2018 Annual Report and Notice of the 2019 AGM
Zotefoams plc
2018 Annual Report and Notice of the 2019 Annual General Meeting
In compliance with Listing Rule 9.6.1, the following documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at:
1 Annual Report for the year ended 31 December 2018, incorporating the Notice of the 2019 Annual General Meeting; and
2 Form of Proxy for the 2019 Annual General Meeting.
Copies of the 2018 Annual Report and the Notice of the 2019 Annual General Meeting will also shortly be available on our website at www.zotefoams.com.
A condensed set of the financial statements, the Chairman's statement, the Group CEO's review and the Group CFO's review in respect of the Annual Report were included in the unaudited preliminary results announcement issued on 19 March 2019, which may be found at:
www.zotefoams.com/investors/announcements/
This announcement contains, in Annex A, additional information for the purposes of compliance with the Disclosure and Transparency Rules, including the statement of Directors' responsibilities in respect of the financial statements, a description relating to principal risks and uncertainties, and details of related party transactions. This information is extracted from the 2018 Annual Report. This announcement is not a substitute for reading the full Annual Report. Page and note references in the text below refer to page numbers and notes in the 2018 Annual Report.
Enquiries:
James Adams
Interim Company Secretary
Zotefoams plc 020 8664 1600
17 April 2019
About Zotefoams plc:
Zotefoams plc (LSE - ZTF) is a world leader in cellular materials technology. Using a unique manufacturing process with environmentally friendly nitrogen expansion, Zotefoams produces and sells lightweight AZOTE® polyolefin and ZOTEK® high-performance foams for diverse markets worldwide. Zotefoams uses its own cellular materials to manufacture T-FIT® advanced insulation for demanding industrial markets. In addition, Zotefoams owns and licenses patented MuCell® microcellular foam technology, developed specifically for extrusion applications, from a base in Massachusetts, USA to customers worldwide.
Zotefoams is headquartered in Croydon, UK, with additional manufacturing sites in Kentucky and Oklahoma, USA (foam products manufacture and conversion), Massachusetts, USA (MuCell Extrusion) and Jiangsu Province, China (T-FIT®).
AZOTE®, ZOTEK®, T-FIT® are registered trademarks of Zotefoams plc
MuCell® is a registered trademark of Trexel Inc.
Annex A
Statement of Directors' responsibilities in respect of the financial statements
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Consolidated and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group and Company for that period. In preparing the financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· state whether applicable IFRSs as adopted by the European Union have been followed for the Consolidated and Company financial statements, subject to any material departures disclosed and explained in the financial statements;
· make judgements and accounting estimates that are reasonable and prudent; and
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.
The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements and the Directors' remuneration report comply with the Companies Act 2006 and, as regards the Consolidated financial statements, Article 4 of the IAS Regulation.
The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors consider that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and Company's position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed on pages 38 and 39 of the Annual Report confirm that, to the best of their knowledge:
· the Consolidated and Company financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group and Company; and
· the Group CEO's review includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.
Principal risks and uncertainties
The details of our principal risks and uncertainties and the key mitigating activities can be found on pages 26 to 29. We are disclosing those risks and uncertainties that we believe have the greatest impact in achieving our strategic objectives. The Group is exposed to a wide range of risks in addition to those listed, and these are managed through the risk management framework shown on page 24. This framework enables us to monitor for any increase in likelihood or impact and ensure that we have the appropriate mitigations in place.
Zotefoams' risk profile will evolve as the business grows at its targeted pace, although we expect these principal risks to remain broadly consistent. As we mature our thinking and approach to risk management and appraise how best to embed and communicate it, we have attempted to simplify our presentation of the key risks by aggregating those risks that share common causes. As a result, we have consolidated the 12 principal risks and uncertainties reported in 2017 into 6 principal risk areas in 2018.
We have removed pension from our key risks. While we recognise the importance of effective management of this area and accept the exceptional items of the past two years, we have concluded that it is not a material risk to the Group given the size of the net pension liability and its diminishing ratio against the Group's net assets as the Group continues to grow.
Related party transactions
Directors
The Directors of the Company as at 31 December 2018 and their immediate relatives control approximately 1.0% (2017: 1.1%) of the voting shares of the Company. Details of Directors' pay and remuneration are given in the Remuneration Report on pages 46 to 55. Executive Directors are considered to be the only key management personnel. Details of compensation paid to key management personnel are included in note 6.
Subsidiaries and joint venture
Details of the subsidiaries and joint venture of the Company are set out in notes 10 and 13. These companies are considered to be related parties.
The following material transactions were carried out with related parties:
2018 2017
£000 £000
Sale of goods: subsidiaries of the Company 9,892 13,405
Sale of services: subsidiaries of the Company 165 410
Loans given (net of repayments): subsidiaries of the Company 6,828 -
Interest income: subsidiaries of the Company 95 -
Sale of goods: joint venture of the Company 2,938 2,565
Total 19,918 16,380
Balances between the Company and its active subsidiaries and joint venture are as follows:
Receivable from/ Investment in
(payable to)
2018 2017 2018 2017
£000 £000 £000 £000
Zotefoams Inc 14,166 5,490 - -
KZ Trading and Investment Ltd 2,133 1,434 - -
Azote Asia Limited 1,601 1,542 73 89
MuCell Extrusion LLC 877 (13) - -
Zotefoams International Limited - - 23,549 23,546
Zotefoams Operations Limited - 187 - -
Kunshan Zotec King Lai Limited 53 - - -
Zotefoams Poland Sp. z o.o. 1,566 - - -
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