. M
is
state
me
nts ca
n ar
ise f
rom f
ra
ud or e
rro
r an
d
are c
ons
id
ere
d mate
ria
l if, ind
iv
idu
al
ly or i
n the a
ggre
ga
te, they co
uld re
as
on
abl
y be ex
pe
cted to in
flue
nc
e the e
co
nom
ic d
eci
si
ons of u
se
rs ta
ken o
n the
basis o
f these financial
stat
ements.
Irregularities,
including fraud
, are
instances of
non-compliance with
laws
and regulati
ons. W
e design procedures in
line with
our responsibilit
ies, out
lined
ab
ove, to detect m
ater
ia
l mis
sta
teme
nts in r
es
pe
ct of ir
reg
ul
ar
itie
s, in
clu
din
g fr
aud. T
he ex
ten
t to whi
ch ou
r pro
ce
dure
s a
re ca
pab
le of d
etec
ting
irregularities,
including fraud
is detailed
below
.
We obta
ine
d an u
nde
rs
tan
di
ng of the g
rou
p and p
are
nt c
omp
any a
nd th
e sec
tor in w
hic
h they o
pe
rate to id
enti
f
y law
s and r
eg
ulat
ion
s that c
oul
d
rea
so
nab
ly b
e exp
ecte
d to have a di
rec
t ef
fe
ct on t
he fin
an
cia
l sta
teme
nts. We obt
ain
ed o
ur un
de
rst
an
din
g in thi
s reg
ard t
hrou
gh d
isc
uss
io
ns wi
th
management,
application o
f audit
knowledge and e
xperience of the
se
ctor
.
Our audit pr
ocedures were
de
signed t
o ensure
the audit
team con
sidered whether
there w
ere any
indications
of non
-compliance by
the group
and parent
company wit
h those
laws
and regulation
s. The gr
oup and p
arent company
are subject
to
laws
and regulation
s that
directly
affect the financial st
atement
s
including financial
reporting legislation
, pensions legisla
tion,
distributable
profits
legislation
, and taxation
legislation
and we
assessed the ext
ent of
compliance with
these law
s and regula
tions as
part of our pr
ocedures on t
he relat
ed financial stat
ement items
.
In ad
diti
on, th
e grou
p an
d par
ent c
om
pany a
re su
bje
ct to ma
ny othe
r law
s and r
egu
lati
on
s whe
re th
e con
se
que
nc
es of n
on-
co
mpl
ia
nce c
oul
d have a
mat
erial effect on amounts
or disclosur
es in the
financial stat
eme
nts
, for
instance t
hrough the
imposition
of fines
or litigat
ion.
We
identified the
follo
wing
are
as a
s thos
e mo
st li
kely to have s
uc
h an ef
f
ect: h
ea
lth a
nd sa
fet
y; var
iou
s re
gul
atio
n aro
und th
e ha
ndl
ing of c
he
mi
cal
s an
d ge
ner
al e
nvi
ronm
en
tal
prot
e
ction
legislation
; fraud
; briber
y and corruption
; export control
; Consumer Rights
Act
; and emplo
yment law
recognising the
nature
of t
he group
and
parent compan
y’
s activities
. Auditi
ng standards
limit the
required a
udit procedures
to
identify non-compliance with t
hese laws
and regulat
ions t
o enquir
y
of t
he Direct
ors and o
ther management and
inspection o
f regulat
or
y and legal correspondence
, if an
y
. The identified
actual or
suspected non-compliance
was n
ot suf
fi
ci
entl
y si
gni
fic
ant to ou
r aud
it to re
sul
t in ou
r re
spo
nse b
ei
ng id
ent
ifie
d as a key a
udi
t mat
ter
.
We als
o ide
ntifi
ed th
e ri
sks of m
ater
ia
l mis
state
me
nt of the fi
na
nci
al s
tatem
ent
s due to f
rau
d. We cons
ide
re
d, in add
iti
on to the n
on-
reb
ut
ta
ble p
res
um
ption
of a ri
sk of fr
aud a
ri
sin
g fro
m ma
nag
em
ent ove
rr
id
e of co
ntrol
s, that t
he re
cog
ni
tio
n of reven
ue, po
stin
g of un
usu
al jo
ur
na
ls an
d ma
nip
ula
ting th
e gro
up’
s
al
tern
ative p
er
for
man
ce p
rofit m
ea
sure
s an
d othe
r key pe
r
for
ma
nc
e ind
ic
ators to me
et re
mu
ner
atio
n ta
rgets a
nd ex
te
rna
ll
y com
mu
nic
ated t
arg
ets.
As in a
ll of o
ur au
dit
s, we add
res
se
d the r
isk of f
ra
ud ar
is
ing f
rom m
an
age
me
nt over
ri
de of c
ontro
ls by p
er
fo
rm
ing a
udi
t pro
ce
dure
s wh
ic
h inc
lud
ed b
ut
were n
ot lim
ited to: the tes
tin
g of jou
rn
als; rev
iew
ing a
cc
oun
ting e
sti
mate
s for ev
ide
nc
e of bi
as; and e
valu
atin
g the b
usi
ne
ss r
atio
nal
e of any s
ign
ifi
ca
nt
transactions
that are unusual
or outside
the normal
course of
business.
Be
cau
se of th
e inh
er
ent l
imi
tati
ons of a
n au
dit, the
re is a r
is
k that we w
il
l not de
tect a
ll ir
reg
ul
ar
itie
s, in
clu
di
ng tho
se le
ad
ing to a ma
teri
al m
iss
tatem
en
t
in the
financial stat
eme
nts
or non-compliance wit
h regulat
ion. This
risk increases t
he more
that compl
iance with a
law or
regulation
is remo
ved from
the eve
nts a
nd tra
ns
act
ion
s refle
cte
d in the fi
na
nci
al s
tatem
ent
s, as we wi
ll b
e les
s li
kely to b
eco
me awa
re of in
sta
nc
es of no
n-
com
pli
an
ce. T
he r
isk i
s
also great
er regarding irregularities
occurring due t
o fraud rather
than error
, as fraud
involv
es int
entional concealment
, forger
y
, collusion
, omission or
misre
prese
ntation.
A further description
of our
responsibilities
for the
audit o
f the
financial stat
e
ments i
s locat
ed on the
Financial Reporting Council
’
s website
at: ww
w
.fr
c.
org.
uk
/
auditorsresponsibilities
. This descript
ion forms
par
t of
our auditor’
s repor
t.
Ot
h
er m
at
t
er
s wh
ic
h we ar
e r
eq
ui
re
d to ad
dr
es
s
We were a
ppo
inte
d by the Au
dit C
om
mit
tee o
n 6 Oc
tobe
r 2020 to aud
it the fi
na
nci
al s
tatem
ent
s for th
e per
io
d en
ded 31 De
ce
mbe
r 2020 a
nd su
bse
qu
ent
financia
l period
s. Ou
r t
otal un
int
errupt
ed period
of en
gagement
is two y
ears.
Th
e non
-aud
it s
er
v
ic
es p
rohi
bi
ted by the FR
C’
s Eth
ic
al S
tan
da
rd were n
ot prov
ide
d to the g
roup o
r the p
are
nt co
mpa
ny an
d we re
mai
n ind
ep
en
de
nt of
the gr
oup and t
he parent
company in
conducting our
audit.
Our audit opi
nion is consis
tent
with the
additional
repor
t t
o the audit committ
ee.
Use o
f ou
r re
po
r
t
Th
is re
por
t is ma
de so
le
ly to the c
omp
any’s mem
ber
s, as a b
od
y
, in a
cc
orda
nc
e wi
th Cha
pter 3 of Pa
r
t 1
6 of the C
om
pan
ie
s Act 20
0
6. Our a
ud
it wor
k
has b
ee
n un
de
r
ta
ken so th
at we mi
ght s
tate to the c
omp
any’s memb
er
s tho
se ma
tte
rs we a
re req
ui
red to sta
te to them in a
n au
dito
r’
s r
epo
r
t an
d for n
o
othe
r pur
po
se. T
o th
e fu
lle
st ex
ten
t pe
rmi
t
ted by law, we do not ac
ce
pt or as
su
me re
sp
ons
ibi
lit
y to anyo
ne, oth
er th
an th
e com
pa
ny and t
he co
mp
any’s
me
mbe
rs a
s a bo
dy
, for ou
r au
dit wo
rk, fo
r thi
s rep
or
t, or fo
r the o
pin
io
ns we have fo
rm
ed.
Joseph Archer
(Senior Statutory Auditor)
For a
n
d on b
eh
a
lf o
f PKF L
it
t
l
ej
oh
n LLP
Statutor
y Auditor
1
5 We
st
fer
r
y Ci
rcus
Canary Wharf
London E
1
4 4HD
6 Ap
ril 20
22
Independent audit
or
’
s repor
t to the members of Zotef
oams plc
Continued
10
8
Zot
efoams plc
An
nua
l Re
por
t 2021
Consolidated incom
e sta
tement
F
or t
he year en
de
d 3
1 Dec
emb
er 2
0
21
Note
20
21
£’
000
2020
£’
000
Reven
ue
3
100,750
82,652
Cos
t of sa
le
s
(74,184
)
(54,874)
Gross profit
26,566
27,778
Distribution costs
(7,316)
(6,793)
Administrative
expenses
(11,117)
(11,876)
Operating profit
8,133
9,109
Finance costs
6
(1,116)
(872)
Finance income
6
11
26
Share o
f (loss
)/pr
ofit fr
om joint
venture
9
(20)
38
Profit before
income tax
7,008
8,301
Inc
om
e ta
x exp
en
se
7
(2,632)
(1,138)
Pr
ofi
t fo
r th
e ye
ar
4,376
7,163
Pro
fit attributable t
o:
Equity holders o
f the
Company
4,376
7,163
4,376
7,163
Earnings per
s
hare:
Basic (p
)
8
9.01
14.87
Di
lu
t
ed (
p)
8
8.87
14.63
Al
l acti
vi
tie
s of the G
rou
p are c
onti
nui
ng.
Th
e notes o
n pag
es 1
1
7 to 1
54 fo
rm a
n inte
gra
l par
t of the
se fin
an
cia
l st
ateme
nts.
Th
e Com
pa
ny has e
le
cte
d to take the exe
mpti
on un
de
r se
cti
on 40
8 of the C
omp
an
ie
s Act 20
06 f
rom p
res
en
ting th
e Co
mpa
ny in
com
e sta
teme
nt
ando
ther comprehensiv
e income.
Company number
: 2
7
1
4645
Strat
egic Repor
t
Gov
ernance
Financial Statements
10
9
Zot
efoams plc
An
nua
l Re
por
t 2021
Consolid
ated st
atem
ent
of compre
hensi
v
e income
F
or t
he year en
de
d 3
1 Dec
emb
er 2
0
21
Note
20
21
£’
000
2020
£’
000
Pr
ofi
t fo
r th
e ye
ar
4,376
7,163
Other compreh
ensive income
Item
s that wi
ll not b
e re
cl
assi
fie
d to profi
t or lo
ss
Actuarial gains/
(losses) on
defined benefit pension
schemes
23
3,517
(2,460)
T
a
x re
lati
ng to item
s that w
ill n
ot be re
cl
as
sifi
ed
(444)
467
T
ot
a
l it
em
s t
ha
t w
il
l no
t be r
ec
l
as
si
fi
ed t
o pr
ofi
t o
r lo
ss
3,073
(1,993)
Item
s that may b
e rec
las
sifi
ed s
ubs
eq
ue
ntly to pr
ofit o
r loss
Foreign
exchange
translat
ion losses on i
nvestment
in foreign subsidiaries
(96)
(583)
Cha
ng
e in fa
ir va
lue of h
ed
gin
g ins
tru
me
nts
(344)
952
Hedging (losses
)/
gains reclassified to
profit or loss
(1,251)
82
T
a
x relating
to
items
that ma
y be r
eclassified
376
(256)
T
ot
a
l it
em
s t
ha
t m
ay b
e re
cl
a
ss
i
fie
d su
b
se
qu
e
nt
l
y to p
ro
fit o
r lo
s
s
(1,315)
195
Ot
h
e
r co
mp
r
eh
en
s
ive i
nc
o
me fo
r t
h
e yea
r
, n
et of t
a
x
1,758
(1,798)
T
ot
a
l co
m
pr
eh
e
ns
i
ve in
co
me f
or t
h
e ye
ar
6,134
5,365
T
otal comprehensive
income attributable to
:
Equity holders o
f the
Company
6,134
5,365
T
ot
a
l co
m
pr
eh
e
ns
i
ve in
co
me f
or t
h
e ye
ar
6,134
5,365
Th
e notes o
n pag
es 1
1
7 to 1
54 fo
rm a
n inte
gra
l par
t of the
se fin
an
cia
l st
ateme
nts.
11
0
Zot
efoams plc
An
nua
l Re
por
t 2021
Consolid
ated st
atem
ent
of financial position
As at 3
1 Dec
embe
r 2
021
Note
2021
£’000
2020
£’000
Non-current assets
Prop
er
t
y
, pl
ant a
nd e
qui
pme
nt
10
91,401
92,925
Right
-
of
-use assets
11
1,104
1,397
Intangible assets
12
6,224
5,888
Inve
stme
nt in j
oi
nt vent
ure
9
163
183
T
rad
e an
d othe
r rec
ei
vab
le
s
15
11
54
Defe
r
red ta
x as
sets
19
492
509
T
otal non-current
assets
99,395
100,956
Current
assets
Inven
torie
s
14
25,954
23,033
T
rad
e an
d othe
r rec
ei
vab
le
s
15
24,338
22,150
Derivative
financial inst
ruments
21
173
1,580
Cash and
c
ash equiv
alents
16
8,055
8,503
T
otal current
assets
58,520
55,266
T
otal assets
157,915
156,222
Current liabilities
T
rad
e an
d othe
r paya
ble
s
17
(9,242)
(7,851)
Derivative
financial inst
ruments
21
(600)
(53)
Current tax liabilit
y
(83)
(101)
Lease liabilit
ies
11
(486)
(420)
Interest
-bearing loans and borrowings
18
(26,564)
(23,430)
T
otal current liabilities
(36,975)
(31,855)
Non-current liabilities
Lease liabilit
ies
11
(643)
(986)
Interest
-bearing loans and borrowings
18
(14,710)
(19,263)
Deferred tax liabili
ties
19
(3,155)
(891)
Post
-employment benefits
23
(4,657)
(8,851)
T
otal non-current liabilities
(23,165)
(29,991)
T
otal liabilities
(60,140)
(61,846)
T
ot
a
l ne
t a
ss
et
s
97,775
94,376
Equit
y
Issued share
capital
20
2,431
2,431
Share pr
emium
20
44,178
44,178
Ow
n sha
re
s hel
d
(10)
(23)
Capital redemp
tion reserve
15
15
T
ranslation
reser
ve
2,228
2,324
Hedging reserve
(310)
909
Retained earnings
49,243
44,542
T
otal equit
y
97,775
94,376
Th
e notes o
n pag
es 1
1
7 to 1
54 fo
rm a
n inte
gra
l par
t of the
se fin
an
cia
l st
ateme
nts.
Th
e fina
nc
ial s
tate
men
ts on pa
ge
s 1
09 to 1
16 were au
thor
is
ed fo
r iss
ue by th
e Boa
rd of D
ire
ctors o
n 6 Ap
ri
l 2022 an
d were s
ig
ned o
n its b
eh
alf by:
G C Mc
G
ra
t
h
Gro
up CFO
Company number
: 2714645
Strat
egic Repor
t
Gov
ernance
Financial Statements
111
Zot
efoams plc
An
nua
l Re
por
t 2021
Company statem
ent
of financial position
As at 3
1 Dec
embe
r 2
021
Note
2021
£’000
2020
£’000
Non-current assets
Prop
er
t
y
, pl
ant a
nd e
qui
pme
nt
10
41,401
41,960
Right
-
of
-use assets
11
519
780
Intangible assets
12
1,010
1,546
Inv
estment in
subsidiaries
13
30,822
30,822
T
rad
e an
d othe
r rec
ei
vab
le
s
15
11
54
T
otal non-current
assets
73,763
75,162
Current
assets
Inven
torie
s
14
18,695
16,854
T
rad
e an
d othe
r rec
ei
vab
le
s
15
54,337
49,502
Derivative
financial inst
ruments
21
173
1,580
Cash and
c
ash equiv
alents
16
5,034
6,328
T
otal current
assets
78,239
74,26
4
T
otal assets
152,002
149,426
Current liabilities
T
rad
e an
d othe
r paya
ble
s
17
(6,667)
(6,188)
Derivative
financial inst
ruments
21
(600)
(53)
Lease liabilit
ies
11
(251)
(279)
Interest
-bearing loans and borrowings
18
(26,564)
(23,430)
T
otal current liabilities
(34,082)
(29,950)
Non-current liabilities
Lease liabilit
ies
11
(274)
(504)
Interest
-bearing loans and borrowings
18
(14,710)
(19,263)
Deferred tax liabili
ties
19
(3,155)
(891)
Post
-employment benefits
23
(4,657)
(8,851)
T
otal non-current liabilities
(22,796)
(29,509)
T
otal liabilities
(56,878)
(59,459)
T
ot
a
l ne
t a
ss
et
s
95,124
89,967
Equit
y
Issued share
capital
20
2,431
2,431
Share pr
emium
20
4
4,178
4
4,178
Capital redemp
tion reserve
15
15
Hedging reserve
(310)
909
Retained earnings
48,810
42,434
T
otal equit
y
95,124
89,967
Th
e notes o
n pag
es 1
1
7 to 1
54 fo
rm a
n inte
gra
l par
t of the
se fin
an
cia
l st
ateme
nts.
Th
e fina
nc
ial s
tate
men
ts on pa
ge
s 1
09 to 1
16 were au
thor
is
ed fo
r iss
ue by th
e Boa
rd of D
ire
ctors o
n 6 Ap
ri
l 2022 an
d were s
ig
ned o
n its b
eh
alf by:
G C Mc
G
ra
t
h
Gro
up CFO
Company number
: 2714645
112
Zot
efoams plc
An
nua
l Re
por
t 2021
Consolid
ated st
atem
ent
of cas
h flow
s
F
or t
he year en
de
d 3
1 Dec
emb
er 2
021
Note
2021
£’000
2020
£’000
Cash flo
ws fro
m operating activities
Profit f
or the ye
ar
4,376
7,163
Adjus
tments for:
Depreciation
and amortisation
10,11,12
7,624
6,746
Di
spo
sa
l of as
sets
4
53
40
Finance costs
6
1,105
846
Share o
f pro
fit from j
oint vent
ure
9
20
(38)
Net exc
han
ge d
if
fe
ren
ce
s
376
(133)
Equity-se
ttled share-based payments
24
360
300
Ta
x
a
t
i
o
n
7
2,632
1,138
Operating profit bef
ore changes in
working capital and
provisions
16,546
16,062
(Increase
)/
decrease in
trade
and ot
her receivables
(1,636)
1,199
Inc
rea
se i
n inven
tori
es
(2,843)
(4,536)
Inc
rea
se i
n trad
e and ot
her p
ayab
le
s
1,506
980
Employ
ee defined benefit
contributions
23
(779)
(700)
Cash generated
from operations
12,794
13,005
Interest paid
(789)
(456)
Inc
om
e ta
xes p
aid, n
et of ref
un
ds
(1,087)
(1,113)
Net cash
flows
gen
erated from
oper
ating activities
10,918
11,436
Ca
sh fl
ows f
r
om i
nve
st
i
ng a
ct
i
vi
t
ie
s
Interest re
ceive
d
6
11
26
Interest paid
6
(32)
(604)
Purchases o
f intangibles
12
(1,069)
(346)
Proc
ee
ds o
n dis
pos
al of p
rop
er
t
y
, pl
ant a
nd e
qui
pme
nt
88
–
Purc
ha
ses o
f prop
er
t
y
, pl
ant a
nd e
qui
pme
nt
(6,002)
(12,363)
Ne
t ca
s
h us
ed i
n i
nve
st
i
ng a
ct
i
vi
t
ie
s
(7,004)
(13,287)
Ca
sh fl
ows f
r
om fi
na
nc
i
ng a
ct
i
vi
t
ie
s
Proc
ee
ds f
rom o
ption
s exerc
ise
d an
d iss
ue of s
ha
re ca
pit
al
40
–
Re
paym
ent o
f bor
rowi
ngs
(7,739)
(8,053)
Proceeds from
bor
rowings
6,974
13,180
Pri
nci
pa
l ele
me
nts of l
ea
se pay
me
nts
11
(543)
(433)
Di
vid
en
ds pa
id to eq
ui
ty h
ol
der
s of the C
om
pan
y
8
(3,074)
(977)
Net cash
(used in)
/
generated from financing
activit
ies
(4,342)
3,717
Net (
decrease)/increase
in cash
and cash equiv
alents
(428)
1,866
Ca
sh a
n
d ca
s
h eq
ui
va
le
n
ts a
t 1 Ja
n
ua
r
y
8,503
6,656
E
xcha
ng
e los
se
s on c
ash a
nd c
as
h equ
iva
le
nts
(20)
(19)
Ca
sh a
n
d ca
s
h eq
ui
va
le
n
ts a
t 31 De
c
em
be
r
16
8,055
8,503
Cas
h an
d ca
sh eq
ui
val
ents c
om
pri
se
s ca
sh at b
ank a
nd s
hor
t
-term h
ig
hly l
iqu
id in
vest
men
ts wi
th a matu
ri
t
y date of le
ss th
an th
re
e mont
hs, pe
r the
bre
akdow
n on n
ote 2
1.
Du
rin
g the ye
ar
, t
he G
roup p
aid i
ntere
st of £821
k
, of whi
ch i
t ca
pit
ali
se
d £32k (2020: paid i
ntere
st of £1,060
k, of wh
ich i
t ca
pit
ali
se
d £604
k) on q
ua
lif
yin
g
as
sets u
nde
r IAS 23 “C
ap
ita
lis
atio
n of Bo
rrow
ing C
ost
s”
. Th
e inter
est p
aid h
as b
ee
n sp
lit b
et
wee
n op
era
ting a
cti
vit
ie
s of £789
k (2020: £456k) a
nd
inve
stin
g act
ivi
tie
s of £32k (2020: £604
k) to refle
ct th
e Gro
up’
s u
til
isa
tion of t
he inte
res
t pa
id.
Th
e net exc
han
ge d
if
fe
ren
ce
s of £376
k w
ith
in op
era
ting a
cti
vi
tie
s rel
ate to the fore
ig
n excha
ng
e movem
en
t on bo
rrow
in
gs an
d op
en fo
r
ward c
ontr
act
s
inth
e inc
ome s
tate
men
t (2020: £133
k
).
Refer t
o not
e 1
8 for
a reconciliat
ion of
liabilities arising from
financing activities
.
Th
e notes o
n pag
es 1
1
7 to 1
54 fo
rm a
n inte
gra
l par
t of the
se fin
an
cia
l st
ateme
nts.
Strat
egic Repor
t
Gov
ernance
Financial Statements
113
Zot
efoams plc
An
nua
l Re
por
t 2021
Company statem
ent
of cas
h flow
s
F
or t
he year en
de
d 3
1 Dec
emb
er 2
0
21
Note
20
21
£’
000
2020
£’
000
Cash flo
ws fro
m operating activities
Profit f
or the ye
ar
6,03
8
6
,
9
51
Adjus
tments for:
Depreciation
and amortisation
1
0
,11
,1
2
4
,1
8
5
3,958
Di
spo
sa
l of as
sets
105
38
Finance costs
628
5
74
Net exc
han
ge d
if
fe
ren
ce
s
(4
3
8)
(13
3
)
Equity-se
ttled share-based payments
24
360
300
Ta
x
a
t
i
o
n
2
,60
8
1
,1
9
9
Operating profit bef
ore changes in
working capital and
provisions
13
,
4
8
6
12
,
8
8
7
(Increase
)/
decrease in
trade
and ot
her receivables
(2
,
53
6)
975
Inc
rea
se i
n inven
tori
es
(
1,
8
41)
(2,4
9
2)
Inc
rea
se i
n trad
e and ot
her p
ayab
le
s
572
1,
4
8
1
Employ
ee defined benefit
contributions
23
(
779)
(
70
0)
Cash generated
from operations
8,9
02
1
2
,1
5
1
Interest paid
(78
3)
(4
51)
Inc
om
e ta
xes p
aid, n
et of ref
un
ds
(
9
8
1)
(
1,
0
9
5
)
Net cash
flows
gen
erated from
oper
ating activities
7,1
3
8
10
,
6
0
5
Ca
sh fl
ows f
r
om i
nve
st
i
ng a
ct
i
vi
t
ie
s
Inv
estment in
subsidiaries
13
–
(
24
6
)
Interest re
ceive
d
–
6
Interest paid
(32)
(16
6
)
Loa
ns gi
ven to su
bsi
di
ar
ies, n
et of pr
epay
me
nts
(1,
3
3
4
)
(7
,555)
Purchases o
f intangibles
12
(1
32)
(
111
)
Purc
ha
ses o
f prop
er
t
y
, pl
ant a
nd e
qui
pme
nt
(
2
,
8
3
1)
(
4
,1
4
4
)
Ne
t ca
s
h us
ed i
n i
nve
st
i
ng a
ct
i
vi
t
ie
s
(
4,329)
(
12
,
2
16
)
Ca
sh fl
ows f
r
om fi
na
nc
i
ng a
ct
i
vi
t
ie
s
Proc
ee
ds f
rom o
ption
s exerc
ise
d an
d iss
ue of s
ha
re ca
pit
al
40
–
Re
paym
ent o
f bor
rowi
ngs
(
7,
7
3
9
)
(8,0
53
)
Proceeds from
bor
rowings
6,97
4
1
3
,1
8
0
Pri
nci
pa
l ele
me
nts of l
ea
se pay
me
nts
(30
4)
(
3
18
)
Di
vid
en
ds pa
id to eq
ui
ty h
ol
der
s of the C
om
pan
y
8
(
3
,
0
74
)
(97
7
)
Net cash
(used in)
/
generated from financing
activit
ies
(
4
,1
0
3
)
3,832
Net (
decrease)/increase
in cash
and cash equiv
alents
(1,
2
9
4
)
2,
2
21
Ca
sh a
n
d ca
s
h eq
ui
va
le
n
ts a
t 1 Ja
n
ua
r
y
6,32
8
4
,1
0
7
Ca
sh a
n
d ca
s
h eq
ui
va
le
n
ts a
t 31 De
c
em
be
r
16
5
,03
4
6
,328
Cas
h an
d ca
sh eq
ui
val
ents c
om
pri
se
s ca
sh at b
ank a
nd s
hor
t
-term h
ig
hly l
iqu
id in
vest
men
ts wi
th a matu
ri
t
y date of le
ss th
an th
re
e mont
hs, pe
r the
bre
akdow
n on n
ote 2
1
.
Du
rin
g the ye
ar
, t
he Co
mp
any pa
id in
tere
st of £81
5k, of w
hi
ch it c
ap
ita
lis
ed £32k (2020: pa
id in
tere
st of £61
7k, of w
hi
ch it c
ap
ita
li
sed £1
66
k) on q
ua
lif
yin
g
as
sets u
nde
r IAS 23 “C
ap
ita
lis
atio
n of Bo
rrow
ing C
ost
s”
. Th
e inter
est p
aid h
as b
ee
n sp
lit b
et
wee
n op
era
ting a
cti
vit
ie
s of £7
83
k (2020: £45
1
k
) and i
nves
ting
acti
vi
tie
s of £32k (2020: £1
66
k) to refl
ect t
he G
roup’
s u
til
isa
tio
n of the in
tere
st pa
id.
Th
e net exc
han
ge d
if
fe
ren
ce
s of £438k w
ith
in o
per
atin
g act
ivi
tie
s re
late to the fo
rei
gn exch
ang
e move
me
nt on b
or
rowin
gs a
nd op
en fo
r
wa
rd con
trac
ts in
the i
nco
me st
atem
ent (2020: £1
3
3k).
Refer t
o not
e 1
8 for
a reconciliat
ion of
liabilities arising from
financing activities
.
Th
e notes o
n pag
es 1
1
7 to 1
54 fo
rm a
n inte
gra
l par
t of the
se fin
an
cia
l st
ateme
nts.
114
Zot
efoams plc
An
nua
l Re
por
t 2021
Consolid
ated st
atem
ent
of changes
in equit
y
F
or t
he year en
de
d 3
1 Dec
emb
er 2
021
Note
Share
capital
£’000
Share
premium
£’000
Own
share
s
held
£’000
Capital
redemption
rese
r
ve
£’000
T
ranslation
rese
r
ve
£’000
Hedging
rese
r
ve
£’000
Retained
earnings
£’000
To
t
a
l
equity
£’000
Ba
la
n
ce a
s at 1 J
a
nu
ar
y 2
020
2,415
44,178
(9)
15
2,907
131
40,003
89,640
Profit f
or the ye
ar
–
–
–
–
–
–
7,163
7,163
Other comprehensive
income for
the y
ear
Fore
ig
n excha
nge t
ran
sla
tion l
os
se
s on inve
stm
ent i
n
subsidiaries
–
–
–
–
(583)
–
–
(583)
Cha
ng
e in fa
ir va
lue of h
ed
gin
g ins
tru
me
nts re
cog
ni
sed
in o
ther comprehensive
income
–
–
–
–
–
952
–
952
Reclassification t
o income stat
e
ment –
administra
tive
expen
ses
–
–
–
–
–
82
–
82
T
a
x re
lati
ng to ef
fe
cti
ve por
tio
n of cha
ng
es i
n fai
r valu
e
of ca
sh flow h
ed
ge
s, net of re
cyc
lin
g
–
–
–
–
–
(256)
–
(256)
Actuarial loss
on defined benefit
pension scheme
23
–
–
–
–
–
–
(2,460)
(2,460)
T
a
x relating
to
actuarial loss on
defined benefit pension
scheme
–
–
–
–
–
–
467
467
T
ot
a
l co
m
pr
eh
e
ns
i
ve in
co
me f
or t
h
e ye
ar
–
–
–
–
(583)
778
5,170
5,365
T
r
a
ns
ac
t
io
n
s wi
t
h own
e
rs o
f t
he P
ar
en
t
:
Opti
ons exe
rci
sed
–
–
2
–
–
–
(2)
–
Proc
ee
ds of s
ha
res i
ssu
ed, n
et of exp
en
se
s
16
–
(16)
–
–
–
–
–
Equi
t
y-set
tle
d sh
are
-ba
se
d paym
en
ts net of t
a
x
–
–
–
–
–
–
348
348
Dividends paid
8
–
–
–
–
–
–
(977)
(977)
T
ota
l tran
sa
ctio
ns w
ith ow
ner
s of th
e Pare
nt
16
–
(14)
–
–
–
(631)
(629)
Ba
la
n
ce a
s at 31 D
ec
e
mb
er 2
020
2,431
44,178
(23)
15
2,324
909
44,542
94,376
Ba
la
n
ce a
s at 1 J
a
nu
ar
y 2
021
2,431
44,178
(23)
15
2,324
909
44,542
94,376
Profit f
or the ye
ar
–
–
–
–
–
–
4,376
4,376
Other comprehensive
income for
the y
ear
Fore
ig
n excha
nge t
ran
sla
tion l
os
se
s on inve
stm
ent i
n
subsidiaries
–
–
–
–
(96)
–
–
(96)
Cha
ng
e in fa
ir va
lue of h
ed
gin
g ins
tru
me
nts re
cog
ni
sed
in o
ther comprehensive
income
–
–
–
–
–
(344)
–
(344)
Reclassification t
o income stat
e
ment –
administra
tive
expen
ses
–
–
–
–
–
(1,251)
–
(1,251)
T
a
x re
lati
ng to ef
fe
cti
ve por
tio
n of cha
ng
es i
n fai
r valu
e
of ca
sh flow h
ed
ge
s, net of re
cyc
lin
g
–
–
–
–
–
376
–
376
Actuarial gain
on defined benefit
pension scheme
23
–
–
–
–
–
–
3,517
3,517
T
a
x relating
to
actuarial loss on
defined benefit pension
scheme
–
–
–
–
–
–
(444)
(444)
T
ot
a
l co
m
pr
eh
e
ns
i
ve in
co
me f
or t
h
e ye
ar
–
–
–
–
(96)
(1,219)
7,449
6,134
T
r
a
ns
ac
t
io
n
s wi
t
h own
e
rs o
f t
he P
ar
en
t
:
Opti
ons exe
rci
sed
–
–
13
–
–
–
27
40
Equi
t
y-set
tle
d sh
are
-ba
se
d paym
en
ts net of t
a
x
–
–
–
–
–
–
299
299
Dividends paid
8
–
–
–
–
–
–
(3,074)
(3,074)
T
ota
l tran
sa
ctio
ns w
ith ow
ner
s of th
e Pare
nt
–
–
13
–
–
–
(2,748)
(2,735)
Ba
la
n
ce a
s at 31 D
ec
e
mb
er 2
021
2,431
44,178
(10)
15
2,228
(310)
49,243
97,775
Th
e agg
reg
ate cur
re
nt an
d defe
rr
ed ta
x rel
atin
g to items th
at ar
e de
bite
d to equ
it
y is £
129
k (2020: cred
ite
d £259k).
Th
e notes o
n pag
es 1
1
7 to 1
54 fo
rm a
n inte
gra
l par
t of the
se fin
an
cia
l st
ateme
nts.
Strat
egic Repor
t
Gov
ernance
Financial Statements
115
Zot
efoams plc
An
nua
l Re
por
t 2021
Company statem
ent
of changes
in equit
y
F
or t
he year en
de
d 3
1 Dec
emb
er 2
0
21
Note
Share
capital
£’
000
Share
premium
£’
000
Capital
redemption
rese
r
ve
£’
000
Hedging
rese
r
ve
£’
000
Retained
earnings
£’
000
To
t
a
l
equity
£’
000
Ba
la
n
ce a
s at 1 J
a
nu
ar
y 2
0
20
2
,
41
5
4
4
,17
8
15
131
3
8
,1
0
7
84,846
Profit f
or the ye
ar
–
–
–
–
6
,
9
51
6
,
9
51
Other comprehensive
income for
the y
ear
Cha
ng
e in fa
ir va
lue of h
ed
gin
g ins
tru
me
nts re
cog
ni
sed i
n othe
r
comprehensive in
come
–
–
–
9
52
–
9
52
Reclassification t
o income stat
e
ment –
administra
tive e
xpenses
–
–
–
82
–
82
T
a
x re
lati
ng to ef
fe
cti
ve por
tio
n of cha
ng
es i
n fai
r valu
e of ca
sh fl
ow hed
ge
s,
net of re
cyc
lin
g
–
–
–
(256
)
–
(
256
)
Actuarial loss
on defined benefit
pension scheme
23
–
–
–
–
(2,4
6
0
)
(
2,4
6
0
)
T
a
x relating
to
actuarial loss on
defined benefit pension scheme
–
–
–
–
467
4
67
T
ot
a
l co
m
pr
eh
e
ns
i
ve in
co
me f
or t
h
e ye
ar
–
–
–
778
4,95
8
5
,7
3
6
T
ransactions with owners:
Opti
ons exe
rci
sed
–
–
–
–
(2)
(2)
Proc
ee
ds of s
ha
res i
ssu
ed, n
et of exp
en
se
s
16
–
–
–
–
16
Equi
t
y-set
tle
d sh
are
-ba
se
d paym
en
ts net of t
a
x
–
–
–
–
348
348
Dividends paid
8
–
–
–
–
(
977
)
(97
7)
T
otal transaction
s with o
wners
16
–
–
–
(
6
31)
(61
5)
Ba
la
n
ce a
s at 31 D
ec
e
mb
er 2
0
2
0
2
,
4
31
4
4
,17
8
15
909
42,434
89,
9
67
Ba
la
n
ce a
s at 1 J
a
nu
ar
y 2
0
21
2
,4
31
4
4
,17
8
15
909
42,434
8
9,9
67
Profit f
or the ye
ar
–
–
–
–
6,0
3
8
6,0
38
Other comprehensive
income for
the y
ear
Cha
ng
e in fa
ir va
lue of h
ed
gin
g ins
tru
me
nts re
cog
ni
sed i
n othe
r
comprehensive in
come
–
–
–
(
34
4)
–
(34
4)
Reclassification t
o income stat
e
ment –
administra
tive e
xpenses
–
–
–
(
1,
2
51)
–
(
1,
2
5
1)
T
a
x re
lati
ng to ef
fe
cti
ve por
tio
n of cha
ng
es i
n fai
r valu
e of ca
sh fl
ow hed
ge
s,
net of re
cyc
lin
g
–
–
–
376
–
376
Actuarial loss
on defined benefit
pension scheme
23
–
–
–
–
3
,
5
17
3
,
5
17
T
a
x relating
to
actuarial loss on
defined benefit pension scheme
–
–
–
–
(444
)
(444
)
T
ot
a
l co
m
pr
eh
e
ns
i
ve in
co
me f
or t
h
e ye
ar
–
–
–
(1,
2
19
)
9
,111
7,
8
9
2
T
ransactions with owners:
Opti
ons exe
rci
sed
–
–
–
–
40
40
Equi
t
y-set
tle
d sh
are
-ba
se
d paym
en
ts net of t
a
x
–
–
–
–
299
299
Dividends paid
8
–
–
–
–
(
3
,
0
74
)
(
3
,
0
74
)
T
otal transaction
s with o
wners
–
–
–
–
(
2
,73
5
)
(2
,73
5)
Ba
la
n
ce a
s at 31 D
ec
e
mb
er 2
0
21
2
,
4
31
4
4
,17
8
15
(3
10
)
4
8
,
810
9
5
,1
2
4
Th
e agg
reg
ate cur
re
nt an
d defe
rr
ed ta
x rel
atin
g to items th
at ar
e de
bite
d to equ
it
y is £1
29
k (2020: cred
ite
d £259k).
Th
e notes o
n pag
es 1
1
7 to 1
54 fo
rm a
n inte
gra
l par
t of the
se fin
an
cia
l st
ateme
nts.
11
6
Zot
efoams plc
An
nua
l Re
por
t 2021
Notes
1
. General information
Zotefoa
ms pl
c (the “C
omp
any
”) is a p
ub
lic l
imi
ted co
mpa
ny
, w
hi
ch is
list
ed on the
London St
ock Exchange and incorporat
ed and domiciled in
Eng
la
nd, UK
. Th
e reg
iste
red of
fi
ce of th
e Co
mpa
ny is 67
5 Mi
tcha
m Roa
d,
Croyd
on, CR
9 3AL.
The Company
, its subsidiaries and
joint v
enture
(t
ogether re
ferred t
o as t
he
“Gro
up”) a
re en
gag
ed i
n the m
anu
fac
tur
ing a
nd s
al
e of hig
h-p
er
fo
rm
an
ce
foa
ms an
d lic
en
sin
g of rel
ated te
chn
ol
ogy f
or sp
ec
ia
list m
ar
kets wor
ld
wi
de.
2
. Significant accounting policies
The principal accounting
policies applied in t
he preparation
of t
hese
fina
nc
ial s
tate
men
ts are s
et ou
t be
low. The
se po
lic
ie
s have be
e
n
co
nsi
stentl
y ap
pli
ed to al
l of the ye
ar
s pre
se
nted, u
nle
ss ot
her
wis
e sta
ted.
2.
1 Basis of
p
reparation
Th
e fina
nc
ial s
tate
men
ts of Zotefoa
ms pl
c have b
ee
n pre
par
ed in
accordance with
International A
ccounting St
andards in con
formity
wi
th the re
qu
ire
men
ts of the C
om
pan
ie
s Act 20
0
6 and a
s ap
pli
ed i
n
accordance with
the provisions
of t
he Companies Act
2006. The
financial
state
me
nts have b
ee
n pre
pa
red u
nd
er th
e his
toric
al c
os
t conve
nti
on
excep
t for de
ri
vati
ve fina
nc
ial i
nst
rum
en
ts, wh
ich a
re me
as
ure
d at fa
ir
val
uethr
oug
hprofi
t or lo
ss.
The preparat
ion of
financial stat
eme
nts
in conformity wit
h IFRS
requires t
he
use of c
er
tai
n cr
itic
al a
cc
oun
ting e
sti
mate
s. It al
so req
ui
res m
ana
ge
me
nt to
exerc
ise i
ts jud
ge
me
nt in th
e pro
ce
ss of a
ppl
yi
ng th
e Grou
p’
s ac
co
unti
ng
policies. The
areas inv
olving a higher
degree of
judgement or comple
xity
,
or areas wher
e assumption
s and estima
tes ar
e significant t
o the financial
state
me
nts, ar
e dis
clo
se
d in note 26.
i) Goi
ng co
ncern
The Group
’
s business act
ivities, t
ogether with t
he fact
ors lik
ely t
o affect its
fu
ture d
evel
op
men
t, per
f
orm
an
ce a
nd po
sit
ion, a
re set o
ut i
n the St
rateg
ic
Re
por
t o
n pag
es 1 to 77 a
nd the s
ec
tio
n enti
tle
d “R
isk m
an
age
me
nt
an
d pri
nci
pa
l ris
ks” on p
age
s 45 to 54. Th
es
e als
o de
scr
ib
e the fi
nan
ci
al
pos
iti
on of th
e Gro
up, its ca
sh fl
ows an
d liq
uid
it
y po
sit
ion. I
n addi
tio
n, note
2
1 t
o the
financial stat
eme
nts
includes the
Group
’
s objectives
, policies
and processes f
or managing it
s capital,
its financial
risk management
objectives
, details
of it
s financial inst
ruments and
hedging activities
,
bor
row
ing fa
cil
iti
es, a
nd it
s expo
su
re to cred
it r
isk a
nd l
iqu
idi
t
y ris
k.
At 3
1 De
ce
mb
er 2021
, the G
rou
p’
s gro
ss fi
nan
ce fa
cil
iti
es we
re £4
7
.3
m
(2020: £53.8m), comp
ri
sin
g a mul
ti-
cur
re
ncy ter
m lo
an of £
20.0m, a
mul
ti-
cur
ren
cy revo
lv
ing c
red
it fa
cil
it
y of £
25.
0m, a
nd a re
ma
ini
ng ba
la
nc
e
of £2.3m (2020: £3.8m) of a f
ur
th
er £7
.5m s
terl
ing a
nn
ual
ly re
new
abl
e
term l
oa
n, rep
ayabl
e in e
qua
l qu
ar
te
rl
y ins
tal
me
nts. In li
ne w
ith th
e ban
k
fina
nc
ing a
gre
em
ent, a re
paym
en
t of £5.0m was m
ade o
n 30 J
une 20
2
1
.
Th
e ban
k fac
ili
t
y is for a fi
ve-ye
ar p
er
iod a
nd ex
pir
es in M
ay 2023. At
the d
ate of the st
atem
ent of fi
na
nci
al p
osi
tio
n, £5.3m was u
ndr
awn o
n
the fa
cil
it
y (2020: £1
0.
7
m)
. At the s
am
e date, the G
rou
p als
o he
ld £8.
1
m
(2020: £8.5m) of ca
sh an
d ca
sh e
qui
val
ent
s. Th
e fac
ili
ty i
s su
bje
ct to t
wo
cove
na
nts, wh
ich a
re tes
ted se
mi-
ann
ua
lly: n
et de
bt to EBIT
DA (lev
era
ge)
an
d EBIT
DA to net fina
nc
e ch
arg
es.
In Ma
rch 20
22, the Grou
p co
mpl
eted a b
ank r
efin
anc
ing a
nd s
el
ecte
d
Ha
nde
ls
ban
ken a
nd Na
tWest, the i
nc
umb
ent
s, to conti
nu
e as its l
en
de
rs.
Und
er th
e ter
ms of th
e new fa
cil
it
y
, t
he G
roup’
s gros
s fin
an
ce fa
cil
it
y wi
ll
be a £50
m mu
lti-
cu
rre
ncy r
evol
vin
g cre
di
t fac
ili
ty
, wi
th a £25m a
cco
rdi
on,
on a 4+
1 teno
r
, an
d an in
tere
st rate ra
tchet o
n sl
ight
ly im
prove
d ter
ms to
the p
revi
ous f
aci
lit
y
, wi
th a sm
all e
le
me
nt re
lated to th
e ach
ieve
me
nt of
sus
tai
na
bil
it
y ta
rget
s. Th
e fina
nc
e cos
t and l
eve
rag
e cove
nan
ts rem
ai
n, with
the fo
rm
er re
ma
ini
ng at 4:
1 an
d the l
at
ter in
cre
asi
ng to 3.5:
1 fro
m3.0:
1
.
The Direct
ors believe
that
the Group
is well
place
d t
o manage its business
ri
sks a
nd, af
ter m
ak
in
g enq
ui
rie
s in
clu
din
g a rev
iew of fo
rec
as
ts an
d
predictions,
taking account o
f reasonably possible changes in
trading
pe
r
for
ma
nce a
nd c
ons
id
er
ing th
e exi
stin
g ba
nki
ng fa
cil
iti
es, h
ave a
reasonable e
xpectation tha
t the
Group has
adequate
resources t
o continue
in op
er
atio
nal ex
is
tenc
e for th
e nex
t t
wel
ve mo
nths fo
llow
in
g the d
ate of
ap
prova
l of the fin
an
cia
l sta
teme
nts. T
he D
ire
ctor
s have a
lso d
rawn u
po
n
the ex
pe
ri
enc
es of r
eac
tin
g to the ch
all
en
ge
s of COVI
D-
1
9 thro
ug
h its
safe
t
y protoc
ols a
nd c
ost a
nd c
ash m
an
age
me
nt, all of w
hi
ch c
oul
d be
replicat
ed in a
similar scenario
.
Af
ter d
ue c
ons
ide
rat
ion of th
e ra
nge a
nd l
ikeli
ho
od of pote
ntia
l ou
tcom
es,
the D
ire
ctor
s co
ntinu
e to ado
pt the g
oin
g co
nce
rn b
asi
s of ac
cou
ntin
g in
preparing the
Annual Repor
t.
2.
2 Basis
of consolidation
i) Subsidiaries
Subsidiaries are
all entities
over
which the
Group has
control
. The Group
co
ntrol
s an e
ntit
y w
he
n the G
roup i
s exp
ose
d to, or has r
ig
hts to, vari
abl
e
retu
rns f
rom i
ts invo
lve
me
nt wi
th the e
ntit
y a
nd ha
s the a
bi
lit
y to af
fe
ct
tho
se retu
rn
s thro
ugh i
ts powe
r over th
e en
tit
y
. Sub
sid
ia
ri
es a
re fu
lly
co
nso
lid
ated f
rom th
e date on w
hi
ch co
ntro
l is tra
nsf
er
red to the G
rou
p.
Th
ey are d
ec
ons
ol
idate
d fro
m the d
ate on wh
ic
h that c
ontr
ol ce
as
es.
ii) T
ransactions eliminated on consolidation
Intr
a-gr
oup b
ala
nc
es a
nd tr
ans
act
ion
s, inc
lud
ing a
ny un
rea
li
sed g
ai
ns
an
d los
se
s or in
co
me an
d exp
en
ses a
ri
sin
g fro
m su
ch tra
ns
acti
ons, a
re
eliminated in pr
eparing the consolidated financial statements.
Unrealised
los
se
s are e
li
min
ated in t
he sa
me way a
s un
rea
lis
ed g
ain
s, but o
nl
y to the
ex
tent th
at the
re is n
o evi
de
nce of i
mpa
ir
me
nt. Wh
ere n
ec
es
sa
r
y
, a
mou
nts
reported by
subsidiaries hav
e been adjust
ed to con
form with
the Group
’
s
accounting policies
.
iii) Joint arrange
ments
Th
e Gro
up ap
pl
ies I
FRS 1
1 to its jo
int a
rra
ng
em
ents. U
nd
er IF
RS 1
1
,
invest
ments in
joint arrangements
are classified as
either joint
ope
rations
or jo
int ve
ntu
res, d
ep
en
din
g on th
e con
trac
tua
l rig
hts a
nd ob
lig
atio
ns of
ea
ch inve
stor
. Th
e Gro
up ha
s as
se
sse
d the n
atu
re of its j
oint a
rr
an
gem
en
ts
an
d deter
mi
ne
d the
m to be joi
nt ve
nture
s. Inte
res
ts in th
e joi
nt ve
nture
s
area
cco
unte
d for u
sin
g the e
qui
t
y meth
od, af
te
r ini
tia
lly b
ei
ng re
co
gni
sed
at c
o
st.
iv) E
quity method
Und
er th
e eq
ui
ty m
etho
d of ac
cou
ntin
g, the i
nvest
me
nt is in
iti
all
y
rec
og
nis
ed at c
ost a
nd th
e ca
rr
y
in
g amo
unt i
s inc
re
ase
d or d
ec
rea
sed to
rec
og
nis
e the i
nvesto
r’
s s
ha
re of the c
ha
nge i
n net a
ss
ets of th
e inve
stee
after the
date
of a
cquisition.
If the ow
ne
rs
hip i
ntere
st i
n the jo
int ve
ntu
re is re
du
ced b
ut j
oin
t con
trol is
retained,
only a pr
opor
tionat
e share o
f the
amounts pre
viously recognised
in o
ther comprehensive
income is r
eclassified to
profit
or loss where
appropriate
.
Th
e Gro
up’
s s
har
e of pos
t-acqu
isi
tion p
rofit o
r lo
ss is re
co
gn
ise
d in th
e
inc
om
e state
me
nt, and i
ts sh
are of p
ost-acq
uis
iti
on m
oveme
nts i
n othe
r
comprehensive in
come is recognised
with a
corresponding adjust
ment
to the ca
rr
yin
g am
oun
t of the i
nvest
men
t. Whe
re th
e Grou
p’
s sh
are of
los
se
s in th
e joi
nt ven
ture e
qu
als o
r exce
eds i
ts in
teres
t in th
e joi
nt ven
ture,
inc
lud
in
g any oth
er u
nse
cur
ed re
ce
iva
ble
s, th
e Gro
up do
es n
ot rec
og
nis
e
fur
ther losses
, unless it has
incurred legal or
c
onstructiv
e obligat
ions or
mad
e pay
men
ts on b
eh
alf of t
he jo
int ve
ntur
e. Dis
tri
but
ion
s rec
ei
ved f
rom
the j
oint v
entu
re re
duc
e the c
ar
r
yi
ng a
mou
nt of the i
nves
tme
nt.
Th
e Gro
up de
term
in
es at e
ac
h rep
or
ti
ng date w
heth
er t
her
e is any
obj
ec
tive ev
id
en
ce tha
t the in
vest
men
t in th
e joi
nt ven
ture i
s imp
aire
d. If
thi
s is the c
as
e, the Gr
oup c
al
cul
ates th
e am
oun
t of imp
air
me
nt as t
he
dif
fere
nc
e bet
we
en th
e rec
over
ab
le am
ou
nt of the j
oin
t ventu
re an
d its
ca
rr
y
in
g valu
e an
d rec
og
nis
es th
e am
ount a
dja
ce
nt to “sha
re of pro
fit
/(los
s)
of joi
nt ve
nture” i
n the i
nco
me st
atem
ent.
Ga
ins a
nd lo
ss
es re
su
ltin
g fro
m ups
tre
am a
nd dow
nstr
ea
m tran
sa
ctio
ns
bet
we
en th
e Gro
up a
nd the j
oi
nt vent
ure a
re rec
og
nis
ed i
n the G
roup’
s
fina
nc
ial s
tate
men
ts on
ly to the ex
te
nt of an u
nre
lated i
nves
tor’
s inte
res
ts
in th
e joi
nt ven
ture. U
nre
ali
se
d los
se
s are e
lim
ina
ted un
le
ss th
e tra
nsa
ctio
n
prov
ide
s ev
ide
nc
e of an i
mpa
irm
en
t of the a
sse
t tra
nsfe
rre
d. Acc
ou
ntin
g
pol
ic
ies o
f the jo
int ve
ntu
re have b
ee
n ali
gn
ed wh
er
e nec
es
sa
r
y to en
sur
e
consistenc
y with t
he policies a
dopted
by t
he Group
.
v) Accounting
for business combinations
Business combinations
a
re a
ccounted
for using
the acquisit
ion met
hod
as at th
e acq
ui
siti
on d
ate, whi
ch is th
e date o
n whi
ch c
ontro
l is tr
ans
fer
red
to the Gr
oup. Co
ntro
l is the p
ower to gove
rn t
he fin
an
cia
l an
d ope
rat
ing
pol
ic
ies o
f an e
ntit
y so a
s to obta
in be
ne
fits f
rom th
e acti
vi
tie
s. In a
sse
ss
in
g
co
ntrol, th
e Gro
up ta
kes i
nto con
sid
er
atio
n poten
tial vot
ing r
ig
hts tha
t are
currently
exer
cisable.
Strat
egic Repor
t
Gov
ernance
Financial Statements
117
Zot
efoams plc
An
nua
l Re
por
t 2021
2
. Significant accounting policies (continued)
The Group measur
es goodwill at
the a
cquisition dat
e as:
X
Th
e fai
r val
ue of th
e con
sid
er
atio
n tra
nsfe
rre
d; plu
s
X
Th
e rec
og
nis
ed a
mou
nt of any n
on-
co
ntro
lli
ng inte
res
ts in th
e
acquiree
;pl
us
X
If the b
us
ine
ss c
om
bin
atio
n is ac
hie
ved in s
tag
es, th
e fa
ir val
ue
rem
ea
sur
ed at a
cqu
isi
tio
n date of th
e exis
ting i
ntere
st i
n the ac
qu
ire
e
le
ss th
e net re
co
gn
ise
d am
oun
t of the id
en
tifia
bl
e as
sets a
cqu
ire
d
andl
iabilities assumed.
Wh
en th
e exces
s is n
eg
ative, a b
arg
ain p
urc
has
e ga
in is re
co
gn
ise
d
immediately
in the
income sta
tement
. The considerat
ion transf
erred does
not in
clu
de a
mou
nts re
late
d to the set
tl
em
ent of p
re-
exi
stin
g rel
atio
ns
hip
s.
Suc
h am
oun
ts are g
en
er
all
y rec
og
nis
ed i
n the in
co
me st
ateme
nt. Co
sts
relat
ed t
o the
acquisition,
other than t
hose associat
ed with
the issue
of deb
t or equity securities
, that
the Gr
oup incurs in
connection with
ab
usiness combination
are expensed
as incurred
.
Wh
en s
har
e-b
ase
d pay
me
nt award
s (rep
lac
em
ent aw
ard
s) are req
ui
red
to be excha
ng
ed fo
r award
s he
ld by the a
cq
uire
e em
pl
oyee
s (acqu
ire
e
award
s) and re
late to pa
st se
r
v
ice
s, the
n al
l or a po
r
tio
n of the a
mo
unt
of the a
cqu
ire
r rep
lac
em
ent a
ward
s are in
cl
ude
d in m
ea
sur
ing t
he
consideration
transferred
in the
business combination
. This de
termination
is ba
se
d on the m
ar
ket-base
d va
lue of th
e rep
la
ce
men
t award
s co
mpa
red
wi
th the m
ar
ket
-ba
se
d val
ue of th
e acq
uire
e awa
rds a
nd the ex
te
nt to
wh
ich th
e rep
la
ce
men
t award
s rel
ate to past a
nd
/or futu
re se
r
v
ice
s.
2.3 Forei
gn curren
cy
i) F
unctional and presentation
currency
Item
s inc
lud
ed i
n the fin
an
cia
l st
ateme
nts of e
ac
h of the G
roup’
s ent
itie
s
are measured
using the
currency o
f the
primar
y economic envir
onment in
which each ent
ity operates
(“the functional
currency”)
. The consolida
ted
fina
nc
ial s
tate
men
ts are p
res
en
ted in ste
rl
ing, w
hic
h is th
e Gro
up’
s
presentation
currency
.
Th
e Com
pa
ny’
s fina
nc
ial s
tate
men
ts are p
rep
are
d an
d pre
se
nted in
sterling
, which is it
s functional currency
.
ii) T
ransactions and balances
Foreign
currency transact
ions are
translat
e
d int
o the functional
currency
usi
ng th
e excha
ng
e rates p
reva
ili
ng at th
e date
s of the tra
ns
act
ion
s or
val
uati
on (wh
er
e item
s are re
me
as
ure
d). Forei
gn exch
an
ge ga
in
s and
losses resulting
from t
he settlement o
f monetary assets
and liabilities
denominated
in for
eign currencies are
recognised in
the income
stat
ement
,e
xcept
when d
eferr
ed in
ot
her comp
rehensiv
e income
asqu
al
if
y
ing c
as
h flow h
edg
es. A
ll fo
rei
gn exch
an
ge g
ain
s and l
os
se
s
arep
res
ente
d in th
e inc
om
e state
me
nt wi
thin a
dmi
nis
trati
ve exp
en
se
s.
T
ranslation
dif
ferences relat
ed t
o items
classified through
other
comprehensive in
come are r
ecognised in o
ther comprehensive
income,
while remaining t
ranslation differences are recognised in
the income
stat
ement.
iii) Group companies
The results
and financial posit
ion of
all the
Group ent
ities (
none of
which
has the
currency o
f a h
yper
-inflationary economy) t
hat ha
ve a
functional
cur
re
ncy d
if
fe
ren
t fro
m the p
res
ent
atio
n cur
re
ncy a
re tra
nsl
ated i
nto the
presentation
currency as f
ollows
:
X
Assets and
liabilities f
or each st
atement
of financial
position pr
esented
are tr
ans
late
d at the c
lo
sin
g rate at th
e date of tha
t state
me
nt of fin
anc
ia
l
position
X
Inc
om
e and ex
pe
ns
es fo
r eac
h inc
om
e state
me
nt ar
e tran
sla
ted
at aver
age exc
ha
nge r
ates (un
le
ss thi
s aver
age i
s not a re
as
ona
bl
e
ap
proxi
mati
on of th
e cum
ula
tive ef
fec
t of the r
ates pr
evai
lin
g on the
tra
nsa
cti
on date
s, in w
hic
h ca
se in
co
me an
d exp
en
ses a
re tra
ns
lated
atthe r
ate on th
e dates of e
ac
h tra
nsa
cti
on); and
X
Al
l res
ult
ing exch
an
ge di
f
fe
ren
ce
s are re
co
gn
ise
d in oth
er
comprehensive in
come.
Go
odw
ill a
nd f
air va
lu
e adj
ustm
en
ts ar
isi
ng on t
he ac
qui
sit
ion of a fo
rei
gn
ent
it
y are tr
eate
d as as
set
s and l
ia
bil
itie
s of th
e fore
ign e
nti
ty, and they a
re
tra
nsl
ated at th
e cl
osi
ng rate. E
xch
an
ge di
f
fe
ren
ce
s ar
isi
ng ar
e rec
ogn
is
ed
in o
ther comprehensive
income.
2.4 Derivative
financial instruments
Th
e Gro
up us
es d
er
ivat
ive fin
an
cia
l ins
tru
me
nts to he
dge i
ts exp
os
ure to
foreign
exchange
risks arising
from operat
ional, financing
and in
vestment
activities.
In accordance
with it
s treasury policy
, the Group
does not
hold
or is
su
e de
ri
vative fi
na
nci
al i
nstr
um
ents fo
r tra
din
g pur
po
ses
. Howeve
r
,
de
ri
vative
s tha
t do not q
ua
lif
y for he
dg
e acc
ou
ntin
g are a
cco
unte
d for
astr
adin
g ins
tru
me
nts.
De
ri
vative
s ar
e ini
tia
lly r
ec
ogn
ise
d at fa
ir va
lue o
n the d
ate wh
en a de
ri
vati
ve
co
ntrac
t is e
ntere
d into, and t
hey a
re sub
se
que
ntl
y rem
ea
sur
ed at th
ei
r fai
r
val
ue. Th
e met
hod of r
eco
gn
isi
ng th
e res
ult
ing g
ain o
r los
s de
pe
nd
s on
wh
ethe
r the d
er
ivat
ive is d
es
ign
ated a
s a he
dgi
ng in
str
ume
nt a
nd, if s
o, the
natu
re of the i
tem b
ein
g he
dge
d. Th
e Gro
up d
es
ign
ates a
ll de
ri
vati
ves a
s
he
dge
s of a pa
r
tic
ula
r ri
sk a
sso
ci
ated w
ith a re
co
gni
sed a
ss
et or l
ia
bil
it
y
ora
highly probable for
ecast transaction
(cash
flow hedge
).
At
the incept
ion of
the t
ransaction,
the Group documents
the relationship
bet
we
en h
edg
in
g inst
rum
en
ts an
d hed
ge
d item
s, as we
ll as i
ts r
isk
management objectiv
es and str
ategy f
or undertaking various hedging
tra
nsa
cti
ons. T
he G
rou
p als
o do
cum
ents i
ts as
se
ss
me
nt, both at h
ed
ge
inc
epti
on a
nd on a
n on
goi
ng ba
si
s, of whe
the
r the d
er
ivat
ive
s that a
re us
ed
in he
dg
ing tr
an
sac
tio
ns are h
ig
hly e
f
fec
tive i
n of
fs
et
tin
g cha
ng
es in f
ai
r
val
ue
s or ca
sh fl
ows of he
dg
ed ite
ms.
Th
e fai
r val
ue
s of var
iou
s de
ri
vative i
nst
rum
en
ts use
d for h
ed
gin
g pur
po
se
s
are d
isc
los
ed i
n note 21
. T
he f
ul
l fai
r valu
e of a he
dg
ing d
er
ivati
ve is
classified as a
non-current asset
or liability where
the remaining
maturity
of the h
ed
ged i
tem is m
ore th
an t
we
lve mo
nth
s, and a
s a cur
re
nt as
set o
r
liability where t
he remaining ma
turity of t
he hedged it
em is less
than twelve
months
. T
rading derivativ
es are classified
as a current
as
set or
liability
.
Th
e fai
r val
ue of for
ward exc
han
ge c
ontr
acts i
s the
ir qu
oted m
ar
ket pri
ce
at the s
tatem
en
t of fina
nc
ial p
os
itio
n date, be
in
g the pr
es
ent va
lu
e of the
quot
ed forward price.
i) Ca
sh 
ow hed
gin
g
Th
e ef
fe
cti
ve por
tion o
f cha
ng
es in t
he fa
ir va
lue of d
er
ivat
ive
s that a
re
de
sig
nate
d and q
ua
lif
y as c
ash fl
ow he
dge
s is re
co
gn
ise
d in th
e he
dgi
ng
res
er
v
e with
in e
qui
t
y
. T
he g
ain o
r los
s re
lati
ng to the i
nef
fe
cti
ve po
r
tio
n
is re
co
gni
sed i
mm
edi
atel
y in th
e inc
om
e state
me
nt wi
thin a
dmi
nis
trati
ve
expen
ses.
When forward cont
racts
are used t
o hedge forecast t
ransactions
, the
Gro
up ge
ne
ra
lly d
es
ig
nates o
nl
y the c
han
ge i
n fai
r valu
e of the f
or
wa
rd
contract
relat
ed t
o the spo
t component as the
hedging inst
rument.
Ga
ins o
r los
se
s rel
atin
g to the ef
fe
ct
ive po
r
tio
n of the c
ha
nge i
n the s
pot
co
mpo
ne
nt of the fo
r
war
d con
trac
ts are r
ec
ogn
ise
d in th
e ca
sh flow
he
dgi
ng re
se
r
ve wi
thin e
qu
it
y
. Th
e cha
ng
e in th
e for
wa
rd el
em
ent of t
he
contract
that
relates
to
the hedged it
em (“aligned
forward element”) is
recognised within
other
comprehensive income
in the
costs o
f hedging
res
er
v
e with
in e
qui
t
y
. I
n som
e ca
ses, t
he e
ntit
y mi
ght d
es
ign
ate the f
ul
l
cha
ng
e in fa
ir va
lue of t
he for
ward c
ontr
act (
inc
lu
din
g for
wa
rd po
ints) as
the h
edg
in
g inst
ru
men
t. In suc
h ca
se
s, the g
ain
s or lo
ss
es re
lati
ng to the
ef
fe
cti
ve por
tio
n of the c
han
ge in f
ai
r valu
e of the e
nti
re for
wa
rd co
ntra
ct
are re
co
gn
ise
d in th
e ca
sh flow h
ed
gin
g res
er
ve w
ith
in e
qui
t
y
.
Wh
en a h
edg
ing i
nst
rum
en
t expi
res o
r is s
old o
r term
in
ated, or w
he
n a
hedge no longer
meets t
he criteria f
or hedge accoun
ting,
any cumula
tive
defe
rr
ed g
ain o
r los
s an
d defe
r
red c
osts of h
ed
gin
g in e
qui
ty a
t that ti
me
rem
ai
ns in e
qui
t
y unti
l the fo
rec
ast t
ran
sac
tio
n oc
cur
s, res
ul
ting i
n the
recognition o
f a
non-financial
asset.
When the f
orecast transact
ion is n
o
lon
ge
r exp
ec
ted to occ
ur
, th
e cu
mul
ative g
ai
n or lo
ss a
nd d
efer
re
d cos
ts
of hedging
that were
reported in equity are
immediately
reclassified t
o the
income statement
.
Note
s
Continued
11
8
Zot
efoams plc
An
nua
l Re
por
t 2021
2
. Significant accounting policies (continued)
2.
5 In
vestments in subsidiaries and joint arrangements
Th
e Com
pa
ny’
s inve
stme
nts i
n sub
sid
ia
ri
es a
nd jo
int a
rra
ng
em
ents a
re
state
d at co
st le
ss p
rovi
sio
n for i
mpa
ir
me
nt.
2.6 Property,
plant and equipment
i) O
wne
d as
se
ts
Item
s of prop
er
ty, plant a
nd e
qui
pme
nt a
re sta
ted at co
st o
r dee
me
d
cos
tle
ss a
ccu
mul
ated d
ep
rec
iati
on a
nd any i
mpa
ir
me
nt lo
sse
s.
Wh
en pa
r
ts of a
n item of p
rop
er
t
y
, pl
ant a
nd e
qui
pme
nt hav
e dif
f
ere
nt
use
fu
l live
s, tho
se c
omp
one
nts a
re ac
cou
nted fo
r as s
epa
rate ite
ms of
propert
y
, plant and equipment
.
Sub
se
que
nt c
osts a
re in
clu
de
d in th
e ass
et’s car
r
yi
ng am
ou
nt or
rec
og
nis
ed a
s a sep
ar
ate ass
et, as a
ppro
pr
iate, on
ly wh
en i
t is pr
oba
ble
that
future economic benefit
s associat
ed with
the it
em will fl
ow t
o the
Gro
up a
nd the c
ost o
f the ite
m ca
n be m
eas
ure
d re
lia
bly. The c
ar
r
yi
ng
am
ount o
f the re
pla
ce
d par
t is de
re
cog
ni
sed. A
ll oth
er re
pa
irs a
nd
maintenance
are charged
to
the income
statement
during the
financial
yea
rin w
hic
h they a
re in
cur
re
d.
Th
e cos
t of as
sets u
nd
er c
ons
tru
ctio
n inc
lu
de
s the c
ost of m
ater
ial
s an
d
dir
ect l
ab
our
, an
d any oth
er c
osts d
ire
ctl
y at
trib
ut
abl
e to bri
ngi
ng th
e as
set
to a work
in
g con
di
tion f
or its i
nten
de
d use.
ii) Depreciation
La
nd i
s not de
pre
ci
ated. D
epr
eci
atio
n is c
har
ge
d to the inc
om
e state
me
nt
on a st
rai
ght-lin
e bas
is ove
r the e
stim
ated u
sef
ul l
ive
s of eac
h pa
r
t of the
item of p
rop
er
t
y
, pl
ant a
nd e
qui
pme
nt. Th
e es
tima
ted us
efu
l li
ves a
re as
fo
ll
o
ws:
Buildings
20-40
years
Pla
nt an
d eq
uip
me
nt
5
–20 ye
ar
s
Fix
t
ure
s and fi
t
ting
s
3
–
5 ye
ar
s
As
sets u
nde
r co
nst
ruc
tio
n are d
ep
rec
iate
d from t
he mo
nth in w
hi
ch th
e
as
set is r
ead
y for i
ts inte
nde
d us
e.
Th
e as
sets’ res
id
ual v
alu
es a
nd u
sef
ul li
ves a
re rev
iewe
d, an
d adju
sted i
f
ap
prop
ri
ate, at the e
nd of e
ach fi
nan
ci
al ye
ar
.
2.7 In
tangible assets
i) Re
se
ar
ch an
d deve
lop
men
t
E
xp
end
itu
re on re
se
arc
h ac
tiv
itie
s un
de
r
ta
ken wi
th the p
ros
pe
ct of ga
in
ing
new s
cie
nti
fic or te
chn
ic
al k
now
led
ge a
nd u
nde
rs
tan
din
g is re
co
gni
se
d in
the i
nco
me st
atem
ent a
s an ex
pe
nse a
s inc
ur
red.
Deve
lo
pme
nt c
osts th
at ar
e dire
ctl
y at
tri
bu
tab
le to the d
es
ign a
nd te
stin
g of
identifiable and
unique product
s contr
olled by
the Group are
recognised as
int
ang
ibl
e as
sets w
he
re the f
oll
owin
g cr
iter
ia a
re met:
X
It is te
chn
ic
all
y fea
si
ble to co
mp
lete th
e ass
et so t
hat it w
il
l be avai
la
ble
for use
X
Ma
nag
em
ent i
nten
ds to com
pl
ete the a
sse
t and u
se o
r sel
l it
X
Th
ere i
s an a
bil
it
y to use o
r se
ll the a
ss
et
X
It ca
n be d
em
ons
trated h
ow the a
ss
et wi
ll ge
ne
rate pro
ba
ble f
utu
re
economic benefits
X
Adequat
e t
echnical, financial and
other resources t
o complete
the
deve
lo
pme
nt an
d to use o
r se
ll the a
ss
et are av
ail
ab
le an
d
X
Th
e exp
end
itu
re at
tri
bu
tab
le to the a
ss
et du
rin
g its d
evel
opm
en
t ca
n
bere
lia
bl
y me
asu
red.
Di
rec
tly at
tr
ibu
ta
ble c
ost
s that a
re ca
pi
tal
ise
d as p
ar
t of th
e as
set i
ncl
ude
the pr
oduct development emplo
yee costs
and an appropriat
e por
tion of
relevan
t ov
erheads.
Oth
er d
evel
op
me
nt exp
en
ditu
res t
hat d
o not me
et th
es
e cri
ter
ia ar
e
rec
og
nis
ed a
s an ex
pe
nse a
s inc
ur
red. D
evel
opm
ent c
os
ts prev
io
usl
y
rec
og
nis
ed a
s an ex
pe
nse a
re not re
co
gni
se
d as a
n ass
et in a s
ubs
eq
ue
nt
period.
ii) Good
will
Go
odw
ill r
ep
res
ents t
he exce
ss of th
e co
st of ac
qui
sit
ion ove
r the f
air v
alu
e
of the G
rou
p’
s inte
res
t in the i
de
ntifi
ab
le as
se
ts, lia
bil
iti
es a
nd c
onti
nge
nt
liabilities acqu
ired in a
busine
ss combinat
ion. Goodwill
is stated
at the
amount r
ecognised on acquisit
ion dat
e less any
accumulat
ed impairment
los
se
s. Go
od
wil
l is tes
ted an
nua
ll
y for im
pa
irm
en
t or mo
re fre
qu
en
tly if
the
re are i
nd
ica
tion
s that g
oo
dwi
ll may b
e im
pai
red.
iii
) Sof
t
war
e
Acq
uire
d co
mp
uter s
of
t
ware l
ice
nc
es a
re ca
pi
tal
ise
d on th
e bas
is of th
e
cos
ts in
cur
red to ac
qu
ire a
nd br
ing to u
se the s
pe
ci
fic sof
t
wa
re.
iv) O
the
r int
an
gibl
e as
set
s
Intangible
assets acquir
ed from a
busine
ss combinat
ion are
capitalised at
fai
r val
ue as a
t the d
ate of acq
uis
iti
on an
d am
or
ti
sed ove
r the
ir e
sti
mated
use
fu
l ec
ono
mic l
ife. T
he
ir ca
rr
yin
g val
ue is t
he fa
ir va
lue at a
cq
uis
itio
n le
ss
cumulative
amor
tisation
and any
impairment. An in
tangible asset acquir
ed
as part of a
busine
ss combinat
ion is r
ecognised outside goodwil
l if t
he
as
set is s
ep
ara
bl
e or a
ris
es f
rom c
ontr
actu
al o
r othe
r le
ga
l rig
hts a
nd its f
air
val
ue ca
n be m
ea
sur
ed re
lia
bl
y
.
Deve
lo
pme
nt c
osts th
at ar
e dire
ctl
y at
tri
bu
tab
le to the d
es
ign a
nd
development
of in
ternally generat
e
d int
angible assets
controlled
by
the G
rou
p are re
co
gni
se
d wh
en th
e rel
evant c
ri
ter
ia ar
e met. Inte
rn
all
y
ge
ne
rated i
nta
ngi
ble a
ss
ets ar
e amo
r
tis
ed f
rom th
e po
int at w
hic
h the
as
set is r
ead
y for u
se.
E
xp
end
itu
re on i
nter
nal
ly g
en
era
ted go
odw
ill a
nd b
ran
ds is r
ec
ogn
ise
d in
the i
nco
me st
atem
ent a
s an ex
pe
nse a
s inc
ur
red. R
ese
ar
ch ex
pen
di
ture
an
d deve
lop
me
nt exp
en
dit
ure th
at do no
t mee
t the c
rite
ri
a ab
ove are
rec
og
nis
ed a
s an ex
pe
nse a
s inc
ur
red. D
evel
opm
ent c
os
ts prev
io
usl
y
rec
og
nis
ed a
s an ex
pe
nse a
re not re
co
gni
se
d as a
n ass
et in a s
ubs
eq
ue
nt
period.
v) Amor
tis
ation
Th
e es
timate
d us
efu
l live
s of th
e Gro
up’
s in
tan
gib
le a
sse
ts are a
s fol
lows:
Ma
rketi
ng re
lated
5
–
1
5 ye
ar
s
Cus
tome
r rel
ated
2–
10 year
s
T
ec
hn
olo
gy re
late
d
5
–20 ye
ar
s
Sof
t
wa
re rel
ated
3–1
0 ye
ars
Cap
ita
li
sed d
evel
op
me
nt
3
–
10 year
s, fro
m the da
te the pate
nt
isgr
ante
d
Am
or
ti
sati
on m
etho
ds, us
efu
l li
ves a
nd re
sid
ua
l val
ue
s are rev
iew
ed at
ea
ch re
por
ting d
ate an
d adju
sted i
f ap
pro
pri
ate.
2.
8 F
inancial assets
i) Classications
The Group classifies
its financial
assets in
the f
ollowing cat
egorie
s:
a) those
to be me
as
ure
d sub
seq
ue
ntl
y at fai
r val
ue; and b) th
ose to be m
ea
su
red at
amor
tised cost.
The classification
depends on the
purpose for
which the
financial assets
were
acquired.
Management det
ermines the classificat
ion of
its financial
assets a
t initial
recognition.
a) Fin
anc
ial a
s
set
s sub
se
que
ntl
y mea
su
red a
t fai
r valu
e thr
oug
h pro
t
or loss
Fin
an
cia
l as
sets a
t fai
r valu
e thro
ug
h profi
t or lo
ss a
re fin
anc
ia
l
assets held
for t
rading.
A financial asset is
classified in this
c
at
egor
y
if ac
qu
ired p
ri
nci
pa
lly fo
r the p
ur
pos
e of sel
lin
g it i
n the sh
or
t te
rm.
De
ri
vative
s ar
eals
ocate
gor
is
ed a
s hel
d for tr
adi
ng un
le
ss th
ey are
designated
ashedges.
Assets i
n this
category are classified as
current
as
sets i
fexp
ec
ted to be se
ttl
ed w
ith
in 1
2 m
onth
s, othe
r
wi
se th
ey are
classifiedas
non-current
assets.
b)
Financial
assets at amortised cost
Financial assets
at amortised cost
are held
for collection
of con
tractual
ca
sh flow
s whe
re th
ose c
as
h flows re
pre
se
nt so
le
ly pay
me
nts of p
rin
ci
pal
and int
erest.
Strat
egic Repor
t
Gov
ernance
Financial Statements
11
9
Zot
efoams plc
An
nua
l Re
por
t 2021
2
. Significant accounting policies (continued)
ii) Recognition and measurement
Fin
an
cia
l as
sets n
ot ca
rr
ie
d at fa
ir val
ue th
roug
h profi
t or l
oss a
re in
iti
all
y
rec
og
nis
ed at f
air va
lu
e plu
s tra
nsa
cti
on co
sts. F
ina
nc
ial a
ss
ets ca
rr
ie
d
at fa
ir val
ue th
rou
gh profi
t or l
oss a
re in
iti
all
y re
cog
nis
ed at f
ai
r valu
e,
an
d tran
sac
tio
n co
sts ar
e expe
ns
ed i
n the in
co
me st
ateme
nt. Fi
nan
ci
al
as
sets a
re de
re
cog
nis
ed w
he
n the r
igh
ts to rec
ei
ve cas
h flow
s fro
m the
inve
stme
nts h
ave exp
ire
d or have b
ee
n tra
nsfe
r
red a
nd th
e Grou
p ha
s
transferred substantially all risks and r
ewards of
ownership. Int
e
rest income
fro
m fina
nc
ial a
ss
ets at a
mor
tise
d co
st is i
ncl
ud
ed in fi
na
nce i
nco
me u
sin
g
the ef
fec
tive i
ntere
st ra
te metho
d. Any g
ai
n or lo
ss a
ris
in
g on de
re
cog
ni
tion
is re
co
gni
sed d
ire
ctl
y in pr
ofit or l
os
s and p
re
sen
ted in oth
er g
ain
s/(lo
ss
es)
toget
her w
ith f
ore
ign exc
han
ge g
ain
s an
d los
se
s. Imp
air
me
nt lo
ss
es a
re
pre
se
nted a
s a sep
ara
te line i
tem in t
he st
atem
ent of p
rofit o
r los
s.
Ga
ins o
r los
se
s ar
isi
ng f
rom c
han
ge
s in th
e fai
r valu
e of the “
fin
anc
ia
l
as
sets at f
air v
alu
e thro
ug
h profit o
r lo
ss” ca
tego
r
y ar
e pre
se
nted in th
e
inc
om
e state
me
nt wi
thin a
dmi
nis
trati
ve exp
en
se
s in the fi
na
nci
al ye
ar i
n
wh
ich th
eyar
is
e.
iii) Off
setting nancial instruments
Fin
an
cia
l as
sets a
nd l
iab
ili
tie
s are of
fse
t, and th
e net a
mo
unt is r
epo
r
ted i
n
the st
atement
of financial
position,
when there
is a legally
enforceable right
to of
fse
t the re
co
gni
se
d amo
unt
s and th
er
e is an i
ntenti
on to set
tl
e on a n
et
basis or
realise the
asset and
settle the
liability simultaneously
. The legally
enfo
rce
ab
le r
igh
t mus
t not b
e con
ting
ent o
n fu
ture e
vent
s and i
t mus
t be
enfo
rce
ab
le i
n the no
rm
al c
our
se of b
usi
ne
ss a
nd in th
e eve
nt of def
aul
t,
ins
ol
venc
y or ba
nk
ru
ptcy of the G
rou
p or th
e cou
nter
pa
r
t
y
.
iv) Im
pai
rm
ent of 
na
nci
al as
se
ts c
ar
rie
d at a
mor
tis
ed c
ost
Th
e Gro
up as
se
ss
es o
n a for
wa
rd-l
oo
kin
g ba
sis th
e exp
ec
ted cre
di
t
los
se
s as
soc
iate
d wi
th its d
ebt in
str
um
ents c
ar
ri
ed at a
mo
r
tis
ed co
st. Th
e
impairment met
hodology applied depends on
whether t
here has been a
sig
ni
fica
nt in
cre
as
e in cr
edi
t ri
sk. Fo
r trad
e rec
ei
vab
le
s, the G
rou
p app
lie
s
the s
imp
lifi
ed a
ppr
oac
h pe
rmi
t
ted by IFR
S 9, whic
h req
ui
res ex
pe
cted
lifeti
me losses t
o be r
ecognised from init
ial recognition
of t
he receivables.
Fur
th
er d
etai
ls a
re prov
ide
d in n
ote 2
1
.
2.9 T
rade and
other receiv
ables
T
rad
e re
cei
vab
le
s are a
mo
unts d
ue f
rom cu
stom
er
s for go
od
s sol
d or
se
r
vi
ce
s pe
r
for
me
d in the o
rdi
nar
y co
urs
e of bu
sin
es
s. Th
ey are g
en
er
all
y
due f
or se
ttl
em
ent w
ith
in 3
0-
90 d
ays an
d are th
ere
fore a
ll cl
as
si
fied
as cu
rre
nt. T
ra
de re
ce
iva
bl
es a
re rec
og
nis
ed in
iti
all
y at th
e amo
unt of
consideration
that i
s unconditional
, unless the
y contain
significant financing
co
mpo
ne
nts, in w
hic
h ca
se th
ey are r
ec
ogn
ise
d at fa
ir va
lue. T
he G
rou
p
holds the
trade
receivables with
the objectiv
e of
collecting t
he contra
ctual
ca
sh flow
s, and s
o it m
ea
sure
s th
em su
bse
qu
ent
ly at a
mor
tise
d co
st us
ing
the ef
fec
tive i
ntere
st me
tho
d.
Du
e to the sh
or
t-term na
ture of c
urr
ent re
ce
iv
abl
es, th
ei
r ca
rr
y
in
g amo
unt
is co
ns
ide
red to b
e the s
ame a
s the
ir f
air va
lu
e. Infor
mat
ion a
bo
ut th
e
imp
air
me
nt of tr
ade re
ce
iva
bl
es a
nd th
e Grou
p’
s ex
pos
ure to cre
di
t ris
k
an
d fore
ign c
ur
ren
cy ri
sk c
an b
e foun
d in note 21
.
2.
10 In
ventories
Inve
ntori
es a
re sta
ted at th
e lowe
r of cos
t an
d net re
al
isa
bl
e valu
e. Net
rea
lis
ab
le va
lue i
s the e
sti
mated s
el
lin
g pri
ce i
n the o
rdin
ar
y c
ou
rse of
bus
in
es
s, le
ss th
e est
imate
d cos
ts of co
mp
leti
on an
d se
lli
ng exp
en
se
s.
In det
e
rmining t
he cost o
f raw
materials, consumables
and goods
pur
cha
se
d for re
sa
le, the we
ig
hted ave
rag
e pur
cha
se p
ric
e is u
sed. T
he
cos
t of fin
ish
ed g
ood
s an
d work i
n pro
gre
ss c
omp
ri
se
s de
sig
n co
sts,
raw
materials,
direct labour
, ot
her direct cos
ts and
related
production
overheads
(based on normal
operating capacity)
but ex
clude
s borro
wing
cos
ts. For wo
rk i
n pro
gre
ss a
nd fin
ish
ed g
ood
s ma
nu
fact
ure
d by the
Group
, cost i
s taken as
production
cost,
which includes an appropriat
e
proportion of
attributable o
verheads.
2
.
1
1 Ca
s
h an
d ca
s
h eq
u
iva
l
en
ts
Cash and
c
ash equiv
alents
comprise cash
balances and
short-
term highly
liq
uid i
nves
tme
nts wi
th an o
ri
gin
al m
atur
it
y of th
ree m
onth
s or le
ss
.
2.
12
Impairment of
non-financial
assets
Th
e ca
rr
y
in
g amo
unts of t
he G
roup’
s non
-fina
nci
al a
sse
ts are r
evi
ewed
at ea
ch st
atem
ent of fi
na
nci
al p
osi
tio
n date wh
ere t
her
e is an i
ndi
cat
ion
that th
e as
set m
ay be i
mpa
ire
d. If any s
uch i
ndi
cat
ion ex
ist
s, the a
sse
t’
s
rec
over
abl
e am
oun
t is e
stim
ated (se
e be
low).
For g
ood
wi
ll, pro
per
ty, plant a
nd e
qui
pm
ent a
nd in
tan
gib
le a
ss
ets tha
t have
ind
efin
ite us
efu
l li
ves o
r that a
re not yet av
ail
ab
le for u
se, the r
ec
overa
bl
e
am
ount i
s es
tima
ted ea
ch ye
ar at th
e sa
me ti
me. A
n imp
air
me
nt lo
ss i
s
rec
og
nis
ed i
f the c
ar
r
yi
ng am
ou
nt of an a
ss
et or it
s rel
ated c
ash
-g
ene
rat
ing
uni
t (CGU
) exce
eds i
ts es
tim
ated re
cove
rab
le a
mou
nt.
i) Calculation of
recoverable amount
Wi
th the exc
epti
on of the c
ur
ren
t deve
lop
me
nt inve
stm
ent i
n Re
Zorce
®
,
a mono-mat
eria
l barrier t
e
chnology solution
for t
he packaging
industry
that u
se
s Mu
Ce
ll
®
tech
no
log
y
, th
e re
cove
rab
le a
mou
nt of an a
ss
et or
CGU i
s the g
reate
r of its va
lu
e in us
e and i
ts fa
ir va
lue l
es
s co
sts to se
ll.
In as
se
ss
ing va
lu
e in us
e, the e
stim
ated f
utu
re ca
sh fl
ows are d
isc
ou
nted
to thei
r pre
se
nt val
ue u
sin
g a dis
cou
nt ra
te that refl
ec
ts cu
rre
nt ma
rket
as
se
ssm
en
ts of the ti
me va
lue of m
on
ey an
d the r
isks s
pe
ci
fic to the
as
set o
r CGU. For th
e pur
po
se of im
pa
irm
ent te
sti
ng, as
sets t
hat c
ann
ot
be tes
ted in
di
vid
ua
lly a
re gro
up
ed tog
ethe
r into th
e sma
ll
est g
rou
p of
as
sets th
at ge
ne
rate
s ca
sh infl
ows f
rom c
onti
nui
ng us
e that a
re la
rge
ly
ind
ep
en
de
nt of the c
as
h infl
ows of othe
r as
sets o
r CG
Us. Su
bje
ct to an
ope
rat
ing s
eg
men
t ce
ili
ng tes
t, for the p
ur
pos
es of g
ood
wi
ll im
pai
rm
ent
testi
ng, CG
Us to whi
ch g
ood
wi
ll ha
s be
en a
llo
cate
d are a
ggre
ga
ted so th
at
the l
evel at w
hi
ch im
pa
irm
ent te
sti
ng is p
er
fo
rm
ed re
fle
cts th
e lowe
st leve
l
at which goodwill
is monit
ored for
internal r
epor
ting purposes.
Goodwill
acq
uir
ed in a b
us
ine
ss c
om
bin
atio
n is al
lo
cated to g
roup
s of CGU
s that a
re
expected
to
benefit from
the synergies
of t
he combination
.
In the c
as
e of Re
Zorce, m
ana
ge
me
nt ju
dge
me
nts ba
se
d on fa
ctor
s suc
h
as ma
rke
t potent
ial, c
ustom
er i
ntere
st, tec
hno
log
y de
velo
pm
ent s
tatu
s,
fu
ndi
ng ca
pa
bil
it
y an
d Bo
ard a
ppe
tite for
m the b
asi
s for a
ss
es
sin
g the
rec
over
abl
e am
oun
t.
Th
e Gro
up’
s c
or
por
ate ass
ets do n
ot ge
ne
rate se
pa
rate ca
sh i
nflows a
nd
are u
tili
se
d by mor
e than o
ne C
GU. Cor
po
rate as
sets a
re al
lo
cated to
CGU
s on a re
aso
na
ble a
nd c
ons
iste
nt ba
sis a
nd te
sted fo
r imp
air
me
nt as
par
t of the te
stin
g of the C
GU to whi
ch th
e co
rpo
rate as
se
t is al
loc
ated.
ii) Impairment losses
Imp
air
me
nt lo
ss
es a
re rec
og
nis
ed i
n the in
co
me st
atem
ent. Im
pai
rm
ent
los
se
s rec
og
nis
ed i
n res
pe
ct of CG
Us ar
e all
oc
ated fir
st to re
duc
e the
ca
rr
y
in
g amo
unt of a
ny go
odw
il
l all
oc
ated to the C
GU (or gro
up of C
GUs),
an
d the
n to redu
ce th
e ca
rr
y
in
g amo
unts of t
he oth
er as
se
ts in th
e CGU (or
gro
up of CG
Us) on a pro r
ata ba
si
s.
iii
) Rever
s
al of im
pai
rm
ent
An i
mpa
ir
me
nt los
s in re
sp
ec
t of go
odw
ill i
s not reve
rs
ed. In r
es
pe
ct of
othe
r as
sets, i
mpa
ir
me
nt los
se
s re
cog
nis
ed i
n pr
ior ye
ar
s are a
ss
es
se
d at
ea
ch re
por
ting d
ate for a
ny ind
ic
atio
ns tha
t the lo
ss h
as d
ec
rea
sed o
r no
lon
ge
r exi
sts. A
n imp
air
me
nt lo
ss i
s rever
se
d if th
ere h
as b
ee
n a cha
ng
e in
the e
stim
ates u
se
d to deter
min
e the r
ec
overa
bl
e amo
unt. A
n imp
ai
rme
nt
los
s is re
ver
sed o
nl
y to the ex
tent th
at th
e ass
et’s car
r
yi
ng am
ou
nt do
es
not exce
ed t
he ca
rr
yin
g am
oun
t that wo
uld h
ave be
en d
eter
min
ed, n
et of
depreciation
or amortisation,
if no
impairment loss had
b
een recognised
.
2.
1
3 Divide
nds
Fin
al d
ivi
de
nd
s are re
co
gni
se
d as a li
ab
ili
ty i
n the fi
nan
ci
al ye
ar in w
hi
ch
they a
re ap
prove
d. Inter
im d
iv
ide
nd
s are re
co
gn
ise
d wh
en pa
id.
2.
14
Inter
est-bearing lo
ans and borrowings
Inter
est-be
ar
in
g bor
rowi
ngs a
re re
co
gni
se
d ini
tia
lly a
t fai
r valu
e le
ss
attributable tr
ansaction cost
s. Subsequent
to
initial r
ecognition,
interest
-
be
ar
ing b
or
rowin
gs a
re sta
ted at a
mor
t
ise
d cos
t wi
th any d
if
fe
ren
ce
s
bet
we
en c
ost a
nd re
de
mpti
on val
ue
s be
ing r
ec
ogn
ise
d in th
e inc
om
e
state
me
nt over t
he pe
ri
od of th
e bor
row
ing
s on an e
f
fe
ctive i
ntere
st b
asi
s,
where mat
er
ial.
Note
s
Continued
12
0
Zotef
oams plc
An
nua
l Re
por
t 2021
2
. Significant accounting policies (continued)
2.
15
Employee
benefits
i) Dened contribution plans
A defi
ne
d con
tri
buti
on p
lan i
s a pe
nsi
on p
lan u
nd
er w
hic
h the G
rou
p
pays fi
xed co
ntr
ibu
tio
ns into a s
epa
rate e
ntit
y
. Th
e Gro
up h
as no l
eg
al o
r
constructiv
e obligation
s t
o pay
fur
ther con
tributions if
the fund does not
hol
d su
f
fici
en
t as
sets to pay a
ll em
pl
oyee
s the b
en
efits r
ela
ting to e
mpl
oyee
se
r
vi
ce in t
he cu
rre
nt a
nd pr
ior p
er
io
ds. O
bli
gati
ons f
or co
ntr
ibu
tio
ns to
defi
ne
d con
tri
buti
on p
ens
io
n pla
ns a
re rec
og
nis
ed a
s an ex
pe
nse i
n the
inc
om
e state
me
nt as i
ncu
rre
d.
For defi
ned contribution
plans,
the Group
pays
contributions
to
publicly
or privat
ely administered
pension insurance
plans on a
mandatory
,
co
ntrac
tua
l or vo
lunt
ar
y b
as
is. T
he Gr
oup h
as no f
ur
the
r paym
en
t
obligations
once the
contributions
hav
e been paid.
T
he cont
ributions are
rec
og
nis
ed a
s an e
mpl
oyee b
en
efit ex
pe
nse w
he
n they a
re du
e. Pre
pai
d
co
ntri
but
ion
s are re
co
gn
ise
d as a
n ass
et to the ex
te
nt that a c
as
h ref
und
orre
duc
tio
n in f
utu
re paym
en
ts is ava
ila
bl
e.
ii) Dened benets plans
A defi
ne
d be
nefi
t pla
n is a p
ens
io
n pla
n tha
t is not a d
efin
ed c
ontr
ibu
tio
n
plan. T
ypically
, defined benefit
plans define an
amount o
f pension benefit
that a
n em
ploy
ee wi
ll re
ce
ive o
n retir
eme
nt, us
ual
ly d
ep
end
en
t on on
e or
mor
e fac
tors, su
ch a
s age, ye
ar
s of se
r
vi
ce a
nd co
mp
ens
ati
on.
The liability recognised i
n the s
tatement
of financial
position in
respe
ct o
f
defined benefit pension
plans is
the present
value o
f the
defined benefit
obl
ig
atio
n at the e
nd of th
e fina
nc
ial y
ea
r
, le
ss th
e fai
r val
ue of pl
an a
ss
ets.
The defined benefit
obligation
is calculat
ed annually b
y independent
actu
ar
ie
s us
ing th
e pro
je
cted u
nit c
red
it m
etho
d. Th
e pre
sen
t valu
e of the
defined benefit obl
igation is
determined by
discounting
the estima
ted
future
ca
sh ou
t
flows u
sin
g A
A c
red
it-rated b
ond
s that h
ave ter
ms to matu
ri
ty
appro
ximating t
o the t
erms of
the rela
ted pension
obligation
.
Th
e cur
re
nt se
r
vi
ce c
ost of th
e defi
ne
d be
nefi
t pl
an, re
cog
nis
ed i
n “staf
f
exp
ens
es” i
n the in
co
me st
atem
ent, exce
pt wh
ere i
ncl
ud
ed in th
e co
st of
an asset
, reflect
s the
increase in
the defined
benefit obligation
resulting
fro
m se
r
vi
ce in t
he cu
rre
nt ye
ar
, b
en
efit c
ha
nge
s, cu
r
tai
lm
ents a
nd
settlem
ents
.
Past s
er
v
ic
e co
sts ar
e rec
og
nis
ed im
me
dia
tely i
n the i
nco
me st
atem
ent.
Th
e net i
ntere
st c
ost is c
al
cu
lated by a
pp
lyi
ng th
e dis
co
unt ra
te to the net
bal
an
ce of th
e defi
ne
d be
nefi
t obl
iga
tion a
nd th
e fa
ir val
ue of p
lan a
ss
ets.
Th
is co
st is i
ncl
ud
ed in fi
na
nce c
os
ts in the i
nc
ome s
tatem
en
t.
Actu
ar
ia
l gai
ns a
nd lo
sse
s ar
is
ing f
rom ex
pe
ri
en
ce ad
jus
tme
nts a
nd
cha
ng
es i
n actu
ar
ia
l as
sum
ptio
ns ar
e cha
rge
d or c
red
ited to e
qui
ty i
n
othe
rco
mpre
he
ns
ive in
co
me in t
he yea
r in w
hic
h the
y ar
ise.
2.
16
Share-based payment transactions
The Company
operates
a number of
e
quity-se
ttled, share-based
co
mpe
ns
atio
n pla
ns, u
nde
r wh
ic
h the e
ntit
y re
ce
ive
s se
r
vi
ce
s fro
m
employees as
consideration
for equity inst
ruments (
share awards
) of t
he
Co
mpa
ny
. T
he f
air va
lu
e of the e
mpl
oyee s
er
vic
es r
ec
eive
d in exc
han
ge
for th
e gra
nt of th
e sha
re awa
rds is r
ec
ogn
ise
d as a
n exp
en
se. Th
e total
am
ount o
f the sh
are a
ward to be va
lu
ed is d
eter
mi
ned by r
efer
enc
e to the
fai
r val
ue of th
e sha
re awa
rds gr
ante
d:
X
Including an
y marke
t performance conditions (
for e
xample,
an entity’
s
share price)
X
Excluding t
he impact o
f any service and non-marke
t performance
vesting
conditions (
for e
xample, pro
fitability
, sales growth targe
ts,
and
rem
ai
nin
g an e
mpl
oyee of th
e en
tit
y over a s
pe
ci
fied t
ime p
er
iod
) an
d
X
Including t
he impact
of an
y non-
vesting
conditions (
for e
xample,
the
req
uir
eme
nt fo
r em
ploye
es to s
ave or ho
ld s
har
es fo
r a spe
ci
fic pe
ri
od
of
t
i
m
e).
Wh
ere m
ater
ial, s
ha
re award
s gra
nted s
in
ce 1 Ja
nua
r
y 20
06 w
ith m
ar
ket-
bas
ed ve
sti
ng co
ndi
tio
ns a
re valu
ed u
si
ng a Mo
nte Car
lo m
ode
l. Per th
e
sta
nd
ard, the
se h
ave no rev
is
ion
s to ori
gin
al e
stim
ates.
At the e
nd of e
ach re
po
r
tin
g pe
rio
d, the C
omp
any re
vis
es i
ts es
tima
tes of
the n
umb
er of s
ha
re award
s that a
re ex
pe
cted to ve
st ba
sed o
n the n
on-
market
vesting
conditions and
ser
vice conditions
. It
recognises the
impact
of the re
vis
ion to o
rig
in
al e
stim
ates, i
f any
, in the i
nc
ome s
tatem
en
t, with a
corresponding adjustment
to
equit
y
.
In ad
diti
on, in s
om
e circ
ums
ta
nce
s, em
pl
oyee
s mig
ht prov
id
e se
r
vi
ce
s in
adv
anc
e of the g
ran
t date, an
d so th
e gra
nt date f
air va
lu
e is es
tim
ated
for th
e pur
po
se
s of rec
og
nis
ing th
e exp
en
se du
ri
ng the p
er
io
d bet
we
en
se
r
vi
ce c
omm
en
ce
men
t and g
ra
nt date.
Wh
en th
e sha
re awa
rds ve
st or a
re exerc
is
ed, the E
mpl
oyee B
en
efit T
ru
st
(EBT
) w
ill n
or
mal
ly re
le
as
e the s
hare
s to the p
ar
ti
cip
ant. T
his m
ay invo
lve
se
lli
ng al
l, or a po
r
tio
n of, the sha
res
. Th
e proc
ee
ds re
ce
ive
d fro
m the s
al
e,
net of a
ny di
rec
tly at
tr
ibu
ta
ble tr
an
sac
tio
n cos
ts, are c
red
ited to s
har
e
capital (
nominal value
) and share premium
.
Any social
security contributions p
ayable i
n connection wit
h the
grant of
the s
har
e award
s are c
ons
id
ere
d an i
ntegr
al p
ar
t of th
e gra
nt it
sel
f, and the
cha
rg
e wil
l be tre
ated a
s a ca
sh-s
et
tle
d tra
nsa
cti
on.
i) O
wn sh
are
s he
ld by the E
BT
T
ra
nsa
cti
ons of th
e EBT a
re trea
ted as b
ei
ng tho
se of th
e Gro
up a
nd are
theref
ore re
flected in
the financial
statement
s. In
par
ticular
, the
EBT
’
s
pur
cha
se a
nd sa
le of s
ha
res i
n the C
omp
any a
re de
bite
d an
d cre
dite
d
directly t
o equit
y
.
2
.
17 T
r
ad
e an
d ot
h
e
r pay
ab
l
es
T
rad
e an
d othe
r paya
ble
s ar
e obl
iga
tion
s to pay for g
ood
s or s
er
v
ic
es th
at
have
been acquired
in the
ordinary course of b
usiness from suppliers.
T
rade and
other
payables
are classified as
current liabilit
ies if pa
yment
is du
e wi
thin o
ne ye
ar o
r le
ss (or in t
he no
rm
al op
er
atin
g cycl
e of the
business, if
longer)
. If not
, they are
presented as non
-current liabilit
ies.
T
rad
e an
d othe
r paya
ble
s ar
e state
d at co
st.
T
rad
e an
d othe
r paya
ble
s ar
e rec
ogn
is
ed in
iti
all
y at fa
ir va
lue a
nd
sub
se
que
ntl
y me
asu
red a
t amo
r
tis
ed c
ost u
sin
g the e
f
fec
tive i
ntere
st
method
.
2
.
18 B
or
row
i
ng c
os
t
s
General and specific borr
owing cost
s directly
attributable t
o the acquisition
,
construction or
production o
f qualifying assets, which
are assets
that
ne
ce
ss
ar
ily t
ake a su
bst
anti
al p
er
iod of t
ime to ge
t rea
dy for t
hei
r inte
nde
d
use o
r sa
le, ar
e add
ed to the c
ost of t
hos
e as
sets u
ntil s
uch t
ime a
s the
as
sets a
re su
bst
anti
all
y re
ady fo
r the
ir in
tend
ed u
se or s
al
e.
Inve
stme
nt in
co
me e
ar
ned o
n the te
mpo
ra
r
y inve
stm
ent of s
pe
ci
fic
bor
row
ing
s, pe
ndi
ng the
ir ex
pe
ndi
tur
e on qu
ali
f
y
ing a
ss
ets, is d
edu
cte
d
from t
he borrowing
c
osts
eligible for
capitalisation
. All o
ther borro
wing
cos
ts are r
ec
ogn
ise
d in th
e in
com
e sta
teme
nt in th
e pe
ri
od in w
hi
ch the
y
are incu
rred.
2
.
19 Revenu
e
Reve
nu
e com
pr
ise
s of the s
al
e of foa
m, sal
e of eq
uip
me
nt an
d lic
en
ce
an
d royalt
y i
nco
me. A
ll th
ese r
even
ue st
rea
ms ar
e reven
ue
s ar
isi
ng f
rom
contract
s with
customers.
The recognition
and measurement principles
ofIFRS 15 are ap
pli
ed a
s set ou
t be
low.
Reve
nu
e exclud
es i
nter-com
pany r
even
ue
s and v
alu
e add
ed t
a
xes a
nd
isst
ated ne
t of dis
co
unts a
nd ret
urn
s.
i) S
ale of f
oam
Reve
nu
e from t
he sa
le of fo
am i
s rec
og
nis
ed w
hen c
ont
rol of th
e goo
ds
has b
ee
n tra
nsf
er
red to a thi
rd pa
r
t
y
. T
hi
s usu
all
y oc
cur
s wh
en th
e titl
e
pas
se
s to the cu
stom
er
, e
ith
er o
n shi
pme
nt o
r on re
ce
ipt of go
od
s by
thec
ustom
er
, d
ep
en
din
g on ag
ree
d tra
din
g term
s. Paym
en
t is du
e
wi
thinc
red
it ter
ms w
hi
ch ar
e con
sis
tent w
ith i
ndu
str
y p
rac
tic
es, wi
th
no
financing components
.
ii) S
al
e of eq
uipm
en
t
Reve
nu
e from t
he sa
le of e
qu
ipm
ent i
s rec
og
nis
ed w
he
n con
trol of th
e
goo
ds h
as be
e
n tran
sfe
rre
d to a third p
ar
t
y
. T
his u
sua
ll
y occ
ur
s whe
n
theti
tle p
ass
es to th
e cus
tome
r
, ei
the
r on s
hip
me
nt or o
n rec
eipt o
f the
goo
ds by th
e cus
tome
r
, de
pe
nd
ing o
n agre
e
d trad
ing te
rms.
Strat
egic Repor
t
Gov
ernance
Financial Statements
121
Zotef
oams plc
An
nua
l Re
por
t 2021
2
. Significant accounting policies (continued)
iii
) Lic
en
ce an
d royal
t
y inc
ome
Reve
nu
e from u
sa
ge
-ba
sed roy
alt
ies i
n excha
ng
e for a li
ce
nc
e of the
Group
’
s technology
is recognised when
the performance obligation
is
sati
sfie
d, wh
ich i
s at the t
ime w
he
n the s
al
e or us
ag
e occ
ur
s. Li
cen
ce
reve
nue f
rom c
ontr
act
s, whi
ch in
cl
ude a m
ini
mu
m royalt
y g
ua
ran
tee to
prov
ide u
se of th
e Gro
up’
s te
chn
olo
gy, is reco
gn
ise
d at a po
int i
n time
when the
uptake
of t
he minimum
roy
alty becomes unconditional.
Royalty
inc
om
e whi
ch d
oe
s not in
clu
de a m
ini
mum roya
lt
y g
uar
ante
e is re
co
gni
sed
when the
usage occurs.
2.
20 Leases
Th
e Gro
up le
as
es of
fi
ce
s an
d var
iou
s eq
uip
me
nt. Ren
tal c
ont
ract
s are
t
ypi
ca
lly b
et
wee
n t
wo an
d seve
n yea
rs. Le
as
e ter
ms ar
e neg
otia
ted on a
n
ind
iv
idu
al b
asi
s and c
on
tai
n a wid
e ra
nge of d
if
fe
re
nt ter
ms an
d co
ndi
tio
ns.
Th
e le
ase a
gre
em
ents d
o not i
mpo
se a
ny cove
nan
ts, bu
t lea
se
d as
sets
may not b
e us
ed a
s sec
ur
it
y for b
or
rowi
ng pu
rp
ose
s.
Lea
se
s are r
eco
gn
ise
d as a r
igh
t-of-use as
se
t and a c
or
res
po
ndi
ng li
ab
ili
ty
at the d
ate at wh
ic
h the le
as
ed a
ss
et is ava
ila
bl
e for us
e by the G
rou
p.
Eac
h le
as
e paym
ent i
s al
loc
ated b
et
wee
n the l
iab
ili
t
y an
d fina
nc
e cos
t. The
fina
nc
e cos
t is c
har
ged to th
e inc
om
e state
me
nt over th
e le
as
e pe
rio
d to
pro
duc
e a co
nsta
nt p
er
iod
ic ra
te of intere
st o
n the re
ma
ini
ng ba
la
nce of
the l
iab
ili
t
y for e
ach p
er
io
d. The r
ig
ht-of-use a
sse
t is de
pre
ci
ated ove
r the
sho
r
ter of th
e as
set
’
s u
sef
ul l
ife a
nd th
e lea
se te
rm on a s
tra
igh
t
-li
ne ba
si
s.
As
sets a
nd li
ab
ili
tie
s ar
isi
ng f
rom a le
as
e are i
nit
ial
ly m
ea
sure
d on a p
res
ent
val
ue ba
sis. L
ea
se li
ab
ili
tie
s inc
lud
e the n
et pre
se
nt va
lue of t
he fol
low
ing
le
ase p
aym
ents:
X
Fixe
d pay
me
nts (i
ncl
udi
ng in
-su
bsta
nc
e fixe
d paym
ent
s)
, le
ss a
ny
lease
incentiv
es receivab
le
X
Varia
bl
e le
ase p
aym
ents th
at ar
e bas
ed o
n an in
dex o
r a rate
X
Th
e exerci
se p
ric
e of a pu
rch
ase o
ptio
n if th
e les
se
e is re
as
ona
bl
y
ce
r
ta
in to exerci
se th
at opti
on a
nd
X
Paym
ents of p
en
al
tie
s for ter
mi
nati
ng th
e lea
se, if t
he le
as
e term
reflects
the
lessee exer
cising tha
t opt
ion.
Th
e le
ase p
aym
ents a
re di
sco
unte
d us
ing th
e Gro
up’
s i
ncr
eme
nta
l
bor
row
ing r
ate, bei
ng the r
ate that th
e Gro
up wo
uld h
ave to pay to bor
row
the funds
necessar
y to
obtain an
asset of
similar economic environment
within simi
lar terms
and conditions
.
Rig
ht-of-use a
ss
ets a
re me
asu
red a
t cos
t com
pr
isi
ng th
e foll
owi
ng:
X
The amount o
f init
ial measurement o
f lease liability
X
Any l
ea
se pay
me
nts ma
de at o
r befo
re the c
om
me
nce
me
nt da
te les
s
any
lease incent
ives r
eceived
X
Any i
nit
ial d
ire
ct c
osts a
nd
X
Restoration
costs.
Paym
ents a
ss
oci
ated w
ith s
hor
t-
ter
m lea
se
s an
d le
ase
s of low va
lu
e are
rec
og
nis
ed o
n a stra
igh
t-line ba
si
s as a
n expe
ns
e in th
e inc
ome s
tatem
en
t.
Sho
r
t-t
er
m le
as
es a
re le
ase
s wi
th a le
as
e term of t
we
lve m
onth
s or le
ss
.
Low
-value
assets comprise small
items o
f equipment
.
2.
21
Current
and def
erred tax
Th
e ta
x ex
pe
nse fo
r the p
er
iod c
om
pri
se
s cur
re
nt an
d defe
rr
ed ta
x
. T
a
x
is re
co
gni
sed i
n the i
nco
me s
tatem
ent exc
ept to th
e exte
nt th
at it re
late
s
to
items
recognised directly
in o
ther comprehensive
income or di
rectly in
eq
uit
y
, in w
hic
h ca
se it i
s rec
og
nis
ed in ot
he
r com
pre
he
nsi
ve in
com
e or
dir
ect
ly in e
qu
it
y res
pe
cti
vel
y
.
Th
e cur
re
nt ta
x c
har
ge is c
al
cul
ated o
n the ba
si
s of the ta
x laws e
nac
ted
at the s
tatem
en
t of fina
nc
ial p
os
itio
n date in t
he co
unt
rie
s wh
ere t
he
Group
operat
es and
generat
es taxable i
ncome
. Mana
gement
periodical
ly
eval
uate
s pos
iti
ons t
aken i
n ta
x re
tur
ns wi
th re
spe
ct to si
tua
tion
s in
which applicable tax regulation is
subject t
o int
erpretation
. It
establishes
prov
isi
ons, w
he
re ap
pro
pri
ate, on th
e bas
is of a
mou
nts exp
ec
ted to be
pai
d to the ta
x a
uth
or
itie
s.
Defe
r
red ta
x is re
cog
ni
sed o
n tem
por
ar
y d
if
fe
ren
ce
s ar
isi
ng b
et
wee
n the
ta
x ba
se
s of as
sets a
nd l
iab
ili
tie
s an
d the
ir ca
rr
yi
ng am
oun
ts in th
e fina
nc
ial
state
me
nts. How
ever
, d
efe
rre
d ta
x l
iab
ili
tie
s are n
ot re
cog
nis
ed i
f they a
ri
se
fro
m the i
niti
al re
co
gn
itio
n of go
odw
ill; d
efer
re
d ta
x is n
ot acc
ou
nted fo
r if it
arises from t
he initial
recognition o
f an asset
or liability in a t
ransaction o
ther
than a
business combination
that
, at the
time o
f the
transaction
, affects
ne
ithe
r ac
co
unti
ng no
r ta
xa
bl
e profi
t or lo
ss. D
efe
rre
d ta
x is d
eter
mi
ned
usi
ng ta
x rates (a
nd law
s) that have b
ee
n en
acte
d or su
bs
tant
ive
ly e
nac
ted
by the st
atem
ent of fi
na
nci
al p
osi
tio
n date an
d are ex
pe
cte
d to appl
y wh
en
the re
late
d defe
rr
ed ta
x ass
et is r
eal
ise
d, or th
e def
er
red ta
x lia
bi
lit
y is
set
t
le
d.
Defe
r
red ta
x as
sets a
re re
cog
nis
ed o
nl
y to the ex
tent th
at it i
s prob
ab
le
that f
utu
re ta
x
ab
le profi
t wi
ll be ava
il
abl
e ag
ain
st wh
ic
h the tem
po
rar
y
dif
fere
nc
es c
an b
e uti
lis
ed.
Deferred tax liabilit
ies are pr
ovided on
ta
xable t
emporar
y differences
ar
isi
ng f
rom inve
stm
en
ts in su
bsi
di
ar
ies a
nd j
oin
t ar
ran
ge
me
nts, exce
pt for
any d
efer
re
d ta
x li
ab
ili
ty w
he
re the t
imi
ng of th
e rever
sa
l of the te
mpo
ra
r
y
difference is contr
olled by
the Group and
it is pr
obable that
the t
emporar
y
dif
fere
nc
e wi
ll not rev
er
se in th
e fore
se
ea
bl
e fu
ture.
Deferred tax assets
a
re r
ecognised on deductible
temporar
y differences
ar
isi
ng f
rom inve
stm
en
ts in su
bsi
di
ar
ies a
nd j
oin
t ar
ran
ge
me
nts on
ly to
the ex
te
nt that i
t is pr
oba
ble t
hat th
e temp
ora
r
y di
f
fe
ren
ce w
ill re
ver
se in
the f
utu
re an
d the
re is s
uf
fic
ie
nt ta
x
ab
le profi
t avai
la
ble a
gai
nst w
hi
ch th
e
temp
ora
r
y di
f
fe
ren
ce c
an b
e util
ise
d.
Defe
r
red ta
x as
sets a
nd li
ab
ili
tie
s are of
f
set w
he
n the
re is a l
eg
all
y
enfo
rce
ab
le r
igh
t to of
fse
t cur
ren
t ta
x a
sse
ts aga
ins
t cu
rre
nt ta
x l
iab
ili
tie
s
an
d whe
n the d
efe
rre
d ta
x a
ss
ets an
d lia
bi
liti
es re
late to in
co
me ta
xe
s
levied b
y the
same taxation authority on
either the
same taxable entity or
dif
fere
nt ta
xab
le e
ntiti
es a
nd th
ere i
s an i
ntenti
on to set
tl
e the ba
la
nc
es o
n
a net b
asi
s.
2.
22 Share capital
Ordinary shares are classified
as equity
. Incremental cost
s directly
at
tri
but
ab
le to the is
su
e of new o
rdi
nar
y sha
re
s or opt
ion
s are s
hown i
n
eq
uit
y a
s a ded
uc
tion, n
et of ta
x, f
rom t
he pro
ce
ed
s.
Where any
Group compan
y purchases t
he Company
’
s equity share capital
(tr
easur
y shares
)
, the
consideration p
aid, incl
uding any
directly a
ttributable
inc
rem
en
tal c
ost
s (net of in
com
e ta
x), is de
du
cted f
rom e
qu
it
y at
tri
but
ab
le
to the Co
mpa
ny’s equit
y h
old
er
s unt
il the s
ha
res a
re ca
nc
el
led o
r rei
ss
ue
d.
Where such or
dinar
y shares
are subsequently
reissued,
any considera
tion
rec
ei
ved, n
et of any d
ire
ctl
y at
trib
ut
abl
e in
cre
me
ntal t
ran
sac
tio
n cos
ts
an
d the re
late
d inc
ome t
a
x ef
fe
cts, i
s inc
lu
ded i
n eq
uit
y at
tr
ibu
ta
ble to th
e
Company’
s equit
y holders.
2.
23 Exceptional
items
E
xcept
ion
al i
tems a
re di
scl
ose
d se
par
atel
y in th
e fina
nci
al s
tatem
en
ts
wh
ere i
t is ne
ce
ss
ar
y to d
o so to prov
ide f
ur
t
her u
nd
er
sta
ndi
ng of th
e
financial performance of t
he Group
. These are it
ems that
are mat
er
ial,
ei
the
r be
cau
se of th
ei
r size o
r the
ir nat
ure, or th
at ar
e non
-rec
ur
ri
ng, an
d
are p
res
ente
d wi
thin t
he li
ne ite
ms to wh
ich th
ey be
st re
late.
Note
s
Continued
12
2
Zotef
oams plc
An
nua
l Re
por
t 2021
2.
24 Ne
w standards and
interpretations
Th
e IAS
B and I
FRS In
terp
reta
tion
s Co
mmi
tte
e have i
ssu
ed th
e fol
lowi
ng st
an
dar
ds an
d inte
rp
retati
ons w
ith a
n ef
fe
cti
ve da
te of impl
em
ent
atio
n for
acc
ou
ntin
g pe
rio
ds b
egi
nn
ing af
ter the d
ate on w
hic
h the G
rou
p’
s fin
anc
ia
l state
me
nts for t
he cu
rre
nt ye
ar c
omm
en
ce
d.
i) N
ew sta
nd
ard
s an
d ame
nd
men
ts – ap
pli
ca
ble 1 Ja
nu
ar
y 20
21
Th
e foll
owi
ng st
and
ard
s an
d inter
pre
tati
ons a
pp
ly for t
he fir
st ti
me to fina
nc
ial r
epo
r
tin
g pe
ri
ods c
om
men
ci
ng on o
r af
ter 1 J
anu
ar
y 2021
:
Ef
fe
cti
ve fo
r acc
ou
nti
ng
periods beginning on
or a
f
ter
Impact
Inter
est r
ate be
nch
ma
rk re
for
m – Am
end
me
nts to IFRS 1
7 “
Ins
ura
nc
e Co
ntrac
ts”
1 Jan
ua
r
y 2021
None
Inter
est r
ate be
nch
ma
rk re
for
m – Am
end
me
nts to IFRS 16 “Lea
se
s”
1 J
an
uar
y 2021
None
Inter
est r
ate be
nch
ma
rk re
for
m – Am
end
me
nts to IFRS 9 “
Fi
nan
ci
al In
stru
me
nts”
1 Jan
ua
r
y 2021
None
Inter
est r
ate be
nch
ma
rk re
for
m – Am
end
me
nts to IAS 3
9 “Fi
nan
ci
al In
str
ume
nts: Re
co
gni
tio
n and M
ea
su
rem
ent
”
1 J
anu
ar
y 2021
None
Inter
est r
ate be
nch
ma
rk re
for
m – Am
end
me
nts to IFRS 7 “
Fi
nan
ci
al In
stru
me
nts: Di
scl
osu
re
s”
1 Jan
ua
r
y 2021
None
ii) Forthc
oming requirements
As at 31 Dec
em
be
r 2021
, t
he fol
low
ing s
tan
da
rds a
nd inte
rp
retat
ion
s had b
ee
n is
sue
d bu
t were n
ot ma
ndato
r
y for a
nnu
al re
po
r
tin
g pe
rio
ds e
ndi
ng o
n
31Dece
mb
er 2021
.
Ef
fe
cti
ve fo
r acc
ou
nti
ng
periods beginning on
or a
f
ter
E
xp
ec
te
d
Impact
COVID
-
1
9 rel
ated R
ent C
on
ce
ssi
on
s – Am
end
me
nts to IFRS 16
1 Ma
rch 2021
None
Inc
om
e T
a
xes – D
efe
rre
d ta
x a
me
ndm
ent
s to IAS 1
2
1 May 20
21
None
Prop
er
t
y
, Pla
nt a
nd Equ
ipm
ent: Pro
ce
ed
s befo
re inte
nd
ed us
e – Am
en
dme
nts to IA
S 1
6
1 Jan
ua
r
y 2022
None
Refe
re
nce to th
e Con
ce
ptua
l Fram
ewor
k – A
men
dm
ents to IF
RS 3
1 Jan
ua
r
y 2022
None
On
ero
us Co
ntra
cts: Co
st of Ful
fill
ing a C
ontr
act – A
me
nd
me
nts to IAS 37
1 Jan
ua
r
y 2022
None
An
nua
l Im
prove
men
ts to IFRS S
tan
da
rds 201
8
–
2020
1 Jan
ua
r
y 2022
None
Classification o
f Liabilities
as Current
or Non-current
– Amendments t
o IAS 1
1 Janu
ar
y 2023
None
Strat
egic Repor
t
Gov
ernance
Financial Statements
12
3
Zot
efoams plc
An
nua
l Re
por
t 2021
3. Segment repor
ting
Th
e Gro
up’
s o
per
atin
g se
gme
nts a
re re
por
te
d in a ma
nn
er c
ons
iste
nt wi
th the i
nter
na
l rep
or
ti
ng prov
id
ed to an
d reg
ula
rl
y rev
iewe
d by the G
rou
p Chi
ef
E
xecu
tive O
f
fi
cer
, Dav
id St
irl
ing, w
ho is c
on
sid
ere
d to be th
e ‘
ch
ief o
pe
rati
ng de
ci
sio
n ma
ker’ for t
he pu
rp
ose of ev
alu
atin
g se
gme
nt p
er
fo
rm
anc
e
an
d all
oc
atin
g res
ourc
es. T
he G
rou
p Ch
ief E
xec
uti
ve O
f
fice
r pr
im
ar
ily u
se
s a me
asu
re of profi
t for th
e yea
r (b
efore exc
epti
on
al ite
ms) to ass
es
s the
per
formance o
f the
operating segment
s.
The Group manuf
actures and
sells high-performance foams
and licenses rela
ted t
ec
hnology for
sp
ecialist mark
ets w
orldwide. The
Group
’s
activities
arec
ateg
or
ise
d as fo
llow
s:
X
Polyole
fin Foams
: these foams
are made
from olefinic
homopolymer and copolymer r
esin. The m
ost common r
esin used is
polyeth
ylene.
X
High-Performance Pro
ducts (HP
P)
: these foams
exhibit high
per
formance on
cer
tain k
ey pr
oper
ties, such
as impr
oved chemical
, flammability
,
temperat
ure or
energy management performance. Rev
enue in t
he segment is
currently
mainly derived from
products
manufactured
from thr
ee main
polymer types: polyvinylidene fluoride (PVDF) fluor
opolymer
, polyamide (
nylon) and
thermoplastic
elastomers.
Foams are
sold under
the brand
name
ZOT
E
K
®
, wh
ile te
chn
ic
al in
sul
atio
n pro
duc
ts ma
nu
fac
ture
d fro
m ce
r
ta
in mate
ri
als a
re br
and
ed a
s T
-F
IT
®
.
X
Mu
Ce
ll E
x
tru
si
on LLC (ME
L): lice
ns
es mi
cro
ce
llu
la
r foam te
ch
nol
og
y and s
el
ls re
lated m
ac
hin
er
y. It is als
o cur
re
ntly d
evel
op
ing a f
ull
y ci
rcul
ar s
olu
tio
n
form
ono
-ma
teri
al ba
rr
ie
r pac
ka
gin
g, whi
ch it h
as b
ran
de
d ReZo
rce
®
.
Polyole
fin Foams
HPP
MEL
Consolidat
ed
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Group reven
ue
5
6
,1
6
6
50,9
0
4
42,
29
4
3
0,01
6
2,290
1,
7
3
2
10
0
,75
0
8
2,6
52
Segment profit/
(loss)
pre-amortisation
684
4,8
3
6
8
,7
3
2
7,
9
0
7
(4
9
4)
(
1
,1
8
4
)
8,92
2
1
1
,5
59
Amor
tisation
of acquir
ed intangible assets
–
–
–
–
(19
4
)
(26
2)
(19
4
)
(
262)
Segment profit/
(loss)
684
4,8
3
6
8
,7
3
2
7,
9
0
7
(6
88)
(1,
4
4
6
)
8
,72
8
11
,
2
9
7
Foreign e
xchange gains/
(losses)
–
–
–
–
–
–
1
,1
6
8
(30
0)
Unallocat
ed central co
sts
–
–
–
–
–
–
(1,76
3
)
(
1
,88
8)
Ope
ratin
g profit
8
,1
3
3
9
,1
0
9
Financing costs
–
–
–
–
–
–
(
1
,11
6
)
(
872)
Financing income
–
–
–
–
–
–
11
26
Share o
f (loss
)/pr
ofit fr
om joint
venture
(20
)
38
–
–
–
–
(20
)
38
Ta
x
a
t
i
o
n
–
–
–
–
–
–
(2
,632)
(
1
,1
3
8
)
Profit f
or the ye
ar
4,
376
7,
1
6
3
Segment assets
1
0
7,
6
3
3
10
6
,79
2
4
0
,1
8
9
41,
0
4
6
9,
6
01
7,
8
7
5
1
5
7,
4
2
3
15
5
,7
13
Unalloca
ted
asset
s
–
–
–
–
–
–
492
50
9
To
t
a
l
a
s
s
e
t
s
157
,
915
1
56,222
Segment liabilities
(4
0
,79
5
)
(4
6
,6
76)
(15
,
2
2
4
)
(13
,
2
3
4
)
(8
83)
(9
4
4)
(56,9
02)
(60,854)
Unallocated
liabilities
–
–
–
–
–
–
(3,2
38)
(
9
92)
T
otal liabilities
(
6
0
,14
0
)
(61
,84
6)
De
pre
cia
tio
n of PPE
4
,79
3
4
,
478
1,
0
5
2
813
13
3
11
5
5,978
5,40
6
Depreciation o
f right
-of-use asset
s
302
307
90
71
133
36
525
414
Amo
r
tisati
on
638
494
289
15
3
19
4
279
1
,1
2
1
926
Capital e
xpenditure
:
Prop
er
t
y
, pl
ant a
nd e
qui
pme
nt (PPE
)
4,0
93
9,928
74
3
2,4
01
1
,1
6
0
4
47
5,996
12
,
7
7
6
Right
-
of
-use assets
223
13
7
3
–
623
230
639
Intangible assets
98
89
34
22
9
37
23
5
1,
0
6
9
346
Una
ll
oc
ated as
set
s mad
e up of de
fer
red t
a
x as
sets a
re £492k for th
e yea
r (2020: £509
k). Una
llo
cate
d lia
bi
liti
es a
re ma
de up of c
or
por
atio
n ta
x £8
3k
(2020:£1
01
k) a
nd de
fer
red t
a
x lia
bi
liti
es £
3,
1
5
5k (2020: £891
k).
Se
gme
nt pr
ofit
/(los
s) is ma
de up of o
pe
rati
ng pr
ofit
/(los
s) befo
re exce
ptio
nal i
tems, f
ore
ign exc
han
ge g
ain
s/(lo
sse
s) an
d una
llo
ca
ted ce
ntra
l co
sts.
Una
ll
oc
ated ce
ntr
al co
sts a
re not d
ire
ctly a
tt
rib
uta
bl
e or c
ann
ot be a
llo
cate
d to a seg
me
nt. Hed
gi
ng ga
ins
/(los
se
s) are not a
ll
oca
ted to the s
egm
en
t
buta
rein
stea
d rec
ord
ed u
nde
r un
all
oc
ated c
entr
al c
osts.
Segment profit/
(loss)
pre-amortisation only ex
clude
s amortisation on
acquired intangible
assets.
Note
s
Continued
12
4
Zotef
oams plc
An
nua
l Re
por
t 2021
3. Segment
repor
ting (
continued)
Geographical segments
Polyo
lefi
n Foa
ms, HPP a
nd M
EL are m
an
age
d on a wo
rld
wi
de ba
si
s but o
pe
rate fr
om UK
, USA
, Euro
pe
an a
nd As
ia
n loc
ati
ons. I
n pre
se
ntin
g info
rma
tio
n
on th
e bas
is of ge
og
ra
phi
ca
l se
gme
nts, s
egm
en
tal re
venu
e is b
ase
d on th
e ge
og
rap
hic
al l
oc
atio
n of cus
tome
rs. S
eg
men
t as
sets a
re ba
sed o
n the
geographical location of
assets.
United
Kingdom
£’
000
Continental
Europe
£’
000
North
America
£’
000
Re
st of
the wo
rl
d
£’
000
To
t
a
l
£’
000
For th
e yea
r en
ded 31 De
ce
mbe
r 2021
Gro
up reve
nu
e fro
m ex
tern
al c
ustom
er
s
10,7
6
8
28,200
1
9,959
41,
8
2
3
10
0
,75
0
Non-current asset
s
42,
94
4
19,
8
3
0
3
5,
521
445
9
8
,
74
0
Cap
ita
l exp
en
dit
ure – PPE
2
,7
76
798
2
,
3
91
31
5,99
6
For th
e yea
r en
ded 31 De
ce
mbe
r 2020
Gro
up reve
nu
e fro
m ex
tern
al c
ustom
er
s
1
9
,1
0
6
1
7,
8
5
6
17,
6
2
9
28,
0
61
8
2,6
52
Non-current asset
s
44,
343
2
1,
0
5
0
3
4
,
3
51
520
10
0,
2
6
4
Cap
ita
l exp
en
dit
ure – PPE
4,09
0
7,
0
9
5
1,
4
2
3
16
8
12
,7
7
6
Non
-c
urr
ent a
ss
ets do n
ot inc
lud
e def
er
red t
a
x as
sets o
r inve
stme
nts i
n joi
nt ven
ture
s.
Major customer
Reve
nu
e from o
ne c
ustom
er l
oc
ated in ‘R
es
t of the wo
rld’ c
ontr
ib
uted £
33,850
k to the G
rou
p
’
s reve
nue (2020: O
ne c
ustom
er of th
e Gro
up lo
ca
ted
inth
eUni
ted K
ing
dom a
nd o
ne cu
stom
er l
oca
ted in ‘R
est of t
he wor
ld’ c
ontr
ibu
ted £1
3,9
04k a
nd £
21
,60
8k r
es
pe
ctive
ly to th
e Gro
up’
s reve
nu
e)
.
Analysis of
r
ev
enue b
y category
Bre
akdow
n of reve
nu
es by pr
odu
cts a
nd se
r
v
ice
s for t
he Gr
oup:
20
21
£’
000
2020
£’
000
Sa
le of foa
m
98,4
60
8
0,92
0
Li
ce
nce a
nd roya
lt
y in
co
me
1,
0
6
6
908
Sale of
equipment
1,
2
2
4
8
24
Gr
ou
p reven
ue
10
0
,75
0
8
2,6
52
Strat
egic Repor
t
Gov
ernance
Financial Statements
12
5
Zot
efoams plc
An
nua
l Re
por
t 2021
4. E
x
pe
ns
es by na
tu
r
e
20
21
£’
000
2020
£’
000
Inc
lud
ed i
n profi
t for th
e yea
r are:
Cha
ng
es i
n inve
ntori
es of fi
nis
he
d goo
ds a
nd wor
k in p
rog
res
s
1,
9
5
8
297
Changes in ra
w mat
e
rials and cons
umables used
963
4
,1
3
2
Invent
or
y write-(back)/
down
(1)
17
Sta
f
f co
sts (note 5)
2
5
,1
9
6
2
2,7
8
4
Op
era
ting l
ea
se c
har
ge
s (note 1
1
)
19
2
228
Amor
tisation
(not
e 1
2)
1
,1
2
1
926
De
pre
cia
tio
n of PPE and r
ig
ht-of-use a
sse
ts (note 1
0 and n
ote 1
1
)
6,503
5,820
Di
spo
sa
l of as
sets
53
40
Re
sea
rch a
nd d
evel
op
men
t cos
ts exp
en
sed
806
1,
0
14
Deve
lo
pme
nt c
osts c
ap
ita
lis
ed (note 1
2)
(627)
–
Net exc
han
ge (g
ain
s)/l
oss
es
(
1
,1
6
8
)
300
Ex
ternal Audit
or’
s remuneration
:
Group –
Fees pay
able t
o the
Group
’s
E
x
ternal A
uditor
and its
associates f
or the
audit o
f the
Company and
consolidated
financial stat
eme
nts
Previous
Audit
or (PwC)
–
38
PKF Littlejohn LLP
19
5
17
5
Fee
s paya
ble to th
e E
x
tern
al Au
di
tor an
d its as
so
cia
tes in re
sp
ec
t of othe
r se
r
vi
ce
s:
– aud
it-rel
ated a
ssu
ra
nce s
er
v
ic
es (P
w
C)
–
30
T
ota
l cos
t of sa
le
s, dis
tri
buti
on c
osts a
nd ad
mi
nis
trati
ve exp
ens
es
9
2
,
6
17
73,
5
4
3
5. S
t
af
f n
um
be
r
s an
d exp
en
se
s
The monthly
average
numbe
r o
f people employ
ed by
the Gr
oup and Compan
y (including
Executive Direct
ors) during t
he year
, analysed by
c
at
egor
y
,
wasa
s foll
ows:
Number of
employees
Grou
p
Compa
ny
20
21
2020
20
21
2020
Production
258
2
25
16
6
15
3
Maint
enance
36
36
25
23
Distribution and marketing
87
77
49
44
Administra
tion and t
e
chnical
11
5
114
90
88
496
452
330
308
Th
e agg
reg
ate pay
roll c
ost
s of the
se pe
rs
on
s were a
s foll
ows:
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Wage
s and s
al
ar
ie
s*
20,84
2
18
,
8
5
7
14
,
4
6
2
13
,
5
0
2
Social security costs
*
2
,7
9
6
2,5
8
4
1,4
9
5
1,
4
8
8
Sha
re opt
ion
s gra
nted to di
rec
tors a
nd e
mpl
oyee
s (note 2
4)
360
300
360
30
0
Pens
io
n cos
ts, in
clu
din
g pas
t se
r
vi
ce c
osts
1
,1
9
8
1,
0
4
3
855
759
2
5
,1
9
6
2
2,7
8
4
17,17
2
16
,
0
4
9
* Net o
f directly attributable costs capitalised
820
672
284
2
07
Note
s
Continued
12
6
Zotef
oams plc
An
nua
l Re
por
t 2021
5. Staff numbers and e
xpenses (
continued)
Det
ail
s of agg
reg
ate Di
rec
tors’ em
olu
me
nts a
re prov
ide
d be
low:
20
21
£’
000
2020
£’
000
Aggregat
e emoluments
648
652
Agg
reg
ate ga
ins m
ade o
n the exer
cis
e of the s
har
e opti
ons
15
9
26
Agg
reg
ate amo
unt
s rec
ei
vab
le un
de
r lon
g-ter
m inc
ent
ive sc
he
me
s
–
10
9
Company con
tribution t
o money pur
chase pension scheme
71
69
878
856
Fur
th
er d
etai
ls of D
ire
ctor
s’ emol
um
ents, i
nc
lud
ing d
eta
ils of th
e hi
ghe
st-pai
d Di
rec
tor
, ar
e inc
lud
ed i
n the D
ire
ctor
s’ Remu
ne
rati
on re
por
t on pa
ge
s 88 to 99.
6. Finance income and costs
Finance income
20
21
£’
000
2020
£’
000
In
ter
es
t i
nc
om
e
11
26
Finance
costs
20
21
£’
000
2020
£’
000
Fin
an
ce co
sts o
n ban
k loa
ns
1,
0
14
1,
2
8
0
Lease liabilities interest
32
31
Amount capitalise
d
(32)
(6
0
4)
Fin
an
ce co
sts ex
pe
nse
d
1,
0
14
707
Int
erest on defined
benefit pension obli
gation (
note 2
3)
10
2
16
5
1
,11
6
872
Capitalised borro
wing costs
Th
e ca
pit
ali
sat
ion r
ate use
d to deter
mi
ne th
e amo
unt of b
or
rowi
ng co
sts to be c
ap
ita
lis
ed i
s the we
igh
ted aver
age i
ntere
st r
ate app
lic
ab
le to the e
nti
ty’s
ge
ne
ral b
or
rowin
gs d
uri
ng th
e yea
r
, in th
is c
ase 2.46% (2020: 2
.46%)
.
7
. I
nco
me t
a
x exp
en
se
20
21
£’
000
2020
£’
000
UK corporat
ion tax
673
1
,1
0
5
Overseas
ta
x
79
12
0
Adj
ustm
ent f
or ta
x fo
r pr
ior ye
ar
s
(272)
(
3
81)
T
ota
l cur
re
nt ta
x
480
844
Deferr
ed t
a
x
2
,15
2
294
Inc
om
e ta
x exp
en
se
2,6
32
1
,1
3
8
Strat
egic Repor
t
Gov
ernance
Financial Statements
12
7
Zot
efoams plc
An
nua
l Re
por
t 2021
7
. Income tax expense (
cont
inued
)
Fac
to
r
s af
f
ec
t
in
g t
he t
a
x c
ha
r
ge
Th
e wei
ghted ave
ra
ge ap
pl
ica
bl
e ta
x ra
te for the G
rou
p is 1
8.96% (2020: 1
9.65%
). The ma
in e
le
men
ts of the i
nc
ome t
a
x exp
ens
e are a
s fol
lows:
20
21
£’
000
2020
£’
000
T
a
x reconciliation
Profit b
efo
re ta
x
7,
0
0
8
8
,3
01
T
a
x at th
e UK ta
x rate of 1
9% (2020: 1
9%
)
1,
3
3
2
1,
5
7
7
Ef
fec
ts of:
Expe
nses no
t deductible
for tax purposes
17
3
223
Re
sea
rch a
nd d
evel
op
men
t and ot
he
r ta
x cr
edi
ts
(19
9
)
(25
0)
(Uti
lis
ati
on of
) t
a
x los
se
s for w
hic
h no d
efe
rre
d inc
om
e ta
x as
se
t rec
ogn
ise
d
420
(
147
)
Ef
fec
t of di
f
fer
ent ove
rs
ea
s ta
x ra
tes
20
(28)
Cha
ng
es i
n ta
x rate
s
1,
0
2
4
79
Capital allo
wance super deduct
ions
(10
1)
–
Other
differences
(53)
65
Adj
ustm
ent
s to pri
or yea
r UK c
or
por
atio
n ta
x c
har
ge
16
(
3
8
1)
2
,632
1,1
3
8
Th
e mai
n rate of U
K cor
po
rati
on ta
x s
ubs
tan
tive
ly e
nac
ted fo
r the p
er
iod wa
s 1
9%. T
he G
rou
p has n
ot ide
nti
fie
d any un
ce
r
ta
in ta
x p
os
itio
ns
asat31Dec
em
be
r 2021 (2020: none).
An i
ncr
ea
se in th
e UK c
orp
or
ate ta
x rate f
rom 1
9% to 25
% (ef
fe
cti
ve fro
m 1 Ap
ri
l 2023) was su
bst
anti
vel
y en
acte
d on 1
4 M
ay 2021
.
8. Dividends and e
arnings per share
20
21
£’
000
2020
£’
000
Pri
or ye
ar fin
al d
iv
ide
nd of 4.27
p (2020: ni
l) p
er 5.0p o
rdi
nar
y sha
re
2
,05
8
–
Inter
im d
iv
ide
nd of 2.
1
0
p (2020: 2
.03p) pe
r 5.0p or
din
ar
y s
ha
re
1,0
16
977
Di
vid
en
ds pa
id d
ur
ing th
e yea
r
3
,
0
74
977
Th
e pro
pos
ed fin
al d
iv
ide
nd fo
r the ye
ar e
nd
ed 31 Dec
em
be
r 2021 of 4
.40
p pe
r sh
are (2020: 4.27
p) is s
ubj
ect to a
pprov
al by sh
are
ho
lde
rs a
t the AGM
an
d has n
ot be
en re
co
gni
se
d as a li
ab
ili
ty i
n the
se fi
nan
ci
al st
ateme
nts. T
he p
rop
ose
d di
vid
en
d woul
d am
oun
t to £2,
1
3
0k i
f pai
d to all s
ha
reh
old
er
s on th
e
Co
mpa
ny reg
iste
r at the c
los
e of bu
sin
es
s on 31 May 2022.
Earnings per
or
dinary share
Ea
rni
ng
s per o
rdi
na
r
y sh
are is c
al
cul
ated by d
iv
idi
ng co
nso
li
dated p
rofit a
f
ter ta
x a
ttr
ib
uta
bl
e to equ
it
y ho
lde
rs of th
e Co
mpa
ny of £4,3
7
6k (2020: £7
,
163k) by
the we
ig
hted ave
rag
e num
be
r of sha
re
s in is
su
e dur
ing t
he ye
ar a
nd exclu
di
ng own s
ha
res h
el
d by the EBT w
hic
h are a
dmi
nis
tere
d by ind
ep
en
de
nt tru
stee
s.
Th
e num
be
r of sh
are
s he
ld in th
e tru
st at 31 De
cem
be
r 2021 was 1
9
6,88
8 (2020: 459,201
). Di
stri
bu
tion of s
ha
res f
rom t
he tr
ust i
s at the d
isc
reti
on of the
tru
stee
s. Di
lu
ted ea
rn
ing
s pe
r ord
ina
r
y sh
are a
dju
sts fo
r the p
otenti
al di
lut
ive ef
f
ect o
f sha
re opti
on s
che
me
s in ac
co
rda
nc
e with I
AS 33 ‘E
ar
nin
gs p
er Sh
are’
.
20
21
2020
Weig
hted ave
rag
e num
be
r of ord
ina
r
y sh
are
s in i
ssu
e
4
8
,
5
7
7,
9
4
5
48,
186,077
Adjustment
s for
share op
tions
7
55,9
54
779,6
6
0
Di
lute
d num
be
r of ord
ina
r
y sh
are
s is
sue
d
49,333,899
4
8,
9
6
5,737
9. Inve
st
me
nt
s in jo
in
t ven
tu
re
Du
rin
g 201
3 the G
rou
p ente
red i
nto joi
nt-
ven
ture a
rr
ang
em
en
ts wit
h INOAC Cor
po
rati
on. As a r
esu
lt, the G
rou
p ha
s a 50% inter
est i
n A
zote Asi
a Li
mite
d
(apri
vate co
mpa
ny inc
or
po
rated i
n Hon
g Kong) a
nd In
oac Zotefo
ams Ko
rea L
imi
ted (
inc
or
por
ated in S
ou
th Kore
a). Azote As
ia L
imi
ted co
mm
enc
ed
trad
ing i
n 201
4 a
nd is t
he excl
usi
ve dis
tri
bu
tor of Zotefoa
ms’ A
ZO
TE
®
pro
duc
ts in th
e Far Ea
st. Th
e re
gis
tered a
ddr
es
s and p
ri
nci
pa
l pla
ce of bu
si
nes
s
is 1
31
8-22, P
ar
k-In Com
me
rci
al Ce
ntre, 56 D
un
das S
tre
et, Kowlo
on, Ho
ng Kon
g. Inoa
c Zotefoa
ms Kore
a Li
mite
d rem
ain
s no
n-trad
ing. T
he re
gis
tere
d
add
res
s is 100, Jayu
mu
yeok 5
-g
il, Ma
sa
nh
oewo
n-g
u, Cha
ng-wo
n-si, G
yeo
ngs
an
gna
m-
do, Rep
ubl
ic of Kor
ea. A
s at the e
nd of th
e yea
r
, th
ere we
re no
contingent
liabilities rela
ting t
o the Group
’
s interest
in the
joint v
entures.
Th
e joi
nt ven
ture
s have s
ha
re ca
pit
al c
ons
isti
ng s
ole
ly of o
rdin
ar
y sha
re
s whi
ch a
re he
ld di
rec
tly by th
e Gro
up. A
zote Asi
a Li
mite
d is a pr
iva
te com
pany a
nd
the
re is n
o quote
d mar
ket pr
ic
e avai
lab
le fo
r its s
har
es.
A sum
ma
ri
sed s
tatem
en
t of fina
nc
ial p
osi
tio
n of Ino
ac Zotefoa
ms Kor
ea L
imi
ted is n
ot pre
se
nted a
s the c
omp
any is d
or
ma
nt.
Set out
below is
the summarised
financial informat
ion for
Azote
Asia Limit
ed, which
is account
ed for using t
he equity method
.
Note
s
Continued
12
8
Zotef
oams plc
An
nua
l Re
por
t 2021
9.
Inv
estments in j
oint v
enture (
cont
inued)
Summarised stat
e
ment o
f financial posit
ion:
As at 31 De
ce
mb
er
20
21
£’
000
2020
£’
000
Cash and
c
ash equiv
alents
323
3
71
Oth
er c
ur
rent a
ss
ets (exclu
din
g ca
sh)
1
,1
0
2
1,
0
2
7
T
otal current
assets
1,
4
2
5
1,
3
9
8
Financial liabilit
ies (e
xcluding
trade pay
ables)
(79)
(
76
)
Other current
liabilities (including
trade pay
ables)
(1
,
0
2
1)
(9
56)
T
otal current liabilities
(
1
,1
0
0
)
(
1,
0
3
2
)
Net assets
325
366
Summarised stat
e
ment o
f comprehensive
income:
As at 31 De
ce
mb
er
20
21
£’
000
2020
£’
000
Reve
nue
3
,76
6
2,6
9
4
Finance costs
(2)
(2)
(Los
s)/profit b
efor
e ta
x
(41
)
76
Inc
om
e ta
x exp
en
se
–
–
(Los
s)/profit a
f
ter ta
x
(41)
76
Other comprehensive
income
–
–
T
otal comprehensive i
ncome
(41
)
76
Di
vid
en
d rec
ei
ved f
rom j
oin
t vent
ure
–
–
Th
e info
rm
atio
n above r
efle
cts th
e am
oun
ts pre
se
nted i
n the fin
an
cia
l sta
teme
nts of th
e joi
nt ve
nture. T
he
re ar
e no mate
ri
al di
f
fe
ren
ce
s in ac
co
unti
ng
policies between t
he Group and
the join
t vent
ure.
A rec
on
cil
iati
on of th
e sum
ma
ris
ed fi
nan
ci
al in
for
mati
on pre
se
nted to th
e ca
rr
y
ing a
mo
unt of th
e inte
res
t in th
e joi
nt ven
ture i
s provi
de
d be
low:
20
21
£’
000
2020
£’
000
Opening net assets
366
29
0
(Los
s)/profit fo
r the ye
ar
(41
)
76
Other comprehensive
income
–
–
Closing net
assets
325
366
Inter
est i
n jo
int ve
nture @ 5
0%
16
3
18
3
20
21
£’
000
2020
£’
000
Information of
t
he jo
int venture
Car
r
y
ing va
lu
e at 1 Jan
ua
r
y
18
3
14
5
Share o
f (loss
)/pr
ofit f
or the
year
(20
)
38
Ca
rr
y
in
g val
u
e at 31 D
ec
em
b
er
16
3
18
3
Strat
egic Repor
t
Gov
ernance
Financial Statements
12
9
Zote
foams plc
An
nua
l Re
por
t 2021
1
0. Propert
y
, plant
and equipment
Group
Land and
buildings
£’
000
Plant
and
equipment
£’
000
Fix
tures an
d
fitti
ngs
£’
000
Under
construction
£’
000
To
t
a
l
£’
000
Cost
Ba
lan
ce at 1 J
anu
ar
y 2020
31,075
8
3
,
9
74
3
,
9
15
29,532
14
8
,
4
9
6
Additions
15
9
720
115
11,
7
8
2
12
,7
76
Disposals
–
(
51)
(2)
–
(53)
T
ransfers
1,
8
5
7
15
,
8
6
6
36
(
1
7,
7
5
9
)
–
Ef
fec
t of move
me
nt in fo
rei
gn exch
an
ge
(298
)
(
1,
47
2
)
(33)
1,1
7
8
(625)
Ba
lan
ce at 31 De
cem
be
r 2020
32,7
9
3
9
9,0
37
4,
0
31
24
,73
3
160,594
Ba
la
n
ce a
t 1 Ja
n
ua
r
y 2
0
21
32
,7
9
3
99,
037
4,0
31
2
4
,7
3
3
16
0
,
5
9
4
Additions
16
404
25
4
5,3
22
5,9
96
Disposals
(88)
(12
2
)
(13
3
)
–
(343)
T
ransfers
13
,
3
4
6
11
,
2
3
9
(
2
91)
(24,77
4)
(480
)
Ef
fec
t of move
me
nt in fo
rei
gn exch
an
ge
(
2
9
1)
233
10
(
815
)
(86
3)
Ba
la
n
ce a
t 31 De
ce
m
be
r 2
0
21
4
5
,77
6
11
0
,
7
9
1
3,
871
4,46
6
16
4
,
9
0
4
Accumulated
depreciation
Ba
lan
ce at 1 J
anu
ar
y 2020
11
,
4
7
1
4
8,93
6
2,
4
37
–
6
2,
8
4
4
Depreciation
charge for
the y
ear
1,
2
7
7
3,642
4
87
–
5,4
0
6
Disposals
–
(
13
)
–
–
(
13
)
Ef
fec
t of move
me
nt in fo
rei
gn exch
an
ge
(
17
0
)
(370
)
(28
)
–
(5
68)
Ba
lan
ce at 31 De
cem
be
r 2020
12
,
5
7
8
5
2
,1
9
5
2,8
9
6
–
6
7,
6
6
9
Ba
la
n
ce a
t 1 Ja
n
ua
r
y 2
0
21
12
,
5
78
5
2
,1
9
5
2
,896
–
6
7,
6
6
9
Depreciation
charge for
the y
ear
1,
47
9
4
,1
8
4
315
–
5,978
Disposals
–
(
87)
(
11
4
)
–
(
2
0
1)
T
ransfers
51
(
79)
(12
5
)
–
(15
3
)
Ef
fec
t of move
me
nt in fo
rei
gn exch
an
ge
52
14
8
10
–
2
10
Ba
la
n
ce a
t 31 De
ce
m
be
r 2
0
21
1
4
,1
6
0
56,
361
2,982
–
73,
5
03
Ne
t bo
ok va
l
ue
At 1 Jan
ua
r
y 2020
19,
6
0
4
35,0
38
1,
4
7
8
29,532
85
,652
At 3
1 De
ce
mb
er 2020 a
nd 1 Ja
nu
ar
y 2021
2
0
,
2
15
4
6,
842
1,1
3
5
24,7
3
3
92,
925
At 31 De
c
em
be
r 2
0
21
31,
6
16
54,430
889
4,4
66
91
,4
01
De
pre
cia
tio
n is in
clu
de
d in co
st of s
ale
s in th
e inc
om
e state
me
nt.
Du
rin
g the ye
ar
, t
he G
roup h
as c
ap
ita
lis
ed b
orr
owin
g cos
ts am
oun
ting to £32k (2020: £60
4k) o
n qua
lif
yi
ng as
sets
. Bor
rowi
ng c
osts we
re c
api
ta
lis
ed
atther
ate of its g
en
era
l bo
rrow
ing
s of 2.
46% (2020: 2
.46%
).
Ba
nk bo
rrow
ing
s are s
ec
ure
d on pr
ope
r
t
y
, p
la
nt an
d equ
ip
men
t. Refe
r to note 1
8 fo
r det
ail
s.
Note
s
Continued
13
0
Zot
efoams plc
An
nua
l Re
por
t 2021
1
0. Propert
y
, plant and equipment
(c
ontinued)
Company
Land and
buildings
£’
000
Plant
and
equipment
£’
000
Fix
tures an
d
fitti
ngs
£’
000
Under
construction
£’
000
To
t
a
l
£’
000
Cost
Ba
lan
ce at 1 J
anu
ar
y 2020
2
2
,1
3
1
5
8
,1
2
6
2,9
27
7,
3
3
6
9
0,520
Additions
13
0
31
53
3
,8
76
4,09
0
Disposals
–
(
51)
–
–
(
51)
T
ransfers
1,7
9
5
6
,1
3
6
36
(7
,967)
–
Ba
lan
ce at 31 De
cem
be
r 2020
24,
0
5
6
6
4
,
24
2
3
,
016
3
,
24
5
9
4,559
Ba
la
n
ce a
t 1 Ja
n
ua
r
y 2
0
21
24,0
56
6
4,
242
3,
016
3,
245
9
4,559
Additions
–
96
203
2
,
47
7
2
,77
6
Disposals
(88)
(
78)
(12
8
)
–
(2
94)
T
ransfers
10
4
2,894
(45
7)
(2
,94
9)
(4
0
8
)
Ba
la
n
ce a
t 31 De
ce
m
be
r 2
0
21
24,
072
6
7,
1
5
4
2,6
34
2
,77
3
9
6,6
33
Accumulated
depreciation
Ba
lan
ce at 1 J
anu
ar
y 2020
7,118
4
0
,
74
2
1
,
74
1
–
4
9,6
01
Depreciation
charge for
the y
ear
8
41
1,7
7
2
398
–
3
,
0
11
Disposals
–
(13
)
–
–
(13
)
Ba
lan
ce at 31 De
cem
be
r 2020
7,
9
5
9
42,
5
01
2
,1
3
9
–
52,599
Ba
la
n
ce a
t 1 Ja
n
ua
r
y 2
0
21
7
,959
42
,
5
01
2
,1
3
9
–
52
,599
Depreciation
charge for
the y
ear
856
1,
9
01
218
–
2
,
975
Disposals
–
(
78)
(
111
)
–
(18
9
)
T
ransfers
50
(4
9
)
(15
4)
–
(15
3
)
Ba
la
n
ce a
t 31 De
ce
m
be
r 2
0
21
8,865
4
4
,
275
2
,0
92
–
55,2
32
Ne
t bo
ok va
l
ue
At 1 Jan
ua
r
y 2020
15
,
0
13
1
7,
3
8
4
1,1
8
6
7,
3
3
6
4
0
,
919
At 3
1 De
ce
mb
er 2020 a
nd 1 Ja
nu
ar
y 2021
16,
0
9
7
2
1
,
74
1
877
3
,
24
5
41,
9
6
0
At 31 De
c
em
be
r 2
0
21
15
,
2
0
7
22
,
879
542
2
,77
3
41,
4
0
1
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
131
Zot
efoams plc
An
nua
l Re
por
t 2021
1
1
. Leases
(i
) A
mo
un
t
s re
co
gn
is
e
d in t
h
e st
a
te
me
n
t of fi
na
nc
i
al p
os
it
i
on r
el
a
ti
n
g to l
ea
se
s:
Right
-of-use assets
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Pro
pert
y
494
56
0
–
–
Equipment
610
8
37
519
78
0
1
,1
0
4
1,
3
9
7
519
78
0
Leas
e liabilities
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Lea
se l
iab
ili
t
y fal
ls du
e wi
thin 1 ye
ar
486
420
2
51
279
Lea
se l
iab
ili
t
y fal
ls du
e wi
thin 1-3 year
s
553
70
5
2
74
437
Lea
se l
iab
ili
t
y fal
ls du
e in mo
re tha
n 3 ye
ars
90
2
81
–
67
1
,1
2
9
1,
4
0
6
525
783
Add
itio
ns to the r
ig
ht-of-use a
sse
ts du
rin
g the fi
nan
ci
al ye
ar we
re £23
0k fo
r the G
rou
p and £
28k fo
r the C
omp
any (2020: £63
9k fo
r the G
rou
p an
d £1
6k
for t
he Company
)
.
(i
i) A
m
ou
nt
s r
ec
og
ni
s
ed i
n t
he i
nc
om
e s
ta
t
em
en
t r
el
at
i
ng t
o le
as
es
:
Depreciation charge of right
-of-use assets
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Pro
pert
y
19
4
99
–
–
Equipment
3
31
315
288
300
525
414
288
300
Inter
est ex
pe
ns
es (
inc
lud
ed i
n fina
nc
e cos
ts)
39
31
17
24
E
xp
ens
e rel
atin
g to sho
r
t-
ter
m le
ase
s (i
ncl
ud
ed in c
ost of s
al
es a
nd ad
mi
nis
trati
ve
expen
ses)
19
2
228
13
28
E
xp
ens
e rel
atin
g to lea
se
s of low-val
ue a
sse
ts that a
re not s
how
n ab
ove as sh
or
t-term
leases (included in
administra
tive e
x
penses)
72
22
15
22
Th
e total c
ash o
ut
flow fo
r le
as
es
543
433
304
3
18
Note
s
Continued
13
2
Zot
efoams plc
An
nua
l Re
por
t 2021
1
2
. Intangible assets
Group
Ma
rke
tin
g
relat
ed
£’
000
Customer
relat
ed
£’
000
T
echnology
relat
ed
£’
000
Sof
t
ware
relat
ed
£’
000
Goodwill
£’
000
Capitalised
development
£’
000
To
t
a
l
£’
000
Cost
Ba
lan
ce at 1 J
anu
ar
y 2020
24
0
3
87
4,96
9
3
,1
6
0
2,3
0
4
718
11,
7
7
8
Additions
–
–
234
11
2
–
–
346
Ef
fec
t of move
me
nt in fo
rei
gn exch
an
ge
(8)
(8)
(
17
7
)
1
(
76)
–
(268)
Ba
lan
ce at 31 De
cem
be
r 2020
23
2
379
5,026
3,
273
2,
2
28
718
11,
8
5
6
Ba
la
n
ce a
t 1 Ja
n
ua
r
y 2
0
21
232
37
9
5,0
26
3,
273
2
,228
718
1
1
,856
Additions
–
–
277
16
5
–
627
1,
0
6
9
T
ransfer
–
–
–
466
–
14
480
Ef
fec
t of move
me
nt in fo
rei
gn exch
an
ge
3
3
63
(3)
26
12
10
4
Ba
la
n
ce a
t 31 De
ce
m
be
r 2
0
21
235
3
82
5,3
66
3
,9
01
2,254
1,
3
7
1
13
,
5
0
9
Accumulated
amort
isation
Ba
lan
ce at 1 J
anu
ar
y 2020
228
387
2
,75
2
1,7
9
7
–
–
5
,1
6
4
Charge f
or the y
e
ar
12
–
266
558
–
90
926
Ef
fec
t of move
me
nt in fo
rei
gn exch
an
ge
(8)
(8)
(10
6
)
–
–
–
(12
2
)
Ba
lan
ce at 31 De
cem
be
r 2020
23
2
379
2
,
9
12
2,
3
55
–
90
5,9
6
8
Ba
la
n
ce a
t 1 Ja
n
ua
r
y 2
0
21
232
37
9
2
,
9
12
2
,355
–
90
5,968
Charge f
or the y
e
ar
–
–
19
4
74
3
–
18
4
1
,1
2
1
T
ransfer
–
–
–
14
8
–
5
15
3
Ef
fec
t of move
me
nt in fo
rei
gn exch
an
ge
3
3
37
–
–
–
43
Ba
la
n
ce a
t 31 De
ce
m
be
r 2
0
21
235
3
82
3
,1
4
3
3,
246
–
279
7,
2
8
5
Ne
t bo
ok va
l
ue
At 1 Jan
ua
r
y 2020
12
–
2
,
2
17
1,
3
6
3
2,
3
0
4
718
6
,
6
14
At 3
1 De
ce
mb
er 2020 a
nd 1 Ja
nu
ar
y 2021
–
–
2
,11
4
918
2,
2
28
628
5
,888
At 31 De
c
em
be
r 2
0
21
–
–
2,223
655
2,254
1,
0
9
2
6,2
24
Am
or
ti
sati
on is i
nc
lud
ed i
n cos
t of sa
le
s in the i
nco
me s
tatem
ent.
Go
odw
ill a
ri
sin
g on a
cqu
isi
tio
n is al
lo
cated to th
e ca
sh ge
ne
rati
ng u
nit (C
GU) th
at is ex
pe
cted to be
ne
fit, thi
s bei
ng M
EL. Th
e rec
over
ab
le am
ou
nt
oftheC
GU ha
s be
en d
eter
min
ed b
ase
d on a
n as
ses
sm
en
t of the M
uCe
ll
®
tech
no
log
y an
d the p
otenti
al of th
e ReZo
rce
®
mono-mat
erial barrier
packagingsolution
.
Th
e bus
in
es
s has p
rep
are
d fin
anc
ia
l mod
el
s app
roved by m
an
age
me
nt wh
ic
h sup
por
t the c
ar
r
yi
ng va
lue of i
nta
ngi
ble
s, pl
ea
se se
e th
e Gro
up CFO’s
revi
ew on p
age 3
8 for m
ore d
etai
l. Th
e as
ses
sm
ent o
f the pote
ntia
l of Re
Zorc
e has b
ee
n mad
e ba
sed o
n:
X
Th
e tech
no
log
y an
d cur
re
nt sta
ge of d
evel
opm
ent;
X
Its li
nk to Mu
Ce
ll tec
hno
lo
gy;
X
The pot
e
ntial
market si
ze f
or the
solution
;
X
Ma
nag
em
ent p
la
ns to acc
es
s thi
s mar
ket;
X
Po
tential
cust
omer appetit
e;
X
Suf
ficient funding;
and
X
Board risk
a
ppetit
e.
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
13
3
Zot
efoams plc
An
nua
l Re
por
t 2021
1
2
. Intangible asse
ts (
continued)
Company
Customer
relat
ed
£’
000
Sof
t
ware
relat
ed
£’
000
Capitalised
development
£’
000
To
t
a
l
£’
000
Cost
Ba
lan
ce at 1 J
anu
ar
y 2020
12
1
3
,1
6
0
718
3
,999
Additions
–
111
–
111
Ba
lan
ce at 31 De
cem
be
r 2020
12
1
3,
2
71
718
4
,11
0
Ba
la
n
ce a
t 1 Ja
n
ua
r
y 2
0
21
121
3,
271
718
4
,11
0
Additions
–
13
2
–
13
2
T
ransfer
–
393
14
407
Ba
la
n
ce a
t 31 De
ce
m
be
r 2
0
21
121
3
,7
9
6
732
4,6
49
Accumulated
amort
isation
Ba
lan
ce at 1 J
anu
ar
y 2020
12
1
1,
7
9
6
–
1
,
9
17
Charge f
or the y
e
ar
–
558
89
6
47
Ba
lan
ce at 31 De
cem
be
r 2020
12
1
2,
3
5
4
89
2,5
6
4
Ba
la
n
ce a
t 1 Ja
n
ua
r
y 2
0
21
121
2,35
4
89
2,564
Charge f
or the y
e
ar
–
737
18
5
92
2
T
ransfer
–
14
8
5
15
3
Ba
la
n
ce a
t 31 De
ce
m
be
r 2
0
21
121
3,23
9
279
3,639
Ne
t bo
ok va
l
ue
At 1 Jan
ua
r
y 2020
–
1,
3
6
4
718
2,0
8
2
At 3
1 De
ce
mb
er 2020 a
nd 1 Ja
nu
ar
y 2021
–
9
17
629
1,
5
4
6
At 31 De
c
em
be
r 2
0
21
–
557
453
1,0
10
1
3. Inv
estment in
subsidiaries
Company
20
21
£’
000
2020
£’
000
Sha
re
s in Gr
oup u
nde
r
ta
k
ing
s – at co
st
30,
82
2
3
0,
576
Additions
during the y
ear
–
24
6
30,
82
2
30,822
Note
s
Continued
13
4
Zot
efoams plc
An
nua
l Re
por
t 2021
1
3. Inv
estment in subsidiaries
(
continued)
The follo
wing is a
complete list
of t
he subsidiary under
takings of
the Compan
y:
Registered o
ffice
Ownership
Incorporated
in:
Zo
tef
oams Int
ernational Limit
e
d
6
75 Mitcha
m Roa
d, Croydo
n CR9 3
AL
10
0
%
Great Brita
in
Zo
tef
oams Pension
T
rustees Limit
ed
67
5 M
itcha
m Ro
ad, Croyd
on CR
9 3AL
10
0
%
Great Brit
ain
Zotefoa
ms In
c. (ind
ire
ctl
y own
ed
)
C
or
por
atio
n T
r
ust C
ente
r
, 1
20
9 Or
ang
e Stre
et, Wi
lmi
ng
ton, New
Castle
, Delaw
are
10
0
%
USA
Zo
tef
oams Midwest
LLC
(indirectly
owned)
Co
rp
ora
tion T
ru
st Ce
nter
, 1
20
9 Ora
ng
e Stre
et, Wi
lmi
ngto
n, New
Castle
, Delaw
are
10
0
%
USA
MuCell Ex
trusion LL
C (indirectly
owned)
Co
rpo
rati
on T
r
us
t Ce
nter
, 1
209 O
ran
ge S
tree
t, Wil
min
gton, Ne
w
Castle
, Delaw
are
10
0
%
USA
Zo
tef
oams Operations
Limited (in
directly o
wned)
67
5 Mitc
ham R
oad, C
roydon C
R9 3A
L
10
0
%
G
reat Bri
tain
Zo
tef
oams T
echnolog
y Limit
ed (indirect
ly owned)
67
5 M
itch
am Ro
ad, Croyd
on C
R9 3AL
10
0
%
Great Bri
tain
K
Z T
r
adin
g an
d Inve
stme
nt L
imi
ted (i
ndi
rec
tly ow
ne
d)
1
5/
F OTB Bu
ild
ing, 160 Glo
uce
ste
r Roa
d, Hon
g Kong
10
0
%
Hon
g Kong
Zotefoa
ms T
-F
IT Ma
teri
al T
e
ch
nol
og
y (Kun
sha
n) Li
mite
d
(indirectly
owned)
1
8
1 Huanlou Road
, Kunshan
, Jiangsu
10
0
%
China
Zotefoa
ms Fran
ce S
AS (in
dir
ec
tly ow
ned
)
29 Bo
ulev
ard A
lbe
r
t Ei
nste
in, Na
ntes
10
0
%
Fra
nc
e
Zotefoa
ms Pol
and S
p. z.
o.o
. (i
ndi
rec
tly ow
ne
d)
ul. Gr
z
ybow
ska 2
/29, 00
-
1
3
1
, War
sz
awa
10
0
%
Poland
T
-FIT I
nsulation Solution
s India Priv
ate
Limited
(indirectly
owned)
335 U
dyog V
ih
ar Ph
as
e IV Gu
rga
on, Gu
rga
on, Ha
r
ya
na 1
2201
5
10
0
%
India
The principal act
ivities of
the sub
sidiar
y undertakings are as f
ollows
:
Zo
tef
oams Int
ernational Limit
e
d is
a holding
company
. Zo
te
foams P
ension T
rustees Limited
and Zo
tef
oams T
echnology Limited are
currently
inactive
.
Zotefoa
ms In
c. purc
has
es, m
an
ufa
ctur
es a
nd di
str
ibu
tes cr
oss
-lin
ked b
loc
k foa
ms. Zotefoa
ms M
idwe
st L
LC
, ba
sed i
n Ok
la
hom
a, US
A is a tra
din
g
company wit
h operations
in Oklahoma, USA and
supplies specialist mat
er
ials,
based on AZ
OTE
®
foams,
for t
he construct
ion industry
. MuCell Ex
trusion
LLC hol
ds an
d deve
lo
ps mi
cro
ce
llu
lar f
oam te
chn
ol
og
y whi
ch i
t lic
ens
es to cu
stom
er
s and i
s al
so deve
lo
pin
g a mo
no-
mater
ia
l ba
rr
ier p
ack
ag
ing s
olu
tio
n
branded ReZorce
®
. Zotefoa
ms Op
er
atio
ns L
imi
ted is a tr
adi
ng co
mpa
ny an
d dis
tri
bu
tes T
-F
IT
®
technical insulat
ion products
. KZ T
rading and I
nvestment
Li
mite
d is a ho
ldi
ng a
nd tra
din
g com
pa
ny for Zotefoa
ms T
-FIT M
ater
ia
l T
ec
hn
olo
gy (Ku
ns
han) L
imi
ted (
prev
iou
sl
y kn
own a
s Kuns
ha
n Zotek K
ing L
ai
Limited)
, which is a t
rading company
based in K
unshan, China,
processing Zo
tef
oams foams in
to
T
-FIT t
echnical insulation
products and
distributing
the
m. Zotefoam
s Fran
ce SA
S is a wh
ol
ly own
ed s
ubs
id
iar
y of Zotefoam
s Inte
rn
atio
nal L
im
ited a
nd di
d not e
ng
age i
n any tra
din
g act
ivi
tie
s in 2021
.
Zotefoa
ms Pol
and S
p. z.
o.o
., is a whol
ly ow
ne
d sub
sid
ia
r
y of Zotefoa
ms In
tern
atio
na
l Lim
ite
d and e
ng
age
d in tr
adi
ng ac
tiv
iti
es in 2021
. T
-
FIT In
sul
atio
n
Solutions
India Priva
te
Limited dist
ributes T
-FIT t
ec
hnical insula
tion pro
ducts. I
n the
opinion of
the Direct
ors, the in
vestment
s in t
he Company
’
s subsidiar
y
und
er
tak
in
gs ar
e wor
th at l
ea
st th
e amo
unt a
t whi
ch th
ey ar
e state
d in the s
tatem
en
t of fina
nc
ial p
os
itio
n.
Zotefoa
ms pl
c Emp
loye
e Be
nefi
t T
ru
st (EBT
) is a wh
ol
ly own
ed e
nti
ty w
ith i
ts re
gis
tered of
fice J
TC Hous
e, 28 Espl
an
ade, St H
el
ie
r
, Je
rs
ey
, C
han
ne
l
Isl
an
ds, JE
2 3Q
A
. The E
BT rel
ea
se
s sha
re
s in the C
om
pany w
he
n sh
are awa
rds ve
st o
r are exe
rcis
ed.
Zo
tef
oams Int
ernational Limit
e
d,
Zot
efoams T
echnology Limited and
Zot
efoams Operations
Limited ar
e relying upon
the e
xempt
ion from
audit of
individua
l
fina
nc
ial s
tate
men
ts as p
er
mit
ted by s
ec
tio
n 4
79A of the C
om
pan
ie
s Act 20
0
6. All o
uts
tan
din
g li
abi
lit
ies a
s at 31 Dec
em
be
r 2021 of these c
om
pan
ie
s have
be
en g
uar
ante
ed by th
e Co
mpa
ny an
d no li
abi
lit
y i
s exp
ecte
d to ari
se u
nde
r thi
s gua
ra
ntee.
Th
e Com
pa
ny has a b
ra
nch i
n Ita
ly
.
1
4
. Inve
nt
or
ie
s
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Raw ma
terials and
consumables
14
,
6
3
7
1
3
,
6
74
11
,
7
5
9
1
0
,1
6
7
Work i
n pro
gre
ss
5
,70
4
5,3
48
4,3
42
4,
26
8
Finished goods
5
,6
13
4
,
0
11
2,594
2
,
419
25,954
23,0
3
3
18
,
6
9
5
16
,
8
5
4
Inven
torie
s ar
e show
n net of:
Provi
si
on for i
mpa
ir
me
nt lo
sse
s
1,77
2
1,
7
7
3
1,0
51
1,1
0
0
In 2021
, the va
lue of i
nven
tor
y re
cog
ni
sed by th
e Gro
up a
s an ex
pe
nse i
n cos
t of go
ods s
old wa
s £46,87
8
k (2020: £31
,7
6
0
k).
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
13
5
Zot
efoams plc
An
nua
l Re
por
t 2021
1
4. In
vent
ories (
cont
inued)
Mov
ement in
provision
Move
me
nts in th
e inve
ntor
y p
rovis
io
n dur
in
g the fin
an
cia
l yea
r ar
e set ou
t be
low:
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Provi
si
on for i
mpa
ir
me
nt lo
sse
s as at 1 J
an
uar
y
1,7
7
3
1,
7
5
6
1,1
0
0
1,
3
15
Inve
ntori
es w
ri
tte
n of
f ag
ain
st prov
is
ion
(13
8
)
(63
3)
(
11
9
)
(63
3)
Additional pr
ovisions recognised
16
9
816
10
2
584
Unused amounts
reversed
(32)
(
16
6
)
(32)
(16
6
)
Provi
si
on for i
mpa
ir
me
nt lo
sse
s as at 31 De
ce
mbe
r
1,77
2
1,7
7
3
1,
0
51
1
,1
0
0
1
5. T
r
ad
e a
nd ot
h
er r
ec
eiva
bl
es
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Am
ou
n
ts f
a
ll
in
g du
e ove
r on
e ye
ar
:
Pre
paym
ent
s and a
cc
rue
d in
com
e
11
54
11
54
Am
ou
n
ts f
a
ll
in
g du
e w
it
h
in o
ne y
ea
r:
T
rade r
eceivables
20,
88
5
19
,7
6
6
14
,
3
5
6
15
,
8
3
6
Am
oun
ts owed by G
rou
p und
er
t
ak
in
gs
–
–
3
7,
74
6
3
2,
8
15
Other receivables
2,4
38
1,
3
3
1
1,
9
0
3
48
8
Pre
paym
ent
s and a
cc
rue
d in
com
e
1,
0
15
1,
0
5
3
332
36
3
24,3
49
2
2,2
0
4
54,348
49,556
Am
oun
ts owed by G
rou
p und
er
t
ak
in
gs ar
e payab
le o
n dem
an
d. Th
e trad
ing p
or
ti
on do
es n
ot at
trac
t any i
ntere
st. Un
sec
ure
d lo
ans p
rovi
de
d to Grou
p
und
er
tak
in
gs total
lin
g £25,327k (
2020: £23,5
1
9
k) at
tr
act a
n inte
res
t cha
rge of 1
.
73% for loa
ns lin
ked to US d
oll
ar LI
BOR
, 1
.60% fo
r euro a
nd 1
.83% for
ster
lin
g (2020: 2.32
% for lo
an
s lin
ked to US do
lla
r LIB
OR, 2.
10
% for e
uro a
nd 1
.81
% f
or ste
rli
ng).
Ba
nk bo
rrow
ing
s are s
ec
ure
d on th
e trad
e rec
ei
vab
le
s of the G
rou
p. Refer to note 18 for deta
ils.
16. Cas
h an
d ca
sh e
qu
iva
le
nt
s
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Cas
h at ba
nk a
nd in h
and
8
,05
5
8,503
5
,03
4
6
,328
1
7
. T
r
ad
e a
nd ot
h
er pa
yab
le
s
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
T
rad
e paya
ble
s
4,322
3,864
3,4
59
3
,
276
Am
oun
ts owed to G
roup u
nd
er
t
ak
ing
s
–
–
30
30
Other taxation and
social security
921
8
11
413
452
Other pay
ables
1,
0
4
2
809
680
6
87
Accruals and
deferred
income
2
,9
57
2,
3
67
2
,0
85
1
,
74
3
9,
242
7,
8
5
1
6,667
6
,1
8
8
Am
oun
ts owed to G
roup u
nd
er
t
ak
ing
s are u
nse
cu
red, re
paya
ble o
n de
ma
nd an
d at
trac
t no i
ntere
st.
Note
s
Continued
13
6
Zot
efoams plc
An
nua
l Re
por
t 2021
1
8
. Interest
-bearing loans
an
d bo
rrowings
Note
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Current bank
borrowings
26,564
2
3,4
30
26,564
23,4
30
Non-current bank
borrowings
14
,
71
0
19
,
2
6
3
14
,
71
0
19
,
2
6
3
21
41
,
2
74
42,6
9
3
41
,
2
74
42,
6
9
3
In May 201
8, t
he G
roup c
om
ple
ted a de
bt refi
nan
ci
ng to ena
bl
e it to co
ntin
ue to grow c
ap
aci
ty a
nd m
eet i
ts exp
ec
ted de
ma
nd g
row
th. Th
es
e fac
ili
tie
s
are s
ec
ure
d aga
ins
t the p
rope
r
t
y
, p
la
nt an
d eq
uip
me
nt an
d trad
e rec
ei
vab
le
s of the G
roup. T
he tota
l faci
lit
y of £4
7
.25m co
mpr
is
es: a £20
m mu
lti-
cu
rre
ncy
term l
oa
n, wit
h £5m re
payab
le d
uri
ng ye
ar fo
ur wi
th the r
em
ain
de
r at the e
nd of ye
ar fi
ve; a £25m mul
ti-
cur
re
ncy revo
lv
ing c
re
dit f
aci
lit
y
, rep
ayab
le on
de
man
d, an
d a fur
the
r £2.25m ster
lin
g ter
m loa
n, ren
ewab
le a
nnu
al
ly a
nd re
payab
le ove
r five ye
ar
s in e
qua
l qu
ar
ter
ly r
epay
me
nts ove
r the te
rm. T
he
negotiat
ed facility also includes a
£
2
5m accordion
featur
e t
o pro
vide additional
flexibility t
o pursue further inv
estment opportunities i
n the
future.
At the e
nd of th
e fina
nc
ial ye
ar
, the G
rou
p has u
til
ise
d £1
9.8m ($20.6m a
nd £4.5m) of the mu
lti-
cu
rre
ncy te
rm l
oan, £1
9.5m (€1
7
.5m an
d $6.5m) of th
e
revol
vi
ng fa
cil
it
y an
d has a
n ou
tsta
nd
ing £
2.25m on the s
terl
ing te
rm l
oan. T
he tota
l am
ount o
f £4
1
.3m a
bove is n
et of £0.3m l
oa
n or
igi
nati
on fe
es pa
id
upf
ront, be
in
g amo
r
tis
ed ove
r the p
er
io
d of the lo
an.
Th
e Gro
up an
d the C
om
pany h
ave the fo
ll
owin
g und
raw
n bor
rowi
ng fa
cil
iti
es a
s at the e
nd of th
e fina
nc
ial y
ea
r:
20
21
£’
000
2020
£’
000
Floating ra
te
:
Expiring within one
year
5,
307
–
E
xp
iri
ng be
yond o
ne ye
ar
–
1
0
,1
9
1
To
t
a
l
5,
307
1
0
,1
9
1
Th
e dif
fere
nc
e of £0.4m bet
wee
n the u
til
ise
d am
oun
t of £4
2m and £4
1
.6m (£4
1
.3m + £
0.3m lo
an or
ig
ina
tion f
ee
s) is due to th
e dif
fere
nt exch
an
ge rate
s
use
d by the G
rou
p an
d the ba
nk.
Reconciliation
of liabilit
ies arising fr
om financing act
ivities:
Group
2020
£’
000
Non-cash changes
20
21
£’
000
Net cash
inflow
s/
(outflows
)
£’
000
Loan
origination fee
£’
000
Loan
restru
cture
£’
000
Recognition
of lease
liabilities
£’
000
Foreign
ex
change
mov
ement
£’
000
Long-
term borro
wings
19
,
2
6
3
(4
,73
9
)
15
6
–
–
30
14
,
7
10
Short-
term borr
owings
23,4
3
0
3
,
9
74
(12
)
–
–
(8
28)
26,564
T
otal liabilities
42,6
9
3
(
76
5
)
14
4
–
–
(79
8)
4
1
,
2
74
Group
2
019
£’
000
Non-cash changes
2020
£’
000
Net cash
inflow
s/
(outflows
)
£’
000
Loan
origination fee
£’
000
Loan
restru
cture
£’
000
Recognition
of lease
liabilities
£’
000
Foreign
ex
change
mov
ement
£’
000
Long-
term borro
wings
2
1
,630
3
,1
9
7
87
(
5,
000)
–
(
6
51)
19
,
2
6
3
Short-
term borr
owings
1
5
,
7
17
1,
9
3
0
(32)
5
,
000
–
8
15
23,4
30
T
otal liabilities
3
7,
3
4
7
5
,12
7
55
–
–
16
4
42,6
9
3
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
137
Zotef
oams plc
An
nua
l Re
por
t 2021
1
8
. Interest
-bearing loans
an
d bo
rrowings
(con
tinued)
Company
2020
£’
000
Non-cash changes
20
21
£’
000
Net cash
inflow
s/
(outflows
)
£’
000
Loan
origination fee
£’
000
Loan
restru
cture
£’
000
Recognition
of lease
liabilities
£’
000
Foreign
ex
change
mov
ement
£’
000
Long-
term borro
wings
19
,
2
6
3
(4
,73
9
)
15
6
–
–
30
14
,
7
10
Short-
term borr
owings
23,4
3
0
3
,
9
74
(12
)
–
–
(8
28)
26,564
T
otal liabilities
42,6
9
3
(
76
5
)
14
4
–
–
(79
8)
4
1
,
2
74
Company
2
019
£’
000
Non-cash changes
2020
£’
000
Net cash
inflow
s/
(outflows
)
£’
000
Loan
origination fee
£’
000
Loan
restru
cture
£’
000
Recognition
of lease
liabilities
£’
000
Foreign
ex
change
mov
ement
£’
000
Long-
term borro
wings
2
1
,630
3
,1
9
7
87
(
5,
000)
–
(
6
51)
19
,
2
6
3
Short-
term borr
owings
1
5
,
7
17
1,
9
3
0
(32)
5
,
000
–
8
15
23,4
30
T
otal liabilities
3
7,
3
4
7
5
,12
7
55
–
–
16
4
42,6
9
3
In Ma
rch 20
22, the Grou
p co
mpl
eted a b
ank r
efin
anc
ing a
nd s
el
ecte
d Ha
nde
ls
ban
ken a
nd Na
tWest, th
e inc
umb
en
ts, to conti
nu
e as its l
en
de
rs. U
nde
r
the te
rms of t
he ne
w faci
li
ty
, the G
rou
p’
s gro
ss fi
nan
ce f
aci
lit
y c
omp
ri
ses a £5
0m m
ult
i-c
urr
enc
y revol
vi
ng cr
edi
t fac
ili
t
y
, w
ith a £
25m acc
ord
ion, o
n a
4+
1 te
nor
, a
nd w
ith a
n inte
res
t rate ratch
et on s
lig
htl
y imp
roved te
rms to th
e prev
io
us fa
cil
it
y an
d inc
lud
ing a s
ma
ll el
em
en
t rel
ated to the a
chi
evem
en
t
ofsus
ta
ina
bil
it
y ta
rget
s. Th
e fina
nc
e cos
t an
d leve
rag
e cove
nan
ts rem
ai
n in pl
ace, w
ith th
e for
me
r rem
ain
in
g at 4:
1 a
nd th
e lat
ter i
nc
rea
sin
g to 3.5
:
1
fro
m3.0:
1
.
19. Defe
rr
ed t
a
x as
se
ts a
nd l
ia
bi
lit
i
es
Re
co
gn
is
e
d de
fe
rr
e
d ta
x a
s
se
ts a
n
d li
ab
i
li
t
ie
s – Gr
o
up
Defe
r
red ta
x as
sets a
nd li
ab
ili
tie
s are at
tr
ibu
ta
ble to th
e fol
lowi
ng:
Asse
ts
Liabilities
Net
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Prop
er
t
y
, pl
ant a
nd e
qui
pme
nt
–
–
3
,
810
1
,986
3
,
810
1
,986
Rol
le
d-ove
r ga
in
–
–
806
6
13
806
6
13
Inven
torie
s
(
3
2
1)
(
3
74
)
–
–
(
3
2
1)
(
3
74
)
Derivatives
financial instrument
s
(
8
1)
–
–
29
5
(
81)
295
Defined benefit pension
scheme
(
1
,1
6
4
)
(1,
6
8
1)
–
–
(
1
,1
6
4
)
(
1,
6
8
1)
Share op
tion charges
(2
16
)
(
3
17
)
–
–
(2
16
)
(
3
17
)
T
a
x va
lue of re
co
gn
ise
d lo
sse
s ca
rr
ie
d for
wa
rd
(
17
1)
(14
0
)
–
–
(
17
1)
(
14
0
)
(1,
9
5
3
)
(
2
,
512
)
4,
6
16
2,
8
9
4
2,6
63
382
Set of
f
1,
4
61
2,0
0
3
(
1,
4
6
1)
(2,0
0
3)
–
–
Deferred tax (assets)
/liabilitie
s
(49
2
)
(50
9)
3
,1
5
5
8
91
2
,6
63
382
Unrecognised deferred
tax assets
Th
e Gro
up ha
s ta
x l
oss
es c
ar
ri
ed fo
r
ward i
n the U
SA of $2,855k (2020: $1
,
100k
) whi
ch ex
pir
e bet
we
en 2022 a
nd 2037 un
de
r preva
ili
ng ta
x leg
is
lati
on.
In ad
diti
on to thi
s, the G
rou
p has f
ur
t
he
r ta
x lo
ss
es in t
he USA of $
22,
661
k (2020: $1
5,622k) wh
ich a
re ca
rr
ie
d for
w
ard in
defi
ni
tely. A
t ye
ar
-e
nd exch
an
ge
rates, t
he
se ta
x l
os
ses t
ran
sla
te to £
1
8,91
3
k (2020: £1
2,240k). App
ly
ing t
he en
ac
ted US c
orp
ora
tion t
a
x rate of 21
% (2020: 21
%)
, the G
rou
p has
rec
og
nis
ed a d
efer
re
d ta
x as
set o
f £1
38k (2020: £1
40
k) o
n suc
h ta
x l
oss
es ex
pe
cted to b
e util
ise
d in f
utu
re pe
ri
ods
.
Th
e Gro
up c
an pote
ntia
ll
y rec
over £402k (2020: £37
4k) of th
e def
er
red ta
x as
set w
ithi
n t
wel
ve mon
ths of th
e rep
or
ti
ng pe
ri
od. T
he re
mai
nd
er of th
e
defe
rr
ed ta
x ass
et wi
ll b
e rec
overe
d mo
re tha
n tw
elv
e mont
hs af
te
r the re
por
ting p
er
io
d.
Th
e Gro
up c
an pote
ntia
ll
y set
tle n
on
e (2020: £295
k) of the d
efe
rre
d ta
x l
ia
bil
it
y wi
thin t
we
lve m
onth
s of the re
po
r
ting p
er
io
d. Th
e rem
ain
de
r of the
defe
rr
edta
x lia
bil
it
y wi
ll be s
et
tle
d mo
re tha
n twe
lve m
ont
hs af
ter t
he re
por
ting p
er
io
d.
Note
s
Continued
13
8
Zot
efoams plc
An
nua
l Re
por
t 2021
19. Defe
rr
ed t
a
x as
se
ts a
nd l
ia
bi
lit
i
es (co
nt
in
ue
d
)
Movement
in deferred tax
P
r
o
p
e
r
t
y,
plant and
equipment
£’
000
Rolled-ov
er
gain
£’
000
Inventor
ie
s
£’
000
Derivati
ve
financial
instr
uments
£’
000
Defined
benefit
pension
scheme
£’
000
Share
option
charges
£’
000
T
a
x va
lu
e of
recognised
losses ca
rried
for
ward
£’
000
To
t
a
l
£’
000
Ba
lan
ce at 1 J
anu
ar
y 2020
1,
4
8
1
548
(19
0
)
34
(
1
,1
7
7
)
(
2
11
)
(13
8
)
3
47
Charged/
(credit
ed) to t
he
inc
om
estate
me
nt
505
65
(18
4
)
5
(37
)
(58)
(2)
294
Recognised in ot
her
comprehensive in
come and
equity
–
–
–
256
(46
7
)
(4
8
)
–
(25
9)
Ba
lan
ce at 31 De
cem
be
r 2020
1
,986
6
13
(
3
74
)
295
(
1,
6
8
1)
(
3
17
)
(
14
0
)
3
82
Ba
lan
ce at 1 J
anu
ar
y 2021
1
,986
6
13
(
3
74
)
295
(1
,
6
8
1)
(
3
17
)
(
14
0
)
382
Charged/
(credit
ed) to t
he
inc
om
estate
me
nt
1,
8
2
4
19
3
53
–
73
40
(
31)
2
,15
2
Recognised in ot
her
comprehensive in
come and
equity
–
–
–
(
376)
444
61
–
12
9
Ba
la
n
ce a
t 31 De
ce
m
be
r 2
0
21
3
,
8
10
806
(
3
2
1)
(
81)
(
1
,1
6
4
)
(2
16
)
(17
1)
2
,66
3
Deferred
t
ax asse
ts and
liabilities
– C
ompany
Defe
r
red ta
x as
sets a
nd li
ab
ili
tie
s are at
tr
ibu
ta
ble to th
e fol
lowi
ng:
Asse
ts
Liabilities
Net
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Prop
er
t
y
, pl
ant a
nd e
qui
pme
nt
–
–
3
,
810
1
,986
3
,
810
1
,986
Rol
le
d-ove
r ga
in
–
–
806
6
13
806
6
13
Derivative
financial inst
ruments
(
8
1)
–
–
290
(
81)
290
Defined benefit pension
scheme
(
1
,1
6
4
)
(1,
6
8
1)
–
–
(
1
,1
6
4
)
(
1,
6
8
1)
Share op
tion charges
(2
16
)
(
3
17
)
–
–
(2
16
)
(
3
17
)
(1,
4
6
1)
(
1,
9
9
8
)
4
,
616
2,
8
8
9
3
,1
5
5
8
91
Set of
f
1,
4
61
1,
9
9
8
(
1,
4
6
1)
(
1,
9
9
8
)
–
–
Deferred tax (assets)
/liabilitie
s
–
–
3
,1
5
5
8
91
3
,1
5
5
8
91
Movement
in deferred tax
P
r
o
p
e
r
t
y,
plant and
equipment
£’
000
Rolled-ov
er
gain
£’
000
Derivati
ve
financial
instr
uments
£’
000
Defined
benefit
pension
scheme
£’
000
Share
option
charges
£’
000
To
t
a
l
£’
000
Ba
lan
ce at 1 J
anu
ar
y 2020
1,
4
8
1
548
34
(
1,1
7
7
)
(
2
11
)
6
75
Charged/
(credit
ed) to t
he income st
atement
505
65
–
(
37
)
(5
8)
47
5
Recognised in o
ther comprehensiv
e income and
equity
–
–
25
6
(46
7
)
(4
8)
(25
9)
Ba
lan
ce at 31 De
cem
be
r 2020
1
,986
613
290
(
1,
6
8
1)
(
3
17
)
8
91
Ba
lan
ce at 1 J
anu
ar
y 2021
1
,986
6
13
290
(1,
6
81)
(
3
17
)
8
91
Cha
rge
d to the i
nco
me st
atem
ent
1,
8
2
4
19
3
5
73
40
2
,1
3
5
Recognised in o
ther comprehensiv
e income and
equity
–
–
(376
)
444
61
12
9
Ba
la
n
ce a
t 31 De
ce
m
be
r 2
0
21
3
,
810
806
(
8
1)
(
1
,1
6
4
)
(2
16
)
3
,1
5
5
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
13
9
Zot
efoams plc
An
nua
l Re
por
t 2021
20. Issued share
capital
Iss
ue
d, all
ot
ted an
d fu
lly p
aid o
rdi
nar
y sha
re
s of 5p ea
ch:
Number of
share
s
Par
value
£’
000
Share
premium
£’
000
To
t
a
l
£’
000
Op
en
ing b
ala
nc
e 1 Jan
ua
r
y 2020
4
8
,
3
0
1,
2
3
4
2
,
415
4
4
,1
7
8
46,593
Share issue
to
Employee
Benefit T
rust
320,0
0
0
16
–
16
As at 31 Dec
em
be
r 2020
4
8
,
6
2
1,
2
3
4
2,4
31
4
4
,1
7
8
46,
609
At 1 Ja
n
ua
r
y 2
0
21 a
nd 31 D
ec
e
mb
er 2
0
21
48,621
,234
2
,
4
31
4
4
,17
8
46,609
Th
e hol
de
rs of o
rdin
ar
y s
ha
res a
re e
ntitl
ed to re
ce
ive di
vi
de
nds a
s de
cl
are
d fro
m time to ti
me an
d are e
nti
tle
d, on a po
ll, to one vote p
er s
har
e at me
etin
gs
of t
he Company
.
Na
t
ur
e a
nd p
ur
p
os
e of o
th
e
r re
se
r
ve
s
Capital r
edemption
reser
ve
On th
e bu
y-bac
k and c
an
ce
lla
tion o
f prefe
re
nce s
ha
res, a
n am
oun
t equ
al to th
e par va
lu
e was tr
ans
fer
red f
rom re
tai
ne
d ea
rn
ing
s to the ca
pi
tal re
de
mpti
on
reser
ve
for capital mai
ntenance purposes
.
T
ranslation reser
ve
Exchange differences arising on t
ranslation
of t
he foreign
control
led entity are
recognised in o
ther compr
ehensive income and
accumulat
ed in a
separate
res
er
v
e with
in e
qui
t
y
. T
he c
umu
lati
ve am
oun
t is re
cla
ss
ifie
d to the i
nco
me st
atem
ent w
he
n the n
et inve
stm
ent i
s dis
pos
ed of.
Hedging rese
r
ve
Th
e he
dgi
ng re
se
r
ve inc
lu
de
s the c
ash fl
ow he
dg
e res
er
ve a
nd th
e cos
ts of he
dg
ing re
se
r
ve (se
e note 21 for deta
il
s)
. Th
e ca
sh flow h
ed
gin
g res
er
v
e is
use
d to rec
og
nis
e the ef
fec
tive p
or
ti
on of ga
ins o
r lo
sse
s on d
er
iva
tive
s that a
re de
si
gna
ted an
d qu
ali
f
y as c
as
h flow he
dg
es. A
mo
unts a
re su
bse
qu
entl
y
reclassified t
o the
income stat
em
ent as
appropriat
e.
21
. F
inancial instruments and financial
risk management
Policy
Th
e Gro
up’
s a
nd Co
mp
any’s prin
cip
al fin
an
cia
l ins
tru
me
nts in
clu
de c
as
h in ha
nd a
nd at ba
nk a
nd in
tere
st-bea
ri
ng lo
ans a
nd b
or
rowin
gs, th
e ma
in
pur
po
se of w
hic
h is to prov
ide fi
na
nce f
or the G
rou
p’
s an
d Co
mpa
ny’
s op
era
tion
s. Fore
ig
n excha
ng
e der
iv
ative
s are u
se
d to hel
p man
ag
e the G
roup’
s an
d
Co
mpa
ny’
s cur
re
ncy ex
pos
ure. Pe
r the G
rou
p’
s an
d Com
pa
ny’
s pol
icy
, no tr
adi
ng in fi
na
nci
al in
str
ume
nts i
s und
er
t
ake
n.
Th
e mai
n ri
sks a
ri
sin
g fro
m the G
roup’
s an
d Com
pa
ny’
s fi
na
nci
al i
nstr
um
ent
s are c
red
it ri
sk, i
ntere
st ra
te ris
k, liq
ui
dit
y r
isk a
nd fo
rei
gn cu
rre
nc
y ris
k. T
he
Board r
eviews and
agrees policies f
or managing
each of
these risks
and they
are summarised
below
. These policies hav
e remained consist
ent thro
ughout
t
h
e
y
e
a
r.
Credit risk
Cre
dit r
is
k is ma
na
ged o
n a Gro
up b
asi
s, except f
or cr
edi
t ri
sk re
lati
ng to acc
ou
nts re
ce
iva
ble b
ala
nc
es. E
ach l
oc
al e
ntit
y i
s res
pon
sib
le fo
r ma
nag
ing
an
d ana
lys
in
g the c
red
it ri
sk fo
r eac
h of the
ir n
ew cl
ien
ts befo
re st
and
ard p
aym
ent a
nd d
eli
ver
y term
s an
d con
di
tion
s are of
fere
d. Cre
di
t ris
k ar
ise
s
fro
m ca
sh an
d ca
sh e
qui
val
ent
s and d
er
iva
tive fi
nan
ci
al in
str
ume
nts w
ith ba
nks a
nd fi
nan
ci
al in
stit
uti
ons, a
s wel
l as cre
di
t exp
osu
res to cu
stom
er
s,
inc
lud
in
g outs
ta
ndi
ng re
ce
iva
ble
s an
d co
mmi
tte
d tra
nsa
cti
ons. A fi
na
nci
al a
sse
t is co
nsi
de
red i
n def
aul
t wh
en th
e cou
nter
pa
r
t
y fai
ls to pay its c
ont
rac
tua
l
obl
ig
atio
ns. Fi
nan
ci
al as
se
ts are w
ri
tte
n of
f wh
en th
ere i
s no ex
pe
ctat
ion of re
cove
r
y.
Ma
nag
em
ent h
as a c
red
it po
lic
y in pl
ac
e and th
e exp
osu
re to cre
dit r
is
k is mo
ni
tored o
n an o
ngo
ing b
asi
s. Cre
di
t eval
uati
ons a
re pe
r
fo
rme
d for c
usto
mer
s
of
fe
red c
red
it ove
r a cer
tai
n am
oun
t. The G
rou
p and C
om
pany d
o not re
qu
ire co
ll
atera
l in re
sp
ec
t of fina
nc
ial a
ss
ets.
At the st
atem
ent of fi
na
nci
al p
osi
tio
n date the
re we
re no s
ign
ific
an
t con
ce
ntra
tion
s of cre
di
t ris
k. Th
e ma
x
im
um exp
os
ure to cre
di
t ris
k is re
pre
se
nted by
the c
ar
r
yi
ng a
mou
nt of ea
ch fi
nan
ci
al as
set, in
cl
udi
ng de
ri
vati
ve fina
nc
ial i
nst
rum
en
ts, in th
e state
me
nt of fin
anc
ia
l pos
iti
on.
Note
s
Continued
14
0
Zot
efoams plc
An
nua
l Re
por
t 2021
21
. F
inancial instruments and financial
risk management (
continued)
Credit quality of
financial assets
Counterparties without external credit
rating
:
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
E
xis
tin
g cus
tome
rs w
ith no d
efa
ult
s in the p
ast
20,5
29
19
,
42
7
14
,
0
3
9
1
5
,
5
11
E
xis
tin
g cus
tome
rs w
ith so
me d
efau
lts i
n the pa
st, net o
f imp
air
me
nt al
lowa
nce
356
339
3
17
325
20,8
85
19
,
76
6
14
,
3
5
6
15
,
8
3
6
Cas
h at b
an
k
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Moody’
s P
-
1
7,
8
4
9
8,220
5,03
4
6,3
28
Moody’
s P
-3
206
283
–
–
8,055
8,5
03
5,0
34
6,
328
Derivative financial
assets
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Moody’
s P
-
1
92
966
92
966
Moody’
s P
-
2
81
6
14
81
6
14
17
3
1,
5
8
0
17
3
1,
5
8
0
Wh
ile c
as
h and c
as
h eq
uiv
ale
nt a
re sub
je
ct to imp
ai
rme
nt rev
iew u
nd
er IF
RS 9 “F
ina
nc
ial I
nstr
um
ent
s”
, the id
en
tifie
d im
pai
rm
ent l
os
s was im
mate
ri
al
(2
020
: immat
er
ial)
.
T
rad
e re
cei
vab
le
s are a
na
lys
ed a
s foll
ows:
Grou
p
Company
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Gross carr
ying amount
20,
980
19
,7
9
8
14
,
3
6
7
15
,
8
4
7
– due f
or le
ss t
han 6
0 day
s
2
0
,1
3
2
19
,
3
2
4
14
,
2
4
8
1
5
,
8
41
– due f
or mo
re tha
n 60 d
ays
848
4
74
11
9
6
E
x
pe
c
ted l
o
ss r
ate
– due f
or le
ss t
han 6
0 day
s
0.
0
5%
0.0
6%
0
.0
8%
0
.07%
– due f
or mo
re tha
n 60 d
ays
9
.
9
1%
4.4
3%
0.0
0%
0.0
0%
Loss allow
ance
95
32
11
11
T
rad
e re
cei
vab
le
s net of a
ll
owanc
es
20,8
85
19
,7
6
6
14
,
3
5
6
15
,
8
3
6
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
141
Zot
efoams plc
An
nua
l Re
por
t 2021
21
. F
inancial instruments and financial
risk management (
continued)
Los
s all
owan
ce
s an
aly
se
d as fol
lows:
Grou
p
£’
000
Com
pany
£’
000
At 1 Jan
ua
r
y 2020
11
2
49
Inc
rea
se i
n los
s all
owan
ce re
co
gn
ise
d in pr
ofit or l
os
s dur
in
g the ye
ar
11
11
Receivables written o
f
f during t
he year
as uncollectable
(42)
–
Reve
rs
al of l
oss a
llo
wanc
e on c
oll
ec
tio
n of due
s
(49
)
(49
)
At 3
1 De
ce
mb
er 2020
32
11
At 1 Jan
ua
r
y 2021
32
11
Inc
rea
se i
n los
s all
owan
ce re
co
gn
ise
d in pr
ofit or l
os
s dur
in
g the ye
ar
96
11
Receivables written o
f
f during t
he year
as uncollectable
–
–
Reve
rs
al of l
oss a
llo
wanc
e on c
oll
ec
tio
n of due
s
(33)
(
11
)
At 31 De
c
em
be
r 2
0
21
95
11
Th
e nor
ma
l ter
ms of tra
de ar
e bet
we
en 3
0 and 9
0 day
s fro
m the e
nd of th
e mon
th of invo
ice.
Th
e cre
dit q
ua
lit
y of tr
ade re
ce
iva
bl
es th
at ar
e nei
the
r pa
st du
e nor i
mpa
ire
d is a
sse
ss
ed i
ndi
vi
dua
ll
y bas
ed o
n cre
dit h
istor
y an
d exp
er
ien
ce. In 20
2
1
an
d 2020, the Gro
up a
nd Co
mp
any in
sur
ed a ma
teri
al p
or
ti
on of it
s trad
e rec
ei
vab
le ba
la
nce
s to mit
iga
te cred
it r
isk. T
he u
ni
nsu
red ex
pos
ure a
s at
31Dece
mb
er 2021 for th
e Gro
up was £1
3,0
1
1
k (2020: £1
2,
037k) an
d for th
e Com
pa
ny was £7
,
1
83
k (2020: £8,467
k). Th
e Grou
p an
d the C
omp
any m
ake
prov
isi
ons a
ga
ins
t trad
e rec
ei
vab
le
s, suc
h prov
isi
ons b
ei
ng ba
se
d on th
e deb
tor’
s p
ri
or c
red
it hi
stor
y a
nd k
nowl
ed
ge of a
ny adve
rs
e co
ndi
tio
ns af
fe
cti
ng
the d
ebtor (e.g. rece
ive
rs
hip o
r li
qui
dati
on). The D
ire
ctor
s bel
ieve a
n ade
qu
ate prov
isi
on h
as be
en m
ad
e for tra
de re
ce
iva
ble
s at th
e yea
r en
d. Non
e of the
am
ount
s owed by G
roup u
nd
er
t
ak
ing
s are i
mpa
ire
d.
Interest rate
risk
Th
e Gro
up’
s a
nd Co
mp
any’s interes
t rate r
isk a
ri
ses f
rom l
on
g-term b
or
rowi
ngs a
nd sh
or
t-term b
orr
owin
gs. B
orr
owin
gs is
su
ed at va
ri
ab
le ra
tes exp
ose
the G
rou
p and C
om
pany to c
ash fl
ow inte
res
t rate ri
sk. B
or
rowi
ngs i
ssu
ed a
t fixed r
ates ex
pos
e the G
rou
p to fair va
lu
e inter
est r
ate ri
sk.
Th
e Gro
up an
d Co
mpa
ny have s
tron
g cas
h ge
ne
rati
on f
rom it
s ope
rati
on
s and c
los
el
y mo
nitor
s its b
or
rowi
ng leve
ls to ma
na
ge the i
ntere
st r
ate ris
k.
Th
e inter
est r
ate profi
le of th
e Gro
up’
s a
nd Co
mpa
ny’
s bo
rrow
ing
s at 31 Dec
em
be
r is sh
own b
elow:
Group
20
21
20
20
Effe
ctive
interest rate
%
Fixed
rates
£’
000
Variable
rates
£’
000
Ef
fec
tive
inte
re
st
rate
%
Fi
xed
rate
s
£’
000
V
ariable
rate
s
£’
000
Dollar short-
term borrowings
1.
8
6%
–
4
,
8
12
2.3
5%
–
500
Sterling short
-t
erm borrowings
1.
8
4%
–
6,75
0
1.
9
7
%
–
8,
25
0
Euro
short-
term borr
owings
1
.
8
1%
–
14
,
6
75
2
.1
0
%
–
14
,
8
4
2
Dollar long-
term borrowings
2
.
0
3%
–
15
,
2
8
4
2.
3
5%
–
19
,
4
9
2
To
t
a
l
*
–
41,
5
2
1
–
43,0
84
Company
20
21
20
20
Effe
ctive
interest rate
%
Fixed
rates
£’
000
Variable
rates
£’
000
Ef
fec
tive
inte
re
st
rate
%
Fi
xed
rate
s
£’
000
V
ariable
rate
s
£’
000
Dollar short-
term borrowings
1.
8
6%
–
4
,
8
12
2.3
5%
–
50
0
Sterling short
-t
erm borrowings
1.
8
4%
–
6,75
0
1.
9
7
%
–
8,
25
0
Euro
short-
term borr
owings
1
.
8
1%
–
14
,
6
75
2
.1
0
%
–
14
,
8
4
2
Dollar long-
term borrowings
2
.
0
3%
–
15
,
2
8
4
2.
3
5%
–
19
,
4
9
2
To
t
a
l
*
–
41,
5
2
1
–
43,0
84
*
T
he tot
al a
mou
nt of £41
,521k is gro
ss of a
n ou
ts
ta
ndi
ng a
mo
unt o
f £247k loan o
ri
gi
na
tio
n fe
es p
aid u
pf
ron
t an
d be
in
g am
or
ti
se
d ove
r the p
er
io
d of th
e lo
an (20
20: £43,0
84
k is gr
os
s of £391k loa
n
origination f
ees).
Th
e imp
act o
n pos
t ta
x p
rofit of a 1
% sh
if
t i
n the va
ri
ab
le rate b
orr
owin
gs wou
ld b
e £336
k (2020: £349
k).
Note
s
Continued
14
2
Zot
efoams plc
An
nua
l Re
por
t 2021
21
. F
inancial instruments and financial
risk management (
continued)
Liquidity risk
Gro
up Fi
na
nce p
er
f
orm
s ca
sh fl
ow fore
ca
stin
g in th
e ope
rati
ng e
ntiti
es of t
he G
roup, wh
ich i
s the
n agg
reg
ated. G
rou
p Fin
anc
e mo
nitor
s rol
lin
g fore
ca
sts
of t
he Group
’
s liquidity requirements
to
ensure tha
t it has
suf
ficient cash
to
meet operational
needs, while
maintaining sufficient headroom
on its
undrawn
co
mmi
tte
d bor
row
ing f
aci
liti
es (note 18) at all tim
es, s
o that th
e Gro
up do
es n
ot bre
ac
h bor
rowi
ng li
mi
ts or cov
ena
nts (w
he
re ap
pli
ca
ble) o
n any of it
s
borrowing
facilities.
Such for
ecasting tak
es int
o consideration t
he Group
’
s debt
financing plans,
covenant
compliance,
compliance with i
nternal balance
sh
eet r
atio ta
rg
ets an
d any a
ppl
ic
abl
e ex
ter
nal r
egu
lato
r
y or l
ega
l re
qui
rem
ents
.
The follo
wing are
the cont
ractual ma
turities of
financial liabilities, includ
ing estimat
ed payments and
ex
cluding the
ef
fect of
netting agreements
:
Group
20
21
2020
Carr
yi
ng
amount
£’
000
Contrac
tual
ca
s
h flow
s
£’
000
1 ye
ar
or l
es
s
£’
000
1 to 2
year
s
£’
000
More
than
2 ye
ar
s
£’
000
Carr
ying
amount
£’
000
Contract
ual
ca
sh fl
ows
£’
000
1 yea
r
or less
£’
000
1 to 2
years
£’
000
More
than
2 y
ears
£’
000
Non-derivative
financial
liabilities
Interest
-bearing loans and
borrowings
(
41
,
2
74
)
(42
,
0
52
)
(
2
7,
2
1
2
)
(
1
4,8
40)
–
(42,6
9
3
)
(44,388)
(
2
4
,1
9
9
)
(5
,40
0
)
(
14
,7
8
9
)
T
rad
e an
d othe
r paya
ble
s
(5,3
64)
(5,3
64)
(5,36
4)
–
–
(4,673)
(4,673)
(
4,673)
–
–
Lease liabilit
ies
(
1
,1
2
9
)
(
1
,1
3
0
)
(
479
)
(3
63)
(2
88
)
(1,
4
0
6
)
(
1,
4
6
7
)
(4
4
8
)
(39
9)
(620)
T
otal non-derivative
financial liabilities
(
4
7,
7
6
7
)
(4
8
,
5
4
6)
(33,
055)
(15
,
2
0
3
)
(2
88
)
(4
8
,7
7
2
)
(5
0,528)
(
29,
320
)
(
5
,79
9
)
(
15
,
4
0
9
)
Derivative financial
liabilities
(60
0)
(6
00
)
(60
0)
–
–
(53)
(53)
(53)
–
–
Company
20
21
2020
Carr
yi
ng
amount
£’
000
Contrac
tual
ca
s
h flow
s
£’
000
1 ye
ar
or l
es
s
£’
000
1 to 2
year
s
£’
000
More
than
2 ye
ar
s
£’
000
Carr
ying
amount
£’
000
Contract
ual
ca
sh fl
ows
£’
000
1 yea
r
or l
es
s
£’
000
1 to 2
years
£’
000
More
than
2 y
ears
£’
000
Non-derivative
financial
liabilities
Int
erest
-bearing lo
ans
an
dbor
rowi
ngs
(
41
,
2
74
)
(42
,
0
52
)
(
2
7,
2
1
2
)
(
1
4,8
40)
–
(42,6
9
3
)
(44,388)
(
2
4
,1
9
9
)
(5
,40
0
)
(
14
,7
8
9
)
T
rad
e an
d othe
r paya
ble
s
(
4
,13
9
)
(
4
,1
3
9
)
(
4
,1
3
9
)
–
–
(3,9
63)
(3,9
63
)
(3,96
3)
–
–
Lease liabilit
ies
(52
4)
(
516
)
(249)
(20
0)
(67
)
(
78
3)
(
8
15
)
(29
6)
(252
)
(267
)
T
otal non-derivative
financial liabilities
(45,937)
(4
6,7
07
)
(
3
1,
6
0
0
)
(1
5,040
)
(67)
(
4
7,
4
3
9
)
(
4
9
,1
6
6
)
(28
,45
8)
(5
,6
52)
(15
,
0
5
6
)
Derivative financial
liabilities
(60
0)
(6
00
)
(60
0)
–
–
(53)
(53)
(53)
–
–
Foreign
currency risk
Th
e Gro
up an
d Co
mpa
ny op
era
te inter
nati
on
all
y an
d are ex
pos
ed to for
eig
n exch
ang
e ri
sk ar
is
ing f
rom va
ri
ou
s cur
ren
cy ex
pos
ure
s, pr
ima
ri
ly wi
th re
sp
ect
to
the eur
o and US
dollar
. Foreign e
xchange risk
arises from r
ecognised assets and
liabilities and
future commercial
transaction
s.
Fore
ig
n excha
nge r
is
k is ma
na
ged c
en
tral
ly by G
rou
p Fin
anc
e. Fore
ig
n excha
ng
e ris
k ar
ise
s wh
en f
utu
re co
mm
erc
ial t
ran
sac
tio
ns or re
co
gn
ise
d as
sets o
r
liabilities ar
e denominat
ed in a
currency tha
t is n
ot the
C
ompany
’
s functional currency
.
Th
e Gro
up’
s p
oli
cy is to us
e for
wa
rd cu
rre
ncy c
ont
rac
ts to cover a
pp
roxim
atel
y two
-thir
ds of th
e esti
mate
d net c
as
h fore
ign exc
ha
nge tr
adi
ng ex
pos
ure
for th
e eu
ro and U
S dol
la
r for th
e nex
t t
wel
ve mo
nths, a
s well a
s cove
r ap
prox
imate
ly 25
% of the e
sti
mate
d net c
as
h fore
ign exc
ha
nge tr
adi
ng ex
pos
ure
for th
e foll
owi
ng si
x mo
nths. T
he G
rou
p als
o he
dge
s its ex
po
sur
e to forei
gn c
urr
enc
y de
nom
ina
ted as
set
s, whe
re po
ss
ibl
e, by of
fs
et
ting th
em w
ith s
am
e-
currency liabilit
ies, primarily t
hrough borr
owing in
the r
elevant c
urrency
. These foreign
currency denominat
ed assets, which
a
re t
ranslat
ed on a
mark to
ma
rket ba
si
s ever
y m
ont
h and th
e move
me
nt ta
ken to the i
nco
me s
tatem
ent, in
cl
ude l
oa
ns mad
e by the C
om
pany to, an
d interc
om
pany t
radi
ng ba
la
nc
es
wi
th, its ove
rse
as s
ubs
id
iar
ie
s, the e
f
fec
t of wh
ich i
s ca
sh ne
ut
ral. T
hey a
lso i
ncl
ud
e non
-ster
lin
g acc
ou
nts re
ce
iva
ble, h
eld o
n the C
om
pany’s statem
ent
of fina
nc
ia
l pos
itio
n, the i
mpa
ct of wh
ic
h sho
ul
d rever
se th
rou
gh for
ward c
urr
enc
y co
ntrac
ts, bu
t are s
ubj
ec
t to the tim
ing b
et
wee
n ac
cou
nts re
ce
iva
bl
e
recordin
g and cash
received.
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
14
3
Zot
efoams plc
An
nua
l Re
por
t 2021
21
. F
inancial instruments and financial
risk management (
continued)
Th
e eur
o and U
S dol
la
r rates u
se
d in pr
epa
ri
ng th
e fina
nci
al s
tatem
en
ts are a
s foll
ows:
20
21
2020
Aver
ag
e
Closing
Average
Closing
Euro/
sterling
1
.1
6
3
1
.1
9
2
1
.1
2
5
1
.111
US dollar
/sterling
1.
3
76
1.
3
51
1.
2
8
4
1.
3
6
6
In respect o
f o
ther monetary assets
and liabilities held
in currencies o
ther than the
euro and
the US
dollar
, the
G
roup and
the Company ensure
that the
netex
po
sure i
s kept to a ma
nag
ea
bl
e leve
l by buy
in
g or se
ll
ing fo
rei
gn cu
rre
nc
ie
s at sp
ot rates, w
he
re ne
ce
ss
ar
y
, to add
res
s sh
or
t-term im
ba
lan
ce
s.
Wh
ere p
oss
ib
le, the G
rou
p tri
es to ho
ld th
e maj
or
it
y of its c
as
h and c
as
h eq
ui
vale
nt ba
la
nc
es in t
he lo
ca
l cur
re
ncy of th
e res
pe
cti
ve en
tit
y or
, f
or
bor
row
ing
s, in a cu
rre
ncy w
hi
ch pr
ovid
es a
n of
fs
et, al
bei
t of
ten p
ar
ti
al, ag
ain
st mo
net
ar
y wo
rk
in
g ca
pit
al n
et as
sets i
n that c
ur
ren
cy
.
Recognised
assets and liabilities
The table belo
w shows
non-derivativ
e financial ins
truments o
f the
Group and
Company in
currencies other
than st
e
rling
:
Gr
o
up – 2
0
21
Euro
£’
000
US dollar
£’
000
Oth
er
£’
000
To
t
a
l
£’
000
Cash and
c
ash equiv
alents
1,
4
8
3
2
,05
6
436
3
,
975
T
rade r
eceivables
3,494
11
,
2
1
2
1,
2
4
2
1
5,948
T
rad
e paya
ble
s
(
3
,0
16
)
(54
0)
(
3
17
)
(3,
873)
Gro
up – 20
20
Euro
£’
000
US dollar
£’
000
Other
£’
000
To
t
a
l
£’
000
Cash and
c
ash equiv
alents
834
3,
3
91
542
4,7
67
T
rade r
eceivables
3
,70
0
11
,
5
5
3
73
6
15
,
9
8
9
T
rad
e paya
ble
s
(2,
25
4)
(
522)
(
12
3
)
(
2,8
9
9)
Co
mp
a
ny – 2
0
21
Euro
£’
000
US dollar
£’
000
Oth
er
£’
000
To
t
a
l
£’
000
Cash and
c
ash equiv
alents
512
39
0
78
980
T
rade r
eceivables
3,28
8
6
,378
24
8
9
,
9
14
T
rad
e paya
ble
s
(2
,
6
0
1)
3
–
(2
,
598
)
Co
mpa
ny – 2020
Euro
£’
000
US dollar
£’
000
Other
£’
000
To
t
a
l
£’
000
Cash and
c
ash equiv
alents
512
2,
0
6
3
36
2
,
6
11
T
rade r
eceivables
3,3
52
8,
287
13
9
11,
7
7
8
T
rad
e paya
ble
s
(
2
,1
3
3
)
(
24
4)
–
(
2,
377
)
Note
s
Continued
14
4
Zot
efoams plc
An
nua
l Re
por
t 2021
21
. F
inancial instruments and financial
risk management (
continued)
Forecast
transact
ions
Th
e Gro
up an
d the C
om
pany c
la
ssi
f
y th
eir f
or
wa
rd excha
ng
e con
trac
ts us
ed to he
dge f
ore
ca
st tra
nsa
cti
ons a
s ca
sh flow h
ed
ge
s. Th
e fai
r val
ue of su
ch
for
wa
rd exch
ang
e co
ntra
cts is s
how
n in th
e tab
le b
elow:
31 De
c
em
be
r 2
0
21
Level 1
£’
000
Level 2
£’
000
Level 3
£’
000
To
t
a
l
£’
000
Assets
Forward e
xchange cont
racts
–
17
3
–
17
3
T
otal assets
–
173
–
17
3
Liabilities
Forward e
xchange cont
racts
–
(60
0)
–
(6
00)
T
otal liabilities
–
(60
0)
–
(60
0)
31 Dec
em
be
r 2020
Leve
l 1
£’
000
Leve
l 2
£’
000
Leve
l 3
£’
000
To
t
a
l
£’
000
Assets
Forward e
xchange cont
racts
–
1,
5
8
0
–
1,
5
8
0
T
otal assets
–
1,
5
8
0
–
1,
5
8
0
Liabilities
Forward e
xchange cont
racts
–
(5
3)
–
(53)
T
otal liabilities
–
(53
)
–
(5
3)
Th
e he
dge
d hi
ghl
y pro
bab
le fo
rec
as
t tran
sa
ctio
ns de
no
min
ated i
n fore
ign c
ur
ren
cy ar
e exp
ecte
d to occ
ur at va
ri
ous d
ates d
ur
ing th
e nex
t t
wel
ve mo
nths.
Ga
ins a
nd lo
ss
es re
co
gni
se
d in th
e hed
gin
g re
ser
ve in e
qui
ty o
n for
w
ard fo
rei
gn exch
ang
e co
ntra
cts a
s of 3
1 De
ce
mb
er 2021 are re
co
gni
se
d in the
inc
om
e state
me
nt in th
e pe
rio
d or p
er
iod
s du
rin
g wh
ich th
e he
dg
ed fo
rec
ast t
ran
sac
tio
n af
fe
cts th
e inc
om
e state
me
nt. Thi
s is g
ene
ra
lly w
ith
in t
wel
ve
mon
ths of th
e en
d of the re
por
ting p
er
io
d.
Hedge ineffectiveness
He
dge e
f
fec
tive
ne
ss i
s dete
rm
ine
d at the i
nc
epti
on of th
e hed
ge re
lat
ion
shi
p, and thro
ug
h pe
rio
di
c pros
pe
cti
ve ef
fe
cti
ven
es
s as
se
ssm
en
ts to ens
ure
that
an economic relat
ionship e
xists between t
he hedged it
em and hedging
instrument
. In
hedges of f
or
ward
ex
change contract
s, i
nef
fectiv
eness mainly
ar
ise
s if th
e tim
ing of th
e fore
c
ast tr
ans
ac
tion c
ha
ng
es f
rom wh
at wa
s ori
gin
al
ly e
stim
ated. T
he
re was n
o inef
fec
tive
ne
ss d
ur
ing 2021 or 2020 in r
ela
tion to
the f
or
ward
ex
change contract
s.
Estimation of fair
values
The follo
wing summarises the
major methods and
assumptions
used in esti
mating f
air values o
f financial i
nstruments r
eflected
in the
table abov
e. They
a
re
classified according
to
the f
ollowing fai
r value
hierarchy:
X
Leve
l 1
: quote
d pro
ce
ss (un
adj
uste
d) in a
cti
ve mar
kets fo
r ide
nti
cal a
ss
ets or l
ia
bil
iti
es
X
Leve
l 2: input
s othe
r tha
n quote
d pro
ce
ss in
clu
de
d wi
thin L
evel 1 th
at ar
e obs
er
va
bl
e for th
e as
set o
r lia
bil
it
y
, e
ith
er d
ire
ctl
y (i.e. as pr
ice
s) or in
di
rec
tly
(
derived
from
prices)
X
Leve
l 3: inpu
ts for th
e as
set o
r lia
bil
it
y th
at are n
ot bas
ed o
n obs
er
v
abl
e ma
rket d
ata (un
obs
er
va
bl
e inp
uts).
De
ri
vative fi
na
nci
al i
nstr
um
ents a
re va
lue
d us
ing H
an
del
sb
anke
n an
d NatWe
st mi
d-ma
rke
t rates (2020: Ha
nd
el
sba
nken a
nd N
atWes
t mid
-ma
rket r
ates) at
the st
atement
of financial
position dat
e.
Th
e matu
ri
ty p
rofil
e of the fo
r
war
d con
trac
ts as at 31 De
ce
mbe
r is a
s foll
ows:
Group
and Co
mpany:
20
21
2020
For
eig
n
currency
Contrac
t
valu
e
£’
000
T
ransaction
fair v
alue
£’
000
Contrac
t
fair v
alue
£’
000
Foreign
currency
Contract
value
£’
000
T
ransaction
fair v
alue
£’
000
Contract
fair v
alue
£’
000
Se
ll EUR
€3,
000
2,5
54
2
,522
32
€2,
8
0
0
2,
5
0
9
2
,
51
9
(10
)
Buy EUR
–
–
–
–
€600
553
566
(13
)
Sell USD
$38,300
2
7,
9
6
8
2
8,427
(4
59
)
$
3
3,6
0
0
2
6
,1
0
1
2
4
,
5
51
1,
5
5
0
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
14
5
Zot
efoams plc
An
nua
l Re
por
t 2021
21
. F
inancial instruments and financial
risk management (
continued)
Sensitivit
y analysis
In ma
na
gin
g cur
ren
cy r
isk
s, the G
roup a
nd C
omp
any a
im to red
uc
e the im
pac
t of sh
or
t-term flu
ctu
atio
ns on t
hei
r ea
rn
ing
s. Ove
r the l
on
ger te
rm, h
owever
,
cha
ng
es i
n fore
ign exc
ha
nge wo
ul
d have an i
mpa
ct o
n ear
ni
ngs
.
In re
sp
ect of t
he retr
an
slat
ion of m
on
eta
r
y item
s at 31 Dec
em
ber 20
2
1
, i
t is es
tim
ated th
at an i
ncre
as
e of on
e pe
rce
ntag
e po
int in t
he val
ue of s
terl
ing
aga
ins
t the e
uro wo
uld i
ncr
ea
se the G
rou
p’
s profi
t be
fore ta
x by app
roxi
matel
y £6k (2020: i
ncre
as
e of £1
1
k
) befo
re for
ward exch
an
ge c
ontr
acts a
nd £
2k
(2020: inc
rea
se of £39
k) a
f
ter for
ward exc
han
ge c
ontr
acts a
re in
clu
de
d.
In re
sp
ect of t
he retr
an
slat
ion of m
on
eta
r
y item
s at 31 Dec
em
ber 20
2
1
, i
t is es
tim
ated th
at an i
ncre
as
e of on
e pe
rce
ntag
e po
int in t
he val
ue of s
terl
ing
aga
ins
t the U
S dol
la
r woul
d de
cre
ase t
he G
roup’
s profi
t befo
re ta
x by a
ppr
oxim
ately £
240k (2020: £25
1
k) b
efore f
or
wa
rd excha
ng
e con
trac
ts an
d £79k
(2020: £82k) af
ter fo
r
war
d excha
nge c
ont
rac
ts are i
ncl
ud
ed.
Financial
instruments by
category
Group
20
21
20
20
Financial
assets at
amortised
cost
£’
000
Derivatives
us
e
d fo
r
hedging
£’
000
Financial
liabilities at
amortised
cost
£’
000
Financial
assets
at
amortised
cost
£’
000
Derivati
ves
used for
hedging
£’
000
Financial
liabilities at
amortised
cost
£’
000
T
rad
e an
d othe
r rec
ei
vab
le
s
23,323
–
–
2
1,
0
9
7
–
–
Cash and
c
ash equiv
alents
8,0
55
–
–
8,503
–
–
Ba
nk over
draf
t
–
–
–
–
–
–
Derivative
financial inst
ruments
– a
ss
ets
–
173
–
–
1,
5
8
0
–
–
liabilities
–
(60
0)
–
–
(53
)
–
Interest
-bearing loans and
borrowings
–
–
(
41
,
2
74
)
–
–
(4
2,6
9
3
)
T
rad
e an
d othe
r paya
ble
s
–
–
(5,3
64)
–
–
(4,673)
Lease liabilit
y
–
–
(
1
,1
2
9
)
–
–
(1,
4
0
6
)
Company
20
21
20
20
Financial
assets at
amortised
cost
£’
000
Derivatives
us
e
d fo
r
hedging
£’
000
Financial
liabilities at
amortised
cost
£’
000
Financial
assets
at
amortised
cost
£’
000
Derivati
ves
used for
hedging
£’
000
Financial
liabilities at
amortised
cost
£’
000
T
rad
e an
d othe
r rec
ei
vab
le
s
54,0
0
8
–
–
4
9
,1
3
9
–
–
Cash and
c
ash equiv
alents
5,03
4
–
–
6
,328
–
–
Ba
nk over
draf
t
–
–
–
–
–
–
Derivative
financial inst
ruments
– a
ss
ets
–
173
–
–
1,
5
8
0
–
–
liabilities
–
(60
0)
–
–
(53
)
–
Interest
-bearing loans and
borrowings
–
–
(
41
,
2
74
)
–
–
(4
2,6
9
3
)
T
rad
e an
d othe
r paya
ble
s
–
–
(
4
,1
3
9
)
–
–
(3,9
63
)
Lease liabilit
y
–
–
(524)
–
–
(
78
3)
Capital management
Th
e Gro
up’
s o
bje
cti
ves w
he
n ma
nag
ing c
ap
ita
l are to s
afeg
ua
rd its a
bil
it
y to con
tinu
e as a g
oin
g co
nce
rn, i
n ord
er to prov
id
e retur
ns fo
r sha
re
hol
de
rs
an
d ben
efi
ts for oth
er st
ake
hol
de
rs, a
nd to mai
nta
in a
n optim
al c
ap
ita
l str
uct
ure to red
uc
e the c
ost of c
ap
ita
l. In ord
er to ma
int
ain o
r adj
us
t the c
api
ta
l
str
uct
ure, the G
rou
p ca
n adj
ust t
he am
ou
nt of di
vid
en
ds pa
id to sh
are
ho
lde
rs, i
ssu
e new s
ha
res o
r red
ee
m exi
sti
ng on
es o
r bor
row fu
nd
s fro
m fina
nc
ial
institutions.
Th
e Gro
up mo
ni
tors c
api
ta
l on th
e bas
is of the f
oll
owin
g leve
rag
e rati
o: net bo
rrow
ing
s di
vid
ed by EB
ITDA (as p
er ba
nk f
aci
lit
y ag
ree
me
nt).
i) Loan
cov
enants
Und
er th
e ter
ms of it
s bor
rowi
ng fa
cil
iti
es, th
e Gro
up is r
equ
ire
d to com
ply w
ith t
he fol
low
ing fi
nan
ci
al cov
ena
nts:
X
Th
e rati
o of net b
orr
owin
gs o
n the la
st d
ay of the re
leva
nt pe
ri
od to ea
rn
in
gs be
fore in
tere
st, ta
x, d
epr
ec
iati
on an
d am
or
ti
sati
on, sh
are of p
rofit
/(lo
ss)
fro
m joi
nt ven
ture, e
qui
t
y-set
tle
d sh
are
-ba
se
d paym
en
ts and exc
epti
on
al ite
ms (EB
ITDA) s
ha
ll not exc
ee
d 3.00:
1
.0
0.
X
Th
e rati
o of EBIT
DA to net fin
anc
e ch
arg
es i
n res
pe
ct of th
e rel
evan
t per
io
d sh
all n
ot be le
s
s than 4.0
0:
1
.0
0.
The Group has
c
omplied with
these co
venants
throughout
the financial y
ear
.
Note
s
Continued
14
6
Zot
efoams plc
An
nua
l Re
por
t 2021
21
. F
inancial instruments and financial
risk management (
continued)
Net b
or
rowin
gs c
omp
ri
se cu
rre
nt a
nd no
n-c
ur
rent i
ntere
st-be
ar
ing l
oa
ns an
d bor
row
ing
s of £4
1
,27
4k, a
s pe
r note 1
8, a
nd c
as
h and c
as
h eq
uiv
ale
nts
of£8,055k a
s pe
r note 1
6.
As a
t
31
December
20
21
£’
000
As at
3
1 December
2020
£’
000
Net borro
wings
3
3
,
219
3
4
,1
9
0
EB
IT
DA
1
6
,11
7
1
6
,1
5
5
Net borro
wings/EBITDA
2
.0
6
2
.1
2
Net fin
ance charges
1,
0
0
2
6
81
EBITD
A
/Net finance charges
16
.0
8
2
3
.72
EBITD
A comprises:
Note
20
21
£’
000
2020
£’
000
Profit f
or the ye
ar
4,
376
7,1
6
3
Depreciation
and amortisation
1
0
,11
,1
2
7,
6
2
4
6
,
74
6
Finance costs
6
1
,1
0
5
846
Share o
f loss/
(
profit
) from joint
ventur
e
9
20
(38)
Equity-se
ttled share-based payments
24
36
0
30
0
Ta
x
a
t
i
o
n
7
2,6
32
1
,1
3
8
1
6
,11
7
1
6
,1
5
5
Net fi
na
nce c
ha
rge
s co
mpr
is
e intere
st i
nco
me of £1
1k and fina
nc
e co
sts exp
en
se
d of £1
,01
4k as p
er n
ote 6.
Th
e Gro
up’
s o
bje
cti
ve is to ma
inta
in l
ever
age b
el
ow the B
oard’s app
etite of 2.0. However
, i
t has a
cc
epted a
n in
cre
ase i
n thi
s rati
o, whil
e rem
ai
nin
g bel
ow
the co
venant le
vel,
as the
Group in
vested
in its
capacity expansion pr
ogramme.
Subject t
o short-
term macro-economic and
geopolitical vola
tility as w
ell
as a
ny poten
tial l
on
ge
r
-ter
m stra
tegi
c inve
stme
nts, i
t is exp
ec
ted to red
uc
e qui
ck
ly b
ack b
el
ow the B
oard’s app
etite as c
ap
aci
t
y util
is
atio
n imp
roves.
Th
e ban
k cove
na
nt de
fini
tio
n doe
s not i
ncl
ude t
he im
pac
t of IFRS 16 “Lea
se
s”
, whi
ch wo
uld h
ave move
d the r
atio f
rom 2.06 to 2.
13.
Th
e Gro
up de
fine
s it
s retur
n on c
ap
ita
l as o
pe
ratin
g profi
t befo
re exce
ptio
nal i
tem
s div
id
ed by th
e avera
ge s
um of its e
qu
it
y
, n
et de
bt an
d othe
r no
n-
current liabilit
ies. This
measure ex
clude
s acquir
ed intangible
assets and
their amortisation
costs.
The Group also
excludes significant
capacity investmen
ts
und
er c
on
stru
cti
on u
ntil th
ey ente
r pro
duc
tio
n. In 2021
, the ret
urn o
n ca
pi
tal wa
s 6.
1
% (2020: 9.0%
) a
nd th
ere a
re no l
ong
er a
ny si
gni
fic
ant c
apa
ci
ty
invest
ments t
o be ex
cluded follo
wing the
commissioning o
f the P
oland manufacturing facility in
Februar
y 202
1
.
2
2
. Com
mi
t
me
nt
s – Gr
ou
p
Grou
p
Compa
ny
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Cap
ita
l exp
en
dit
ure c
ontr
acte
d for at th
e en
d of the re
po
r
ting p
er
io
d but n
ot yet in
cu
rre
d
is as fo
ll
ows:
Prop
er
t
y
, pl
ant a
nd e
qui
pme
nt
1,
3
8
3
1,
4
7
5
74
2
471
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
147
Zo
tef
oams plc
An
nua
l Re
por
t 2021
23. Po
st
-employment
benefits
Defined benefit
pension plans
Th
e Com
pa
ny op
erate
s a UK re
gi
stere
d tru
st-bas
ed p
ens
io
n sch
em
e that p
rovi
de
s defi
ne
d be
nefi
ts. In 20
01
, t
he Co
mpa
ny cl
ose
d the D
efi
ned B
en
efit
Pens
io
n Sch
em
e (“D
B Sch
em
e”) to new m
em
be
rs, wh
il
e in 20
05 th
e DB Sc
he
me wa
s clo
sed to f
utu
re ac
cru
al of b
en
efits, a
nd a
ll ac
tive m
em
be
rs at
that ti
me tr
ans
fer
red to a d
efin
ed c
ontr
ibu
tio
n sc
hem
e, sub
sta
ntia
ll
y de
-ri
sk
ing t
he Co
mpa
ny’s financ
ia
l and a
cc
oun
ting ex
po
sur
e to the DB S
che
me’
s
obl
ig
atio
ns. Fol
low
ing l
eg
al ad
vi
ce in 201
7 that t
he cl
osu
re ha
d not be
en c
om
ple
te with r
esp
ec
t to the br
ea
ki
ng of li
nka
ge wi
th f
utur
e inc
rea
se
s in s
ala
r
y
,
am
end
me
nts we
re mad
e in 201
8 a
nd th
e lin
kag
e dul
y bro
ken.
Pens
io
n be
nefi
ts are l
inke
d to the me
mb
er
s’ final p
en
sio
na
ble s
al
ar
ie
s and s
er
vic
e at th
eir r
etire
me
nt (or da
te of leav
in
g if ea
rl
ie
r). The T
r
uste
es a
re
res
po
nsi
ble fo
r ru
nn
ing th
e Sc
hem
e in ac
co
rda
nc
e with t
he Sc
he
me’
s T
ru
st D
ee
d and R
ule
s, wh
ic
h set o
ut th
eir p
ower
s. Th
e T
r
uste
es of th
e Sc
hem
e
are re
qu
ire
d to act in th
e be
st in
tere
sts of th
e be
nefi
cia
ri
es of th
e Sc
he
me. Th
er
e is a req
ui
rem
ent th
at on
e-th
ird of th
e T
ru
stee
s are n
om
inate
d by the
me
mbe
rs of t
he Sc
he
me.
There are
three cat
egor
ies of
pension scheme members
:
X
Defe
r
red m
emb
er w
ith s
al
ar
y l
ink
age: cu
rre
nt e
mpl
oyee
s of the C
om
pan
y who h
ave not c
ons
ente
d to the bre
ak i
n the
ir s
ala
r
y li
nk;
X
Defe
r
red m
emb
er
s: for
mer a
nd c
urr
ent e
mp
loye
es of th
e Co
mpa
ny not yet i
n rec
ei
pt of pe
nsi
on; an
d
X
Pensioner members
: in
receipt o
f pension.
Th
e defi
ne
d be
nefi
t obl
iga
tion i
s val
ue
d by proj
ec
ting t
he be
st e
stim
ate of fu
tur
e ben
efi
t outgo
in
gs (all
owi
ng for f
utu
re sa
la
r
y in
cre
as
es fo
r defe
rre
d
me
mbe
rs w
ith s
al
ar
y l
ink
age, re
valu
atio
n to retir
eme
nt fo
r defe
rr
ed me
mb
er
s an
d ann
ua
l pe
nsi
on in
cre
as
es fo
r all m
em
be
rs) an
d the
n dis
co
unti
ng
tothest
ateme
nt of fi
nan
cia
l po
sit
ion d
ate. Th
e maj
or
it
y of be
nefi
ts re
ce
ive in
cre
as
es in l
in
e with i
nfla
tion (su
bje
ct to a c
ap of no m
ore th
an 5% per
an
num).The va
lu
atio
n meth
od is k
now
n as th
e Proj
ec
ted Un
it M
etho
d. Th
e app
roxim
ate over
all d
ura
tio
n of the Sc
he
me’
s defi
ne
d be
nefi
t obl
iga
tion
asat31 Dec
em
be
r 2021 was 1
5 ye
ar
s (2020: 1
6 ye
ar
s)
.
Future
funding obligation
Th
e T
ru
stee
s ar
e req
uire
d to ca
rr
y o
ut a
n actu
ar
ia
l valu
ati
on eve
r
y thre
e ye
ar
s.
Th
e las
t act
uar
ia
l val
uati
on of th
e DB Sc
he
me wa
s pe
r
for
me
d by the DB S
ch
em
e Actu
ar
y fo
r the T
ru
stee
s as at 5 A
pr
il 2020. T
his va
lu
atio
n revea
le
d
afu
ndi
ng sh
or
t
fa
ll of £7
.
7 mi
lli
on.
In re
sp
ect of t
he de
fici
t in th
e DB Sc
he
me a
s at 5 Ap
ri
l 2020, the Co
mpa
ny ha
s agre
e
d to pay £643,
200 p.a. f
rom 1 Ju
ly 2021 for 5 ye
ar
s and 4 m
ont
hs.
In ad
diti
on, th
e Com
pa
ny wil
l pay £
21
6,00
0 p.a. to cover a
dmi
nis
trati
on ex
pe
nse
s, Paym
ent P
rotecti
on Fun
d lev
ie
s an
d pre
miu
ms fo
r de
ath in s
er
v
ic
e
lum
p su
ms as
so
cia
ted wi
th the S
che
me. T
he C
om
pany th
er
efore c
ur
rent
ly ex
pec
ts to pay £859,20
0 to the S
che
me d
ur
ing th
e ca
le
nda
r yea
r be
gi
nni
ng
1Jan
ua
r
y 2022.
Method and
assumptions
Th
e ini
tia
l res
ult
s of the va
lua
tion a
s at 5 A
pr
il 2020 have b
ee
n up
dated to 31 Dec
em
be
r 2021 by a qual
ifie
d ind
ep
en
de
nt ac
tua
r
y
.
The assumption
s used w
ere as f
ollows
:
As a
t
31 De
c
em
be
r 2
0
21
As at
31 Dec
em
be
r 2020
Di
s
co
un
t ra
te
1.
8
0%
1.
2
0
%
RPI in
flation
3.
4
0%
2.9
0
%
CPI
inflation
2
.9
0%
2.
3
0%
Salar
y incr
eases
2
.9
0%
2.
3
0%
Pension incr
eases
– Post 8
8 GMP
2
.4
0%
2
.1
0
%
– Non GMP
3.
3
0%
2.9
0
%
Reva
lua
tion o
f defe
rre
d pe
ns
ion
s in exce
ss of G
MP
2
.9
0%
2.
3
0%
Mor
tality (pre and post
-retirement)
100
% S3
PM
A
_
M /
10
0%
S
3
P
FA
_
M
CMI_
201
9_M/F
1.
2
5% (
y
o
b)
1
0
0% S3
PMA
_
M /
1
0
0% S3
PF
A
_
M
CMI_
20
1
9_
M/F
1
.25% (yob)
Life e
xpectancies (in years
)
:
Y
ea
r e
nd
e
d 31 De
ce
m
be
r 2
0
21
Y
ea
r en
de
d 31 Dec
em
be
r 2020
Males
Females
Males
Fema
les
For a
n ind
iv
idu
al ag
ed 6
5 in 2021
21.
3
2
3
.7
2
1.
3
23.6
At age 6
5 for a
n ind
iv
idu
al ag
ed 4
5 in 2021
22
.6
2
5.2
22.
6
25.
2
Note
s
Continued
14
8
Zote
foams plc
An
nua
l Re
por
t 2021
23. Po
st-emplo
y
ment benefits
(c
ontinued)
Risks
Th
roug
h the S
ch
em
e, the Co
mpa
ny is ex
pos
ed to a nu
mb
er of r
isk
s:
X
As
set vo
lati
lit
y: th
e Sch
em
e’
s de
fine
d be
ne
fit ob
lig
atio
n is c
alc
ul
ated us
in
g a dis
cou
nt rate s
et wi
th refe
ren
ce to co
rp
orate b
ond y
ie
lds; ho
wever
, t
he
Sch
em
e inve
sts s
ign
ific
an
tly in e
qu
iti
es a
nd oth
er gr
ow
th as
sets. T
he
se a
ss
ets ar
e expe
cte
d to outp
er
fo
rm c
or
por
ate bon
ds i
n the lo
ng ter
m, bu
t are
sub
je
ct to inc
rea
se
d vol
atili
t
y and r
is
k in th
e sho
r
t ter
m
X
Cha
ng
es i
n bon
d yi
eld
s: a dec
re
ase i
n cor
po
rate bo
nd y
iel
ds wo
uld i
ncr
ea
se the S
ch
em
e’
s de
fine
d be
nefi
t ob
lig
atio
n; however
, thi
s woul
d be pa
r
ti
all
y
of
fs
et by an i
ncr
ea
se in th
e val
ue of th
e Sch
em
e’
s bo
nd h
old
ing
s
X
Inflat
ion risk: a
significant pr
opor
tion o
f the
Scheme’
s defined benefit obligat
ion is
linked t
o inflation
, therefore
highe
r infla
tion will
result in a higher
defined benefit obl
igation (
subject to
the appr
opriate
caps in place
). The
majority of the
Sc
heme
’
s assets are
either unaffected
by in
flation
, or are
onl
ylo
ose
ly c
or
rel
ated w
ith in
flati
on, the
refo
re an i
nc
rea
se in i
nflati
on wo
uld a
lso i
nc
rea
se th
e defi
cit
X
Li
fe exp
ec
tan
cy: if S
ch
em
e mem
be
rs l
ive lo
ng
er th
an ex
pe
cted, th
e Sch
em
e’
s b
ene
fits w
ill n
ee
d to be pa
id for l
on
ger
, inc
re
asi
ng th
e Sch
em
e’
s
defined
benefit obligation
.
The T
rustees and Company
manage risks
in the
Scheme through
the f
ollowing
strat
egies:
X
Di
ver
sifi
cat
ion: inve
stm
ent
s are we
ll di
ver
si
fie
d, suc
h that th
e fa
ilu
re of any s
ing
le inve
stm
en
t woul
d not have a m
ater
ia
l imp
act o
n the ove
ra
ll leve
l
ofas
sets
X
Inve
stme
nt st
rateg
y: the T
ru
stee
s are r
equ
ire
d to revi
ew the
ir inv
estm
en
t strate
gy o
n a reg
ul
ar ba
sis
X
AL
M: the Sc
he
me inve
sts i
n an a
ss
et-liab
ili
t
y match
ing (
AL
M) fr
ame
wor
k that a
ims to ac
hi
eve lo
ng-ter
m inve
stme
nt re
tur
ns in l
ine w
ith th
e obl
ig
atio
ns
und
er t
he Sc
he
me. T
hisi
sach
ieve
d thro
ugh a
rou
nd 25
% of as
set
s bei
ng inv
este
d in L
iab
ili
t
y Dr
ive
n Inve
stme
nt f
und
s.
Change in assumpt
ion
Ch
ang
e in d
efi
ne
d
benefit obliga
tion
Di
s
co
un
t ra
te
+0
.
5%
/–
0
.
5%
p.
a
.
–
8
%
/+
9
%
RPI in
flation
+
0.
5%
/–
0.
5%
p.
a
.
+
7%/–7%
As
sum
ed l
ife ex
pe
cta
ncy
+1
y
e
a
r
+
5%
Th
es
e ca
lcu
lati
ons p
rovi
de a
n app
roxim
ate gu
ide to th
e sen
si
tiv
it
y of re
sul
ts an
d may not b
e as ac
cu
rate as a f
ul
l valu
atio
n ca
rr
ie
d out o
n the
se
as
sum
ptio
ns. Ea
ch a
ssu
mpti
on c
han
ge is c
on
sid
ere
d in i
sol
atio
n, whi
ch i
n pra
ctic
e is u
nli
kely to o
ccu
r
, as c
ha
nge
s in s
ome of t
he as
su
mptio
ns a
re
cor
related.
Th
e as
sets of th
e Sc
he
me ar
e inves
ted as f
oll
ows:
Asset class
Y
ea
r e
nd
e
d 31 De
ce
m
be
r 2
0
21
Y
ea
r en
de
d 31 Dec
em
be
r 2020
Ma
rke
t
valu
e
£’
000
% of t
ot
al
Scheme
assets
Ma
rke
t
value
£’
000
% of tota
l
Scheme
asse
ts
Equi
tie
s an
d othe
r grow
t
h ass
ets
17,
8
3
1
5
2%
16
,
319
5
1%
Diversified Credit
Funds
6
,
3
12
19
%
6,308
20%
Liabili
ty Driven
Inv
estments
8
,
3
12
2
4%
7,
4
0
9
23%
Cash
705
2%
804
3%
Othe
r
997
3%
1,
0
7
8
3%
To
t
a
l
3
4
,1
5
7
10
0
%
3
1,
9
18
10
0
%
Actu
al re
tur
n on as
set
s over th
e yea
r
2
,
6
74
2,9
4
9
Note: All a
ss
ets li
sted a
bove have a q
uote
d mar
ket pr
ic
e in an a
cti
ve ma
rket (exce
pt for th
e res
er
ve f
or in
sure
d pe
ns
ion
er
s)
.
Th
e amo
unt
s rec
ogn
is
ed in t
he st
ateme
nt of fin
an
cia
l po
sit
ion a
re de
term
ine
d as fo
ll
ows:
20
21
£’
000
2020
£’
000
Ma
rket va
lue of p
la
n as
sets
3
4
,1
5
7
3
1,
9
1
8
Present v
alue of
d
efined benefit
pension scheme obligat
ion
(
3
8
,
8
14
)
(4
0
,76
9
)
Deficit –
recognised as a
liability in the
statement o
f financial posit
ion
(4,
6
57
)
(
8
,
8
51)
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
14
9
Zo
tefo
ams plc
An
nua
l Re
por
t 2021
23. Po
st-emplo
y
ment benefits
(c
ontinued)
Th
e move
me
nt in th
e defi
ned b
en
efi
t obl
iga
tion ove
r the ye
ar i
s as fo
llow
s:
20
21
£’
000
2020
£’
000
Value of d
efin
ed b
en
efit o
bli
gati
on at th
e sta
r
t of th
e yea
r
4
0,7
6
9
3
6,4
8
6
Interest cost
482
721
Benefits paid
(1
,
2
14
)
(
1,
2
9
1
)
Actu
arial loss
es/
(gain
s)
: experi
ence differing
from tha
t assum
ed
18
6
(
117
)
Actuarial (gains
)/losse
s
: changes in demographic assumpt
ions
(
8
1)
19
Actuarial (
gains)
/losses: changes i
n financial assumpt
ions
(1
,32
8)
4
,
9
51
Value of d
efin
ed b
en
efit o
bli
gati
on at th
e en
d of the ye
ar
3
8
,
8
14
4
0
,76
9
Th
e move
me
nt in th
e valu
e of the p
la
n as
sets ove
r the ye
ar i
s as fo
llow
s:
20
21
£’
000
2020
£’
000
Ma
rket va
lue of p
la
n as
sets at t
he st
ar
t of th
e yea
r
31,
9
18
29,
56
0
In
ter
es
t i
nc
om
e
380
556
Actual r
eturn on
plan assets
2,294
2,
3
9
3
Employ
er contributi
ons
779
70
0
Benefits paid
(1
,
2
14
)
(
1,
2
9
1
)
Ma
rket va
lue of a
ss
ets at th
e en
d of the ye
ar
3
4
,1
5
7
3
1,
9
18
The table belo
w outlines wher
e the
Company’
s post
-employment amounts
and activity are
included in
the financial
statement
s.
20
21
£’
000
2020
£’
000
Stat
ement of
financial position
for:
– Defined benefit
pension scheme obliga
tions
(4,
6
57
)
(
8
,
8
51)
Inc
om
e state
me
nt ch
arg
e for:
– Defi
ne
d be
nefi
t pe
nsi
on sc
he
me i
ntere
st co
st
(10
2
)
(16
5
)
Actuarial gains/
(losses) r
ecognised in ot
her comprehensive
income for
:
– Defined benefit
pension scheme
3
,
5
17
(2,4
6
0
)
Other pension
schemes
On 1 J
anu
ar
y 20
0
6 a se
par
ate sta
keho
ld
er sc
he
me wa
s set u
p for th
ose e
mp
loye
es w
ho wer
e or
igi
nal
ly in t
he cl
ose
d de
fine
d be
ne
fit pe
ns
ion s
ch
eme.
In ad
diti
on to the a
bove, th
e Com
pa
ny cre
ated t
wo f
ur
th
er st
ake
hol
de
r sch
em
es fo
r fu
ture j
oin
er
s. Th
e co
ntri
bu
tion
s pai
d by the C
om
pany i
n 2021 were
£855k (
2020
: £
7
55k)
.
For c
er
t
ain n
on-
UK ba
se
d em
ploye
es o
f the Co
mp
any
, the C
omp
any m
akes c
on
trib
uti
ons i
nto ind
iv
idu
al s
che
me
s. Th
e co
ntr
ibu
tio
ns pa
id by the
Co
mpa
ny in 2021 were £5k (2020: £4k).
For US
A-ba
se
d emp
loye
es, Zotefo
ams I
nc. op
er
ates a 401
(
k) pl
an. T
he c
ontr
ib
utio
ns pa
id by Zotefo
ams I
nc. in 2021 were £
279k (2020: £263
k).
Note
s
Continued
15
0
Zot
efoams plc
An
nua
l Re
por
t 2021
24. Share
-based payments
The Company
has a share
option
scheme that
e
ntit
les senior management personnel t
o purchase shares
in the
Company
. Opt
ions are
exer
cisable at
a pr
ice e
qu
al to the l
ower of th
e mi
d-ma
rket p
ri
ce of th
e Co
mpa
ny’
s sh
are
s the d
ay befo
re the o
ptio
n is gr
ante
d or th
e avera
ge mi
d-m
ar
ket pr
ice fo
r
theth
ree d
ea
lin
g days b
efo
re the o
ptio
n is gr
anted. T
he ve
sti
ng pe
ri
od i
s thre
e yea
rs. If t
he opti
on
s rem
ain u
nexe
rcis
ed af
ter a pe
ri
od of ten ye
ar
s fro
m
thed
ate of gra
nt, the o
ption
s wi
ll exp
ire. D
epe
nd
ing o
n the c
irc
ums
tan
ce
s, opti
ons a
re no
rm
all
y for
fe
ite
d if th
e emp
loye
e le
aves th
e Gro
up b
efore t
he
optio
ns ve
st.
In 20
07
, th
e Com
pa
ny intro
duc
ed a L
TIP s
ch
eme f
or se
ni
or ma
nag
em
en
t pe
rso
nn
el. Sh
are
s are awa
rde
d in th
e Co
mpa
ny an
d ves
t af
ter th
ree ye
ar
s to
the ex
te
nt pe
r
for
ma
nce c
on
diti
on
s are m
et. Dep
en
de
nt on th
e ci
rcum
sta
nc
es, awa
rds a
re no
rm
all
y for
fe
ite
d if th
e emp
loye
e le
aves th
e Gro
up b
efore t
he
award ve
sts. A n
ew L
T
IP sc
he
me was i
ntro
duc
ed i
n 201
7
, wh
ich o
pe
rates i
n a si
mil
ar way to the L
TIP s
ch
eme i
ntro
duc
ed i
n 2007
. No ne
w award
s are
mad
e und
er t
he 20
07 sche
me. D
epe
nd
ing o
n the c
ircu
ms
tan
ce
s, opti
ons a
re no
rma
ll
y for
fe
ite
d if th
e emp
loye
e le
aves th
e Gro
up b
efore t
he opti
on
s vest.
In 20
07
, th
e Com
pa
ny intro
duc
ed a D
efe
rre
d Bo
nus S
ha
re Pla
n. Und
er t
he ter
ms of th
is pl
an, exec
uti
ve bo
nus
es w
ith a va
lu
e equ
iva
le
nt to over 40% of
eli
gi
ble s
al
ar
y we
re he
ld a
s defe
rr
ed s
har
es fo
r thre
e yea
rs. I
n 201
4, the R
emu
ne
rati
on C
omm
it
tee a
me
nde
d the D
efe
rre
d Bo
nus S
ha
re Pla
n for b
onu
se
s
award
ed s
inc
e 201
4, su
ch th
at 25
% of execu
tive b
on
use
s are h
el
d as d
efer
re
d sha
re
s for thr
ee ye
ar
s. De
pe
ndi
ng on t
he ci
rcu
msta
nc
es, awa
rds a
re
nor
ma
ll
y for
fe
ited i
f the e
mp
loye
e le
aves th
e Gro
up be
fore th
e award v
ests
. A new D
efer
re
d Bon
us Sh
are P
lan s
ch
em
e was in
trod
uce
d in 201
7
, whi
ch
ope
rate
s in a s
imi
lar way to th
e old P
lan i
ntro
duc
ed i
n 2007
. No ne
w award
s are m
ade u
nd
er th
e 2007 Pla
n. De
pe
ndi
ng on th
e ci
rcum
sta
nc
es, awa
rds
aren
or
mal
ly fo
r
fei
ted if t
he e
mpl
oyee l
eave
s the G
rou
p befo
re the aw
ard ve
sts.
Det
ail
s of the ve
sti
ng co
nd
itio
ns fo
r the sh
are, s
ha
re opti
on an
d L
TI
P award
s are g
ive
n in th
e Dir
ec
tors’ Rem
un
era
tion r
ep
or
t on p
age
s 88 to 9
9.
Move
m
en
ts i
n s
ha
r
e op
t
io
ns d
u
ri
ng t
h
e ye
ar a
r
e as fo
l
low
s:
Th
e opti
ons o
utst
an
din
g at 31 Dece
mb
er 2021 have a
n exerci
se pr
ic
e bet
we
en 245.
7p and 57
2.0p and a w
eig
hted c
ontr
act
ual l
ife of s
even ye
ar
s
(2
020:
six y
ears)
.
Th
e fai
r val
ue re
ce
ive
d in retu
rn fo
r sh
are o
ption
s gra
nted i
s me
asu
red by r
efer
enc
e to the fa
ir va
lue of s
ha
re opti
on
s gra
nted u
sin
g a Bla
ck-Sch
ole
s mo
de
l.
Th
e con
trac
tua
l lif
e of the o
ption (te
n yea
rs) is u
se
d as an i
np
ut in
to this mo
de
l. No al
lowa
nce i
s mad
e for e
ar
ly l
eave
rs.
20
21
2020
Number
of
share
options
Weighted
aver
age
ex
ercise
pr
i
ce (
p)
Number
of sh
are
optio
ns
Weig
hted
average
exer
ci
se
price (p
)
Ou
tsta
nd
ing at t
he be
gi
nni
ng of th
e yea
r
89,
2
6
6
327
9
7,1
2
0
3
31
E
xerci
se
d dur
in
g the ye
ar
(14
,
6
9
4
)
270
–
–
Gra
nted d
ur
ing t
he yea
r
40,6
90
433
–
–
Forfeited during
the y
ear
(13
,
3
3
6
)
42
6
(7
,854)
382
Ou
tsta
nd
ing at t
he en
d of the ye
ar
1
01
,926
364
89,
26
6
327
E
xerci
sa
bl
e at the e
nd of th
e yea
r
5
7,
9
9
4
293
77
,598
29
0
Move
m
en
ts i
n L
T
IP a
war
d
s du
r
in
g t
he y
ea
r ar
e a
s fol
l
ows
:
20
21
2020
Number
of
share
options
Weighted
aver
age
ex
ercise
pr
i
ce (
p)
Number
of sh
are
optio
ns
Weig
hted
average
exer
ci
se
price (p
)
Ou
tsta
nd
ing at t
he be
gi
nni
ng of th
e yea
r
8
2
7,
6
6
5
–
74
1
,
7
6
7
–
E
xerci
se
d dur
in
g the ye
ar
(
155
,084)
–
–
–
Gra
nted d
ur
ing t
he yea
r
35
4
,372
–
2
6
4
,
6
15
–
Forfeited during
the y
ear
(373
,
297
)
–
(
17
8
,
7
17
)
–
Ou
tsta
nd
ing at t
he en
d of the ye
ar
653,656
–
8
2
7,
6
6
5
–
E
xerci
sa
bl
e at the e
nd of th
e yea
r
–
–
–
–
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
151
Zot
efoams plc
An
nua
l Re
por
t 2021
24. Share-based pa
yments (
continued)
Move
m
en
t in D
ef
er
r
ed B
on
u
s S
ha
re P
la
n aw
ar
d
s du
r
in
g th
e ye
ar a
r
e as f
ol
low
s:
20
21
2020
Number
of
share
options
Weighted
aver
age
ex
ercise
pr
i
ce (
p)
Number
of sh
are
optio
ns
Weig
hted
average
exer
ci
se
price (p
)
Ou
tsta
nd
ing at b
eg
inn
in
g of the ye
ar
15
5
,
8
8
4
–
4
9
,1
3
5
–
E
xerci
se
d dur
in
g the ye
ar
(79
,
289)
–
(
3
3
,
0
14
)
–
Gra
nted d
ur
ing t
he yea
r
14
,
7
9
0
–
13
9
,
76
3
–
Forfeited during
the y
ear
(30
6)
–
–
–
Ou
tsta
nd
ing at t
he en
d of the ye
ar
91,
0
7
9
–
15
5
,
8
8
4
–
E
xerci
sa
bl
e at the e
nd of th
e yea
r
–
–
–
–
Fair
value of share
options and assumptions
Th
e exp
ec
ted vol
atili
t
y is ba
se
d on hi
stor
ic vol
atil
it
y for a th
ree
-yea
r pe
ri
od pr
io
r to the award.
0
5
-
A
p
r
-1
6
2
7-
M
a
r-1
7
2
4
-
A
u
g
-1
7
1
6
-
A
p
r
-1
9
0
8
-
A
p
r-
21
Sha
re pr
ic
e (p)
290
3
0
5.5
3
05.
5
572
41
5
Exercise price (p
)
290
30
5.5
3
2
7.
5
572
4
33
Expe
cted
volat
ility
3
5%
3
5%
3
5%
25%
40%
Option
life
Five ye
ar
s
Five yea
rs
Five ye
ar
s
Three y
ears
Three y
ears
E
xp
ecte
d di
vid
en
ds (
p) (assu
med to b
e inc
rea
si
ng at 2.5
% p.a.
)
5.6
5
.7
5.7
5.5
6.3
Ris
k fr
ee in
tere
st rate (
bas
ed on n
ati
ona
l gove
rn
men
t bon
ds)
2.0
0%
2.0
0%
2.0
0%
2.0
0%
2.0
0%
Fair va
lu
e at gra
nt d
ate (p)
80
10
3
.1
111
.1
10
3
99
The Company
’
s employee share
option aw
ards are
granted
under a service condition and
a performance condition.
T
here are
no marke
t conditions
as
soc
iate
d wit
h the s
har
e optio
ns. T
he L
T
IP awa
rds a
re gra
nted u
nde
r a se
r
v
ice c
on
diti
on a
nd a pe
r
fo
rma
nc
e co
ndi
tio
n, par
t of w
hi
ch is a m
ar
ket
condition
. The Deferred
Bonus Plan
awards
are grant
ed under a service condition.
Th
e amo
unt
s rec
ogn
is
ed in t
he in
com
e sta
teme
nt for e
qu
it
y-set
tl
ed s
har
e-b
ase
d pay
me
nts ar
e as fol
lows:
20
21
£’
000
2020
£’
000
Wi
thin a
dmi
nis
trati
ve exp
en
se
s
– sh
are
-ba
se
d paym
ent c
ha
rge
360
30
0
– relat
ed National Insur
ance
36
57
Of th
e ab
ove, amo
unts r
ela
ting to D
ire
ctor
s of Zotefoa
ms pl
c agg
reg
ate to £1
69
k (2020: £1
77k).
Note
s
Continued
15
2
Zot
efoams plc
An
nua
l Re
por
t 2021
25
. Re
la
ted p
ar
t
ies
Dire
ctor
s
Th
e Di
rec
tors of th
e Co
mpa
ny as at 31 De
cem
be
r 2021 and th
eir i
mme
di
ate rel
ative
s co
ntro
l app
roxi
matel
y 1
.2% (2020: 1
.
1
%) of the voti
ng sh
are
s of
the C
omp
any. Detai
ls of D
ire
ctors’ pay a
nd re
mu
ner
atio
n are g
ive
n in th
e Dir
ec
tors’ Re
mun
era
tio
n rep
or
t on p
ag
es 88 to 9
9. Exe
cuti
ve Di
rec
tors a
re
co
nsi
de
red to be th
e on
ly key ma
na
gem
en
t pe
rso
nn
el. De
tai
ls of co
mp
ens
ati
on pa
id to key ma
nag
em
ent p
er
son
ne
l are i
ncl
ud
ed in n
ote 5.
Subsidia
ries and j
oint venture
Det
ail
s of the j
oin
t ventu
re an
d su
bsi
dia
ri
es of th
e Co
mpa
ny are s
et ou
t in n
otes 9 an
d 1
3. T
he
se c
omp
an
ies a
re c
ons
ide
re
d to be rel
ated pa
r
ti
es.
The follo
wing mat
e
rial transact
ions wer
e carried out with
relat
ed parties:
20
21
£’
000
2020
£’
000
Sale of
goods:
subsidiaries of
the Compan
y
3,
8
57
6,4
6
5
Sale of
ser
vices:
subsidiaries of
the Company
1,
2
4
6
76
0
Loa
ns gi
ven (ne
t of rep
aym
ents): sub
sid
ia
rie
s of th
e Com
pa
ny
2
,
74
8
8,6
0
6
Int
erest income
: subsidiaries o
f the
Company
468
56
9
Sale of
goods:
joint v
enture
of t
he Company
2
,
9
51
2
,1
5
5
Sa
le of se
r
v
ice
s: joi
nt ven
ture of th
e Co
mpa
ny
733
407
To
t
a
l
12
,
0
0
3
18
,
9
6
2
Balances between the
Company and
its act
ive subsidiaries and
joint v
enture
are as
follows
:
Receivable
from/
(pay
able t
o)
Inve
stme
nt in
20
21
£’
000
2020
£’
000
20
21
£’
000
2020
£’
000
Zot
efoams Inc.
12
,
5
41
9
,426
–
–
K
Z T
r
adin
g an
d Inve
stme
nt L
imi
ted
2
47
1,
4
9
8
–
–
Azote
Asia Limit
ed
1,
0
6
5
896
–
–
MuCell Ex
trusion LL
C
4
,
41
0
3,
4
24
–
–
Zo
tef
oams Int
ernational Limit
e
d
17,
0
3
7
15
,
0
8
7
3
0,82
2
30,822
Zo
tef
oams Operations
Limited
–
76
–
–
Zotefoa
ms T
-F
IT Ma
teri
al T
e
ch
nol
og
y (Kun
sha
n) Li
mite
d
2,9
93
2,4
0
2
–
–
Zotefoa
ms Pol
and S
p. z.
o.o
.
304
523
–
–
Zotefoa
ms Fran
ce S
AS
(39)
(3
0)
–
–
T
-FIT I
nsulation Solution
s India Priv
ate
Limited
253
379
–
–
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
15
3
Zot
efoams plc
An
nua
l Re
por
t 2021
2
6. Acc
ou
nt
in
g es
t
ima
te
s an
d ju
dg
eme
nt
s fo
r th
e G
rou
p a
nd Co
mp
any
In the a
pp
lic
ati
on of the G
rou
p’
s ac
co
unti
ng po
lic
ie
s, wh
ich a
re de
sc
rib
ed i
n note 2, the Di
rec
tors a
re req
ui
red to ma
ke jud
ge
me
nts, es
tim
ates a
nd
as
sum
ptio
ns ab
ou
t the c
ar
r
yi
ng am
ou
nts of as
set
s and l
ia
bil
itie
s wh
ic
h are n
ot read
il
y app
are
nt f
rom oth
er so
urc
es. T
he e
sti
mates a
nd a
ss
oci
ated
as
sum
ptio
ns ar
e bas
ed o
n histo
ric
al ex
pe
ri
en
ce a
nd othe
r fa
cts th
at are c
ons
id
ere
d rel
evan
t. Actu
al am
ou
nts may d
if
fe
r fro
m the
se e
sti
mates.
Esti
mate
s and j
udg
em
en
ts are c
onti
nua
ll
y eval
uate
d and a
re ba
se
d on hi
stor
ica
l exp
er
ie
nce a
nd oth
er f
actor
s, in
clu
din
g exp
ec
tati
ons of f
utu
re eve
nts
thata
re be
li
eved to be r
eas
on
abl
e un
de
r the ci
rcu
mst
anc
es.
Ke
y sources of
es
timation uncer
taint
y
Th
e key as
sum
ptio
ns co
nc
er
nin
g the f
utu
re an
d othe
r key sou
rce
s of es
tim
atio
n unc
er
t
ai
nt
y at the s
tatem
ent of fi
na
nci
al p
osi
tio
n date th
at have a
sig
ni
fica
nt r
isk of c
au
sin
g a mate
ria
l adj
us
tme
nt to the ca
rr
yi
ng am
oun
ts of as
sets a
nd l
iab
ili
tie
s wi
thi
n the nex
t fi
na
nci
al ye
ar a
re di
scl
ose
d be
low.
i) E
stim
ate
d impa
ir
me
nt of go
odw
ill a
nd int
an
gibl
es
Th
e Gro
up tes
ts an
nua
ll
y whe
the
r goo
dw
ill h
as su
f
fe
red a
ny im
pai
rm
ent, in a
cc
orda
nc
e wi
th the ac
co
unti
ng po
li
cy sta
ted in n
ote 2
.
1
2.
Th
e dete
rmi
nati
on of i
mpa
ir
men
t in th
e ca
rr
y
ing v
alu
e of go
odw
ill a
nd i
nta
ngi
ble a
ss
ets re
qui
res j
udg
em
en
ts to be mad
e by Di
rec
tors. T
he
se a
sse
ts are
as
se
sse
d on a
n ong
oi
ng ba
sis to d
eter
min
e wh
ethe
r cir
cum
sta
nc
es ex
ist th
at co
uld l
ea
d to the co
ncl
us
ion th
at the c
ar
r
y
ing va
lu
e of suc
h as
sets i
s not
supportable. In r
elation t
o the operat
ional MuCell business t
hat licenses t
ec
hnology and
sells relat
e
d t
echnology
, the Dir
ectors use
a model t
hat includes
the u
se of thi
s tec
hno
lo
gy wi
thi
n ReZo
rce. In r
ela
tio
n to the Re
Zorce s
olu
tio
n an
d give
n the s
tag
e of its d
evel
op
men
t, the Di
rec
tors c
on
sid
er d
if
fe
ren
t
fac
tors, s
uch a
s the p
otenti
al m
ar
ket size, th
e abi
lit
y to pe
ne
trate thi
s ma
rket, pote
ntia
l cus
tome
r inte
res
t, devel
opm
en
t par
tne
rs
hip
s with p
otenti
al
cus
tome
rs a
nd f
utu
re de
live
r
y pa
r
tn
er
s, cur
ren
t tech
no
log
ic
al de
velo
pm
ent s
tatu
s, Gro
up fu
nd
ing ava
il
abi
lit
y a
nd th
e Boa
rd’
s co
mmi
tme
nt to the p
roje
ct.
Bas
ed o
n the j
udg
em
ent
s and e
sti
mate
s above, th
e Di
rec
tors h
ave con
cl
ude
d tha
t the op
po
r
tun
it
y an
d stra
tegy s
upp
or
t
s the c
ar
r
yi
ng val
ue of th
e
underlying intangible assets
.
ii) P
ension assumptions
The present v
alue of
the de
fined benefit pension obl
igations depends
on a number
of fact
ors that ar
e det
ermined on an act
uarial basis using
a number o
f
assumptions
. Any
changes in these
assumptions
will impact
the carrying amount of
pension obligat
ions. The
Company engages an
independent actuary
to per
f
orm t
he va
luat
ion a
nd a
ssi
st in d
eter
mi
nin
g app
rop
ri
ate ass
um
ption
s at the e
nd of e
ac
h yea
r
. Th
e val
uati
on is p
re
pare
d by an i
nde
pe
nd
ent q
ua
lifi
ed
actu
ar
y
, bu
t si
gni
fic
ant j
udg
em
ent
s are re
qu
ire
d in rel
ati
on to the a
ssu
mpti
ons fo
r pe
ns
ion i
ncr
eas
es, i
nflat
ion, th
e dis
co
unt ra
te app
lie
d, inve
stme
nt re
tur
ns
and member longevity
, all
of which
underpin the v
aluations
. Not
e 23 contain
s informa
tion about t
he assumpt
ions relat
ing t
o re
tirement benefit
obligations
.
Ke
y judgemen
ts
i) Un
re
co
gnis
ed d
efe
rr
ed t
a
x as
set
s
At yea
r
-
en
d excha
ng
e rates, th
e Gro
up h
as ta
x l
os
se
s ca
rr
ied f
or
wa
rd of £1
8,91
3k i
n the US
A whi
le ta
x los
se
s of £657k have be
e
n rec
ogn
is
ed on t
he
state
me
nt of fin
anc
ia
l pos
iti
on. Ba
se
d on pr
oje
cti
ons, th
e Gro
up a
ntic
ipate
s us
ing a
ll th
es
e car
ri
ed fo
r
wa
rd ta
x lo
ss
es; howeve
r
, m
ana
ge
me
nt have
take
n a pr
ud
ent a
ppr
oac
h bas
ed o
n his
tori
cal p
er
for
man
ce by th
e ent
itie
s in th
is ta
x jur
isd
ic
tion a
nd re
co
gn
ise
d a lowe
r figu
re. If th
e Gro
up ma
kes t
wo
co
nse
cu
tive ye
ar
s of profi
t in the U
SA
, fu
r
the
r co
nsi
de
ratio
n wi
ll be g
ive
n to rec
ogn
isi
ng a d
efer
re
d ta
x as
set.
27
. E
vents after the reporting period
Th
ere a
re no eve
nts af
ter the r
ep
or
ti
ng pe
ri
od af
f
ect
ing th
es
e fina
nc
ial s
tate
men
ts, othe
r tha
n tho
se di
scl
os
ed in n
ote 1
8.
Note
s
Continued
15
4
Zot
efoams plc
An
nua
l Re
por
t 2021
Fiv
e
-
year tr
adi
ng su
mma
r
y
20
21
£m
2020
£m
2
019
£m
2
018
£m
2
0
17
£m
Group reven
ue
10
0
.
8
8
2
.7
80.9
8
1.
0
7
0
.1
Operating pr
ofit (be
fore e
xcept
ional it
em)
8
.1
9
.1
9
.1
11
.
6
9.4
Pro
fit befor
e tax (before
ex
ceptional it
e
m)
7.
0
8.3
8.8
10
.
8
8.8
Profit b
efo
re ta
x
7.
0
8.3
9.
8
9.9
7.
5
Profit a
f
ter ta
x
4.4
7.
2
8.2
7.
9
6.0
Capital e
xpenditure (including
intangibles)
7.1
12
.7
24.
4
1
6
.1
12
.
2
Cash generat
ed from
operations
12
.
2
13
.
0
11
.
8
7.1
10
.
0
Bas
ic e
ar
nin
gs p
er s
har
e befo
re exce
ptio
nal i
tem (
p)
9.01
14
.
8
7
14
.
9
1
18
.
6
6
16
.
0
4
Bas
ic e
ar
nin
gs p
er s
har
e (p)
9.01
14
.
8
7
1
7.
1
0
16
.
9
6
13
.7
0
Di
vid
en
ds p
er o
rdin
ar
y s
ha
re (p)
6.50
6.3
0
2.0
3
6
.1
2
5.93
Strat
egic Repor
t
Gov
ernance
Financia
l Statements
15
5
Zot
efoams plc
An
nua
l Re
por
t 2021
Notic
e of t
he 2
0
2
2
Annual Gener
al Meeting
TH
IS D
OCU
M
EN
T IS I
MP
OR
T
A
NT A
ND R
EQ
UI
RE
S
Y
OURIMMED
IA
TE A
T
TENTION
If you a
re in a
ny dou
bt as to th
e acti
on you s
ho
uld t
ake, you a
re
rec
om
me
nde
d to see
k you
r own fin
an
cia
l ad
vi
ce fr
om you
r stoc
kb
roker
,
bank manager
, solicitor
, accountant
or other independent a
dviser
aut
hor
ise
d un
de
r the F
ina
nci
al S
er
v
ic
es a
nd M
ar
kets Act 20
0
0 if you
are re
si
de
nt in th
e UK o
r
, if you r
es
ide e
lse
wh
ere, an
othe
r ap
pro
pri
atel
y
authorised financial adviser
.
If you h
ave sol
d or oth
er
w
ise t
ran
sfe
rre
d you
r sha
res i
n Zotefoa
ms pl
c,
yoush
ou
ld for
ward th
is do
cu
men
t an
d othe
r doc
um
ents e
nc
los
ed a
s
soon as po
ssible either t
o the purchaser
or transf
eree or t
o the person
wh
oarr
an
ge
d the s
ale o
r tra
nsfe
r so th
ey ca
n pa
ss th
es
e doc
ume
nts
tothepe
rs
on w
ho now h
old
s the s
ha
res.
ZOT
E
FOA
M
S
PL
C
Notice o
f Annual General
Meeting
C
O
V
I
D
-19
Zotefoa
ms pl
c con
si
der
s it v
ita
l to en
gag
e wit
h inve
stors a
nd oth
er
stakeholders t
hrough t
he most appr
opriate
channels. Shareholders
’
vi
ews ar
e imp
or
t
ant a
nd we wa
nt to ens
ure th
at the
y are g
ive
n
as much in
formation
as possible in
good time t
o enable them
to
participate
in the
decision-making process.
Sub
je
ct to any g
over
nme
nt re
str
ict
ion
s in pl
ac
e at the ti
me,
ouri
ntent
ion i
s to hold t
he A
nnu
al G
en
era
l Me
eti
ng in p
er
son.
Inad
diti
on, bot
h exis
tin
g sha
reh
ol
de
rs an
d any oth
er s
take
ho
lde
rs
may re
gis
ter wi
th th
e Inves
tor Me
et Co
mp
any pl
at
for
m to liste
n
to the pro
ce
ed
ing
s in re
al ti
me an
d su
bmi
t qu
esti
on
s: http
s:/
/
w
w
w
.inves
torm
eetco
mpa
ny
.co
m/zotefoa
ms-p
lc/re
gis
ter
-
inves
tor
.
Inve
stors w
ho a
lre
ady f
oll
ow Zotefoam
s pl
c on th
e Inves
tor Me
et
Company pla
tform will aut
omatically be in
vited.
The platform does
not of
fe
r votin
g fac
ili
tie
s an
d par
t
ici
pan
ts wi
ll not b
e trea
ted as l
eg
all
y
at
tend
ingo
r par
tic
ipati
ng in t
he me
eti
ng.
Shareholders are
strongly
encouraged to
submit a pro
xy form
ind
ic
atin
g the
ir votes i
n acc
ord
anc
e wi
th the n
otes b
elow a
nd e
ma
il
any q
ue
stio
n for th
e Boa
rd to inve
stor
info@
zotefoam
s.com a m
ini
mum
of 48 ho
ur
s pri
or to the AG
M. Th
e Boa
rd wi
ll do i
ts be
st to an
swer
these questions.
The Board
is monit
oring the
situation
and will mak
e any further
an
nou
nce
me
nt re
qui
red t
hrou
gh th
e rel
ea
se of a
n RNS a
nd o
n
theAGM p
age of i
ts web
si
te: https:/
/
w
w
w
.zotefoa
ms.co
m/agm
/
.
Noti
ce is h
ere
by gi
ven th
at the A
nn
ua
l Ge
ne
ral M
eet
ing (
AGM) of
Zotefoa
ms pl
c (the “C
omp
any
”) w
ill b
e hel
d at the r
eg
ister
ed of
fi
ce of th
e
Company
,
675 Mi
tc
h
am Ro
ad
, C
roy
do
n, C
R9 3
AL
, on 2
5 M
ay 2
0
2
2
at10.
0
0 a
m
for t
he follo
wing purposes.
Ordinar
y business
1
.
T
o rec
ei
ve the A
nn
ual R
ep
or
t of th
e Co
mpa
ny for th
e yea
r en
de
d
31Dece
mb
er 2021
.
2.
T
o ap
prove th
e An
nua
l St
atem
ent by th
e Ch
air of th
e Re
mun
er
atio
n
Committee and t
he Annual Report on Remunerat
ion for
the
yea
r en
de
d 3
1 De
ce
mb
er 2021 set ou
t on p
age
s 88 to 99 of th
e
An
nua
lRe
po
r
t.
3.
T
o de
cl
are a fi
nal d
iv
ide
nd fo
r the ye
ar e
nd
ed 31 Dec
em
be
r 2021 of
4.40 penc
e pe
r ord
ina
r
y s
har
e, suc
h div
id
end to b
e payab
le o
n 1 Jun
e
2022 to sha
re
hol
de
rs on t
he re
gis
ter of me
mb
er
s of the C
omp
any at
the c
los
e of bus
in
es
s on 6 May 20
22.
4.
T
o re
-e
le
ct S P G
ood a
s a Di
rec
tor
.
5.
T
o re
-e
le
ct D B S
tirl
ing a
s a Di
rec
tor
.
6.
T
o re
-e
le
ct G C M
cGr
ath as a D
ire
ctor
.
7
.
T
o re
-e
le
ct J D Ca
rl
ing a
s a Di
rec
tor
.
8.
T
o re
-e
le
ct A M Fi
el
din
g as a D
ire
ctor
.
9.
T
o re
-e
le
ct D G Ro
be
r
tso
n as a D
ire
ctor
.
1
0. T
o re
-el
ec
t C A Wall a
s a Di
rec
tor
.
1
1
.
T
hat PK
F Li
t
tle
joh
n LLP b
e an
d is he
re
by re-a
pp
oin
ted as Au
di
tor of
the Compan
y t
o hold o
ffice from the
conclusion of
the A
GM until t
he
co
ncl
usi
on of th
e nex
t ge
ne
ra
l me
etin
g at wh
ich a
cc
oun
ts are l
aid
before
the Compan
y
.
1
2
.
T
o authorise the
Audit Committee t
o det
ermine the
Auditor
’
s
remuner
ati
on.
Special business
T
o co
nsi
de
r and, i
f tho
ugh
t fit, to pas
s the fo
llow
ing r
eso
lu
tio
ns of wh
ich
res
olu
tio
n 1
3 w
ill b
e pro
pos
ed a
s an o
rdin
ar
y r
eso
lu
tio
n and re
so
lu
tion
s 1
4,
1
5, 1
6 an
d 1
7 wil
l be p
ropo
se
d as sp
ec
ia
l res
olu
tio
ns:
1
3.
Tha
t, in sub
stit
utio
n for a
ny eq
ui
vale
nt au
tho
ri
tie
s an
d powe
rs gr
ante
d
to the Di
rec
tors p
ri
or to the p
ass
in
g of this r
eso
lu
tion, t
he Di
rec
tors b
e
and are
generally and unconditionally
authorised pursuant
to
Section
55
1 of th
e Co
mpa
ni
es Ac
t 200
6 (th
e “
Ac
t”
):
(a)
to exercis
e all p
ower
s of the C
om
pany to a
llot s
ha
res i
n the
Co
mpa
ny an
d gra
nt ri
ghts to s
ubs
cri
be fo
r or to co
nver
t a
ny
se
cur
it
y in
to sha
res of th
e Co
mpa
ny (suc
h sha
re
s, and r
ig
hts to
sub
sc
rib
e for o
r to conve
r
t any s
ec
ur
it
y into sh
are
s of the C
om
pan
y
,
be
ing “re
lev
ant s
ecu
ri
tie
s”) up to a
n agg
reg
ate nom
in
al am
ou
nt of
£81
0,353 (su
ch am
ou
nt to be re
duc
ed by th
e nom
in
al am
ou
nt of
any a
llotm
en
ts or gr
ant
s mad
e und
er p
ara
gra
ph (
b) below i
n exce
ss
of £81
0,353), and f
ur
th
er
(b)
to al
lot e
qui
t
y sec
ur
iti
es (as d
efin
ed in S
ec
tio
n 560 of th
e Act) u
p
toan ag
gre
gate no
min
al a
mou
nt of £1
,620,
706 (su
ch a
mou
nt to be
red
uc
ed by th
e nom
ina
l am
oun
t of any a
llotm
ent
s or gr
ants m
ad
e
und
er p
ara
gra
ph (a) a
bove) in co
nn
ec
tion w
ith a
n of
fe
r by way of
rights issue
:
(i)
i
n favou
r of hol
de
rs of o
rdin
ar
y sha
re
s in the c
ap
ita
l of the
Company
, where the equity securities
respectively a
ttributable
to the inte
res
ts of al
l suc
h ho
lde
rs a
re pro
po
r
tio
nate (as ne
ar
ly a
s
practicable
) t
o the
respective n
umber of or
dinar
y shares
in the
ca
pit
al of th
e Co
mpa
ny he
ld by the
m, an
d
(ii
)
to hold
er
s of any oth
er e
qui
t
y se
cur
iti
es a
s req
uir
ed by th
e
rights o
f thos
e securities or
as the
Directors o
ther
wise consider
necessary
,
but s
ubj
ec
t to suc
h exclu
sio
ns or ot
he
r ar
ran
ge
men
ts as th
e
Di
rec
tors m
ay de
em ne
ce
ss
ar
y or ex
ped
ie
nt to de
al wi
th tre
as
ur
y
shares, fra
ctional entit
lements or
legal, r
egulatory or pract
ical
pro
ble
ms a
ris
in
g und
er th
e laws o
r req
ui
rem
ents of a
ny ove
rse
as
terr
itor
y or by v
ir
tu
e of sha
re
s be
ing re
pre
se
nted by d
ep
osi
tor
y
rec
ei
pts or th
e req
uir
eme
nts of a
ny re
gul
ator
y bo
dy o
r stoc
k
excha
ng
e or any o
the
r mat
ter w
hats
oeve
r
,
(c)
provi
de
d that, un
le
ss p
revi
ous
ly re
voked, va
ri
ed o
r ex
tend
ed,
thi
s auth
or
it
y sh
all ex
pi
re on th
e ea
rl
ier of 3
0 Ju
ne 2023 an
d the
co
ncl
usi
on of th
e nex
t AGM of th
e Co
mpa
ny
, exc
ept th
at the
Co
mpa
ny may at a
ny tim
e befo
re su
ch ex
pir
y m
ake a
n of
fe
r or
agr
ee
men
t wh
ich wo
uld o
r mi
ght re
qu
ire re
leva
nt se
cu
rit
ies to
be a
llot
ted af
ter su
ch ex
pir
y and t
he Di
rec
tors m
ay al
lot re
leva
nt
se
cur
iti
es i
n pur
su
anc
e of su
ch a
n of
fer o
r agr
ee
me
nt as i
f this
aut
hor
it
y ha
d not ex
pire
d.
1
4.
Tha
t if re
sol
uti
on 1
3 is pa
ss
ed, th
e Dir
ecto
rs be a
uth
or
ise
d to all
ot
eq
uit
y se
cu
ri
tie
s (as defi
ne
d in Se
cti
on 56
0 of the A
ct) for c
as
h
und
ert
he au
tho
rit
y g
ive
n by that re
so
lut
ion a
nd
/
or to se
ll o
rdin
ar
y
sha
re
s he
ld by the C
om
pany a
s tre
asu
r
y sh
are
s for c
as
h as i
f Sec
tio
n
561 of the Act d
id not a
pp
ly to any s
uch a
ll
otme
nt or s
al
e, suc
h
authority t
o be limit
ed:
(a)
in favou
r of ho
lde
rs of o
rdi
nar
y sha
re
s in th
e cap
it
al of th
e Com
pa
ny
,
where the
equity securities respectively
attributable t
o the
int
erests
of all s
uc
h hol
de
rs a
re pro
por
tion
ate (as ne
ar
ly a
s pra
ctic
ab
le) to the
respective
number of
ordinary shares in the
capital of
the Compan
y
he
ld by the
m; and
(b)
to the a
ll
otme
nt of eq
uit
y s
ec
uri
tie
s or s
al
e of trea
su
r
y sh
are
s
(other
wis
e tha
n und
er p
ara
gra
ph (a) ab
ove) up to a nom
in
al am
ou
nt
o
f
£
1
21,
5
5
3
,
15
6
Zot
efoams plc
An
nua
l Re
por
t 2021
suc
h au
thor
it
y to exp
ire at t
he co
nc
lus
ion of t
he nex
t AGM o
f the
Co
mpa
ny (or
, if e
ar
li
er
, o
n 30 Ju
ne 2023) bu
t, in ea
ch c
ase, p
rio
r to
its ex
pir
y the C
omp
any m
ay make of
fer
s, and e
nte
r into agr
ee
me
nts,
which would
, or might
, require equity securities t
o be allo
tted (
and
trea
su
r
y sh
are
s to be so
ld) a
f
ter th
e aut
hor
it
y exp
ire
s an
d the D
ire
ctor
s
may a
llot e
qui
t
y se
cur
iti
es (an
d se
ll tre
asu
r
y sh
are
s) und
er a
ny su
ch
of
fe
r or ag
ree
me
nt as i
f the a
utho
ri
t
y had n
ot expi
red.
1
5.
Tha
t if re
sol
uti
on 1
3 is pa
ss
ed, th
e Dir
ecto
rs be a
uth
or
ise
d in ad
dit
ion
to any au
tho
rit
y g
ran
ted un
de
r res
olu
tio
n 1
4 to all
ot eq
uit
y s
ecu
ri
tie
s (as
defi
ne
d in Se
cti
on 56
0 of the Ac
t) for c
ash u
nd
er th
e aut
hor
it
y gi
ven by
that r
eso
lu
tion a
nd
/or to sell o
rdin
ar
y s
ha
res h
el
d by the C
omp
any a
s
trea
su
r
y sh
are
s for c
as
h as if S
ec
tio
n 561 of the Act d
id not a
pp
ly to
any s
uch a
llo
tme
nt or s
ale, s
uch a
uth
or
it
y to be:
(a)
limi
ted to the a
llot
me
nt of eq
uit
y s
ecu
ri
tie
s or s
ale o
f trea
sur
y sh
are
s
up to a no
min
al a
mou
nt of £1
21
,5
53; and
(b)
used only f
or the
purposes of fi
nancing (
or refinancing
, if the
aut
hor
it
y is to be u
se
d wi
thin s
ix m
onth
s af
ter th
e or
igi
na
l
tra
nsa
cti
on) a tra
nsa
ctio
n wh
ich t
he D
ire
ctors d
eter
mi
ne to be a
n
acquisition
or ot
her capital inv
estment o
f a kind
contemplat
ed by
the Sta
tement o
f Principles
on Disapplying Pr
e-Emption
Rights
mos
t rec
en
tly pu
bl
ish
ed by th
e Pre
-Emp
tion G
rou
p pr
ior to th
e date
of t
his not
ice,
suc
h au
thor
it
y to exp
ire at t
he co
nc
lus
ion of t
he nex
t AGM o
f the
Co
mpa
ny (or
, if e
ar
li
er
, o
n 30 Ju
ne 2023) bu
t, in ea
ch c
ase, p
rio
r to
its ex
pir
y the C
omp
any m
ay make of
fer
s, and e
nte
r into agr
ee
me
nts,
which would
, or might
, require equity securities t
o be allo
tted (
and
trea
su
r
y sh
are
s to be so
ld) a
f
ter th
e aut
hor
it
y exp
ire
s an
d the D
ire
ctor
s
may a
llot e
qui
t
y se
cur
iti
es (an
d se
ll tre
asu
r
y sh
are
s) und
er a
ny su
ch
of
fe
r or ag
ree
me
nt as i
f the a
utho
ri
t
y had n
ot expi
red.
1
6.
Tha
t the Co
mp
any b
e and i
s he
reby u
nco
ndi
tio
na
lly a
nd g
ene
ra
lly
aut
hor
ise
d for t
he pu
rp
ose
s of Se
cti
on 70
1 of the A
ct to ma
ke mar
ket
pur
cha
se
s (wit
hin th
e me
an
ing of S
ec
tio
n 693(4) of the Act) of i
ts
ord
ina
r
y sh
are
s of 5 pe
nc
e ea
ch (“ord
ina
r
y sh
are
s”) p
rovi
ded t
hat:
(a)
the ma
x
im
um nu
mb
er of o
rdin
ar
y s
ha
res a
uth
ori
se
d to be
pur
cha
se
d is 4,862,
1
23, re
pre
se
ntin
g app
roxi
matel
y 1
0% of the
is
sue
d ord
ina
r
y sh
are c
ap
ita
l as a
t 5 Apr
il 2022;
(b)
th
e min
im
um pr
ic
e whi
ch m
ay be pa
id fo
r any su
ch o
rdin
ar
y sha
re is
5 penc
e;
(c)
the ma
x
im
um pr
ic
e wh
ich m
ay be pa
id fo
r an o
rdin
ar
y s
ha
re
sha
ll b
e an a
mou
nt eq
ua
l to 1
0
5
% of the ave
ra
ge mi
ddl
e ma
rket
quotat
ions for
an ordinary share as
derived from
the Lon
don St
ock
E
xcha
ng
e Dai
ly O
f
fic
ial L
is
t for th
e five bu
si
ne
ss day
s imm
ed
iatel
y
pre
ce
din
g the d
ay on w
hic
h the o
rdin
ar
y s
ha
re is c
ontr
acte
d to be
purchased;
and
(d)
th
is au
tho
ri
ty s
ha
ll, un
les
s pr
evio
us
ly re
newe
d, revoke
d or va
ri
ed,
exp
ire on t
he e
arl
ie
r of 30 Ju
ne 2023 a
nd th
e con
cl
usi
on of th
e nex
t
AGM, bu
t the C
omp
any m
ay ente
r into a co
ntra
ct for t
he pu
rch
ase
of ord
ina
r
y sh
are
s be
fore th
e exp
ir
y of th
is au
tho
ri
ty w
hi
ch wou
ld or
mig
ht be c
om
ple
ted (wh
oll
y or p
ar
tl
y) af
ter i
ts exp
ir
y.
1
7
.
T
hat a g
en
er
al me
eti
ng othe
r th
an an A
nn
ua
l Ge
ne
ral M
ee
ting m
ay be
ca
lle
d on n
ot le
ss th
an 1
4 c
le
ar day
s’ notic
e.
Date
d: 6 Apr
il 2022
By or
de
r of the B
oard
Registered
Of
fice:
67
5 Mit
cham Road
Croy
don
CR9 3
AL
L Harratt
Company Secretar
y
The following
not
es are subject t
o any applicable social dist
ancing
me
asu
res p
roh
ibi
tin
g phys
ic
al at
ten
dan
ce of th
e AGM by a Me
mb
er o
r
Prox
y
:
(i)
Pur
sua
nt to Par
t 13 of the Com
pa
nie
s Act 20
0
6 an
d to Reg
ulat
ion
4
1 of the U
nc
er
ti
fic
ated Se
cu
ri
tie
s Re
gul
atio
ns 20
01 (
as a
me
nde
d),
onl
y tho
se m
emb
er
s re
giste
red i
n the re
gi
ster of m
em
be
rs of th
e
Co
mpa
ny at the c
lo
se of bu
sin
es
s on 23 M
ay 2022 (or if th
e AGM is
adjourned,
48 hours be
fore t
he time
fixed f
or the
adjourned A
GM) shall
be e
ntitl
ed to at
ten
d and vote at t
he AGM in r
es
pec
t of the n
um
ber o
f
sha
re
s reg
iste
red i
n the
ir na
me at th
at tim
e. In e
ach c
as
e, cha
nge
s
to the re
gis
ter of me
mb
er
s af
ter s
uch t
ime s
ha
ll be d
isr
ega
rde
d in
dete
rm
ini
ng the r
ig
hts of a
ny per
so
n to atte
nd or vote at th
e AGM.
(ii
)
I
f you wi
sh to at
ten
d the AGM i
n per
so
n, ple
as
e br
ing s
ome fo
rm of
ide
nti
fic
atio
n (such a
s dr
ive
r’
s lic
en
ce o
r ban
kcar
d) an
d pre
se
nt thi
s to
the C
omp
any’s rece
ptio
n de
sk on a
rr
iv
al.
(ii
i)
A mem
be
r who i
s ent
itle
d to at
tend, s
pe
ak an
d vote at the AGM m
ay
ap
poi
nt a prox
y to at
tend, s
pe
ak a
nd vote ins
tead of h
im or h
er
. A
me
mbe
r may a
pp
oint m
ore t
han o
ne p
roxy, provid
ed e
ach p
rox
y
is ap
po
inted to exer
cis
e ri
ghts at
ta
ch
ed to di
f
fere
nt s
har
es (so a
me
mbe
r mu
st have m
ore th
an o
ne s
har
e to be abl
e to app
oi
nt mor
e
tha
n one p
rox
y). A prox
y nee
d not b
e a me
mb
er of th
e Com
pa
ny but
mus
t at
tend th
e AGM in o
rde
r to repr
es
ent yo
u. A prox
y mu
st vote in
acc
ord
an
ce wi
th any i
nst
ruc
tio
ns gi
ven by th
e me
mb
er by w
hom th
e
prox
y is a
pp
ointe
d. Ap
poi
ntin
g a prox
y w
ill no
t preve
nt a me
mb
er f
rom
at
tend
ing i
n pe
rso
n an
d voting a
t the AGM (al
tho
ugh vot
ing i
n pe
rso
n
at the AGM w
il
l term
ina
te the prox
y a
ppo
int
men
t)
. A prox
y fo
rm i
s
en
clo
se
d or ha
s be
en s
ent to you s
ep
arate
ly
. Th
e note
s to the prox
y
form include
instructions
on how t
o appoint
the Chair
of t
he A
GM or
an
othe
r pe
rso
n as a p
roxy. Y
o
u ca
n onl
y ap
po
int a pr
oxy u
si
ng the
pro
ce
dure
s se
t out i
n the
se note
s an
d in th
e notes to the p
rox
y for
m.
(i
v)
T
o b
e vali
d, a prox
y for
m, an
d the o
rig
ina
l or d
uly c
er
tifi
ed co
py of the
powe
r of at
torn
ey or oth
er a
utho
ri
t
y (if a
ny) un
de
r whi
ch i
t is si
gn
ed or
aut
hen
tic
ated, sh
ou
ld re
ach th
e Co
mpa
ny’
s re
gist
rar
s, Co
mpu
ter
sha
re
Inve
stor Se
r
v
ice
s pl
c, The Pav
il
ion
s, Br
idg
water R
oad, Br
is
tol BS9
9
6Z
Y
, by n
o late
r tha
n 1
0.0
0 am o
n 23 May 2022.
(v)
CREST m
emb
er
s wh
o wis
h to app
oi
nt a prox
y or p
roxi
es th
rou
gh
the C
REST el
ec
tron
ic prox
y a
ppo
int
men
t se
r
vi
ce may d
o so fo
r the
me
etin
g and a
ny ad
jou
rn
me
nt(s) there
of by us
ing th
e pro
ce
dur
es
de
scr
ib
ed in t
he CR
EST Ma
nua
l. CREST p
er
son
al m
emb
er
s or oth
er
CREST s
pon
so
red m
emb
er
s, an
d tho
se CR
EST mem
be
rs w
ho have
ap
poi
nted a voti
ng se
r
v
ice p
rovi
de
r(s)
, sho
ul
d refe
r to thei
r CREST
spo
ns
or or voti
ng se
r
v
ic
e provi
de
r(s)
, wh
o wil
l be a
ble to ta
ke the
appropriat
e action
on their
behalf.
In ord
er fo
r a prox
y a
ppo
intm
en
t or in
str
ucti
on m
ade u
sin
g the C
REST
se
r
vi
ce to be va
lid, th
e ap
prop
ri
ate CREST m
es
sa
ge (a CREST Prox
y
Instruction
) must be pr
operly authenticat
ed in accordance wit
h
Euroclear
UK & Ir
eland Limited
’
s specifications and
must contain
the
info
rm
atio
n req
uire
d for s
uc
h ins
tru
ctio
n, as d
esc
ri
be
d in the C
REST
Manual (
available
via ww
w
.euroclear
.com/CRE
ST).
The message,
reg
ard
le
ss of w
heth
er i
t co
nsti
tute
s the a
ppo
intm
ent of a p
rox
y
, o
r
is an a
me
nd
me
nt to the in
str
ucti
on g
ive
n to a previ
ou
sly a
pp
oin
ted
prox
y mu
st, in or
de
r to be val
id, be tr
ans
mi
tte
d so as to be r
ec
ei
ved
by the is
su
er’s agen
t (ID 3R
A
50) by the l
ates
t time
(s) for rec
ei
pt of
prox
y ap
po
intm
ent
s spe
ci
fie
d in Note 3 a
bove. For th
is p
urp
os
e, the
tim
e of rec
eip
t wil
l be ta
ken to be th
e tim
e (as dete
rm
ine
d by the ti
me
sta
mp a
ppl
ie
d to the me
ss
age by t
he CR
EST Ap
pli
cati
on Ho
st) fr
om
wh
ich th
e is
sue
r’s agent i
s abl
e to retr
ieve th
e me
ss
age by e
nq
uir
y
to CREST in th
e ma
nne
r pr
esc
ri
be
d by CREST
. Af
te
r this ti
me, any
change of
instructions t
o proxies appoint
ed through
CRES
T should be
communicated t
o the appoint
ee through
other means.
CRES
T members and,
w
here applicable
, their
CRES
T sponsors
or voti
ng se
r
vi
ce p
rovi
de
rs sh
ou
ld note th
at Euro
cle
ar U
K & Ire
la
nd
Limited
does not mak
e available special
procedures in
CREST
for
any particular mes
sages. Normal system
timings and limitations will
the
refo
re ap
ply i
n rel
atio
n to the in
put o
f CREST Prox
y I
nstr
uc
tion
s.
It is th
e res
po
nsi
bil
it
y of the C
REST me
mb
er c
onc
er
ne
d to take (or
,
if th
e CREST m
em
ber i
s a CR
EST per
so
nal m
em
be
r or sp
ons
ore
d
me
mbe
r or h
as a
ppo
inte
d a voting s
er
v
ic
e prov
ide
r(s), t
o pro
cur
e that
his C
REST sp
ons
or o
r voting s
er
v
ic
e prov
id
er(s) ta
ke(s)
) su
ch ac
tio
n as
sha
ll b
e ne
ce
ss
ar
y to en
su
re that a m
es
sa
ge is tr
an
smi
tte
d by me
ans
157
Zot
efoams plc
An
nua
l Re
por
t 2021
of the C
REST sys
tem by any p
ar
ti
cul
ar ti
me. In th
is c
onn
ec
tio
n, CREST
me
mbe
rs a
nd, w
her
e app
li
cab
le, th
eir C
REST sp
on
sor
s or voti
ng
se
r
vi
ce pr
ovid
er
s are r
efer
re
d, in pa
r
ticu
la
r
, to thos
e se
cti
ons of th
e
CREST M
an
ual c
on
ce
rni
ng pr
act
ica
l lim
it
atio
ns of the C
REST sys
tem
and timings
(w
ww.
euroclear
.com/
CRES
T
)
.
Th
e Com
pa
ny may tre
at as i
nval
id a CR
EST Prox
y Ins
tru
cti
on in th
e
circumstances set
out in Regulation
35(
5)(
a) of t
he Uncer
tificat
ed
Securities Regulations 2
0
01
(as
amended).
(vi
)
In th
e ca
se of jo
int h
old
er
s of sh
are
s, the vote of th
e fir
st na
me
d in
the re
gi
ster of m
em
ber
s wh
o tend
er
s a vote, whe
the
r in pe
rs
on or by
prox
y
, sha
ll b
e acc
epte
d to the exclu
si
on of th
e votes of othe
r jo
int
hol
der
s.
(vi
i)
The fo
ll
owin
g info
rm
atio
n is ava
ila
ble a
t w
w
w
.zotefoa
ms.co
m: (
1
) the
mat
ter
s set o
ut i
n this n
otic
e of AGM; (2) the total nu
mbe
rs o
f sha
res i
n
the C
omp
any
, an
d sha
re
s in ea
ch c
las
s, in re
sp
ec
t of wh
ich m
em
be
rs
are e
nti
tle
d to exercis
e votin
g rig
hts at th
e AGM; (3) the tota
ls of th
e
votin
g rig
hts th
at me
mbe
rs a
re e
ntitl
ed to exerc
is
e at the AGM, i
n
res
pe
ct of th
e sh
are
s of ea
ch cl
as
s; and (4) memb
er
s’ statem
ent
s,
members’
resolutions and
members’
matters of
busine
ss received
by the C
omp
any af
ter the fi
rs
t date on w
hic
h noti
ce of th
e AGM
wasg
ive
n.
(vi
ii)
If you a
re a pe
rs
on w
ho ha
s be
en n
omi
nate
d by a me
mbe
r to enj
oy
informat
ion rights
in accordance
with Section
1
46 of t
he Companies
Act 20
0
6, notes (
iii
) to (v) above d
o not a
ppl
y to you (as the r
ig
hts
de
scr
ib
ed in t
he
se note
s ca
n onl
y be exe
rcis
ed by m
em
ber
s of th
e
Co
mpa
ny) bu
t you may h
ave a ri
ght u
nde
r an a
gre
em
ent b
et
wee
n
you a
nd the m
em
be
r by who
m you we
re no
min
ated to be a
pp
ointe
d
or to have s
ome
on
e els
e ap
poi
nted, a
s a prox
y for th
e me
etin
g. If you
have no s
uc
h rig
ht or d
o not w
ish to exer
cis
e it, you may h
ave a ri
ght
und
er s
uc
h an ag
ree
me
nt to gi
ve ins
tru
ctio
ns to the m
em
be
r as to
theexe
rcis
e of votin
g rig
hts.
(i
x)
A me
mb
er th
at is a c
omp
any o
r othe
r org
an
isat
ion n
ot hav
ing a
phys
ic
al pr
ese
nc
e ca
nn
ot atte
nd in p
er
so
n but c
an a
pp
oin
t som
eo
ne
to repr
ese
nt i
t. Thi
s ca
n be do
ne i
n one of t
wo ways: e
ith
er by th
e
ap
poi
ntme
nt of a pr
oxy (de
sc
ri
be
d in note
s (ii
i) to (v) ab
ove) or of a
corpora
te
represent
ativ
e. Members
considering
the
appoin
tment
of
a co
rpo
rate re
pre
se
ntati
ve sh
oul
d ch
ec
k the
ir own l
eg
al p
osi
tio
n, the
Company’
s Ar
ticles of
Association and
the r
elevant pr
ovision o
f the
Companies Act
2006.
(x)
M
em
be
rs at
ten
din
g the AGM h
ave the r
ig
ht to ask, a
nd, s
ubj
ec
t to the
provisions
of the Companies
Act 2
00
6,
the Compan
y must cause
to
be a
nswe
red, a
ny que
sti
ons r
ela
ting to th
e bus
in
es
s be
ing d
ea
lt wi
th at
th
e AG
M.
(xi
)
As a
t the cl
os
e of bus
ine
s
s on 5 A
pri
l 2022 (b
ei
ng the l
ates
t pra
ctic
ab
le
date be
fore p
ubl
ic
atio
n of this n
otic
e)
, the C
om
pany
’
s i
ssu
ed s
ha
re
ca
pit
al c
omp
ri
sed 4
8,62
1
,23
4 ordi
na
r
y sh
are
s of 5 pe
nc
e eac
h. Ea
ch
ord
ina
r
y sh
are c
ar
ri
es th
e ri
ght to on
e vote at a ge
ne
ral m
eet
ing of th
e
Co
mpa
ny
. N
o ord
ina
r
y sh
are
s we
re he
ld in tr
eas
ur
y a
nd a
cco
rdi
ngl
y
the tota
l num
be
r of votin
g rig
hts in t
he Co
mp
any as a
t the c
los
e of
bus
in
es
s on 5 A
pri
l 2022 is 4
8,62
1
,234.
(xi
i)
S
har
eho
ld
er
s sho
uld n
ote that i
t is po
ss
ibl
e that, pu
rs
ua
nt to requ
es
ts
mad
e by sh
are
hol
de
rs of th
e Co
mpa
ny un
der S
ec
tio
n 52
7 of the
Co
mpa
nie
s Ac
t 200
6, the C
om
pany m
ay be re
qu
ire
d to publ
ish o
n
a web
site a st
atem
ent s
et
ting o
ut a
ny mat
ter r
ela
ting to: (
1
) th
e aud
it
of t
he Company
’
s accounts (in
cluding the
auditor
’
s report and the
co
ndu
ct of th
e aud
it) tha
t are to be l
aid b
efo
re the AGM; o
r (2) any
circumstance
connected with
the Auditor
of the Compan
y ceasing t
o
hol
d of
fic
e sin
ce th
e prev
io
us me
eti
ng at w
hic
h an
nua
l ac
cou
nts a
nd
rep
or
ts we
re la
id i
n acc
ord
anc
e wi
th Se
cti
on 437 of the C
om
pan
ie
s
Act 20
0
6. Th
e Com
pa
ny may not r
equ
ire th
e sh
are
hol
de
rs re
qu
es
ting
any s
uch we
bs
ite pu
bli
cati
on to pay i
ts exp
ens
es i
n co
mpl
yi
ng wi
th
Section 5
27 or
52
8 of the
C
ompanies Act
2006. Where
the Compan
y
is re
qui
red to pl
ac
e a state
me
nt on a we
bsi
te und
er S
ec
tion 527 of the
Companies Act
2006, it
must forward t
he stat
eme
nt t
o the Company
’
s
Audit
or not
later
than t
he time
when it mak
es the st
atement
available
on th
e webs
ite. T
he bu
sin
es
s wh
ich m
ay be d
ea
lt w
ith at th
e AGM
inc
lud
es a
ny st
ateme
nt th
at the C
om
pany h
as b
ee
n req
uir
ed un
de
r
Section 5
27 o
f the
Companies Act 2
0
06 to
publish on
a websit
e.
(xiii)
Copies of t
he Executive
Directors
’ ser
vice contract
s with
the Compan
y
an
d any of it
s sub
sid
ia
r
y un
der
tak
in
gs, d
ee
ds of in
de
mni
t
y in favo
ur of
the Dir
ectors and
letters o
f appointment
of t
he Non-Executiv
e Direct
ors
are ava
il
abl
e for i
nsp
ec
tio
n at the re
gi
stere
d of
fic
e of the C
om
pany
dur
in
g the u
sua
l bu
sin
es
s hou
rs o
n any we
ekday (S
atu
rday
, Sun
day
or pu
bl
ic ho
lid
ays exclu
de
d) f
rom th
e date of th
is noti
ce u
ntil th
e
conclusion o
f the A
GM.
Explanator
y notes
to the resolutions
Ordinar
y business
Resolution 1 – Receiving the
Annual Repor
t
Sha
re
hol
de
rs w
ill b
e aske
d to rec
ei
ve the C
omp
any’s Annu
al R
epo
r
t for t
he
fina
nc
ial y
ea
r end
ed 31 Dec
em
be
r 2021
, a
s req
ui
red by l
aw
.
Resolution 2 – Directors’
Remuneration repor
t
Re
sol
uti
on 2 se
ek
s sha
re
hol
de
r app
roval of t
he Di
rec
tors’ Re
mu
ne
ratio
n
rep
or
t fo
r the ye
ar e
nd
ed 31 Dec
em
be
r 2021 whic
h ca
n be fou
nd o
n
pag
es 8
8 to 99 of the A
nn
ua
l Rep
or
t. T
he Co
mp
any’s Ex
ter
na
l Audi
tor
,
PKF Littlejohn LLP
, has
audited
those parts of
the Directors
’ Remuneration
rep
or
t th
at ar
e req
uire
d to be au
dite
d an
d its re
por
t may be f
oun
d on
pag
es 104 to 1
08 of t
he A
nnu
al R
epo
r
t.
The shareholders appro
ved t
he current
Directors
’ Remuneration P
olicy
at the AGM h
el
d on 8 Ju
ne 2020 a
nd i
t bec
am
e ef
fe
cti
ve im
med
iate
ly
. As
the
re have b
ee
n no c
han
ge
s to the D
ire
ctors’ Re
mu
ne
ratio
n Poli
cy
, the
re
is no n
ee
d to see
k fu
r
the
r ap
prova
l of it at t
his ye
ar’s AGM. The c
ur
rent
int
ention is
to
submit the
Directors
’ Remuneration P
olicy for shareholder
ap
prova
l at the AGM s
che
du
le
d for 2023, un
le
ss, i
n the in
teri
m, the
re
are s
pe
cifi
c ch
ang
es t
hat re
qui
re sh
are
ho
lde
r ap
prova
l. Th
e Dir
ecto
rs’
Re
mun
er
atio
n Poli
cy may b
e foun
d in th
e 201
9 An
nua
l Re
po
r
t on
pag
es58to 6
3.
Re
sol
utio
n 3 – De
cl
ara
tio
n of div
ide
nd
Th
is re
sol
uti
on co
nc
er
ns th
e Com
pa
ny’
s fi
na
l div
id
en
d paym
ent. T
he
Di
rec
tors a
re rec
om
me
ndi
ng a fin
al d
ivi
de
nd of 4.40 pe
nce p
er o
rdi
nar
y
sha
re in r
es
pe
ct of the ye
ar e
nd
ed 31 Dec
em
be
r 2021 whic
h, if a
pprove
d,
wil
l be pay
abl
e on 1 J
une 202
2 to the sh
are
hol
de
rs o
n the re
gis
ter of
me
mbe
rs o
n6 May 2022.
Re
sol
utio
ns 4 to 10 – Re-
el
ec
tio
n of Di
rec
tor
The Company
’
s Ar
ticles of
Association r
equire each
Director
of t
he
Co
mpa
ny to retire f
rom of
fi
ce at e
ac
h an
nua
l ge
ne
ral m
eet
ing of th
e
Co
mpa
ny an
d, if they a
re w
illi
ng, to of
fe
r the
mse
lve
s for re
-a
ppo
intm
en
t
by the s
har
eho
ld
er
s. Bi
ogr
aph
ie
s for th
e Di
rec
tors a
re set o
ut o
n pag
es
78 t
o 79 of the re
por
t and fi
na
nci
al s
tatem
ent
s for th
e yea
r end
ed 31
De
ce
mbe
r 2021
. Wi
th the C
hai
r hav
ing u
nde
r
ta
ken p
er
fo
rm
an
ce rev
iew
s
of the D
ire
ctor
s, an
d the No
n-E
xe
cu
tive D
ire
ctor
s hav
ing u
nde
r
ta
ken a
pe
r
for
ma
nce r
evi
ew of the C
ha
ir
, th
e Boa
rd is s
atis
fied t
hat e
ach D
ire
ctor
co
ntinu
es to b
e ef
fe
cti
ve and d
em
ons
trate
s com
mi
tme
nt to the ro
le an
d
recommends tha
t each Direct
or should be re-elect
ed.
In li
ne wi
th th
e provi
si
ons of th
e UK C
or
por
ate Gove
rna
nc
e Co
de, the
Co
mpa
ny Cha
ir’s term of of
fi
ce is d
ue to en
d in 2023. Fol
low
ing a
n
as
se
ssm
en
t of the B
oard’s existi
ng s
ki
llse
ts ag
ain
st tho
se re
qui
red to
de
live
r the s
trate
gy
, a rec
ru
itm
ent p
roc
es
s, le
d by the Se
ni
or In
de
pe
nde
nt
Director
, was
initiat
ed for
the appoin
tment o
f a new
C
ompany
Chair in
2023. Fur
th
er de
tai
ls a
re prov
ide
d on p
age 87 of the A
nn
ua
l Rep
or
t 2021
.
Re
sol
utio
ns 1
1 an
d 1
2 – Re
-a
ppo
intm
en
t of Aud
itor a
nd it
s rem
une
ra
tio
n
Resolution 1
1 concerns the r
e-appointment
of P
KF Littlejohn LLP as
the
Company’
s Auditor
, t
o hold o
f
fice unt
il the
conclusion o
f the Comp
any’
s
nex
t ge
ne
ra
l me
etin
g whe
re ac
co
unts a
re la
id. Re
so
lut
ion 1
2 au
thor
is
es
the
Audit Committee
to
determine
the Audit
or’
s remuneration
.
Notice of the 20
22 Annual Ge
neral Meeting
Continued
15
8
Zot
efoams plc
An
nua
l Re
por
t 2021
Special business
Re
sol
utio
n 1
3 – Power to al
lot s
har
es
This resolution
grants
the Direct
ors authority to
allot shares
in the
capital
of t
he Company
and ot
her relev
ant securities up
to
an aggregat
e nominal
val
ue of £81
0,353, re
pr
ese
nti
ng ap
prox
imate
ly o
ne
-third of th
e nom
in
al
val
ue of th
e iss
ue
d ordi
na
r
y sh
are c
ap
ita
l of the C
om
pany a
s at 5 A
pri
l
2022, bein
g the l
atest p
rac
tic
ab
le da
te befo
re pub
lic
ati
on of th
is noti
ce. In
addition
, in a
ccordance with
the lat
e
st ins
titutional
guidelines issued b
y the
Inv
estment Associati
on, para
graph (b
) of
resolution
1
3 grants t
he Direct
ors
authority t
o allot
fur
ther equity securities
up t
o an aggrega
te n
ominal value
of £1
,620,
706 re
pre
se
ntin
g app
roxi
matel
y t
wo-thi
rds of th
e nom
in
al val
ue of
the i
ssu
ed o
rdin
ar
y sha
re c
api
tal o
f the Co
mp
any as a
t 5 Ap
ril 20
22, bein
g
the la
test pr
acticable dat
e before publ
ication o
f this
notice
. This a
dditional
aut
hor
it
y may o
nl
y be a
ppl
ied to f
ull
y pre
-e
mpti
ve ri
ghts i
ss
ue
s.
Th
e inte
ntio
n of the au
tho
ri
ty g
ra
nted pu
rs
ua
nt to par
agra
ph (
b) of
res
olu
tio
n 1
3 i
s to pres
er
ve ma
x
imu
m flex
ibi
lit
y a
nd if t
he Di
rec
tors d
o
exerc
ise th
is au
tho
ri
ty, they inten
d to foll
ow be
st pr
acti
ce a
s reg
ard
s its u
se.
Th
e Com
pa
ny do
es not c
ur
ren
tly ho
ld a
ny sh
are
s as tre
as
ur
y s
ha
res
wi
thin th
e me
an
ing of S
ec
tio
n 72
4 of the C
om
pan
ie
s Act 20
0
6
(“T
reasur
yShares
”)
.
The Direct
ors consider it
desirable that
the specified amoun
t of
authorised
but u
ni
ssu
ed s
ha
re ca
pi
tal i
s avail
ab
le for i
ss
ue so t
hat th
ey ca
n mo
re
rea
dil
y take a
dva
ntag
e of po
ss
ibl
e opp
or
tu
ni
tie
s, whi
ch m
ay inc
lud
e the
all
otme
nt of s
har
es to the E
mpl
oyee B
en
efit T
r
us
t for th
e pur
po
se of f
ulfi
lli
ng
future po
tent
ial aw
ards.
Unl
es
s revo
ked, var
ie
d or ex
ten
de
d, this a
uth
ori
t
y wil
l exp
ire at th
e
co
ncl
usi
on of th
e nex
t AGM of th
e Co
mpa
ny or 3
0 Jun
e 2023, whi
ch
ever
is th
e ea
rli
er
.
Re
sol
utio
ns 1
4 an
d 1
5 – A
uth
ori
t
y to allo
t sha
re
s dis
re
gar
din
g pre
-
emption rights
These resolutions
authorise t
he Direct
ors in certain circumstances
to
all
ot eq
uit
y s
ec
uri
tie
s for c
as
h othe
r tha
n in ac
co
rda
nce w
ith th
e sta
tutor
y
pre
-e
mpti
on ri
ght
s (whi
ch re
qu
ire a co
mp
any to of
fe
r all a
llot
me
nts for c
as
h
firs
t to exis
ting s
ha
reh
old
er
s in p
ropo
r
tio
n to the
ir ho
ldi
ngs). Res
olu
tio
n
1
4 au
tho
ris
es th
e Di
rec
tors to is
su
e sha
re
s eit
her w
he
re th
e all
otme
nt
take
s pl
ace i
n co
nne
cti
on w
ith a r
ight
s iss
ue o
r the a
llotm
en
t is lim
ite
d to
a maximum nominal amount o
f £
1
2
1
,553
, representing
approxima
tely 5
%
of t
he nominal v
alue of
the issued
ordinary share capital o
f the
Company
as at 5 A
pr
il 2022, bei
ng th
e late
st pr
acti
ca
ble d
ate bef
ore pu
bli
ca
tion of
thi
s notic
e. Re
sol
uti
on 1
5 aut
hor
ise
s th
e Dir
ecto
rs to is
sue a f
ur
t
her 5%
of the i
ssu
ed o
rdi
nar
y sha
re c
api
ta
l of the C
omp
any
, bu
t onl
y to be us
ed
to
raise finance
for an a
cquisition or
a specified capital in
vestment
(within
the m
ea
nin
g giv
en in t
he Pre
-Em
ptio
n Gro
up’
s S
tatem
ent o
f Pri
nci
ple
s)
which is announced cont
e
mporaneously with t
he allotment
, or which
has t
ake
n pla
ce in t
he pr
ece
di
ng si
x-month p
er
io
d and i
s dis
cl
ose
d in th
e
announcement of t
he allotment
.
Unl
es
s revo
ked, var
ie
d or ex
ten
de
d, the
se au
tho
rit
ie
s wil
l expi
re at th
e
co
ncl
usi
on of th
e nex
t AGM of th
e Co
mpa
ny or 3
0 Jun
e 2023, whi
ch
ever
is th
e ea
rli
er
.
Th
e Di
rec
tors c
ons
ide
r tha
t the p
ower
s prop
os
ed to be g
ran
ted by the
se
res
olu
tio
ns a
re ne
ce
ss
ar
y to ret
ain fl
exi
bil
it
y
, a
lth
oug
h they d
o not h
ave any
inte
ntio
n at the p
res
ent t
ime of exe
rcis
in
g the
m. In ac
cord
an
ce w
ith th
e
Pre-Emp
tion Group
’
s Statement
of P
rinciples, the
D
irect
ors confirm t
hat
they d
o not in
tend to is
su
e mor
e than 7
.5% of the is
su
ed o
rdin
ar
y s
ha
re
ca
pit
al of th
e Co
mpa
ny on a n
on-p
re-
em
ptive b
as
is in a
ny roll
ing t
hre
e-yea
r
period without prior consulta
tion with
shareholders.
Re
sol
utio
n 1
6 – Au
thor
it
y to pu
rch
as
e sha
re
s (mar
ket pu
rch
as
es)
Th
is re
sol
uti
on au
tho
ris
es t
he Bo
ard to ma
ke ma
rket pu
rch
as
es of up
to 4,862
,
1
23 ord
ina
r
y sh
are
s (rep
res
ent
ing a
ppr
oxim
atel
y 1
0% of th
e
Co
mpa
ny’
s is
sue
d ord
ina
r
y sh
are
s as a
t 5 Ap
ril 202
2, being t
he la
test
practicable da
te
before
publication o
f thi
s not
ice)
. Shares so pur
chased
may b
e can
ce
lle
d or h
el
d as T
re
as
ur
y S
ha
res. T
he a
utho
ri
t
y wil
l exp
ire at
thee
nd of th
e nex
t AGM of th
e Co
mpa
ny or 3
0 Jun
e 2023, whi
ch
ever
is th
e ea
rli
er
. T
he D
ire
ctor
s inte
nd to se
ek re
new
al of th
is au
thor
it
y at
subsequent A
GMs.
Th
e min
imu
m pr
ice t
hat c
an b
e pai
d for a
n ordi
na
r
y sh
are i
s 5 pe
nce, b
ein
g
the n
omi
nal v
alu
e of an o
rdin
ar
y sha
re. Th
e ma
x
im
um pr
ic
e that c
an b
e
pai
d is 5% over the ave
rag
e of the m
id
dle m
ar
ket pr
ice
s for a
n ord
ina
r
y
sha
re, de
ri
ved f
rom th
e Da
ily O
f
fi
cia
l Li
st of the L
ond
on S
tock E
xch
an
ge,
for th
e five b
usi
ne
ss day
s imm
ed
iate
ly be
fore th
e day o
n whi
ch th
e sh
are
isco
ntra
cted to b
e purc
ha
sed.
Th
e Di
rec
tors in
tend to exerc
is
e this r
ig
ht on
ly wh
en, i
n lig
ht of the m
ar
ket
co
ndi
tion
s prev
ail
ing at t
he tim
e an
d tak
in
g into ac
cou
nt a
ll rel
eva
nt fac
tors
(for
example
, the
effect on earnings per share
),
they belie
ve t
hat such
pur
cha
se
s are i
n the b
est i
ntere
sts of t
he Co
mpa
ny an
d sh
are
hol
de
rs
ge
ne
ral
ly a
nd wi
ll re
sul
t in a
n inc
rea
se in e
ar
ni
ngs p
er o
rdi
nar
y sha
re. T
he
over
all p
osi
tio
n of the C
omp
any w
ill b
e ta
ken into ac
co
unt b
efore d
ec
id
ing
upon this
c
ourse o
f action
. The decision
as t
o whether
any such
shares
bou
ght b
ack w
ill b
e ca
nc
ell
ed o
r he
ld in tr
ea
sur
y w
il
l be ma
de by th
e
Di
rec
tors o
n the s
ame b
as
is at th
e time of t
he pu
rch
ase.
As at 5 A
pr
il 2022, bei
ng th
e late
st pr
acti
ca
ble d
ate bef
ore pu
bli
ca
tion
ofthi
s notic
e, the
re wer
e outs
ta
ndi
ng awa
rds un
de
r the C
omp
any’s long
-
term i
nc
enti
ve sc
he
me
s (exclud
ing th
e Sh
are In
ce
nti
ve Pla
n) in res
pe
ct
of835,347 ordin
ar
y sha
re
s in the c
ap
ita
l of the C
om
pany r
ep
res
enti
ng
1
.
7%
of the
C
ompany
’
s issued ordinary share capital.
If the authority
topurc
has
e the C
om
pany’s ordin
ar
y sha
re
s were exe
rcis
ed i
n ful
l,
suc
hawar
ds wou
ld re
pre
se
nt 2% of the Co
mp
any’s issu
ed or
din
ar
y
share
capital.
Re
sol
utio
n 1
7 – No
tic
e pe
rio
d for g
ene
ra
l me
eti
ngs
Und
er th
e Co
mpa
ni
es Ac
t 200
6, a li
sted c
omp
any m
ust g
ive at l
ea
st 21
days’ noti
ce of i
ts ge
ne
ral m
eet
ing
s. Howeve
r
, th
e Act e
nab
le
s ge
ne
ral
me
etin
gs (othe
r tha
n AGMs) to be he
ld o
n sh
or
ter n
otic
e of not le
ss
tha
n 1
4 day
s, prov
ide
d the s
ha
reh
old
er
s have g
ive
n the
ir co
nse
nt at th
e
prev
io
us AGM or a g
en
er
al me
eti
ng he
ld s
inc
e the l
ast AGM
. Res
ol
utio
n
1
7 se
eks s
uch a
pp
roval s
imi
la
r to the res
ol
utio
n tha
t was pa
ss
ed la
st
yea
r
. T
he ap
prova
l wil
l be ef
fec
tive u
ntil th
e Co
mpa
ny’
s nex
t AGM, w
he
n
it is i
nten
de
d that a s
imi
lar r
eso
lu
tio
n wil
l be pro
po
sed. T
he D
ire
ctor
s wi
ll
alw
ays en
de
avour to gi
ve as m
uc
h notic
e as p
oss
ib
le of ge
ne
ra
l me
etin
gs,
but w
oul
d like to have th
e flex
ibi
lit
y to ca
ll a g
ene
ra
l me
etin
g on th
e sho
r
ter
pe
rm
it
ted noti
ce p
er
iod f
or tim
e-s
en
siti
ve mat
te
rs th
at are c
le
ar
ly in t
he
shareholders’
int
erests and
otherwise for non
-routine
business, where
me
rite
d, in th
e inter
ests o
f sha
reh
ol
der
s as a w
ho
le. If th
e aut
hor
it
y is u
se
d,
the C
omp
any w
ill of
f
er th
e ab
ili
ty, as requ
ire
d by the C
omp
ani
es A
ct 20
06,
to vote ele
ctro
nic
al
ly
.
Recommendatio
n
Th
e Di
rec
tors c
ons
ide
r tha
t the p
ropo
sa
ls be
in
g put to th
e sha
re
hol
de
rs at
the AGM a
re in th
e be
st in
tere
sts of th
e Com
pa
ny and of t
he sh
are
ho
lde
rs
as a w
hol
e. Acc
ordi
ng
ly
, t
he D
ire
ctors r
ec
omm
en
d that yo
u vote in favou
r
of the re
so
lut
ion
s set o
ut in th
e Noti
ce of th
e AGM, as th
ey in
tend to do i
n
respect of
their o
wn beneficial holdings
of or
dinary shares.
15
9
Zot
efoams plc
An
nua
l Re
por
t 2021
Compan
y information
Registered
of
fice
67
5 Mit
cham Road
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on CR
9 3AL
cose
c@zot
efoams.com
Registered
number
2
714
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5
Financial
adviser and
broker
Inve
ste
c Ba
nk p
lc
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res
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m Stre
et
London E
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, 1
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PKF Littlejohn LLP
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5 We
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rcus
Canary Wharf
London E
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4 4HD
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ker
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plc
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oma
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re Squ
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estminster Bank plc
T
ur
npike
House, 1
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RH
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Solicitors
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One London
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Lond
on EC2Y 5EB
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ompt
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vestor
Ser
vices plc
The Pavilions
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d
Br
istol B
S1
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computershare.
com
Financial
calendar
AGM
25 May 2022
Paym
ent of fi
nal d
iv
id
end
1 June 20
22 to sha
reh
old
er
s on
there
gi
ster at th
e cl
ose of b
us
ine
ss
on 6 M
ay 2022
Paym
ent of i
nter
im di
vi
de
nd
October 2
022
Announcement of 2
022 r
esults
March 20
23
Web
s
it
e
Th
e Com
pa
ny has a w
ebs
ite (w
w
w.zotefoams.co
m) whi
ch p
rovi
des
informat
ion on t
he business and
products.
A
ZOT
E
®
, ZO
T
EK
®
,
T-
F
I
T
®
, Plastazot
e
®
, Evazote
®
an
d Re
Zorc
e
®
arere
gi
stere
d tra
dem
ar
ks of Zotefoa
ms p
lc.
MuCell
®
is a re
gis
tere
d trad
em
ar
k of T
rexel I
nc.
Registrars
Enquiries concerning the holding
of or
dinar
y shares in
the Company
should
be ad
dre
ss
ed to the r
egi
stra
rs w
ho s
hou
ld a
lso b
e notifi
ed of a
ny ch
an
ge
s
in a ho
ld
er’s addre
ss.
Th
e reg
istr
ar
s are: Co
mpu
ter
sha
re Inve
stor S
er
v
ic
es Pl
c, Th
e Pavil
ion
s,
Br
idg
water R
oad, B
ris
tol BS1
3 8A
E.
T
e
lephone
: 03
7
0 7
07 1
42
4
ww
w
.in
vest
orcentre
.co.
uk
/con
tactus
16
0
Zot
efoams plc
An
nua
l Re
por
t 2021
13-
14 May 20
15
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Zotefoams plc
Annual Report 2021
Zotefoams plc
675 Mitcham Road
Croydon
CR9 3AL
United Kingdom
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