CHANGING WOOD TO CHANGE THE WORLD

Annual Report and Financial Statements 2022

ACCSYS IS A FAST-GROWING BUSINESS WITH A PURPOSE

We combine chemistry, technology and ingenuity to make high performance wood products that are extremely durable and stable, opening new opportunities for the built environment. By doing so, we give the world a choice to build sustainably.

Cover: The Butter Lane Residence, Bridgehampton, New York. IKIGAI by reSAWN TIMBER co. features charred Accoya wood burnt in the Japanese style of shou sugi ban. Designer: Young Projects

Inside Cover: External cladding and joinery manufactured from Accoya at Casa Hermanas, Madrid, Spain, Architect: ARENAS BASABE PALACIOS

GOVERNANCE FINANCIAL STATEMENTS

01 STRATEGIC REPORT OVERVIEW

Sustainability

Our Strategy

Corporate Governance

“We continue to focus on our purpose of ‘Changing Wood to Change the World’ and our strategy to make this happen”

Overview 02
Key Highlights 04
Our Business at a Glance 06
Chairman’s Statement Strategic Report 10
Our Products 12
Our Market 16
Our Business Model 18
Our Strategy 21
Strategy in Action 26
Chief Executive’s Statement 34
Our Ventures 36
Financial Review 42
Risk Management 50
Sustainability 61
Stakeholder Engagement

Corporate Governance

Board of Directors 66
Senior Leadership Team 68
Chairman’s Introduction to Governance 70
Corporate Governance 72
The QCA Corporate Governance Code 75
Remuneration Report 80
Directors’ Report 98
Statement of Directors’ Responsibilities 102

Financial Statements

Independent Auditors’ Report 104
Consolidated Statement of Comprehensive Income 117
Consolidated Statement of Financial Position 118
Consolidated Statement of Changes in Equity 119
Consolidated Statement of Cash Flow 120
Notes to the Financial Statements 121
Company Statement of Financial Position 166
Company Statement of Changes in Equity 167
Notes to the Company Financial Statements 168

Shareholder Information

Shareholder Information 176

View the latest results online at: www.accsysplc.com

1850 72 Accsys Technologies PLC – Annual Report and Financial Statements 2022

02 KEY HIGHLIGHTS

Financial highlights

1 On an underlying basis, including the Group’s attributable share of our USA joint venture.

	2022	2021
Accoya ® Margin	33%	30%
Accoya® Manufacturing margin of 30%, in line with long term target level
Gross Proﬁt	€33.1m	€36.0m
Gross proﬁt up 9%
Group Revenue	€120.9m	€99.8m
Group revenue up 21%
Underlying Proﬁt before tax 1	€10.1m	€10.4m
Underlying Proﬁt before tax up 18%
Underlying EBITDA 1	(€12.2m)	(€27.2m)
Group net debt increased by €15.0m
Net debt	€36.0m	€1.3m

See page 36 for more ﬁnancial highlights
See page 129 for Alternative Performance Measures details

Accoya cladding speciﬁed in this ‘Zero Series’ house in MariSol in Malibu, USA. Architect: Burdge Architects Manufacturer: Delta Millworks.

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

Operational and ESG highlights

	2022	2021
Health and safety	0.5 Lost-Time Incident Rate	1.8 Improved from FY21 rate of 1.8, with a continuing focus on Safety as one of our core values.
Carbon emissions	0.142 Scope 1 and 2 GHG emissions intensity
Employee engagement	78% Employee survey response rate
Accoya ® sales volume	59,649 cubic metres Accoya ® volume sold in the 2022 ﬁnancial year.
Accoya ® sales growth	-1% Year on year change in Accoya ® volume sold in FY22 from existing Arnhem plant, impacted by fourth reactor installation and as the plant remains at capacity.
Capacity to double	120,000 cubic metres capacity
Hull and Arnhem construction projects to add equivalent of 60,000m 3 to our current capacity. Location-based tCO 2 per m 3 of Accoya® sold. A year on year increase of 4% on FY21. In FY22 we held our third employee engagement survey, with a focus on diversity & inclusion, and the same response rate year on year.

See page 50 for more ESG highlights
See page 53 for more information
See page 60 for more detail on carbon emissions
See page 26 for the CEO Review

Accsys Technologies PLC – Annual Report and Financial Statements 2022 04

OUR BUSINESS AT A GLANCE

OUR PURPOSE

Who we are

Accsys combines chemistry, technology and ingenuity to make high performance wood products that are extremely durable and stable, opening new opportunities for the built environment. By doing so, we give the world a choice to build sustainably.

CHANGING WOOD TO CHANGE THE WORLD

‘Changing wood’ is what we do, and ‘to change the world’ is why we do it. Our purpose gives us a common, aspirational goal to work towards and is embraced by our stakeholders: making the world a better, more sustainable place.

Our values

Our values represent what we believe in as a company. We use them to guide our strategy and actions for the long term and on a daily basis. Our values are:

Be ambitious – the world depends on us
Our ambition is to change the world – it doesn’t get much bigger than that. We must be bold, agile and committed to our goals. We have to be ‘all in’ and move quickly and decisively. To achieve our ambitions we may make mistakes, but we must not be afraid to try. We will always learn from the experience.
Respect and value all stakeholders
Everyone we work with is important – our colleagues, customers, partners, suppliers, shareholders and more. We act with integrity and authenticity, encourage collaboration, and build trust through inclusion and mutual respect. As a team, we will succeed.
Be committed to safety, quality and sustainability
Safety is of the utmost importance in everything we do. We all share responsibility for protecting people, property and the environment at all times. We strive to fulﬁl our brand promise and delight our customers. We commit to delivering consistently high quality.

GOVERNANCE FINANCIAL STATEMENTS

STRATEGIC REPORT OVERVIEW

Key Accsys Locations

Dallas sales ofﬁce
Kingsport Accoya® site
London Accsys head ofﬁce
Barry Accoya® Color site
Hull Tricoya® site
Arnhem Accoya® site & ofﬁce
Freiburg Accsys sales ofﬁce

Our Products

Accoya® is the world’s leading high performance sustainable wood. It is stable, durable and resists rot. Manufactured from abundantly available, FSC® certiﬁed wood species, it is stable, durable and Cradle to Cradle Certiﬁed™.

Tricoya® wood chips are a feedstock for our licensees to manufacture high performance Tricoya® panel products suitable for outdoor use.# CHAIRMAN’S STATEMENT

“Accsys has navigated a dynamic external environment to make substantial progress as the company has moved ahead with its ambitious growth plans”

Overview

During the 2022 ﬁnancial year Accsys has navigated a dynamic external environment to make substantial progress as the company has moved ahead with its ambitious growth plans. COVID-19 has had an evolving impact on labour markets, workplace safety and efﬁciency, and distribution channels. This together with the wider macroeconomic uncertainty generally and that surrounding the war in Ukraine, has seen challenges for many companies including Accsys in increasing costs and volatility in supply chains. At the same time, demand for sustainable products and solutions to the environmental challenges facing the world has never been stronger. As set out in the pages of this report, Accsys is reporting a year of progress on its expansion plans, and another year of signiﬁcant demand for our wood products which continue to outstrip our present production capacity. The resilience of our business against this external backdrop is a testament to the strength of our business model, the value proposition of our products, and the work of our people towards our strategic vision.

Our strategy

Accsys is a purpose-driven organisation with a clear vision and a clear set of values. Our purpose, vision and values sit at the heart of our company, driving us forward together to ‘Change wood to change the world’. Ambition, Respect for our stakeholders and Sustainability are the company’s three core values. During 2022 our ambition and work with our stakeholders is reﬂected by our plan for operational expansion into North America and in having taken on the ﬁnal stages of project management to complete our world-ﬁrst Tricoya® Plant in Hull. Both projects are ventures with world-class partners. Our ‘5x’ production capacity expansion growth target, highlights the company’s deliverable ambition and the conviction we have to participate in the market opportunity for our sustainable products. As a company we are committed to sustainable growth. This is not only through the impact of our products, but also through continuing progress in our own sustainability including through improving the environmental impact of our operations.

Better and greener wood products

The UN ‘COP26’ Climate change conference in November 2021 saw governments meet to tackle climate change. It also highlighted the opportunities for industries and companies to innovate to tackle this, including by reducing ‘embodied carbon’ in buildings. Accsys’ products offer a solution to lower embodied carbon, by providing end-users with a more sustainable alternative for traditional materials, where Accoya® can help contribute towards a lower carbon footprint across the life cycle. Crucially, our products offer high performance, with outstanding durability and stability in the context of other wood species. Innovation in this area, means that choosing sustainable alternatives no longer risks compromising on performance. In Accsys’ case, we are offering a substitutional product with both higher performance and better sustainability impacts than competing materials.

2022 Performance

Accsys has delivered good revenue growth for the year, noting that the operations in Arnhem are fundamentally operating at capacity. With underlying Group revenue growth up 21% to €120.9m, the business demonstrated its pricing power despite raw material cost headwinds, underpinned by the continuing strong market demand for our products. Sales volume of 59,649m³ (2021: 60,466m³) reﬂects the capacity constraint at Arnhem, with some isolated production downtime as reported in March. Underlying Group EBITDA of €10.4m, up 3% on the prior year reﬂects the necessary increased investments made in organisational capability which include increasing our ability to manage the additional production capacity growth that will come online in the year ahead. The Group ﬁnished the year with adjusted net debt of €55.0m (2021: €12.2m), reﬂecting that we are at an important stage of capital deployment on key expansion projects at Hull, Arnhem and the US.

Capital Raise

The Group has successfully raised capital to fund its future growth, which has been oversubscribed and heavily supported by existing shareholders. In May 2021 €37m gross capital was raised to fund Accsys’ equity share of the Accoya USA JV alongside contributions from JV partner Eastman Chemical Company and JV project debt ﬁnance. After the ﬁnancial year end in May 2022, the company completed a further €20m gross capital raise which was also heavily supported by existing shareholders, to support the completion of current capital projects and increase working capital and cashﬂow headroom. We extend our thanks to shareholders for their continuing support and to new shareholders for their investment in Accsys.

ESG

ESG has long been integral to Accsys through our values, our purpose, and our products. As a growing company we are committed to high standards of corporate responsibility, sustainability, and employee engagement, and made excellent progress in FY22 under our ESG framework. We have had another year of good employee engagement with a 78% response rate to our annual engagement survey with a particular focus on inclusion and diversity this year. Through our expanding safety programme which includes increased monitoring, deﬁned strategy and increasing awareness, we are moving towards a stronger safety culture across the organisation. Safety is a strategic imperative for the organisation, as we expand our Group geographic footprint to realise the growth ahead. We have further embedded this commitment to safety by establishing a Board level HSE committee during the period. As a Board, we were pleased to sign off on our ﬁrst Group Climate Policy as an important framework for continuing our journey on climate change management, mitigation and adaptation. During the year we completed a Board performance evaluation, and internal review, which complements our three-yearly cycle of external evaluations. The results of the evaluation conﬁrmed the commitment and effectiveness of Directors in their roles and collectively in governing the Group.

Metric	2022	2021
Underlying Group Revenue	€120.9m	€99.8m
Underlying EBITDA	€10.4m	€10.1m
Adjusted Net Debt	(€55.0m)	(€12.2m)

Our Board

The Board’s composition brings depth and range of experience and views to Accsys, and both supports and challenges the Executive team in the execution of the strategy. During FY22 there were no changes in Board Directors. Accsys’ General Counsel and Company Secretary, Angus Dodwell, stepped down in February 2022, after over a decade with the company and we thank Angus for his support to the Board. We are pleased to welcome Nick Hartigan as Accsys’ new General Counsel and Company Secretary, who joined in April 2022. After the period end, on 14 June 2022 Louis Eperjesi joined the Board as a Non-Executive Director, bringing signiﬁcant experience of building products, manufacturing, and supply chain to the Board. After an eleven-year tenure, Nick Meyer will retire as Director at the close of the Group’s AGM in September 2022. Nick has made a signiﬁcant contribution to the Accsys Board over this time and on behalf of the Board I thank him for the value he has added to the governance of the Group.

Looking ahead

As we move through FY23, Accsys will continue to focus on delivering on our purpose of ‘Changing Wood to Change the World’ and our strategy to make this happen. The demand for our products remains strong and increasingly relevant, as high-performance substitutes for less sustainable building products within a world looking to decarbonise. On behalf of the Board, I would like to thank our people for their work in Accsys’ growth journey over the past year and look forward to a year ahead of further important milestones as we pursue the growth ahead of us.

Stephen Odell
Non Executive Chairman
30 June 2022

Investment proposition

LOW ENVIRONMENTAL IMPACT

Substantial market opportunity. Potential sales for Accoya® and Tricoya® estimated to be in excess of 2.6 million cubic metres per annum. See page 12 to read more about ‘Our Market’.

SUSTAINABLY SOURCED

Sustainability. Our products meet the growing demand for environmentally-friendly alternatives seen in everyday life and in every sector of manufacturing. Read our ‘Sustainability’ section on page 50.

SCALABLE

Scalable growth. Our manufacturing process and modular industrial design is based upon conﬁdential know-how and protected IP which can be expanded and replicated world-wide. See page 18 to read more about ‘Our Strategy’.

WORLDWIDE ACCREDITATIONS

World leaders in wood technology. We have developed innovative, proprietary and protected technologies, and our products are ﬁrst in class and leading the revolution of modiﬁed woods in a growing building industry.

See page 34 for an explanation of the Tricoya® consortium

Our sustainable business model

Through our sustainable business model we give the world a choice to build sustainability and create value for all our stakeholders.

Building new plants and optimising existing sites
Working with business partners
Global sales and distribution
Proprietary manufacturing
Sourcing
Investing in our future
Our activities
Research and development (R&D)

ORGANISED

Strong organisational capability

Talented people are at the core of Accsys, with skilled employees at all levels and committed and experienced leadership. Read more about ‘People and wellbeing’ on page 53

GOVERNANCE

FINANCIAL STATEMENTS

09 STRATEGIC REPORT

OVERVIEW

CASE STUDY

Summer Wind House – Cape Town, South Africa

This incredible coastal home in South Africa features sustainable Accoya® wood throughout. Accoya® is ideal for this property as it is constantly exposed to the sea air, in addition to varying weather year round. The louvres, three garage doors, front door and entrance wall, bifold doors, sliding doors, windows, cladding and pedestrian gate to access driveway were all manufactured using Accoya®. The homeowner wanted to use a hard-wearing timber due to the close proximity to the sea but also wanted to consider sustainability, making Accoya® the right solution. All Accoya® wood was coated using Rubio Monocoat to give a darker brown effect whilst allowing the natural grain of Accoya® wood to remain visible. For more Accoya® projects, visit www.accoya.com/projects

Project details
Architects: Akha architects
Joinery: Window and Door Store Cape
Photography: © Sean Gibson Photography

Accsys Technologies PLC – Annual Report and Financial Statements 2022

10 OUR PRODUCTS

ACCSYS PRODUCES TWO PRODUCTS

Accoya is our acetylated solid wood product brand. It is the world’s leading high performance sustainable wood brand, sourced from fast growing, FSC® certified forests. It is both highly stable and resistant to rot, with properties that match or exceed those of the most durable tropical hardwoods, plastics and other non-renewable alternatives. Ideal for use across numerous internal and external applications, Accoya’s primary applications are windows, doors, decking and cladding.

Accoya comparison chart

	Accoya	Sapele	Oak	Meranti	Iroko	Redwood
Lifespan	●●●	●●●	●●●	●●●	●●	●●
Warranty	●●●	N/A	N/A	N/A	N/A	N/A
Coatings performance	●●●	●●●	●	●	●	●
Thermally insulated	●●	●	●	●	●	●●
Maintenance intervals	●●●	●●	●	●	●	●

Tricoya wood chips are the principal ingredient used by our licensees to manufacture Tricoya panel products (similar to MDF) with enhanced properties: exceptional durability, very high dimensional stability and ideal for use in wet environments internally or externally. These properties open countless opportunities for specifiers, architects, joinery manufacturers and product designers.

Accsys Technologies PLC – Annual Report and Financial Statements 2022

See page 34 for more information on the Tricoya consortium

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

11 OVERVIEW

SUSTAINABILITY

Both wood product brands compete not only with other wood products, such as tropical hardwoods, but also other carbon intensive materials such as aluminium, steel, concrete and plastic. The durability of our products means that we are well placed to substitute these less sustainable materials, as well as offering the additional sustainability benefits that building from wood affords. All sourced wood that is used to manufacture both Accoya and Tricoya is FSC® certified. Our Accoya product brand is also certified by Cradle to Cradle at the Gold level.

PERFORMANCE

Accoya and Tricoya redefine performance when it comes to timber. Both product brands are highly durable with industry leading warranties of up to 50 years above ground and 25 years in ground or freshwater. Offering outstanding dimensional stability in their composition, both products are suited to extreme climates as well as offering high levels of insect resistance.

FINISH

Accoya and Tricoya products look better for longer. Accoya affords the option of being left uncoated to weather naturally or opting for a coated finish. Due to the excellent dimensional stability of both Accoya and Tricoya, coatings last longer, with many coatings manufacturers offering extended coating warranties on their products. Maintenance time is reduced, saving time and money over the long term. Versatility of products means design freedom not normally achievable with other wood products.

Warranty for 50 yrs above ground and 25 years in ground or freshwater
Reduction of over 75% in swelling caused by moisture uptake

Certiﬁcation

Demonstrating leading sustainability credentials

Our products are defined by three sets of credentials: performance, finish, and sustainability. It is with this combination of product attributes that we seek to delight our customers and stand apart from the competition.

25 & 50 YEAR WARRANTIES
HIGHLY STABLE
HIGHLY DURABLE
LONG SERVICE LIFE
NATURAL WOOD
LOW MAINTENANCE
MULTIPLE FINISHES
BESPOKE OPTIONS
IDEAL FOR COATING
WIDE BOARDS AVAILABLE
LOW CO₂ EMISSIONS
NON TOXIC
WORLDWIDE ACCREDITATION
LOW ENVIRONMENTAL IMPACT
SUSTAINABLY SOURCED
100% RECYCLABLE
INSECT RESISTANT
FOR ALL CLIMATES
FEWER CALL BACKS

50 YEAR WARRANTY
INSECT RESISTANT
BESPOKE OPTIONS
HIGHLY STABLE
FOR ALL CLIMATES
HIGHLY DURABLE
LOW MAINTENANCE
FEWER CALL BACKS
WIDE BOARDS AVAILABLE
LONG SERVICE LIFE
MULTIPLE FINISHES
LOW CO₂ EMISSIONS
LOW ENVIRONMENTAL IMPACT
NON TOXIC
SUSTAINABLY SOURCED
WORLDWIDE ACCREDITATIONS
100% RECYCLABLE

Accsys Technologies PLC – Annual Report and Financial Statements 2022

12 A SIGNIFICANT GROWTH OPPORTUNITY

Overview

Accsys’ products are positioned within the substantial global wood products market, a subset of the wider building and construction market. Macro-economic trends, wider societal ‘megatrends’ and market penetration opportunities provide us with significant growth and demand drivers within our market. With demand for our products exceeding our volume of supply, currently a key enabler for sales growth is growing our volume of production capacity. Our ‘5x by 2025’ production target is a key goal in our growth strategy, further details of which can be read in the CEO’s Report.

Market size

We operate within the global wood products industry which produces approximately 800 million cubic metres per annum, according to the UN Food & Agriculture Organization. As our products compete with and displace other non-wood building materials from concrete to plastics, the market in which we operate is even larger. We have used independent market research to estimate that by continuing in our current market approach, with prioritised targeting of regions and product use applications, the potential achievable market for Accoya® and Tricoya® is in excess of 2.6 million cubic metres annually.

Our achievable market figure has three important factors behind it:

Firstly, we know that our products outperform competing materials most strongly when used outdoors. The global outdoor wood market is estimated to be around 14% of the global lumber or sawnwood market.
Secondly, our products compete with the high value end of the outdoor wood market, representing around a quarter of the global outdoor wood market.
Thirdly, our targets for Accoya® and Tricoya® are currently six geographic markets and four product use categories, and our achievable market figure reflects only this scope.

Based on these factors, within the broader global market for solid wood, our target of an achievable 1 million cubic metres for Accoya® still only represents a fraction of the addressable market opportunity. The global market for Tricoya® panel products is estimated to be at least 1.6 million cubic metres per annum, equating to around 1% of global MDF manufacturing capacity.

59,649 m³ Accoya® sold in this financial year
Approximately 2% of 2.6+ million cubic metre total potential market estimation for Accoya® and Tricoya®

OUR MARKET

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

13 Demand drivers

There are three main types of drivers of demand for our products.

Industry demand drivers

GDP
Over time, construction – the main driver of wood consumption – increases as a result of rising GDP per capita, associated economic development and standards of living rising.

Construction & redevelopment
Our products are used in new constructions as well as refurbishment, redevelopment and remodelling for commercial and residential buildings and projects. Underlying drivers include social and market expectations of building usages, performance and design, as well as regulatory changes (e.g. building safety, maintenance, sustainability and energy performance). One-off events can also impact construction and redevelopment growth, as seen with the COVID-19 pandemic causing consumers to spend more time at home and increases in home improvement.

Market penetration
Our products are most frequently chosen for their exceptional performance and characteristics across all climates. The exceptional performance, sustainability and quality of Accsys’ products are fundamental to our proposition. With this valued competitive advantage against other woods and non-wood materials, we believe we can grow faster than the market through market penetration and share gains.

Market share and growth

Accsys has developed as a company and has developed its markets substantially since proving the commercial viability of acetylated wood. We have grown market share and brand awareness in the industry through market seeding under our current model of distributor supply and manufacturer support.

Megatrends

The superior performance and sustainability characteristics of our products tie into a number of broader macroeconomic trends.

Sustainability
The world is coming to a consensus that action is needed to address climate change. The built environment is responsible for almost 40% of global carbon emissions. In addition to decarbonisation, the ‘Race to Zero’, and setting of net zero carbon targets, there is also an increasing focus on renewable resources: reducing embodied carbon in materials and buildings and shifting to the circular economy.# OUR MARKET

continued

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

Many countries and even global businesses now have mandatory, legislative targets to be carbon neutral by 2050; decarbonisation is not simply an option but a necessity.

Shifting consumer priorities

Consumers in our geographic end markets continue to shift towards products that have a lower environmental impact. This can be seen everywhere, from the types of shopping bags or drinking straws we use, to the cars we drive. In the built environment, the trend is the same. We can see evidence all over the world of mass timber buildings – using renewable, carbon-storing wood instead of concrete and steel. Wood is the increasingly popular ‘green building material’ choice, with its natural look and feel and particular favour shown for natural and sustainable products over non-renewable tropical woods. Increasing customer importance is being placed on whole life cycle considerations – both of costs and environmental impacts. Consumers are also becoming more aware of product health and safety with a trend towards non-toxic products.

Lifestyle changes

Socio-economic changes drive a cultural shift in expectations for residences and commercial buildings. There is increasing demand for high performance and low maintenance wood products suitable for outdoor use, with this segment expected to grow faster than for softwood grades generally. Causes of this include lifestyle changes across economies.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 14

Product applications

Our products encourage manufacturers, architects, specifiers and consumers to make sustainable building material choices on multiple global applications, without compromising on performance.

Competitive advantage and material substitution

Accoya® solid wood has class-leading properties that match or improve upon the unsustainable alternatives, combined with its certified sustainability credentials. Our acetylation process substantially reduces the effects of water on the wood, dramatically reducing susceptibility to swelling, shrinking and decay – all but eliminating the traditional drawbacks of wood, while enhancing the positives. Architects, specifiers, manufacturers and end-customers no longer need to choose between performance and sustainability, with Accoya® offering clear advantages over non-renewable, unsustainable and heavily polluting alternatives such as tropical hardwoods, synthetics and plastics or mined metals.

Tricoya® panels’ enhanced performance and suitability for use in ‘wet’ environments not only improves their appeal compared to traditional panel products, but also opens completely new use scenarios and design possibilities. Tricoya® displaces alternative more expensive or less easily handled products and opens up major new market opportunities in the construction sector; and sales of Tricoya® panels have increased significantly each year since their introduction to the market.

Both products offer not just ultra-high quality and performance but also market-leading warranties and service life, along with the sustainable benefits and credentials that make them so attractive in this increasingly environmentally-responsible world.

Targeted segment penetration

With products that could be described as ‘disruptive’ to the existing materials on offer, and with demand exceeding production capacity, we have focused on developing the regions and product applications to support rapid but sustainable growth. This means targeting the product categories and use cases for which our products are particularly well-suited, offering the most substantial and easily-understood advantages over other materials.

The majority of our Accoya® sales are to a network of timber distributors which in turn supply a variety of industries, principally for joinery (windows and doors), decking and cladding. Accoya® is primarily selected for use by architects, manufacturers and specifiers for its high performance characteristics. We focus on these applications as Accoya® offers particularly clear and compelling advantages over traditional alternatives, both in material performance as well as sustainability.

DECKING

Wood decking has a look and feel of its own. Our products’ resistance to cracking, splinters, and other effects of weather and water offers the choice for genuinely sustainable, long-lasting decking of unmistakable quality.

WINDOWS

Classic looks with contemporary performance: Accoya® wood window frames deliver all the benefits and beauty of natural wood with none of the downsides: superior thermal insulation, minimal upkeep, maximum stability, durability and sustainability.

OUR MARKET continued

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

Tricoya® panels are currently manufactured using chipped Accoya® wood, in advance of the completion of the dedicated Tricoya® wood chip acetylation plant in Hull, UK. Agreements have been secured with MEDITE and FINSA, who are expected to use the Tricoya® acetylated wood elements in place of traditional wood chip feedstock to create, market and sell Tricoya® panels.

Sales of Tricoya® panels have increased significantly each year since MEDITE introduced them to the market in 2012, being used both in place of ‘traditional’ panels and in applications where wood panels would not have previously been feasible. As we expand our manufacturing capacity, we will be targeting not just development of and expansion into new regional markets, but also into more application types as we continue to develop our product range.

Route to market

Our focus on marketing and selling to our distributors and their customers has been a very successful route to establish our products in the market as we challenge traditional preconceptions about material choice. We have built and developed strong relationships with our distributor networks in key territories. Through training, support and engagement with them and their manufacturing customers, we develop brand and product advocates throughout the value chain.

We are seeking to significantly increase the awareness of the benefits of Accoya® with end users and consumers. Currently our extended sales network with our partners and customers is a major driver of end-user demand – expert recommendation being highly valued in our markets – however we are already seeing evidence of Accoya® in particular gaining a very positive reputation with enthusiastic property and home owners as well.

The Accoya® brand was refreshed in FY2021, supported by a new website and consumer-facing digital campaigns. The integration of our Approved Manufacturer Programme with location- and application- based ‘Where to Buy’ listings on the new website has resulted in significantly increased throughput of demand to vendors of Accoya® products: benefitting our brand, our customers, and end-consumers.

By developing our multi-channel marketing strategy, coupled with continued close support with our distributors and manufacturers, we will ensure that we continue to build on our strong market position.

DOORS

Industry-leading stability means that our products won’t shrink and swell like other wood: reducing the chance of sticking or jamming in wet conditions, and helping coatings last far longer before cracking or peeling. Tricoya® and Accoya® both provide compelling advantages for all kinds of exterior doors.

CLADDING

Form and function combine perfectly as Accoya® and Tricoya® give designers, specifiers, woodworkers, architects and property owners a material with boundless creative possibilities, world-leading sustainability credentials and best in class long-term performance.

15 Our differentiators

We utilise the following resources and relationships, which offer us a competitive advantage in our marketplace:

We obtain the raw wood timber we use to produce our products from certified sustainable, well-managed and fast-growing forests through wood mills and wood chip suppliers in New Zealand and the UK.

We work with acetyls providers to source acetic anhydride and sell-back acetic acid, our reusable by-product into the market.

We manufacture our wood products using our proprietary, wood acetylation process at our existing plant in the Netherlands.

We work with a network of global distributors to get our sustainable wood products to our customers, who utilise Accoya® and Tricoya® materials to create branded products such as windows, doors, decking, cladding, façades and other external applications.

OUR BUSINESS MODEL

GIVING THE WORLD A CHOICE TO BUILD SUSTAINABLY...

Through our sourcing, production, and bringing our products to market, our business model enables Accsys to fulfil our purpose and give the world a choice to build more sustainably.

Our technology and IP

We have developed families of patents, providing robust protection over our proprietary products and processes.

Our people and engineering expertise

Our passionate employees are key to the successful execution of the Group’s strategy, together with their valuable know-how and a dedication to the future success of the Group.

Environment and sustainability

Accoya® & Tricoya® fit perfectly in the bio-cycle of the circular economy. Accoya® is

45 countries in which we hold
400 patent family members
23% headcount increase in FY22
Cradle to Cradle Certified™ at the Gold level

Accsys Technologies PLC – Annual Report and Financial Statements 2022 16

Our activities

We combine chemistry, technology and ingenuity to make high performance wood products that are extremely durable and stable, and opening new opportunities for the built environment. Our business and products add value at each stage from sourcing to sale and use, through their quality, sustainability, competitive benefits and longevity. Our activities also focus on strategic expansion of our business to capture the substantial global market opportunity we believe is achievable with our products.# OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Forest Stewardship Council® (FSC) certified Outputs 59,649m 3 Accoya® wood sold this year +21% FY22 underlying revenue growth which continues to be driven by ongoing distribution customers Sourcing Proprietary product manufacturing Global sales and distribution Our differentiators We utilise the following resources and relationships, which offer us a competitive advantage in our marketplace: Our stakeholders We work with our stakeholders across our business activities. Through our business activities, we create value for stakeholders in different ways. Our Stakeholder Engagement report on page 61 sets out further detail on our stakeholder relationships. 5x by 2025 production capacity growth target We develop and optimise existing sites and processes to benefit from existing skills and leverage operational and financial scale. We identify new international locations and appropriate partners to develop additional capacity in order to meet our longer-term growth potential in global markets. We have developed innovative, proprietary and protected technologies. We continue to invest in R&D, focused on optimising our existing product offering and technologies and investing in focused technology solutions. In FY21 we launched a new, unique product to selected markets, offering customers Accoya® wood which is coloured through from surface to core. Working with the right business partners helps us maximise our potential, enabling our growth to realise the substantial global market opportunity for our products. We continue to advance our strategic priorities, in particular by working with partners which have resources or technologies that complement our own. ... AND INVESTING IN OUR FUTURE Strong industry relationships We work with equipment manufacturers, wood suppliers, the acetyls industry, testing and certification bodies, and other system supply specialists, to help us develop our technology, products and their place in the market. Industry leading brands Our brands Accoya® and Tricoya® are globally registered trademarks, portraying our products’ sustainable, high quality and long-term performance. Financial position With continued growth in revenue and a cash-generative Accoya® business, our financial position will support our global growth plans. See page 61 for Stakeholder Engagement €1.2m R&D investment in FY 22 excludes capex on new technology Ventures with world class business partners Over 60 countries in which our brands are registered trademarks +21% Revenue growth in FY22

Building new plants and optimising existing sites

Research and development (R&D)

Working with business partners

Our Stakeholders

SHAREHOLDERS	ARCHITECTS	EMPLOYEES	SUPPLIERS	MANUFACTURERS	CONSUMERS	DISTRIBUTORS & SPECIFIERS

Accsys Technologies PLC – Annual Report and Financial Statements 2022

18 18

OUR STRATEGY REALISING OUR AMBITIOUS GLOBAL GROWTH PLAN

WE ARE SEEKING TO GROW OUR ANNUAL PRODUCTION CAPACITY FIVE-FOLD TO 200,000M 3 BY 2025 WITH A FOCUS ON FOUR STRATEGIC PRIORITIES

Develop our technology
Build organisational capability
Practise manufacturing excellence
Grow product demand

Accoya wood vertical panels on the front façade. Perth, Western Australia. Supplied & installed by M&B

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

19 19

Our focus

Drive sales growth in key markets and categories
Strong customer relationships, service and support
Build and protect brands
Competitive advantage through product performance, quality, and sustainability
Well-positioned for global sustainability and consumer megatrends

Our focus

Grow manufacturing position and production capacity in North America and Europe and internationally
Optimising plants & processes for scalable growth
Replicating technology with continuous improvement
Safe operations, everywhere
Partnering fairly

Grow product demand
Developing market opportunities to drive revenue growth.

Practise manufacturing excellence
Growing our global manufacturing production capacity. Doing things faster, better, and more safely.

Material Issues

Sustainable & quality products
Energy & climate change
Governance, management and advocacy
Responsible sourcing
Society & Communities

2022 Progress

Accoya® Arnhem fourth reactor 33% capacity expansion construction progressed with commissioning underway
Construction of ~43,000m 3 Accoya plant in North America under JV with Eastman Chemical Company commenced following investment decision in March 2022
Tricoya® Hull plant physical construction largely complete, and active commissioning underway
Acquisition and repurposing of new Barry, UK site with first batch of Accoya Color produced from new site
Further development of safety strategy and culture, and increased monitoring and reporting of safety indicators
Improved Lost Time Incident Rate (LTIR) rate of 0.5 from 1.8 in prior year

2022 Progress

Total sales volume broadly flat at 59,649 m 3
Continuing strong customer demand, in excess of capacity
New country specific websites for Switzerland, Australia and New Zealand
100% increase in traffic to Accoya websites for second consecutive year
Significant increase in lead generation funnel into Approved Manufacturers
North America market sales ramp-up progressing well, with >40% sales volume growth in North America
Accoya® Color sales growth in decking in DACH region

Looking forward

Further North American sales and brand development
System Partner expansion – co-branding with coatings, adhesives, and hardware manufacturers
Further expansion of B2B activities including Approved Manufacturers Program and collaboration with customers
Increasing B2C brand awareness in core markets to drive consumer ‘pull’
Accoya® Colour market expansion into North America

Looking forward

Tricoya® Hull plant and Arnhem fourth reactor to double production capacity from 60,000m 3 to 120,000m 3 in FY23
Two year construction timeline from March 2022 for 43,000m 3 Accoya USA plant
Completion of feasibility study with PETRONAS Chemicals Group Berhad for the construction of a Tricoya® plant in Malaysia

Material Issues

Sustainable & quality products
Energy & climate change
Governance, management and advocacy
Responsible sourcing
Health and safety
People and wellbeing
Ecological footprint

Read more about our manufacturing expansion in ‘CEO Report’ on page 20
Read more about product demand in ‘Our Market’ on page 12

Accsys Technologies PLC – Annual Report and Financial Statements 2022

OUR STRATEGY continued

See our ‘CEO Report’ on page 20 to read more about our IP
Read our ‘Sustainability report’ on page 50

Our focus

Pursuing process technology to enhance efficiency
Optimising existing products
Protecting our IP
Sourcing responsibly
Lowering resource use and incorporating circular processes

Our focus

Talent management: Adding new skills and talent
Developing our people: Leadership & training
Engaged workforce
Living our values and culture

Develop our technology
R&D of product and process-related technologies and IP to protect and grow our leading market position.

Build organisational capability
Developing our people and organisational capabilities to manage our growth.

Material Issues

Sustainable & quality products
Innovation and technology

2022 Progress

Expanded senior leadership, talent and skills to support growth
Implemented project management office and stronger project management discipline across new projects
Recruitment of new operating roles for our teams to operate new capacity at Arnhem and Hull
Increased investment in training and development to support skills and talent pipeline
Good employee engagement with a 78% response rate to annual engagement survey, with a focus on inclusion and diversity this year

2022 Progress

Continued and expanded IP protection and safeguarding
Global Technology Centre housing central R&D team to support worldwide expansion
Accoya® Color production at new Barry, UK site commenced
Ongoing research into alternative source wood species’ performance
New automated wood handling equipment installed in H2 FY22 with 100,000m 3 annual capability to improve handling and efficiency

Looking forward

Improving process efficiencies, including new wood handling process and equipment
Longer-term research into potential for additional product categories as overall capacity increases
Continue to develop and expand our IP portfolio to support our business strategy
Research into and assessment of alternative raw materials supply options

Looking forward

Progressive enhancement of processes and management systems (eg ISO 9001, 14001)
Continued improvements resulting from annual employee survey feedback
Improving capital project delivery: Stronger project management and contracting practices
Also supported by site-based accountability at Arnhem and Hull

Material Issues

Governance, management and advocacy
People and wellbeing
Fair & ethical conduct

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

GOVERNANCE

COMPETITIVE ADVANTAGE THROUGH PRODUCT PERFORMANCE

The Wood City is an ongoing development in Finland that features Accoya cladding. Accoya was specified for its durability and overall sustainability. Phase one buildings were completed in 2019. These photos were taken during FY 2022, showing that the natural weathering of Accoya has started, turning a distinct shade of grey. Like other wood species, uncoated Accoya wood will weather over time to an elegant silvery grey colour when left outside and exposed to the elements. Unlike other woods however, weathering does not affect the durability, stability or performance of Accoya. For more Accoya projects, visit www.accoya.com/projects

Wood city, Helsinki, Finland.# STRATEGY IN ACTION

DRIVING GROWTH IN NORTH AMERICA

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

OVERVIEW

“ This award-winning residential project in New York represents not only the beauty and quality of Accoya, but also Accoya’s growing presence in the significant North American market in high quality homes and projects”
Mike Lee
Regional Head of Sales – North America

What was the project?

The Butter Lane Residence, otherwise known as the “Six Square House,” is located in Bridgehampton, New York. The home is made of six 24’ x 24’ modules that all feature gabled geometry and a complex-looking roof design that’s shaped like an inverted V. The modules create a seamless and uninterrupted design between the roof and cladding of the home. The simple exterior materials accentuate the roof geometry from all viewpoints. The roof composition translates into the home’s interior, creating six distinct areas. This residential project in New York represents not only the beauty and quality of Accoya, but is an award-winning example of Accoya’s growing presence in the significant North American market in high quality homes and projects.

How was Accoya chosen and used?

reSAWN TIMBER co is an Accsys customer and supplier of Accoya in North America. reSAWN provides prefinished Accoya for architectural specification for exterior and interior applications. For this project, working with the design firm Young Projects, Accoya was specified in IKIGAI by reSAWN. This features charred Accoya wood burnt in the Japanese style of shou sugi ban. IKIGAI can be used for interior or exterior wall cladding.

What was the award for?

Six Square House was recognised in the 2021 AINY Design Awards and was nominated for ArchDaily Building of the Year 2022. AIA New York’s annual Design Awards program recognizes outstanding architectural design by AIA New York members, New York City-based architects in any location, and work in New York City by architects around the globe. The purpose of the awards program is to honor the architects, clients, and consultants who work together to achieve design excellence. In describing the project, the AIA described the home’s “deep gray slatted Accoya wood, whose striations enhance the roofscape’s dynamic edges and arcs while emphasizing the monolithic nature of each module”.

Grow product demand
Link to Strategy: See Our Strategy on pages 18 to 20
For more Accoya projects, visit www.accoya.com/projects

STRATEGIC REPORT

ENHANCING PRODUCTION EFFICIENCY

“ The new stacker technology and equipment will support safety, quality and efficiency improvements”
Francis Lenders
Managing Director, Accoya NL

What is ’process technology’?

One of our four strategic pillars is to develop our technology. At our Arnhem facility, we are researching and developing ’process technology’ that can improve production processes. One example is our new ‘stacker’, which was installed in December 2021, alongside our work in Arnhem this year in adding a fourth reactor.

What is the new stacker?

This is a high tech wood handling machine that helps in the loading and unloading of wood before and after our proprietary acetylation process. The stacker allows us to mechanically move raw wood planks into our required stack formation, so that the stacks are then ready for moving into our reactors for acetylation. The new stacker was custom built for Accsys and has the capacity to handle over 100,000m 3 per annum, significantly improving our existing stacking process.

How will it support production efficiency?

The new stacker technology and equipment will support safety, quality and efficiency improvements. The stacker will be used for stacking before and after the acetylation process. In the de-stacking process, the stacker will also allow us to sort and grade the boards ensuring not only increased productivity but also increased quality assurance.

Develop our technology
Link to Strategy: See Our Strategy on pages 18 to 20

KEEPING UP WITH DEMAND

“ 2022 has been an important year for our customer relationships”
John Alexander
Group Sales Director

What is the most common customer feedback you receive?

The discussions are often rooted in Accoya’s strong product performance and how it benefits their products and business. This is now common feedback across the market, with a notable increase in recognition across the North American market in particular. Common feedback is also that customers can build business with Accoya and require additional volume. We have been held back on being able to provide more because of capacity constraints.

How do you manage this balance with customers?

The demand remains really strong, and so communication this year has been really important – more than ever. It is frustrating to not be able to give our customers as much product as they would want, but we have some incredibly passionate and supportive customers and we are working to deliver for them. We are now on the cusp of capacity increasing and the discussions have moved to how we bring that material most effectively to market together. Service focus at scale is an increasingly important part of the growth journey the company is on. We have also spent time this year working with our customers on training, education and on sales and marketing support. This support and collaboration is important as we increase both supply and sales going forward.

Grow product demand
Link to Strategy: See Our Strategy on pages 18 to 20

FINANCIAL STATEMENTS

Introduction

“ With our purpose of ‘Changing Wood to Change the World’, our talented Accsys team is on a mission to grow five-fold by 2025 and bring our high- performance, sustainable wood products, Accoya® and Tricoya®, to the world”

Accsys has made further strategic progress towards its growth vision in FY 22. With our purpose of ‘Changing Wood to Change the World’, our talented Accsys team is on a mission to grow five-fold by 2025 and bring our high- performance, sustainable wood products, Accoya® and Tricoya®, to the world.

Accsys has delivered good revenue growth in the 2022 financial year, underpinned by continuing strong demand for our products and increases in average sales prices to offset the inflationary pressures on raw materials. Despite these pressures, Accsys has delivered a resilient performance with growth in underlying EBITDA and underlying profit before tax year-on-year. In the period we have further progressed our strategic expansion projects under our ‘5x’ growth target of increasing production capacity to 200,000m 3 per annum in 2025.

In North America we began construction of a new Accoya® production facility in Tennessee under our majority share JV with Eastman Chemical Company and made significant progress in completing the construction of the World’s first Tricoya plant in Hull. Despite some frustrating and isolated delays, we have commenced commissioning of our 33% capacity expansion at our Arnhem Accoya® plant in the Netherlands. This has also been an important period of investing in our business and people. New colleagues that have joined bring skills and expertise to help lead and deliver our growth ambitions.

Demand for our products remains strong. FY 22 has been an important year for our customer relationships, as a year in which we have had to manage both the pressures from an inflationary cost environment through sales price increases, disruption to supply chains around COVID-19 and our own production capacity limit in the face of strong customer demand. We are grateful for the support of our customers, and we have remained in close ongoing dialogue with them as we have addressed these market dynamics.

During the year Accoya’s® high level of performance and sustainability was recognised in various industry awards including the 2022 Alliance for Sustainable Building (ASBP) Awards in London for sustainable low carbon building products, and the US Architectural Product Magazine’s award for product innovation. Accoya also won ‘Best Natural Building Material’ at the 2021 Green Home Awards and ‘Best sustainable technology or product’ at the 2021 Build It Awards. We have been delighted to see Accoya® installed and specified on some flagship architectural projects from London to Rome to the Red Sea. We are proud of the ever-growing pool of residential, commercial, and civic building and renovation projects around the world that are choosing Accoya® and Tricoya® in substitute for less sustainable and lower performance alternative materials.

Summary of results

The Group has delivered good revenue growth on a broadly stable sales volume while remaining capacity constrained. Total revenue for the 2022 financial year increased by 21% to €120.9m (FY21: €99.8m). Accoya® sales volume of 59,649m 3 represents a 1% reduction compared to the prior year. Revenue growth was driven by an increase in average selling prices for our high-performance wood products, and in our acetic acid by-product, while the volume result primarily reflects that our production is at capacity, and disruption to production at Arnhem in the fourth quarter, as reported in early March 2022 and as further set out below.# CHIEF EXECUTIVE’S STATEMENT

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

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2022 2021
60,466m 3 59,649m 3
Accoya® sales volume
59,649m 3
2022 2022 2021 2021
33% 30%
78% 78%
Accoya® manufacturing margin
30%
Employee engagement – response rate
78%

In the period, the Accoya® manufacturing margin was 30% (FY21: 33%), in line with our long-term target level. Higher average sales prices through price increases helped to offset increased raw material costs during the year, with significant increases in acetyls costs in the fourth quarter, as a result of global gas market volatility in particular. In addition to our sales price increases, we continue to benefit from a partial natural hedge on our acetyls raw materials cost through the sale of our acetic acid by-product. Revenue from the sale of this by-product increased 134% in the year to €13.6m driven by the same acetyls market pricing trend that impacted Accsys on the raw material cost side. Group underlying EBITDA increased by 3% against the prior year to €10.4m. This reflects our higher revenue being partially offset by higher Group operating costs year-on-year with increased investment in Group organisational capabilities with increased headcount to support our future growth and operate our new capacity. 18% growth in underlying profit before tax to €1.3m (FY21: €1.1m) includes the benefit of lower finance expenses after the Group’s refinance and simplification of Group debt in H2 FY22. At the close of the period the Group’s balance sheet reflects €27.2m year-end net debt, and €55.0m, adjusted year end net debt which excludes US$31m committed for investment into the US JV and which is expected to be invested into the JV in Q1 FY23.

Accoya® – Global performance

Accoya® segment – summary of results

	FY 2022	FY 2021	Change
Accoya® sales volume – cubic metres	59,649	60,466	(1.4)%
Underlying Accoya® segmental revenue	€119.3m	€97.6m	22.2%
Accoya® wood revenue	€105.1m	€91.1m	15.4%
Licence income	€0.4m	€0.4m	–
Acetic acid sales	€13.6m	€5.8m	134.4%
Manufacturing margin – %	29.8%	33.4%	360 bps
Underlying EBITDA	€21.3m	€21.4m	(0.5)%
Underlying EBIT	€16.5m	€17.1m	(3.5)%

Please see note 1 to the Financial Statements for Alternative Measures details.

Accsys Technologies PLC – Annual Report and Financial Statements 2022
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The Accoya® business delivered broadly stable sales volumes in FY22, since the Arnhem plant remains at capacity production levels, and also because of temporary production downtime at the Arnhem plant, further detail of which is set out under Accoya® strategic progress below. Accoya® revenue growth of 22% was similarly driven by increased average sales prices, reflecting the continuing strong demand from customers and increases to offset higher raw material and logistics costs in our supply chain during the period. Price rises were implemented in June 2021 and September 2021. Average prices were also higher than the prior year period due to changes to the product mix, which included a growing proportion of Accoya Color (1,888m³ in FY22 compared to 171m³ in FY21) and a lower proportion of material sold to Tricoya® customers, which represented 22% of total volumes compared to 26% last year. The Accoya® manufacturing gross margin was 30% (FY21: 33%). Whilst this is c. 3% lower than the prior year, it remains at our target margin level. Overall the higher average selling price in the period more than offset the effect from the higher raw material costs. In addition, gross contribution per cubic metre of Accoya® of €595/m³ is 11% higher than the prior year, while the percentage margin is lower due to a shift in the mix of types of products sold within Accoya® with further detail set out in the Financial Review. We have continued to see strong underlying demand for Accoya® across our regions and with our Tricoya® panel manufacturing partners. The FY22 regional sales trend, on a period-on-period basis, primarily reflects increased sales volumes in North America by 44% where we are increasing marketing, sales, and allocation of product volumes available to customers as we develop this market ahead of our planned US capacity expansion.

CHIEF EXECUTIVE’S STATEMENT continued

As a result, and with available production volumes from Arnhem broadly flat year-on-year, sales volumes in most other regional markets have reported a year-on-year decline. This does not reflect underlying demand, but a shift in available volumes in the context of the North American ramp-up. We expect sales volumes in these markets to improve as increased volumes become available from Arnhem as the new capacity from the new fourth reactor (R4) comes online, and the volume supplied to Tricoya® panel manufacturing partners transitions from Arnhem to Hull.

Sales volume by end-market

	FY22 m 3	FY21 m 3	Change %
UK & Ireland	14,905	14,937	0%
Tricoya®	12,860	15,891	(19)%
Rest of Europe	16,809	18,574	(10)%
Americas	9,575	6,642	44%
Rest-of-World	5,500	4,422	24%
Total	59,649	60,466	(1)%

Accoya® Strategic progress

Across the year we progressed construction to expand our Accoya® production capacity at Arnhem by adding a new 20,000m³ reactor, to increase the site’s annual capacity to 80,000 cubic metres. While approaching the planned project completion at the end of FY22, we faced challenges in the final installation of and temporary production downtime at the Arnhem plant, as reported in early March. Early in the new financial year we experienced further unplanned delays in final installation, tie-ins and delays in the supply of certain equipment as reported in May, which led to a delay in the expected operational start-up of R4 until June. This resulted in an unexpected second shutdown across the plant in April/May 2022. Commissioning of R4 is underway and the plant’s existing three reactors are now back up and fully operational. During commissioning and testing in June, defects were identified in certain installed items of equipment which requires remedial work to repair. This remedial work has required the operational target date of June to be extended from Q1 FY23 into Q2 FY23 and we expect the delay impact of this to be at least 8 weeks. At present we estimate the remedial work cost to be around €1m and are looking to establish if the costs are recoverable. New automated wood handling equipment, which has the ability to handle 100,000m³ per annum including a stacker and scanner, was installed during the year which will support the overall expanded site. This new equipment will provide greater handling efficiency and safety, and the new laser scanner will allow us greater efficiency in our ongoing pre- and post-production quality-control processes. We plan to bring the new fourth reactor gradually up to capacity over two years, increasing Accoya® sales volumes into the market in FY23. We are working closely with our customers who have been waiting patiently for more product and remain strong proponents of Accoya®. As our Tricoya® plant in Hull becomes operational we will gradually stop producing lower-grade Accoya® for production of Tricoya® at Arnhem, effectively making around 22% of the plant’s capacity also available for additional Accoya® production.

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OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

North America represents the largest potential regional market for our product, with an achievable market for Accoya® of up to almost 1,000,000 cubic metres per annum. Under our joint venture with Eastman Chemical Company (NYSE: EMN), a world leader in the production of acetyls, we are building an Accoya® plant in the USA with an initial approximately 43,000 cubic metres capacity at Eastman’s Kingsport, Tennessee site. The plant will replicate our existing Accoya® technology at Arnhem. Under the JV, Accsys holds a 60% interest and Eastman a 40% interest.

CASE STUDY

Accoya cladding chosen for Bay St. Louis residence

Accoya cladding was chosen for this beautiful residence in Bay St. Louis, Mississippi. For more Accoya projects, visit www.accoya.com/projects

Project details

Accoya cladding manufactured by: Delta Millworks
Architect: Unabridged Architecture

In March 2022 we reached a final investment decision to proceed with the project and moved to commence construction with ground broken in April 2022. Earlier during the 2022 financial year, we completed a number of JV planning workstreams including detailed front-end engineering design (FEED) of the plant, market assessment study, negotiation of operational support and supply agreements, and the project’s financing. The project is being funded through a combination of equity contributions from the JV partners, and project debt finance. Further details of the project’s financing arrangements were announced on 4 March 2022 and are included in the Financial Review. We expect that the plant will take approximately two years to construct, with a further two years to ramp production up to the plant’s full capacity. The planning to date confirms the strong financial returns from the plant itself, with an IRR of over 20% targeted. During the year we expanded our ability to produce Accoya® Color through the acquisition of assets of the former Lignia Wood Company business in Barry, Wales, UK for consideration of €1.2m in July 2021.

Project details

Location: Wasilla, Alaska
Client: Mat-Su Health Foundation
Architect: Architects Alaska

Accsys Technologies PLC – Annual Report and Financial Statements 2022
3030

CHIEF EXECUTIVE’S STATEMENT continued

The acquisition, which included equipment, raw wood inventory and technology at the 50,000 square foot (4,650 square metre) manufacturing plant in Barry, Wales, increases our ability to convert Accoya® wood into Accoya® Color – a product which combines the benefits of Accoya® wood with colour all the way through the wood from surface to core, through a patented process.# STRATEGIC REPORT

Accoya® Color

After integrating and successfully repurposing the site for Accoya® Color production, we produced our first batch of Accoya® Color at the site in the period. The site is able to produce up to 12,500 cubic metres of Accoya® Color per annum, with expansion in future being possible to support global demand. We expect increased Accoya® Color sales in the medium term with its unique proposition proving attractive to customers in our target markets, particularly in the decking category where the surface-to-core grey colour will require less maintenance to retain over the long term. This will be supported by increased sales and marketing activity overall to drive end consumer awareness and demand.

CASE STUDY: MAT-SU Health Foundation

The Mat-Su Health Foundation (MSHF) is a new office designed for a non-profit organization whose mission is to improve the health and wellness of the people living in the community. The spaces are meant to build community and bring people together in new ways by creating areas for providers to collocate and provide space for public outreach programmes. The facility covers approximately 46,000 square feet and consists of two two-storey office buildings connected by a central core area and a grand staircase to promote walking between the floors. The interior and exterior finish pallet takes its cues from the surrounding environment and echoes the natural colours found in the community throughout the year. Sustainably harvested Accoya wood siding provides a contextual connection to other community buildings while energy-efficient systems create a space that is safe, welcoming and accommodating. For more Accoya projects, visit www.accoya.com/projects.

Tricoya®

Strategic progress

Accsys and its consortium partners in Tricoya® UK Limited (TUK) are building the world’s first Tricoya® plant in Hull. During the period the main physical construction of the plant has been largely completed. We reported an anticipated three- to-six-month delay to the lead engineering, procurement and construction (EPC) contractor’s construction schedule in April 2021. Subsequently the EPC agreement with the lead contractor for the project was terminated in June 2021, with the contractor citing reasons of force majeure arising from COVID-19. Accsys took over the project management directly to complete the final stages of plant construction. Following an extensive gap analysis, Accsys provided an updated expectation in August 2021 that the plant will be commercially operational by July 2022 and expected €9m to €15m in additional project capital costs than previously anticipated. These additional costs have been largely due to the extended project duration, including the previously reported engineering changes, delays due to COVID-19, and from the impact of past management of, and demobilisation from, the site. These costs also reflected a settlement agreement between TUK and the former lead contractor, where the parties settled and released each other from liability for claims against each other under the EPC contract.

In November under a new loan agreement with TUK, Accsys agreed to lend up to €17m to TUK for the plant construction project alongside existing funding in place for TUK. The supply and offtake agreements with TUK partners Medite (sale and purchase of Tricoya® wood elements) and INEOS (acetic anhydride supply) were also updated at that time to reflect the partners’ ongoing commitment to the project. We have made significant progress in the second half of the year, under direct project management by TUK and a significant increase in our own project team, improvements to project governance, and managing key mechanical, electrical and civil contractors. The plant physical construction workstreams are largely complete, and active commissioning of the plant is well underway. Wood chip commissioning is progressing to further stages of the plant, as we have brought different zones of the plant into commissioning in a staged approach. Most recently utilities have been brought into commissioning and testing the steam system and drying equipment will follow this. Our integrated operating team that will run the Tricoya® plant have been fully recruited and have been playing an active role in the commissioning process in recent months as we learn about and test the plant in its pre-operational commissioning phase.

Since May, further on-going challenges in completing certain day-to-day aspects of the construction have been experienced and commissioning has identified necessary rework of certain areas. In addition, we have been unable to mitigate certain third-party costs, including in relation to mechanical, electrical, instrumentation, control and piping work, to the extent previously forecast. The construction challenges and rework have extended the timeline to completion and the project team costs are running for a longer duration during these final resource intensive stages of the project. Whilst some uncertainty remains, we are targeting completion in the coming months. We now expect the total project capital costs for the project to be €94-103m, an increase compared to our previously announced range of €90-96m. We are in discussion with our consortium partners regarding the consortium’s funding options for the additional costs. Notwithstanding the recent fundraise, given the recent developments outlined above, there is a risk that Accsys may not fund the full extent of any cost overrun at this time, if an appropriate agreement with the consortium is not reached. The Board is actively monitoring the project to ensure the best interests of Accsys are maintained.

Our planning for the plant continues to allow for the ramp-up of production to full capacity over approximately three years following the commencement of operations. This reflects that this is the first plant of its type and that various modifications and operating improvements may be identified once the plant is initially operational and as the ramp up progresses. Once at capacity, we continue to expect that a gross margin of approximately 40% should be achievable for the Tricoya® product. Accsys remains committed to the safe completion and operation of the plant to realise the potential of the Tricoya® product with a large market opportunity, and ongoing high demand. Once the Hull plant is operational, we will look to expand Tricoya® production in Malaysia. We have an ongoing feasibility study with PETRONAS Chemicals Group Berhad for the construction of a Tricoya® plant in Malaysia, where Petronas is a producer of acetyls and this location would have potential to open up new markets for Tricoya in Asia. The full decision to progress with the plant will only follow after the Hull Tricoya® plant has been operational for a sufficient period to ensure that any engineering learnings can be factored into the Malaysian plant design.

Group Strategic Development

Building organisational capability

In the period we have made good progress in developing our people and organisational capabilities to manage our growth, with Accsys’ average headcount increasing from 199 to 244 people. Key hires in place include new heads of departments who are now developing platforms for supporting our growth as we look to increase our capacity significantly in the next six months whilst helping to ensure that the Group can further expand effectively including into new locations. We have also increased our headcount through the recruitment of new operating roles for our teams who will operate our expanded capacity at Arnhem and new capacity at Hull as these become operational and increased our project management team at Hull in the period to oversee the project construction as previously mentioned.

In addition, we have welcomed the new team at Barry through our Accoya Color acquisition. In addition, we have increased training and development. With new leadership training programmes and talent mapping, this is an ongoing but important process to ensure we have the right skills and talent in place and a pipeline to maintain this, as we grow into the future.

Technology & IP

Developing and protecting Accsys’ valuable portfolio of intellectual property and confidential information remains an important priority as the Group grows. Our IP covers not only our physical equipment and engineering but also our supply and production chain processes from the way we prepare our wood to the way we market and sell Accoya® and Tricoya® in the market. We continue to research and develop our technology, including our process technology to drive efﬁciency and quality in our products and production. During the year we have improved IP safeguarding procedures across the Group, and enhanced our project management process, capturing protectable technology as early as possible, and ensuring the strength of our patents is maximised. Accsys’ patent portfolio totals 400 patent family members, covering 27 distinct inventions in 45 countries with over 70% of the patent family members now granted. Our core technologies for Accoya® and Tricoya® production are protected by patenting and trade secrets to maintain our differentiation in the marketplace. Our principal trademark portfolio covers our brands Accoya®, Tricoya®, the Trimarque device and Accsys, protected by registrations in over 60 countries, with continued activity that strengthens those brands. Accsys monitors the commercial and IP activity of third parties to ensure its IP rights are not infringed and its commercial activity is protected.

ESG

Accsys remains committed to growing and operating its business in a sustainable way.

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
31
“ We continue to research and develop our technology, including our process technology to drive efﬁciency and quality in our products and production”

Accsys Technologies PLC – Annual Report and Financial Statements 2022
32
CHIEF EXECUTIVE’S STATEMENT continued# OVERVIEW

We have an ESG framework that aligns with our purpose, values and strategy, and sets out how we contribute to ﬁve main UN Sustainable Development Goals, with additional impacts on seven more. We have identiﬁed 10 key ESG material issues and impact areas. We have completed stage one of our 2020 sustainability strategy roadmap. This has included reviewing and developing our data and assessments, establishing baseline metrics, and identifying initial actions for improvement in each of our material issues. We continue to work on stage two which is setting speciﬁc development plans within each of our key areas. Across FY22 we have made good progress in four key ESG material issue areas set out below. We also continued our commitment to transparency and achieved our ﬁrst third-party rating of our ESG, with the S&P Global Corporate Sustainability Assessment (CSA). Accsys was benchmarked with forest and paper products industry companies, the strong majority of which are large companies with a market capitalisation of over €1bn. Accsys gained an industry percentile ranking of 61, and a company score of 38 (industry average: 37). We are pleased with our ﬁrst-year score which creates a baseline and way for us to assess our progress on our ESG journey against independent criteria in addition to our own targets.

Safety

The Group has set ‘Zero Harm’ as a key target for our operations and is committed to developing best practice Health & Safety (HSE) across Accsys. The 2022 ﬁnancial year has been an important year of development in this area, through increased monitoring of leading and lagging HSE metric indicators and awareness around safety and developing a safety-ﬁrst culture across our organisation. We have increased safety observation card reporting (SOC) to over 800 SOCs, increased leadership safety tours to over 500 tours, and increased our safety communication and awareness including our ﬁrst ever Safety Day. In FY22 we reported two lost time incidents (LTIs), a lagging safety indicator. Our Lost Time Incident Rate (LTIR) per 200,000 hours worked has reduced from 1.8 to 0.5 (our interim target is 0.5). This improvement is due to having fewer accidents year-on-year and with signiﬁcantly increased total hours worked through our contract workers, meaning fewer accidents for every hour that we work, which is a very positive development.

Energy & Climate change

We have developed our Climate Change policy which has been established to outline and clarify Accsys’ approach to climate change, with an expectation that it will be followed by all employees. Our approach to Energy & Climate includes a focus on energy efﬁciency and process optimisation, assessing the carbon impact of our products and integrated climate considerations and activities (e.g. risks and opportunities) across multi-functions across the business. Our next steps involve strategy implementation. In 2022, our location-based scope 1 and scope 2 emissions intensity increased by 4%. This change was driven by a year-on-year increase in electricity usage at Arnhem due to the installation of the new fourth reactor and new wood-handling equipment, but while overall production volumes from the new facilities and equipment have not yet increased.

The acquisition of the new site in Barry, UK site from Q2 in FY22 also increased emissions intensity, where the wood produced from Barry represents a conversion of Accoya volumes into Accoya Color but does not increase volume sold and therefore represents increased intensity.

Society and Communities

In the period we have begun to implement our new Society and Communities strategy, under which we have developed a more structured approach to social and environmental impact through tools such as charitable giving and employee engagement. We began working with our ofﬁcial charity partners and to engage our employees in our chosen charities’ missions. In September we completed a charitable employee initiative called ‘Step out, to help out!’. This saw colleagues across our organisation collectively walk over 16,000km over two months in the summer– the equivalent distance between each of our company locations and back – to promote wellbeing throughout Accsys and in our wider society. Under the initiative Accsys pledged donations to three charities focused on improving wellbeing in Accsys’ communities, with a total of €10,000 donated.

Sustainable & Quality products

In the period we achieved a renewal of our Cradle to Cradle (C2C) gold certiﬁcation for Accoya®, where C2C certiﬁed® is the global standard for products that are safe, circular, and responsibly made. Accoya® wood is one of the very few building products to have acquired C2C certiﬁcation on the stringent Gold-level. C2C assesses the safety, circularity and responsibility of materials and products across ﬁve categories of sustainability performance, including material health where Accoya® achieves a platinum rating. After the end of the period, in May 2022 Accoya Color was awarded Cradle to Cradle certiﬁcation at the prestigious ‘Gold’ level, as well as being awarded ‘Platinum’ level (the highest level) for both ‘Material Health’ and ‘Water Stewardship’. This represents very high standards of sustainability, alongside the recognised high performance and durability credentials of the brand.

Outlook

In summary, we are pleased to report another period of good revenue growth as we continue to see strong demand for our world-leading high performance, sustainable construction products. It is this demand, which continues to exceed supply, that has enabled us to offset the wider market pressures from raw materials costs and supply chain disruption through price increases. We have grown gross proﬁt, while also investing in our organisation to be ready to manage our growing operations. We have made substantial progress in our capacity expansion projects, despite ongoing construction and macro-economic challenges during the year and in the ﬁrst quarter of FY 23. The physical constructions of both the world’s ﬁrst Tricoya plant in Hull and our Accoya plant expansion in Arnhem are largely complete, and whilst some near-term issues have been identiﬁed which are being addressed, commissioning of both facilities is in progress with both expected to be operational in the coming months. Our USA JV’s new 43,000m 3 plant to service the substantial North American market is now also under construction. In FY23, once complete, the added capacity from Hull and Arnhem is expected to double our operating capacity from 60,000m 3 to 120,000m 3 , enabling us to begin to address the pent-up demand for our products. With these revised project timelines on Hull and R4, we are targeting to nearly double EBITDA in FY23, subject to any further changes in the projects’ status. In the longer term, we expect to achieve improved proﬁtability and operating cash-ﬂow generation as we penetrate target markets and leverage the expected beneﬁt from greater economies of scale associated with higher production volumes. We remain focussed on executing the signiﬁcant long- term growth opportunities ahead, with an ongoing commitment to safety and zero-harm to our people and the environment. With continued demand for Accsys’ higher performance, lower maintenance and more sustainable products as the world focuses on decarbonisation. We remain on track to meet this demand through increasing our capacity ﬁvefold by 2025.

Rob Harris
Chief Executive
30 June 2022

33
Accsys Technologies PLC – Annual Report and Financial Statements 2022

34
Overview

Accsys formed the Tricoya consortium in 2017 to realise the market opportunity for Tricoya. The consortium comprises Accsys, INEOS Acetyls Investments Ltd, MEDITE Europe DAC, BGF & Volantis (Lombard Odier). INEOS and MEDITE provide strategic beneﬁts through acetyls supply and Tricoya sales off-take agreements respectively. Project ﬁnance debt is provided by NatWest. The consortium is building new production capacity at the Hull facility. It also continues to develop the Tricoya® product and its production processes, and is seeding the market for Tricoya® products. Once the Hull plant is established it will pursue additional licence or consortium agreements worldwide to support Tricoya®’s growth potential.

Tricoya® market opportunity

The global market for Tricoya® panels is estimated to be in excess of 1.6 million cubic metres per annum. This equates to approximately 1.5% of global MDF manufacturing capacity. Prior to the operation of Hull, Tricoya® panel sales have been limited by lack of production capacity, where sales are made under market seeding using chipped Accoya® produced at Arnhem.

Consortium structure

The consortium includes the following entities:

Tricoya Technologies Limited (TTL) beneﬁts from all Tricoya® related intellectual property
Tricoya UK Limited (TUK), incorporated as TTL’s subsidiary, owns and will operate the Tricoya® plant in Hull
TTL will beneﬁt from future Tricoya® related revenues generated outside the Hull plant.

An organisation chart showing consortium partner interests can be found in the Investor Relations section of the Accsys website

Tricoya® revenue streams

Sale of acetylated wood chips
Licence & royalty fees received from licensees for panel forming IP and right to brand and sell Tricoya® panels
Licence & royalty fees received by TTL for right to use Tricoya® IP to manufacture Tricoya® chips
Sale of acetic acid, which is a by-product of the Tricoya® manufacturing process

The Hull plant (Tricoya UK)

The construction of the world’s ﬁrst Tricoya plant at Saltend Chemicals Park, Hull, is in the ﬁnal stages of completion.

Tricoya® Consortium

Accsys and its consortium partners are working together to build the world’s ﬁrst Tricoya plant in Hull, UK and to develop and grow the global market opportunity for Tricoya.

Tricoya® Hullplant capacity

30,000 metric tonnes targeted

OUR VENTURES

Partners: MEDITE, INEOS, BGF, VOLANTIS

Further details on the latest status of the project can be found in the CEO’s Report. See pages 26 to 33

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

Accoya USA plant capacity

43,000 cubic metres targeted

Independent market research has conﬁrmed an achievable market for Accoya® in North America of up to 948,500m 3 per annum within a wider addressable market of up to approximately 9.6 million m 3 . Accsys has strong foundations and a growing footprint in North America already, but is constrained by the volume of product we can deliver to customers from our Arnhem plant. With key distributor customers and our Approved Manufacturers Programme in place, we are building sales momentum in North America, ready for when the new plant’s additional capacity comes online.

Joint venture structure

Under the JV, Accsys holds a 60% interest and Eastman a 40% interest, through the joint venture company Accoya USA LLC (JV). The initial plant facility designs will target a two-reactor 43,000m 3 capacity plant, while the plans and site will allow for future expansion of up to eight reactors in total. The plant will replicate existing Accoya® technology and operational know-how, provided by Accsys to the JV under a fee-bearing licence. Accsys also provides sales and marketing support under a separate fee-bearing agreement with the JV.

The ﬁnal investment decision to proceed with the venture was announced on 4 March 2022. The total construction and start-up costs for the initial facility are expected to be approximately US$136m. $66m of this cost will be funded by pro-rata equity contributions from the JV parties, with Accsys contributing its pro-rata share of US$39.6m (€34.9m). The remaining $70m is funded through an eight-year term loan to Accoya USA, LLC from First Horizon Bank of Tennessee, USA.

Investment in the Accoya USA LLC joint venture is reported by Accsys using the equity accounting method, with the ﬁnancial result from the venture for the period reported as a single line item on Accsys’ balance sheet. Further details of the ﬁnancing arrangements can be found in the Financial Review.

Attractive JV partner

Eastman is a strong collaborative JV partner who brings multiple beneﬁts to the Accoya® USA JV. As a leading producer of acetyls, Eastman has extensive experience in building and operating chemical plants and is playing a lead role in the EPC contract management in the construction phase. The plant will be located on Eastman’s operating site in Kingsport, Tennessee, USA, adjacent to its acetyls operations which brings cost and geographical beneﬁts.

Outlook

The new Accoya USA plant is expected to take approximately two years to construct with ground broken in April 2022. Following construction, sales are expected to ramp up over a further two years to the plant’s full production capacity. The planning to date conﬁrms the strong ﬁnancial returns from the plant itself, with a targeted IRR of over 20%. Details of the Accoya USA joint venture’s most recent progress can be found in the CEO’s Report.

Overview

In August 2020 Accsys formed a joint venture with Eastman Chemical Company (NYSE: EMN), a world leader in the production of acetyls, to construct an Accoya® plant in the USA to address the strong and growing demand in the US market. The plant will replicate our Arnhem technology as we scale Accsys’ production footprint globally, targeting production capacity of 200,000m 3 a year by 2025.

Signiﬁcant market

North America is the largest potential regional market for Accoya and represents a substantial growth opportunity for Accsys.

Partners: EASTMAN CHEMICAL COMPANY

Accoya USA LLC

Accsys is building a new Accoya plant in Kingsport, USA under a joint venture with Eastman Chemical Company to capture the signiﬁcant market opportunity that North America represents.

35 See our ‘CEO Report’ on pages 26 to 33

Accsys Technologies PLC – Annual Report and Financial Statements 2022

“Accsys has delivered another year of financial progress in 2022”

FINANCIAL REVIEW

	FY22	FY21	Change %
Group Revenue	€120.9m	€99.8m	21%
Gross Proﬁt	€36.0m	€33.1m	9%
Underlying EBITDA	€10.4m	€10.1m	3%
Underlying EBIT	€4.2m	€4.4m	(5%)
Underlying proﬁt before tax	€1.3m	€1.1m	18%
Statutory proﬁt before tax	€1.7m	€0.3m
Cash	€42.1m	€47.6m
Adjusted cash	€4.3m	€47.6m
Net debt	(€27.2m)	(€12.2m)
Adjusted net debt	(€55.0m)	(€12.2m)
Accoya® Sales volume	59,649m 3	60,466m 3	(1%)

Introduction

Accsys has delivered another year of ﬁnancial progress, with good revenue growth driven by continuing strong demand for our products and increased sales prices despite broadly ﬂat sales volume due to capacity constraints. Gross proﬁt has increased by 9% driven by increased Accoya® prices which have more than offset input cost price pressures, in particular those relating to our input chemical costs which are linked to natural gas prices. The Accoya® manufacturing gross contribution per cubic metre of Accoya® sold increased by 11% to €595/m 3 reﬂecting the price increases and changes to product mix in the year.

While the existing Accoya® operations continue to generate strong operating cash ﬂows, our balance sheet continues to be signiﬁcantly inﬂuenced by investment into our key expansion projects with a total equivalent of 103,000m 3 of capacity under construction at the end of the reported year. We raised new equity for the Accoya USA plant early in the year, most of which was still held on our balance sheet at the end of the year. In addition, we completed a comprehensive re-ﬁnancing of our debt arrangements, putting in place a facility with our long-term banking partner ABN AMRO in October. In addition to simplifying our debt arrangements, this has helped signiﬁcantly reduce our cost of debt going forward.

However, additional costs identiﬁed for the Hull plant construction, together with more recently identiﬁed costs associated with the expansion of the Accoya® plant in Arnhem, resulted in a signiﬁcant reduction in our overall liquidity levels. As a result, in May 2022 we completed a further equity capital raise of €19m (net of fees) to help fund the additional costs associated with the fourth reactor project at Arnhem (R4) and to ensure that we have an appropriate level of liquidity in place to support the next period of our expected growth, in particular given the signiﬁcant level of ongoing capital projects.

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

	2022	2021
Gross proﬁt	€36.0m	€33.1m

	2022	2021
Underlying proﬁt before tax	€1.3m	€1.1m

	2022	2021
Net debt	(€27.2m)	(€12.2m)

Statement of comprehensiveincome

Group revenue increased by 21% to €120.9m for the year ended 31 March 2022 (FY21: €99.8m). Overall, Group revenue growth was driven by continuing strong market demand for Accoya® and Tricoya® and increases in average product sales prices for both wood and acid during the year and the effect of increases introduced in the prior year, which were implemented to address rising raw material costs. This resulted in revenue from Accoya® wood increasing by 15% to €105.1m.

Accoya® sales volumes were 1% lower than the prior year, where our ability to grow production volumes at Arnhem remains limited by capacity constraints. While the prior year saw a reduction in volumes in the ﬁrst quarter attributable to COVID-19, sales volumes in FY22 were impacted by temporary production downtime at the Arnhem plant connected with the installation of the new fourth reactor and isolated maintenance work in the second half of the year.

Included within Accoya® wood revenue, in the Accoya® segment, are sales to Medite and Finsa for the manufacture of Tricoya® panels used to develop the market for Tricoya® products ahead of the start-up of the Tricoya® plant. This revenue decreased to €16.0m (FY21: €18.3m), with the associated volume representing 22% of Accoya® sales volumes (FY21: 26%). Tricoya® panel revenue of €1.5m (FY21: €2.1m), in the Tricoya® segment, represented sales of Tricoya® panels, purchased from our Tricoya® licensees, to sell into other geographies in order to provide initial market seeding material for the global Tricoya® market. Licence revenue was stable year- on-year (FY22: €0.4m; FY21: €0.4m) with revenue reﬂecting milestone licence payments received by the Group in the Accoya® segment under the North American joint venture licence agreement with Accoya USA LLC. €16k (FY21: €19k) of licence revenue received from our Tricoya® licence partners was also reﬂected in our Tricoya® segment in the period.

Other Revenue, which predominantly relates to the sale of our acetic acid by-product, increased by 124% to €13.9m (FY21: €6.2m) driven by a 134% increase in acetic acid by- product sales revenue, due to higher acetyls market pricing which has been driven by the increase in gas prices.

Group gross proﬁt of €36.0m was 9% higher than the prior year (FY21: €33.1m). Cost of sales increased by 27% driven primarily by higher cost of raw materials, with the largest raw material cost increase in acetic anhydride, with signiﬁcant increases in Q4 driven by higher gas prices.# FINANCIAL REVIEW

Accsys sells its acetic acid by-product back into the same acetyls market, which continued to act as a partial hedge to these higher costs. The net acetyls cost increased by 39% in FY22 compared to FY21. Raw wood input costs were also moderately higher however the cost of this raw material overall remains more stable than the wider lumber market as we purchase appearance-grade wood under long-term supply contracts with many of our partners. Underlying gross profit margin decreased from 33% to 30% compared to the prior year, with the Accoya® manufacturing gross margin also decreasing to 30% from 33%. The decreases were principally due to the sales mix in the year. Our gross profit margin has and will continue to reflect a number of changing influences including revenue mix between acid and wood products, price increases and changes within our wood product mix including in relation to the introduction of Accoya Color and the proportion of material sold from Arnhem for Tricoya® production.

37 Accsys Technologies PLC – Annual Report and Financial Statements 2022

38 FINANCIAL REVIEW continued

Accoya® manufacturing gross contribution per cubic metre of Accoya® sold increased by 11% to €595/m³ as previously mentioned. Looking forward, there is opportunity for further growth as we expect to benefit from economies of scale from the expanded Accoya® plant and further changes to product mix after the Tricoya® plant in Hull commences operation.

Underlying other operating costs excluding depreciation and amortisation increased from €22.8m to €25.4m, driven by higher staff costs with average Group headcount increasing by 45 to 244 for the current year. This increase in headcount includes increased operating teams to operate our Hull and Arnhem facilities. In addition, the Group has invested in its organisational capability with the hiring of several heads of department, expanded our Engineering and Sales teams and added 11 former Lignia employees who joined Accsys through the purchase of assets in Barry, UK to grow production of Accoya® Color.

Sales and marketing costs (excluding staff costs) also increased by €0.5m compared to the prior year. The prior year included a temporary reduction in salaries for the Senior Management team and a reduction in certain other costs as a mitigating action when demand was temporarily disrupted in the first quarter of the year by COVID-19.

Depreciation and amortisation charges increased by €0.5m to €6.2m following the purchase of assets in Barry, UK to grow production of Accoya® Color.

Underlying finance expenses decreased €0.4m to €2.9m, following the refinance of Group Debt Facilities in October 2021 which decreased the average interest rate payable on the Group’s borrowings as well as simplifying our overall Group debt structure. As a result, underlying finance expenses decreased from €1.7m in H1 to €1.2m in H2.

Exceptional items of €1.8m include €1.6m related to redemption fees and accelerated amortisation of previously capitalised transactions fees related to the refinance of Group Debt Facilities in October 2021. Also included is €0.1m for redundancy payments related to the purchase of assets in Barry, UK to be utilised to manufacture Accoya® Color.

Other adjustments for the year, which are also excluded from Underlying results, include a foreign exchange gain of €2.1m related to US dollars held as Cash for investment into Accoya USA. Following the May 2021 equity raise, the amount raised to invest into Accoya USA was translated into US dollars and held in cash ensuring that foreign exchange movements did not decrease the amount raised below the future US dollar investment into Accoya USA. This treatment did not meet the requirements for hedge accounting under IFRS 9, Financial instruments and therefore the foreign exchange gain on the revaluation of the US dollars has been accounted for in Finance Expenses as an Other adjustment.

Also included in Other adjustments is a foreign exchange gain of €0.2m (FY21: loss of €0.8m) related to loans held in pounds sterling with BGF and Volantis, which were repaid in the October 2021 Group Debt Facilities refinance. Also included are foreign exchange differences on cash held in pounds sterling which is used primarily to act as a cash flow hedge against future sterling project expenditure on the new plant being constructed in Hull and to a lesser extent, as a cashflow hedge against future sterling corporate costs. The effective portions of the cash flow hedges are recognised in other comprehensive income.

Underlying profit before tax increased by 18% to €1.3m (FY21: €1.1m). After taking into account exceptional items and other adjustments, profit before tax increased by €1.4m to €1.7m (FY21: €0.3m).

The tax charge decreased by €0.3m to €1.0m due to re-assessment of prior year Research and development tax claims. (FY21: €1.3m).

Cash flow

Cash flows generated from operating activities before changes in working capital and exceptional items of €11.5m (FY21: €11.8m) were in-line with the prior year reflecting good operational cash flow generated by the Arnhem Accoya® plant.

Inventory levels increased by €8.1m during the year from a lower than optimal level at the start of the year and ahead of the planned Arnhem Reactor 4 start-up, which increases Arnhem production volume by circa 33%. Inventory levels predominantly include raw materials, with finished good levels remaining low given strong sales demand. Raw material levels were also higher than anticipated given the lower than planned production levels in H2 due to some isolated maintenance downtime reducing production volumes.

In May 2021, Accsys completed a successful Placing and Open Offer for an issue of shares in the Company, raising net proceeds of approximately €34.6m. The net proceeds have been used primarily to fund the Group’s investment in expanding its Accoya® business into North America through the construction of a new Accoya® USA plant, through the joint venture with Eastman Chemical Company (Eastman), as well as to provide additional capital to support the Group’s continued growth and ongoing development.

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

At 31 March 2022, the Group held cash balances of €42.1m, representing a €5.5m decrease in the year. The cash decrease in the year is attributable to construction progress made on the Arnhem plant expansion project (€24.7m) and our Tricoya® plant construction in Hull (€18.4m), investment into Accoya USA (€3.8m) and the increase in inventory referred to above, partially offset by the successful Placing and Open Offer and cash flow generated from operating activities referred to above.

When adjusting for the Cash committed to be invested into Accoya USA (€27.9m), and cash pledged for the Letter of Credit provided to First Horizon Bank (‘FHB’) ($10m – explained further below), Adjusted Cash decreased to €4.3m (see note 29).

In July 2021, Accsys entered into a sale and purchase agreement with Lignia Wood Company Limited and its administrators, to acquire certain assets, equipment and technology for €1.2m, including €0.5m for raw wood inventory. Accsys is using the assets to increase production of Accoya® Color, ultimately allowing the Company to accelerate the launch of the product into more geographic markets and for more product applications.

In October 2021, Accsys completed the refinance of its Group debt facilities through a new bilateral agreement with ABN AMRO, one of Accsys’ existing relationship banks. The new €60m three-year bilateral facilities agreement with ABN AMRO comprises a €45m Term Loan Facility and a €15m Revolving Credit Facility (RCF). The €45m Term Loan was fully utilised to repay all of the Group’s existing debt, with the exception of the Natwest facility held by the Tricoya® consortium which remains in place. The new facility significantly simplifies Accsys’ debt structure, which previously included five different debt providers and commercial partners.

The Term Loan is partially amortising, with 5% of the principal repayable per annum after 18 months. The applicable interest rate for the Term Loan will vary between 1.75% and 3.25% above EURIBOR depending on net leverage, resulting in a significant improvement compared to the previous facilities which had a weighted average cost of approximately 6%. The RCF interest rate will similarly vary, but between 2.0% and 3.5% above EURIBOR. The new facilities are secured against the assets of the Group which are 100% owned by the Company and include net leverage and interest cover covenants.

Financial position

Plant and machinery additions of €41.0m (FY21: €20.7m) in the year largely consisted of the construction of the fourth reactor expansion project in Arnhem (€24.7m), the Tricoya® plant in Hull (€12.7m) and the purchase of certain assets and equipment in Wales to be utilised to grow production of Accoya® Color (€0.7m). The prior year primarily related to construction on the Tricoya® plant build in Hull and initial costs related to the fourth Reactor expansion project in Arnhem.

Trade and other receivables increased to €16.9m (FY21: €12.3m) due to higher sales in March compared to the prior year, and a €1.2m increase in VAT receivables.

Trade and other payables are in line with the prior year at €29.9m (FY21: €29.8m) with an increase in trade payables due to the timing of payments on our expansion projects in Hull and Arnhem, offset by the reversal of accruals raised in the prior year associated with the construction of the Tricoya® Hull plant, following the settlement agreement entered into between Tricoya UK and Engie Fabricom UK Limited in August 2021.

Amounts payable under loan agreements increased to €64.0m (FY21: €54.3m) due to the new €10m convertible loan with De Engh, further detailed below under Accoya USA LLC Financing. The new €45m ABN loan offsetting with the repayment of the previous Group debt.## FINANCIAL REVIEW continued

Net debt increased by €15.0m in the year to €27.2m (FY21: €12.2m) due to Capex investments of €44.6m partially offset by the successful Placing and Open Offer (net proceeds of €34.6m). When adjusting for the Cash committed to be invested into Accoya USA (€27.9m), Adjusted Net Debt increased to €55.0m.

Tricoya consortium financing

As set out in the CEO’s report, we now expect the total project capital costs for the project to be €94-103m, an increase compared to our previously announced range of €90-96m. We are in discussion with our consortium partners regarding the consortium’s funding options for the additional costs. The project is also funded through a project finance loan from NatWest bank for €17m, which is in technical default, pending the conclusion of these discussion. A €3m extension to the NatWest loan remains in discussion with NatWest.

Accoya USA LLC Financing

In March 2022, the final investment decision was made to proceed with the construction of the Accoya USA facility. The total construction and start-up costs for the facility, including the initial two reactors, are expected to be approximately $136m (‘Total Project cost’). Accoya USA LLC is accounted for as a joint venture and equity accounted, reflecting the jointly controlled nature of the arrangement with Eastman despite Accsys holding 60% equity interest. $66m of the Total Project cost will be funded by equity contributions from Accsys (60%) and Eastman (40%). Accsys’ pro-rata share is $39.6m (€34.9m) of which $5.6m (€4.8m) has already been contributed to Accoya USA by 31 March 2022.

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Accoya® Manufacturing Margin (%)	FY18	FY19	FY20	FY21	FY22
	22%	23%	30%	33%	30%

| | €595 | €538 | €466 | €337 | €309 |

$70m of the Total Project cost will be funded through an eight-year term loan to Accoya USA, LLC from First Horizon Bank (FHB). FHB is also providing a further $10m revolving line of credit to be utilised to fund working capital. The FHB term loan is secured on the assets of Accoya USA and will be supported by Accoya USA’s shareholders, including $50m through a limited guarantee provided on a pro-rata basis, with Accsys’ 60% share representing $30m. The interest rate varies between 1.25% to 2% over USD LIBOR. Principal repayments commence one year following the completion and start-up of the facility and are calculated on a ten-year amortisation period. To support Accsys’ limited guarantee ($30m), Accsys has provided a $20m Letter of Credit (LC) to FHB. The LC has been issued by ABN AMRO, utilising part of the revolving credit facility agreed in October 2021. To further support the LC, Accsys has agreed a €10m convertible loan (the ‘Convertible Loan’) with De Engh BV Limited, an investment company based in the Netherlands (‘Convertible Loan’). The Convertible Loan proceeds were placed with ABN AMRO solely as cash collateral to enable ABN AMRO to grant the US$20m LC to FHB. The Convertible Loan is unsecured and carries an interest margin of 6.75% above Euribor (see note 29).

Going concern

These consolidated financial statements are prepared on a going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future, and at least 12 months from the date these financial statements are approved. As part of the Group’s going concern review, the Directors have assessed the Group’s trading forecasts, working capital requirements and covenant compliance for the foreseeable future under a base case scenario, taking into account the Group’s financial resources including the current cash position and banking and finance facilities which are currently in place (see note 29 for details of these facilities) and the possible further impact of supply chain disruption. The Directors have also assessed a severe but plausible downside scenario with reduced sales volumes, lower gross margin and a delay in the timing of production from R4 in Arnhem beyond the current expected operational date of Q2, FY23. These forecasts indicate that, in order to continue as a going concern, the Group is dependent on achieving certain operating performance measures relating to the production and sales of Accoya® wood from the plant in Arnhem with the collection of on-going working capital items in line with internally agreed budgets. The Directors’ have also considered the possible amount and timing of capital expenditure required to complete the Tricoya® plant in Hull, noting that should additional funding be required beyond what has been committed by the Tricoya® consortium partners to date, further consent would be required by the Tricoya® consortium partners for funding to be contributed. There are a sufficient number of alternative actions and measures within the control of the Group that can and would be taken in order to ensure on-going liquidity including reducing/deferring costs in some discretionary areas as well as larger capital projects if necessary. The Directors believe that while some uncertainty always inherently remains in achieving the budget, in particular in relation to market conditions outside of the Group’s control, under both the base scenario and severe but plausible downside scenario, there is sufficient liquidity and covenant headroom such that there is no material uncertainty with respect to going concern and have prepared the financial statements on this basis.

William Rudge
Finance Director
30 June 2022

Accoya® Manufacturing profit/m3 (€)
Accoya® Manufacturing margin (%)

OVERVIEW	STRATEGIC REPORT	GOVERNANCE	FINANCIAL STATEMENTS
41

For more Accoya projects, visit www.accoya.com/projects

CASE STUDY

Accoya® curved windows are a hit for unique residence in Australia

At this unique home in New South Wales, all the timber windows are curved and made from Accoya® wood. Accoya was the ideal material for this project as it is easily machined, exceptionally stable and highly durable. The windows were manufactured and installed by approved manufacturer Windoor Joinery Pty Ltd and they sourced the Accoya® wood from distributors Britton Timbers. The windows are coated white to match the aesthetic of the property. Private residence, New South Wales, Australia. Manufacturer: Windoor

Accsys Technologies PLC – Annual Report and Financial Statements 2022

How we identify, evaluate, manage and mitigate risks

Given the macroeconomic headwinds which global companies are currently facing, identifying, evaluating, managing and mitigating risk remains as important as ever.

Risk governance

At Accsys, the Board is ultimately responsible for risk management. Ongoing risk assessment is delegated to the Audit Committee which seeks to ensure that Accsys’ risk processes remain focused and robust. The Audit Committee’s terms of reference ensure it has the capability and structure to operate independently of the Accsys executive team, specifically:

the Committee is required to have a particular focus on Accsys’ processes for the management of business and financial risk;
Committee members should have the ability to understand key business and financial risks and related controls and control processes;
the Committee is entitled to obtain, at Accsys’ expense, independent legal, accounting or other professional advice on any matter it believes is necessary to do so; and
at least one member of the Committee should be literate in business and financial reporting and control and have past experience in finance or accounting or other comparable experience or background.

The current Chair of the Audit Committee is Sean Christie. Sean understands business and financial risk and related controls and control processes through being an experienced audit committee chair and a long executive career which included group finance director roles at large multinational organisations. Accsys also has a Risk Committee, which is chaired by Accsys’ Finance Director. The Risk Committee reports to the Audit Committee on risk management within Accsys’ business and operations. Accsys’ Risk Committee meets at least quarterly and is comprised of certain members of the Senior Management Team. The Committee conducts regular and structured reviews of risk ahead of reporting to, and further review and discussion with, the Audit Committee. The Audit Committee then seeks to ensure that risks have been suitably identified and evaluated with appropriate mitigation plans in place. The Risk Committee maintains a detailed risk register and seeks to:

identify and rank key risk areas, including existing and new risks;
allocate a Senior Management Team member with day to day oversight of each risk;
evaluate the likelihood and impact of each risk;
highlight to the Audit Committee changes in the risk register;
identify steps that are being taken to mitigate the risk; and
traffic light those areas of particular concern.

New and emerging risks

Accsys’ Risk Committee meets regularly and remains alert to the presence of new or emerging risks to the business, as well as any changes in the status or prevalence of existing risks to the business. Emerging risks identified during the past year can be found in the following tables and marked as “New” in the ‘Risk trend’ column.

Risk culture

As part of Accsys’ commitment to good risk management practices, it is focused on developing cultural awareness of risk and embedding good risk management practices at all levels of the organisation. Company initiatives that reinforce risk culture include a requirement for employees to complete training on certain risk topics. The employee annual appraisal process requires managers to check completion of the training by the employees. These training modules cover:

Data management;
Anti-corruption;
Market abuse; and
Anti-slavery.

In addition, during the 2022 financial year, particular time was spent on developing cultural awareness of safety risks.# RISK MANAGEMENT OVERVIEW

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 43

Group Controls

Review of operational controls

Colleagues Remuneration
Colleagues Audit
Board of Directors
Nomination

Our risk management framework incorporates a top-down approach, setting the risk appetite and identifying our principal risks, together with a bottom-up approach to identify our operational risks: All employees have a role in the management of risk within the Group. A summary of the principal risks facing the Group is set out below. The below is subject to ongoing review and change. The risks should not be read in any order of priority. The ‘Risk trend’ column indicates the risk trend in the reporting period compared to the last Annual Report.

| Risk Description In May 2021 and May 2022, the Company undertook equity capital raises to support the Company’s continued growth. In October 2021, the Company refinanced its Group debt facilities through a new bilateral agreement with ABN AMRO, one of Accsys’ existing relationship banks. The new facility has significantly simplified Accsys’ debt structure, which previously included five different debt providers, and provides Accsys with greater liquidity to support the Group’s growth plans.

43 Accsys Technologies PLC – Annual Report and Financial Statements 2022

44 RISK MANAGEMENT continued

| Risk Description # RISK MANAGEMENT (continued)

Risk Description

Development and Supply of Raw Materials

The production of Accoya® and Tricoya® requires the procurement and supply of two key raw materials: raw wood (whether in solid form or chip) and acetic anhydride. A failure to secure the supply of raw materials in the right volumes, at the right times, and appropriate price will hinder our ability to produce and sell our products, which in turn is likely to materially adversely affect our revenue and EBITDA.

Personnel

The Group employs many highly experienced personnel that have deep knowledge of our business, technologies, processes, and products. A loss of key personnel who hold highly valuable information or who are highly knowledgeable about the Group may have a material adverse impact on us. The highly qualified personnel required by the Group in various capacities are sometimes in short supply in the labour market. An inability to swiftly replace personnel that leave the Group or expand our workforce with additional personnel may limit the rate at which we are able to grow our business.

Sale of Products

As a business that sells products, a key risk for the Group is changes in customer demand and other factors that may adversely affect the sales of our products. These changes in demand may arise out of macroeconomic events beyond the Group’s control. In the longer term, a failure to supply pent up demand risks customers adopting alternative technologies and products which may adversely impact future demand and sales growth. Sales may also be impacted by quality control failures which may lead to reputational damage.

Protection of Intellectual Property (IP) and Trade Secrets

As a business which materially benefits from IP, the loss of confidential information, patent rights, trademarks and other intellectual property is a key risk. Also, a failure to maintain and grow its portfolio of IP, by patenting new inventions, acquisition or by prevailing in any IP litigation may have a material adverse impact on the Group. Together these risks could weaken the Group’s competitive advantage in its Tricoya® and Accoya® businesses.

Environmental, Social and Governance (ESG) and Sustainability

Through our products, Accsys offers the world a choice to build more sustainably, and ESG goes to the heart of what we do. An inability to recognise ESG issues and mitigate ESG risks may be materially detrimental to the Group’s prospects as a company with strong ESG credentials. Ensuring appropriate ESG governance is a key objective for Accsys. Strong ESG governance will help Accsys to fulfil our commitments in key ESG areas including health and safety, people and well-being, ensuring fair and ethical conduct, producing and selling products that are sustainable and sourced responsibly, controlling our impact on the environment, and seeking to benefit the broader society and communities around us.

IT

As a company with valuable technological IP and with manufacturing processes that depend on IT systems, a failure of IT security, continuity or inadequate management information may have a serious impact on the Group’s business. Risks relating to IT and cybersecurity are considered by the Audit Committee as part of its regular review of the Group’s Risk Register. The Board member with ultimate oversight of risk management on this issue is the chair of the Audit Committee, while at an executive management level, Accsys’ Head of IT reports to the Group’s Finance Director on the same.

Mitigation

Development and Supply of Raw Materials

Supply of raw materials remains a key risk that Accsys is focused on mitigating. Building long-term relationships with key suppliers of raw materials, including new and existing suppliers of acetic anhydride, continues to be of paramount importance to Accsys. Where possible, maintaining a diversity of supply is key among this, as is ensuring good supplier relationships that provide us with materials on time, in line with our expectations. In managing the supply chain for our raw wood sourcing, we mitigate risk through a number of supplier screening, selection and monitoring steps and processes. It is also a requirement that our wood suppliers are FSC certified by third parties. Further information on our approach to supply chain risk management and biodiversity can be found in our GRI/SASB disclosure on the Accsys corporate website. The Group has continued testing new species of raw wood from different geographic regions which would be suitable for application in respect of both Accoya® and Tricoya®. The Group also continued to build up resilience in its supply chain through further contractually binding arrangements with raw material suppliers.

Personnel

The Group protects its ability to attract and retain skilled people through various processes and policies under the leadership of the Group’s Chief People Officer. In addition, we value and invest in employee engagement and communication to maintain a positive and motivated culture. The Group made progress in FY 2022 with respect to appointments in a number of key roles. Detailed reviews of departmental needs aim to ensure that the Group can appropriately resource its organisational needs at a time of rapid growth. Evaluations are carried out to identify those functions that are of critical importance for the Group and individuals within those functions that are themselves critical and/or are considered of high potential. The Group also operates a Group-wide bonus scheme, together with a long-term incentivisation plan which seeks to reward, incentivise, motivate, attract, and retain critical personnel by way of share-based awards with deferred vesting.

Sale of Products

The Group maintains structured Sales, Marketing and Product Quality functions which focus on supporting and growing our sales and customer demand, while ensuring the quality of our products. Research and development continues, with the goal of increasing overall product quality by way of enhancing quality control standards and carrying out root cause analysis. The Group continues to progress its plans to add new production capacity, at Hull, Arnhem and in the USA, and further details on these projects can be read in the CEO’s Review. The Group is also well advanced in developing demand for its Accoya® Color range.

Protection of Intellectual Property (IP) and Trade Secrets

The Group has dedicated resource to manage its IP which, together with external IP attorneys, are responsible for maintaining and developing the Group’s IP portfolio. We use confidentiality and IP agreements when dealing with our business partners. To mitigate risk in relation to IP protection, training is given to employees to help ensure awareness of the need to protect our IP.

Environmental, Social and Governance (ESG) and Sustainability

During FY 2022 the Group continued to improve its ESG governance structure, which aims to assess ESG risks and opportunities and to implement Accsys’ ESG Strategy. Further details can be found in the Sustainability section of this report.

IT

Accsys maintains a high level of IT security through the adoption of a continuous improvement in enterprise information and data security process, and policy compliance. Physical device and systems security software and industry-leading security platforms have been implemented to monitor and manage the continually evolving threat landscape. We continue to develop and implement processes and procedures to support the Company’s ongoing operational security towards the strategic objective to acquiring ISO 27001 compliance. Approximately 90% of our IT environment is service based/cloud hosted, and supported by organisations which are ISO 27001 certified. During the year, the IT function carried out appropriate platform and infrastructure security testing and reviews resulting in various infrastructure, device management and security configuration improvements. IT security policy and procedures are in place for all employees, which includes a notification and escalation process, and IT security training is held regularly. During the year, the IT function rolled out updated security awareness training to all staff to ensure a suitable level of awareness with respect to cyber risk. We have also held learning lunches on information security and run phishing simulation programs. Development of multi-vendor threat intelligence and response systems utilising advance analytics and 24 hour, seven day a week security, provide us with additional layers of security to monitor and protect infrastructure and assets. We conduct third-party vulnerability scanning & analysis including simulated hacker attacks, and have IT business continuity plans in place with disaster recovery and incident response testing held annually.

Risk Trend

Expansion New plants (including our Tricoya® plant in Hull) or expansions of existing operations, rely on new engineering and technology, which may not perform as expected, particularly in the early stages of operations. Failure to grow manufacturing in line with market expectations may adversely impact the Group’s reputation to deliver complex projects, its financial results and the ability to meet its growth targets. Accsys invests in ensuring we have the right level of project management skills, experience, and capabilities, as we grow, primarily through our team of people managing the execution of our projects. Our technology research and development team also focus on ensuring that our existing and new technologies are tested and developed to reduce unforeseen risks when planning and deploying this technology into new projects. The Group has a strong emphasis on continuous improvement. During the year, the Group was able to use many of the lessons learned from construction activities at Hull and Reactor 4 at Arnhem to inform the project setup which will be used by the Accoya USA joint venture.# Accsys Technologies PLC – Annual Report and Financial Statements 2022

RISK MANAGEMENT continued

Reputational risk

Maintaining good relations and business reputation across all of Accsys’ stakeholders helps it to maintain and grow its business over time. Reputational risk can occur directly through the actions of the Group itself, or indirectly through the actions of employees or other parties, such as joint venture partners, contractors, suppliers and customers. Damage to Accsys’ reputation may have an adverse impact on our financial performance. It may include a loss of support from shareholders, contractors, suppliers, and customers and may impact shareholder value, impact our sales and diminish our ability to raise new capital and implement new projects to grow our business.

The Group maintains various internal controls and processes that directly and indirectly seek to reduce reputational risk and to manage the impact should it occur. The Group has a dedicated Head of Investor Relations who ensures the Group maintains regular contact with investors through a variety of means, including shareholder announcements, face to face meetings with management, and live biannual web-cast presentations of financial results amongst others. In doing so, the Group seeks to keep shareholders informed on a regular and transparent basis which in turn is designed to mitigate risks in this area. Consultation with key shareholders on important issues is actioned where appropriate.

Governance, Compliance and Law

A failure to maintain appropriate governance structures or a lack of a clear business strategy may lead to poor decision making and operational performance. It may also increase the risk of the Group failing to meet or stay compliant with applicable laws and regulations.

As noted on page 65 of this document, Accsys has adopted the QCA Corporate Governance Code and reports against it on a comply or explain basis. In addition to the disclosures set out in these Report and Accounts, Accsys’ current Statement of Compliance relating to the QCA Code explains how Accsys complies with the Code and in turn mitigates risk. A copy of our current QCA Compliance Statement can be found at www.accsysplc.com/qca-compliance.

The Group also has dedicated legal and governance resource, headed by the General Counsel and Company Secretary, who is responsible for the Group’s legal and company secretarial affairs.

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

CASE STUDY

Dynamic views of nature from the fire watchtower – Belgium

The Belgian Kalmthoutse Heide park has gained a valuable landmark, a new 42-metre-high fire watchtower. Architect NOHNIK, and construction partners Bureau Bouwtechniek and Ingenieursbureau ABT België have perfectly combined wood and steel to produce an elegant truss construction. From every angle, the fire watchtower offers a dynamic and panoramic view over the natural landscape of the Kalmthoutse Heide. The tower is built up in 6-metre-high segments, which twist flawlessly into each other. The staircase follows the same orientation, alternating direction at each segment, making the climb up the tower an experience in itself. The fire watchtower is therefore not only an efficient workplace for the fire fighters, but it also provides access for everyone in the area to enjoy the spectacular view from the tower’s platforms.

The Kalmthoutse Heide offers great diversity of landscapes, nature, and cultural-historical heritage. With the fire watchtower as its new landmark, and the surrounding area previously destroyed by a forest fire in 2011, the tower serves to significantly protect the area. Accoya wood was the material of choice for the railings, balustrades, and fire watchtower; the ultimate contrast to the steel truss construction frame. A variation of wood thicknesses and spacing was used, creating a sophisticated look and thanks to the colour and material combination of Accoya wood, the tower harmonises beautifully with the surrounding natural landscape.

For more Accoya projects, visit www.accoya.com/projects

Project details

Client:	Gemeente Kalmthout
Commissioning partners:	Agentschap Natuur en Bos, Telecomoperator Astrid
Tower height:	42m
In collaboration with:	Bureau Bouwtechniek and ABT België
Architect and images:	© NOHNIK architecture and landscapes
Distributor:	Martal Houtimport
Sub-distributor:	Houthandel Jacobs

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Our focus on TCFD

While Accsys is not required to report against the TCFD (Task Force on Climate Related Financial Disclosure) yet, we have conducted an initial review on the Framework and will be looking to further engage key senior leaders on the TCFD in 2023. We will focus on key actions which Accsys is able to implement related to the TCFD recommendations, as we understand the importance of evolving our approach to climate risk and resilience.

SUSTAINABILITY

The Accsys ESG Framework is the foundation of our approach to sustainability, which comprises Accsys’ 10 material issues that are aligned to the United Nations Sustainable Development Goals (SDGs). Each material issue comprises of a strategy, roadmap of actions, goals and performance metrics with a roadmap and progress review each year. Supported by increased resources and improved organisational effectiveness, our approach to these issues is a core part of both our purpose and our integrated business and growth strategy.

Progress on sustainability strategy roadmap

We are on track with our sustainability strategy roadmap. This year, we have further developed our approach, processes and action plans for our material issues, with particular focus on improving measurement, monitoring, reporting and management of performance.

Looking ahead

We are accelerating progress on our ESG and sustainability roadmap, and we are proud to have achieved so much already in 2022. While we celebrate our achievements, we recognise that this is a journey and there is always more that can be done, and more to aim for. A selection of our focus areas for FY 2023 include:

ESG Governance: Formalising and building on ESG governance and management
Health and safety: Continuing to work towards health and safety excellence with the creation of global HSE Team
Climate change – Strategy implementation and roll out of Climate Change Policy
Sustainable and quality products: Continuing to build on our role in the built environment through growth in provision of our sustainable and quality products to the market, supported by the best sustainability standards and accreditations

On the following pages we describe our approach, key highlights and metrics for FY 22, and next steps for each of our key material issues, as seen in our ESG Framework. More information and detail is also available in our SASB and GRI Content Index: www.accsysplc.com/esg-reporting and queries can be directed to [email protected]

OUR APPROACH TO SUSTAINABILITY

AT ACCSYS, WE ARE COMMITTED TO DELIVERING ON OUR PURPOSE, CHANGING WOOD TO CHANGE THE WORLD.

2022 highlights

Health and safety: Moving towards health and safety leadership
Climate change: Development of Climate Change Policy
Responsible sourcing: Ensuring future resilience and security of sustainable supply
People and wellbeing: Inclusion & Diversity and Learning & Development focus
Culture and engagement: Employee engagement including Accsys Green Champions Network
Society and communities: Strategy developed and new charity partners appointed

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

Our contribution to the United Nations Sustainable Development Goals (SDGs)

Our main contributions focus on SDGs 9, 11, 12, 13 and 15, as these areas are where our business can have the most meaningful impacts. Aside from these targeted areas, the strong sustainability performance of our business and product also align with a broader group of SDGs.

	What we do as a business	How we make an impact
People & wellbeing
Innovation & technology
Sustainable & quality products	Changing wood…	…to change the world
Governance management & advocacy
Responsible sourcing
Society & communities
Energy & climate change
Ecological footprint
Health & safety
Fair & ethical conduct

Our ESG Framework
Sustainability strategy roadmap

	Stage 1: Evaluation and strategy refinement	Stage 2: Impactful action and data-led direction
2021	• Improve assessment, monitoring and data management • Review and, where necessary, set up new formal policies, oversight and workﬂows	• Initial actions for improvement in each material issue • Establish baseline statistics and metrics
2022		• Use improved data to reﬁne action plans & set realistic, ambitious and attainable targets • Implement and support new programmes and initiatives • Manage and reassess material issues and stakeholder priorities to ensure continued relevance
5+ years

Accsys Technologies PLC – Annual Report and Financial Statements 2022

SUSTAINABILITY continued

2022 highlights

Introduced new Health & Safety Strategy, HSE Policy and established a Board HSE Committee
Increased HSE events and communications including first annual HSE day, and monthly HSE scorecard
Increased safety monitoring and awareness
Deployed new global Accsys health and safety brand and campaigns including new HSE brand and campaigns and achieving target number of SOCs ans safety tours
Targeted areas for improvement including forklift truck safety, hazards awareness and minor incident prevention
Introduced behavioural-based# SUSTAINABILITY

Health & safety

Our ambition is ultimately for zero harm, which we will achieve through practising continuing health and safety excellence, improved monitoring, raising awareness of our safety policies and strategy, and further work embedding the importance of health and safety in our company culture.

Leadership and employee engagement towards Zero Harm

This year, we built on our commitment to develop best practice health and safety through a targeted strategy and a ‘Zero Harm’ target. Developing a safety-ﬁrst culture depends on all of our employee. We have launched new initiatives to increase employee engagement. One key focus has been on leadership and accountability to demonstrate strong commitment to safety. We’ve looked from the ‘smaller’ and impactful actions, with our CEO, Rob Harris starting each all company meeting with a safety moment, to ensuring visible leadership by increasing safety inspection tours made by senior leader on our sites. To engage employees directly, our competition for our new health and safety slogan received 120 entries and a winning slogan of ‘Think Safe, Act Safe’. This has now been incorporated into a logo which is used on literature and presentations. We also held our ﬁrst Annual Health and Safety Day, which raised awareness on safety related issues and involved employees from every area of operation physically and virtually.

0.5 LTIR Lost Time Incident Rate** (2021: 1.8)
Target 500 SOC (Safety Observation Card) reporting achieved with 811 SOCs received (90 2021)
2 Lost Time Incidents (LTIs) (2021: 3)
5.2 Total Recordable Incident Rate (TRIR) (2021: 6.75)
552 Management Safety Tours (2021: 98)
51 Safety Committee Meetings (2021: 16)
2500 Toolbox Talks (2021: 2780)
811 hazard/Near-miss Reports (2021: 90)
0 Fatalities (2021: 0)*
Employee related metrics. Contractor related metrics can also be found in the ESG section of our corporate website.
** Per 200,000 hours worked. See more about our approach in our 2022 GRI and SASB Report in the ESG section of the Accsys website

HEALTH AND SAFETY CASE STUDY

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

2022 highlights

Launch of Inclusion & Diversity workstream alongside third annual Accsys People employee survey
Learning and development strategy developed and roll out commenced
New organisational structure is being developed to combine global strength through the Accsys ‘Centres of Excellence’ which supports local business units to become P&L centers
Accsys Project Management system implemented
Green Champions Network launched, an employee led engagement initiative to share, learn, and plan sustainable initiatives

Looking forward

2023/24 target* – Maintain employee survey response rate
Further development of Inclusion & Diversity strategy
Build online learning and development system
Adopting a consistent and formal job level model to allow for more transparent career development and aid reward recognition
Further development of the Total Reward Philosophy
Full adoption of ‘OKR’, employee performance and development system
‘Accsys in Action’ employee initiatives focused on wellbeing, environment and social activities

People and wellbeing

We focus on employee engagement, which results in committed and loyal people, who are willing to go the extra mile, and employee enablement, which ensures that we have the right people in the right roles, in an enabling work environment.

Enabling our employees through learning and development

Through our employee engagement activities, we identiﬁed that our employees felt that there were opportunities to improve learning and development opportunities at Accsys. As a result of the feedback, we recruited a new Learning & Development Manager to transform Accsys into a ‘Learning organisation’ through a new learning and development strategy. We have provided training on topics such as leadership and performance management, and in the 2022 employee engagement survey responses to the question, ‘the company provides training so that I can perform my present job well’ increased by 9%. Next year we plan to add a focus on personal development plans and competency management capabilities into our learning and development programme as it also goes online. See more about our approach including labour practices in our 2022 GRI and SASB Report in the ESG section of the Accsys website

	% Male	% Female
Non-Executive Board Members	67	33
Senior managers*	90	10
All employees	84	16
* Senior managers include our Executive Board Members, Senior Leadership Team, and senior managers with highest levels of strategic inﬂuence for the organisation.

78% I&D survey response rate (78% employee survey response rate 2021)
0 incidents of discrimination (FY21: 0)
36% employees invested in Company share plan (2021: 34%)
29 Total hours of training and development per person
88% “I feel able to be myself at work” survey response %

PEOPLE AND WELLBEING CASE STUDY

Accsys Technologies PLC – Annual Report and Financial Statements 2022

SUSTAINABILITY continued

2022 highlights

Continued adherence to QCA Corporate Governance Code (see page 75 for more information)
Internal Board performance evaluation conducted
ISO 9001, ISO 45001 and ISO 14001 certiﬁcation action plan developed
Integration of sustainability principles into procurement practices
Integration of ESG target – see Remuneration report for more information (pages 80 to 97)

Looking forward

Monitoring new external mandatory reporting requirements, such as EU Taxonomy
Annual Board performance evaluation
TCFD (Task Force on Climate-Related Financial Disclosures) implementation commencement
Sustainability and ESG-related policy development
Integrating sustainability in procurement practices
ESG IR Rating (independent benchmark of ESG performance) publish
Further improvement to data management processes

Governance, management and advocacy

We strive for ﬁrst-class governance, management and stakeholder relationships to sustain our growing scale. See more about our Governance on pages 70 to 79 and in our 2022 GRI and SASB Report in the ESG section of the Accsys website

0 ﬁnes and non-monetary sanctions from non-compliance with environmental laws and/or regulations (2021: 0)
2nd annual GRI and SASB reporting disclosure
2 ’meet the Board’ events held for Accsys employees

See more about our approach, including our commitments to waste and water in our 2022 GRI and SASB Report in the ESG section of the Accsys website

2022 highlights

Re-launch of updated compliance policies
Monitoring and training in relation to, amongst other things, Anti-Bribery, Market Abuse and Modern Slavery

Looking forward

Assessment of current processes and performance reporting to external, best practice benchmarks
On-going monitoring and training in relation to, amongst other things, Anti-Bribery, Market Abuse and Modern Slavery
Publication of external facing key ethics relevant policies

Fair and ethical conduct

We’ll uphold our commitment to high ethical standards, ensuring our processes and procedures are strengthened as we continue to grow.

0 incidents of bribery and corruption (2021: 0 incidents)
100% relevant employees (including Board) communicated with on anti-corruption policies (2021: 100%)
100% operations assessed for corruption risks (2021: 100%)
€0 regulatory ﬁnes, sanctions or settlements (2021: €0)
€0 spend on political campaigns, lobbying or think tanks (2021: €0)

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

2022 highlights

Acquisition in Wales for Accoya Color manufacturing scale-up
IP strategy development to future-proof competitive resilience
Continued focus on ‘cleaning’ acetic acid co-product to increase potential for circularity and industrial reuse
Qualiﬁcation of alternative wood species and geographies for future supply options
Strengthening System Partner programme (i.e. coatings, adhesives and hardware) with new and existing partners globally
Reducing batch cycle time in manufacturing processes which has resulted in energy efﬁciencies
Tricoya process optimisation and testing to support Hull

Looking forward

Accoya Color ramp up and further innovations
Building on security of supply efforts
Progressing IP Strategy development and execution
New scanner and stacker equipment to ensure products meet speciﬁcation
Continuous improvements in operations
Building on System Partner programme

Innovation and technology

We’ll innovate and utilise technology with sustainability and quality as our goals, going above and beyond to make a positive impact on a global scale.# OVERVIEW

STRATEGIC REPORT

SUSTAINABILITY

See more about our approach in our 2022 GRI and SASB Report in the ESG section of the Accsys website €1.2m dedicated investment in R&D (2021: €1.1m) 2nd annual GRI and SASB reporting disclosure New automated wood handling equipment installed at Arnhem in FY22 with 100,000m 3 annual handling capability to improve handling and efﬁciency See cross cutting metrics under:
– Ecological footprint (waste)
– Energy and climate change (GHG emissions)

2022 highlights

Further development of Accoya® offcuts reclamation programme
Packaging reduction and elimination for Accoya
Closed-loop recycling of acetic acid
Biomass exploration of wood dust and shavings

Looking forward

Key focus on process innovation to identify and implement further waste reduction through process and technology efﬁciencies
Water efﬁciency activities investigation
Continue closed-loop recycling of acetic acid and exploration of increased scale
Increasing volume of Accoya offcuts reclamation
Commence biomass use at Barry, UK, if feasible

See more about our approach, including our commitments to waste and water in our 2022 GRI and SASB Report in the ESG section of the Accsys website

Ecological footprint

We’ll work to minimise the ecological impact from our operations, particularly focusing on adopting a circular economy approach to resources, which includes reducing waste. Another focus is on monitoring water related impacts.

100% of our reclaimed Accoya® wood re-processed for Tricoya® wood elements
134 tonnes reclaimed Accoya® wood re-processed for Tricoya® (2021: 216 tonnes)
Zero waste to landﬁll (2021: 0)
1,476 tonnes total waste for recycling (2021: 1,206 tonnes)

See further information in our ESG data content index (www.accsysplc.com/esg-reporting)

Accsys Technologies PLC – Annual Report and Financial Statements 2022 56

SUSTAINABLE AND QUALITY PRODUCTS

2022 highlights

Updated Accoya® wood Life Cycle Analysis (LCA)
Accoya recertiﬁed to Cradle to Cradle® Gold overall and Platinum for Material Health
Continued renewal, identiﬁcation and conﬁrmation of suite of technically valid quality and sustainability accreditations
New Accoya® Color product brought to market in selected regions and capacity accelerated through acquisition of assets in Wales, Barry, creating new Accoya Color manufacturing site
Accoya® Arnhem Plant fourth reactor capacity expansion
Continued progress with Eastman on Accoya USA JV
New stacker to support quality control (see page 24 for case study)

Looking forward

Publish of Accoya Environmental Product Declarations (EPDs)
Accoya Color Cradle to Cradle Certiﬁcation and ﬁrst full year of operation at Barry, Wales site
Tricoya® Hull plant commence operation (see pages 26 to 33)
Accoya® Arnhem Plant fourth reactor completion (see pages 26 to 33)
Continued progress with Eastman on Accoya USA JV (see pages 26 to 33)

Responsible sourcing

2022 highlights

Exploration of other wood species, source locations and options for security, quality and sustainability of raw materials inputs
Ongoing evaluation of acetic anhydride supply sourcing, reuse and recycling of our acetic acid co-product
Working with FSC representatives on how to allow for certiﬁcation of a greater number of inputs of Accoya being reused as Tricoya input
Working with a new potential wood supplier to successfully have them achieve FSC certiﬁcation so they can utilise them and let them expand operations to offer more employment in economically stressed area

Looking forward

Target FY23: Maintain 100% certiﬁed sustainable wood sources
Target FY23: Increase annual volume (m 3 ) of Accoya offcut reclamation being remanufactured for Tricoya
Increase in-person wood mill supplier engagement
Continuation of exploration of other wood species, source locations and supply options for more sustainable and lower impact wood sourcing
Ongoing evaluation of acetic anhydride supply sourcing, reuse and recycling of acetic acid co-product

We’ll keep sourcing timber responsibly, working with our suppliers to ensure our needs are met and forging new partnerships to ensure the secure supply of sustainable materials.

Sustainable and quality products

We’ll ensure our products continue to meet high standards of quality and sustainability by achieving accreditations and certiﬁcations – while always meeting our customers’ needs.

	2022	2021
100% certiﬁed sustainable (i.e. FSC® and/or PEFC®) wood sources*	100%	100%
100% suppliers* screened using social and environmental criteria	100%	100%
100% suppliers* met with, visited, or audited in the past year	100%	93.3%
100% of new supplier wood mills visited before supply	100%	100%
85% of wood supply mills visited within three years	85%	85%
100% of operations subject to human rights reviews or impact assessments	100%	100%
47,838 tCO 2 sequestered in products sold	47,838 tCO 2	48,493 tCO 2

200,000m 3 : 2025 production capacity target

CO 2 sequestered in our products sold in 2022 is equivalent** to:

118,743,750 miles driven by an average passenger vehicle
24,008 tonnes of coal burned
5.8 billion smartphones charged

** Source of equivalences: EPA calculator (www.epa.gov/energy/greenhouse-gas-equivalencies-calculator).

65 CPDs delivered

See more about our approach which includes information on our labour practices in our 2022 GRI and SASB Report in the ESG section of the Accsys website

See more about our approach in our 2022 GRI and SASB Report in the ESG section of the Accsys website

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 57

SUSTAINABLE AND QUALITY PRODUCTS CASE STUDY

At Accsys, we are proud that our products are high performing, while contributing to a more sustainable built environment. Externally assessed accreditations and certiﬁcations allow us to demonstrate our sustainability attributes and credentials and ensure that we are progressing and focusing on the right areas.

Cradle to Cradle Certiﬁed® (C2C) is an independent global standard for products that are safe, circular and responsibly made. It helps companies to ensure the impact of their products on people and planet is a positive one. Companies must reapply for C2C status every two years. This year, Accoya has retained Gold C2C certiﬁed status, which Accoya has held since 2010, highlighting the company’s impressive sustainable wood sourcing strategy, non-toxic product and use of more than 50% renewable energy in production. The separate Platinum certiﬁcation in the Material Health category recognises that the product poses no danger to either the environment or human health, and is the highest possible certiﬁcation level.

Cradle to Cradle Certiﬁed ® – demonstrating performance and sustainability go hand in hand

For more Accoya projects, visit www.accoya.com/projects

After the end of the reporting period in May 2022, Accoya Color was awarded Cradle to Cradle certiﬁcation at the prestigious ‘Gold’ level. It also achieved ‘Platinum’ (the highest level) for both ‘Material Health’ and ‘Water Stewardship’. This recognises that Accoya Color as a product adheres to very high standards of sustainability, alongside the recognised high performance and durability credentials of the brand.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 58

ENERGY AND CLIMATE CHANGE

Acetylated wood has sustainability beneﬁts to other materials and species of wood through its durable, stable, non-toxic and carbon storage properties. However, producing acetylated wood does require energy. We are continually looking to optimise our processes, which will in turn, reduce our energy use. At our Arnhem site, Accoya wood is manufactured in ‘batches’. We have been successful in reducing the cycle time of each batch. These innovations have enabled us to reduce the emissions intensity per cubic meter of Accoya for our scope 1 emissions. (The overall scope 1 metric to the right includes emissions associated with additional sites to Arnhem). This year we have also completed a feasibility assessment on increasing batch sizes to further improve the efﬁciency of this process, and will look to implement these further initiatives next year.

2022 highlights

Development of climate change policy
Improved data collection and analysis for targeted improvements
Launch of Green Champions Network throughout the organisation for local and global awareness, initiatives and support
Refreshed carbon offsetting approach to align with purpose and strategy
Reducing batch cycle time in manufacturing processes which has resulted in energy efﬁciencies

Looking forward

Continuation of Green Champions Network activities and workstreams to drive activities around sustainable products and manufacturing, green ofﬁce and personal footprint
TCFD (Task Force on Climate-Related Financial Disclosures) implementation commencement
Implementation of climate change policy
Target setting planning commencement
Climate awareness training for relevant employees

Scope 3 emissions reporting

At Accsys we have long focused on credible assessments on our environmental impact. We have conducted product life cycle assessment of Accoya wood for 20 years.
This year we built on our progress and have conducted scope 3 emissions internal reporting. We are in the process of reviewing the data internally before an external publish.
For the next steps, we will be assessing our impacts in more detail as we look towards developing our near to longer term commitments.

Energy efﬁciencies through innovative optimisation processes

Energy & Climate change

We’ll uphold our commitment to high ethical standards, ensuring our processes and procedures are strengthened as we continue to grow.# OVERVIEW

STRATEGIC REPORT

SOCIETY AND COMMUNITIES

CASE STUDY Engaging employees through Society and communities strategy

Society and communities
We’ll create a positive environmental and social impact through a variety of activities aligned with our purpose of ‘Changing wood to change the world’.

€20,875 donated to charitable activities (2021: €6,400)
3 ofﬁcial charity partners (including Mind)

2022 highlights
* Development of Society and Communities strategy
* Accsys employees in all regions voted for ofﬁcial charity partners, aligned to Accsys values and activities
* Support delivered to communities through monetary donations and charitable product donations (with screening criteria)
* Building on governance and accountability through Charity Committee and its activities
* Engaging employees through ‘Accsys in Action’ charity ambassador initiatives with social, community-related and charitable activities, including ‘Step out to help out’ walking and wellbeing challenge and Tree Planting day with Trees For All, Accsys Dutch charity partner
* Green Champions Network engaging employees on sustainability awareness with Personal Footprint campaign launch

Looking forward
* Further development of partnerships with ofﬁcial charity partners
* Green Champions Network, Personal Footprint group campaign delivery
* Group wide employee engagement campaigns to align social and environmental goals

See more about our approach in our 2022 GRI and SASB Report in the ESG section of the Accsys website

Accsys Technologies PLC – Annual Report and Financial Statements 2022
60

SUSTAINABILITY continued

Greenhouse gas (GHG) emissions information

		2022			2021
		Total	UK	Global (Excluding UK)	Total	UK	Global (Excluding UK)
Scope 1 emissions	tco₂e	4,586.47	291.85	4,294.62	4,421.01	—	4,421.01
Scope 2 emissions location-based	tco₂e	3,878.99	3.46	3,875.53	3,805.81	1.58	3,804.22
Scope 2 emissions market-based	tco₂e	600.62	3.46	597.16	2,277.29	1.58	2,275.71
Total scope 1 and 2 emissions location-based (gross value)	tco₂e	8,465.46	295.31	8,170.15	8,226.82	1.58	8,225.24
Total scope 1 and 2 emissions market-based	tco₂e	5,187.09	295.31	4,891.78	6,698.30	1.58	6,696.72
Carbon offsets purchased	tco₂e	3,909.88	—	—	2,673.00	—	—
Renewable Energy Certiﬁcations (RECs)	tco₂e	3,278.37	—	3,278.37	1,528.52	—	1,528.52
Scope 1 and 2 emissions (net value)	tco₂e	1,277.20		4,025.30
Scope 1 and scope 2 location-based emissions intensity	tco₂e/m³ *	0.1419	—	—	0.1361	—	—
Scope 1 and scope 2 market-based emissions intensity	tco₂e/m³ *	0.0870	—	—	0.1108	—	—
Net scope 1 and scope 2 emissions intensity	tco₂e/m³ *	0.0214	—	—	0.0666	—	—
Energy consumption associated with Scope 1 emissions	MWh	249.00	15.85	233.16	243.28**	—	243.28**
Energy consumption associated with Scope 2 emissions	MWh	8,884.79	16.30	8,868.49	8,712.12	6.80	8,705.32
Energy consumption associated with Scope 1 and 2 emissions	MWh	9,133.80	32.15	9,101.65	8,955.40**	6.80	8,948.60**

Accoya® produced.
** This ﬁgure has been restated in 2022 for updated values.

Methodology
* We have reported on emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013 and the Streamlined Energy and Carbon Reporting requirements.
* We report on existing operating sites for our manufacturing facility in Arnhem, the Netherlands and London ofﬁce. This year we acquired a new site in Barry, UK so have included emissions associated with this site from the date of acquisition.
* Emissions have been calculated following the GHG Protocol – Corporate Accounting and Reporting (revised edition) using the following databases: IPCC 2006 Guidelines for National Greenhouse Gas Inventories, 2007 IPCC Fourth Assessment Report; Eco-invent v3.2 and IEA emissions from fuel combustion 2019 report. We also use the UK Government GHG Conversion Factors for Company Reporting (2021).
* Following the Environmental reporting guidelines: including Streamlined Energy and Carbon Reporting requirements’(BEIS, DEFRA 2019), carbon offsets may be accounted for separately as a ‘NET’ ﬁgure, while the original electricity consumption ﬁgures should be presented as a ‘GROSS’ ﬁgure.
* Scope 2 emissions are reported in both location- based and market-based approached to take into account the purchase of Renewable Energy Certiﬁcates (RECs), a market-based instrument.
* We have purchased 3,910 tCO₂ of carbon credits to offset a proportion of our GHG emissions. The credits are Voluntary Emissions reductions from the Veriﬁed Carbon Standard (VCS) and Climate, Community & Biodiversity Standards (CCB) through EcoAct’s portfolio.

Energy efﬁciency action
* Efﬁciency improvements in our process to enable more wood to be acetylated in each reactor at once – meaning more ﬁnished product for less energy and acetic anhydride use.
* Implementing maintenance measures at the Arnhem site to improve preventative and predictive maintenance measure which will help to prevent unwanted losses, reduce emissions, improve efﬁciencies and safety.

OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
61

Listening, engaging and partnering with stakeholders across our business activities helps us to address our business impacts and improve outcomes for people, health and safety, and the environment.

Board of Directors
SHAREHOLDERS
ARCHITECTS
EMPLOYEES
SUPPLIERS
MANUFACTURERS
CONSUMERS
DISTRIBUTORS & SPECIFIERS

STAKEHOLDER ENGAGEMENT

Accsys considers its stakeholders as integral to its success, and is committed to engaging and collaborating with our key internal and external stakeholders throughout the value chain. Our progressive approach to sustainability and ESG issues began with a stakeholder engagement exercise, with our resulting material issues framework, strategy and activities built from that foundation. Additionally, we summarise below how our Directors fulﬁl their duties in relation to Section 172 of the Companies Act 2006.

The ‘section 172 duty’

The Directors are subject to a duty to promote the success of the Company and act in a way that they consider, in good faith, would be most likely to promote the success of the Company for the beneﬁt of its members as a whole. In doing so they are required to take into account a number of factors including the impact of decisions over the long term and their impact on employees’ interests, business relationships, the community and the environment. They are also required to consider the need to maintain high standards of business conduct and to act fairly between shareholders. As part of their induction, any Director is briefed on their duties and can access professional advice on these – either through the Company or, via external advisers. During the course of the year, key duties and other corporate governance matters are reviewed at Board meetings. In 2018 Accsys conducted a corporate governance review in preparation for the changes to governance requirements for AIM companies and thereafter adopted the QCA Code. As part of this review process the Board analysed the way in which it engaged with stakeholders and ways in which such engagement could be improved (please refer to pages 75 to 79 of the Corporate Governance Report for further information on compliance with the QCA code). The Accsys Board takes its S.172 Duty seriously and seeks to engage with stakeholders to ensure the success of the Company is promoted for the beneﬁt of members as a whole. Here, and throughout this Annual Report, we show how the Board meets the above requirements and engages with key stakeholder groups as part of its S.172 Duty in its decision making processes.

See more about our business activities in our Business Model on pages 16 and 17

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Long-term view

The Directors aim to ensure that the business and its values-led vision is not only a commercial success in the short term but also in the long term. The evaluation of long-term consequences of decisions involves the Board managing responsibly as Accsys continues to advance technologies and solutions for a better world. The Directors hold a strong belief that the Company has a collective social responsibility to use and develop its technology to make the world a better, more sustainable place. This belief, together with health and safety, remains a fundamental priority of the business.# Accsys Technologies PLC – Annual Report and Financial Statements 2022

STRATEGIC REPORT

STAKEHOLDER ENGAGEMENT

In order to assess the likely consequence of a decision in the long term, the Directors focus on Accsys’ key values and stated purpose: ‘Changing wood to change the world’, to ensure that strategic aims provide long- term benefits and success for the business and its stakeholders. For instance, a key part of the Company’s strategy in FY 22 was to progress with the planned construction of an Accoya® plant in the USA through our joint venture with Eastman Chemical Company. The plant in the USA has been designed to allow for efficient expansion in the future. The long-term success of any growth expansion project and ongoing value creation once the plant is operational, was an important factor in the decision-making process. See below for further information on the Accoya® USA joint venture. For further information please see pages 70 to 79 of the Corporate Governance Report.

Employees

The Directors recognise that our people are key to the success of our business, with positive retention rates and engagement survey results which indicate commitment to the future of the Company. The ideas, skills and intellectual capital of Accsys’ people are significant contributors to Accsys’ Research & Development, innovation, proprietary and protected technologies and its work to develop long-term growth market opportunities to exploit the Company’s first mover advantage.

To ensure strong and positive employee engagement, Accsys holds regular communication updates in different forms, from in-person meetings to video-conferences on a wide range of topics, including: health and safety, the Company’s financial position, strategy, and updates on project progress and team activities. Employee feedback and questions are also actively encouraged.

These communication forums combine a strong structure with an informal environment to facilitate and promote real engagement and open dialogue throughout all levels and functions in the organisation. The Company has an annual Employee Share Participation Plan which is open to all employees intended to engage, retain and motivate colleagues, promoting the long-term growth and profitability of the Company by providing employees with an opportunity to acquire an ownership interest in shares as an additional benefit of employment.

In February 2022 and following on from our Employee Engagement Survey in 2021, a Group-wide employee inclusion and diversity survey was commissioned. This provided personnel with another opportunity on an anonymous basis to give valuable feedback on diversity and inclusion within the Company. The results of this survey are currently being reviewed and considered carefully by the Senior Leadership Team.

Through the Company’s learning and development programme, Accsys provides resources and training to allow employees to develop their skills. This creates value for employees by enhancing their skills and learning and enabling them to succeed in what they do now and into the future. The Directors are aware that the success of the business depends on the attraction, motivation and retention of our employees. The Company intends to ensure that we remain a responsible and well-regarded employer, considering factors from health and safety to pay and benefits, and the implications of decisions on employees.

Accsys is also committed to providing local employment across all of our locations. Where we need to hire externally, we do so locally using in-house or local recruitment firms in each market, and we do not operate an ex-pat based employment model. For further information please see pages 70 to 79 of the Corporate Governance Report and pages 53 of the Sustainability section.

STAKEHOLDER ENGAGEMENT continued

Customers, Suppliers & Business Partners

Delivering our strategy requires strong relationships and alignment with suppliers, customers, distributors, licensees and business partners, as well as investors. The Company has developed a strong network of global distributors with its key customers, which has seen Accoya® being sold into all continents of the world. Important relationships with suppliers in the wood and acetyls industries have been fostered over more than a decade to mitigate risk and promote success.

Accsys provides training to its end-users (most frequently joineries) and distributors in relation to Accoya®, including information for usage applications, manufacturing, environmental and social benefits. Accsys also maintains frequent contact with and, when possible, visits to customers to ensure regular and open dialogue.

Through the Company’s joint venture and consortium, its relationships with business partners such as Medite and INEOS in relation to Tricoya®, and with Eastman Chemical Company in relation to Accoya USA, are key elements to the success of those ventures. These relationships and ventures also create value for our partners, where the new plants under construction will create new long-term demand and supply opportunities for their businesses where the sustainable nature of the finished products that they contribute to also supports their own sustainable development. We believe that our Accoya® and Tricoya® products will serve a long-term role in replacing non-renewable hardwoods and environmentally damaging man-made products while crucially being able to offer all of the attributes desired of a high-performance product. For further information please see pages 15, 34 to 35 and 70 to 79.

Community and the environment

At Accsys, we hold a strong belief that we have a collective social responsibility to use and develop our technology to tackle climate change and pollution. Together with a commitment to health and safety, these are fundamental priorities of our business and part of our corporate values. Our stated purpose is ‘Changing wood to change the world’, and with our products we give the world the choice to build in a more sustainable and environmentally-friendly way. The positive impact we believe our operations and Accoya® and Tricoya® products can have on the global community and environment lies at the very core of our business; it is part of the Board’s responsibility to ensure that they remain a key focus.

The Company continues to have a strong focus on responsible sourcing and product sustainability. 100% of the Company’s products are made from FSC® certified sustainable wood from well-managed forests and 100% of the Company’s key materials suppliers are assessed for social and environmental criteria. During FY 2022, Accsys took important steps forward in its commitment and contributions back to the community and the environment. In this period the Company implemented a climate change policy to assess better the impact of our operations on the environment. Under our new Society and Communities strategy, the Company has developed a more structured approach to social and environmental impact through tools such as charitable giving and employee engagement. In addition, the location of our production assets are in sites that do not require community consultation in relation to community relocation or cultural heritage. For further information please see pages 50 to 60 in the Sustainability section, and the Accsys Sustainability Report in the ESG section of the Accsys website.

Good business conduct

Accsys is committed to a policy of minimising any negative social and environmental impact that may flow from its activities. Such expectations are clearly communicated, for example, in the Accsys Sustainability Report, Anti-Corruption, Bribery and Tax Evasion Policy and Accsys’ Modern Slavery Statement. Accsys is committed to improving its practices to combatting and eliminating slavery and human trafficking. The Board periodically reviews and approves such policies and statements (where relevant) to ensure that its high standards are maintained both within the business and by business partners, with training rolled out across the Group to ensure understanding and compliance with key principles. For further information please see pages 50 to 60 and pages 70 to 79.

Shareholders

The Board is regularly updated on engagement and feedback from Accsys’ broad spectrum of stakeholders to enable the Board to consider such views during relevant decision making processes, taking into account the impact of decisions on stakeholder groups. The views of shareholders are regularly sought and received, whether it is through the Company’s Annual General Meeting, or the Company’s investor relations programme which includes meetings with major investors across the year. The Board also receives investor feedback twice a year, following the communication of the Company’s full and half years results to investors. Through this engagement, and other direct investor engagement periodically, the Board ensures that when balancing the interests of stakeholders, it is well-informed on shareholder needs and sentiment. For further information please see pages 70 to 79 of the Corporate Governance Report.

Principal decisions

We outline some of the principal decisions made by the Board over the previous year, explain how the Directors have engaged with the different key stakeholder groups and how stakeholder interests were considered over the course of such decision-making.

1. Accoya USA, LLC

In March 2021, the Company concluded arrangements relating to its joint venture company with Eastman Chemical Company (Accoya USA, LLC) and made the final investment decision to proceed with the construction of an Accoya® wood production plant to serve the North American market. In making the decision to proceed with the joint venture, the Board considered certain key stakeholder interests, including:

Shareholders – the expansion plans of the Group and the potential to enhance revenue, underlying earnings and growth.• Joint venture partners – discussions with joint venture partners are frequent and vital to ensuring alignment that will deliver successful outcomes in the longer term.
• Distributors and other customers – understanding the market demand from distributors and key customers for our Accoya® products has been important in evaluating whether to proceed with and/or adjust growth plans.
• Employees – our ambitious growth plans will only succeed in the longer term with the support, dedication and hard work of our employees. Understanding their views and addressing concerns as we continue on our growth journey is key. Before completing the remaining planning workstreams required in relation to the joint venture our growth plans were discussed across the Group, including at internal communication forums.
• Community and environment – ultimately, we believe that growing our manufacturing capability will give people the choice to build using sustainable, environmentally-friendly products. For example, the expansion plan in the US will allow sustainable building options to be made in the US and offered to local markets. Changing wood to change the world is our core proposition, and we are supporting this through several actions in our approach to our ESG and sustainability material issues.

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

2. Reﬁnancing of Group Debt Facilities

In October 2021, the Company announced the refinancing of its Group debt facilities through a new bilateral agreement with ABN AMRO, one of Accsys’ existing relationship banks. The new facility has significantly simplified Accsys’ debt structure, which previously included five different debt providers, and provides Accsys with greater liquidity to support the Group’s growth plans which will benefit all stakeholders.

3. Purchase of assets for Accoya® Color® production

In July 2021, the Company announced that it entered into a sale and purchase agreement with Lignia Wood Company Limited and its administrators, to acquire certain assets, equipment and technology at its manufacturing plant in Barry, Wales which would be used to convert Accoya® wood into the Accoya® Color product. This allowed the Company to accelerate its plans to grow Accoya® Color both in its current markets and into additional markets as part of its ongoing global growth strategy.

In making the decision to proceed with the purchase of assets, the Board considered certain key stakeholder interests, including:

• Shareholders – the expansion plans of the Group and the potential to enhance revenue, underlying earnings and growth.
• Employees – our ambitious growth plans and expansion will only succeed in the longer term with the support, dedication and hard work of our employees. Understanding their views and addressing concerns as we continue on our growth journey is key and views on the Accoya Color project were sought from key employee stakeholders during the process.
• Community and environment – since Accoya® Color combines the benefits of Accoya® wood with colour all the way through the wood from surface to core, we believe that growing our manufacturing capability in this area will give customers more versatility in how they use our sustainable, environmentally- friendly products.

4. Equity Raise

In May 2021, the Company undertook a placing and open offer to raise gross proceeds of approximately €37 million. The net proceeds of the issue were used primarily to fund the Company’s investment in Accoya USA, LLC as well as to provide additional capital to support the Company’s continued growth.

In making the decision to proceed with the equity raise, the Board considered certain key stakeholder interests, including:

• Shareholders – the expansion plans of the Group and the potential to enhance revenue, underlying earnings and growth.
• Employees – the open offer element of the issue provided an opportunity for employees (whether existing shareholders or not) to participate in the equity raise.
• Community and environment – the Company felt that the proceeds of the equity raise ultimately facilitated further production of Accoya, thereby increasing availability of a sustainable, environmentally friendly, low carbon building material.

BOARD OF DIRECTORS

	Stephen Odell	Robert Harris	William Rudge	Nick Meyer
	Non-Executive Chairman	Chief Executive Officer	Finance Director	Non-Executive Director

Background and Experience

Stephen Odell joined the Board initially as a Non-Executive Director, before becoming Chairman immediately after the Annual General Meeting in 2020 when Patrick Shanley stepped down from the role. He came to Accsys following 38 years of service at Ford Motor Company, including extensive Board and Chair positions. This included appointments as Chairman and Chief Executive of Ford Europe, Middle East and Africa, during which he led the transformation of the European operations and delivery of profitable growth through new product introduction, increased brand building and driving efficiencies across the operations. He most recently held the position of Executive Vice President of Global Marketing, Sales and Service and oversaw these areas for all of Ford’s operations globally, following work for the company in the USA, Asia and Europe. Stephen also moved to and lived in various locations around the world in order to lead several of Ford’s other historic brands, and his strategic insight and global experience will be valuable to Accsys as it delivers on its growth strategy.

External Appointments
Member of the University of Nottingham Council (effective 1 August 2021)

Background and Experience
Rob, born 1963, was appointed CEO of Accsys with effect from 20 November 2019. Rob has significant experience across a range of industrial sectors, including chemicals, oil, metals, renewables and speciality products. Prior to joining Accsys Rob was CEO, Europe at Eco-Bat Technologies Limited, a global energy storage product recycling business with sustainable values. He initially spent nearly 20 years with BP PLC and Exxon-Mobil. Whilst at BP, Rob was responsible for the successful research, development and commercialisation of an international market-leading wood treatment chemicals business. Rob subsequently held senior roles with manufacturing businesses including British Vita, Nippon Glass, and Reliance Industries, a Fortune 500 Industrial company and the largest private sector corporation in India. Rob has a considerable track record in the growth of international manufacturing and marketing business.

External Appointments
None

Background and Experience
William, born February 1977, had been the Financial Controller for Accsys since joining the Company in January 2010 before being appointed Finance Director on 1 October 2012. Prior to this he qualified as a chartered accountant with Deloitte in 2002 and subsequently gained a further six years’ experience in their audit and assurance department, focusing on technology companies including small growth companies and multinational groups. William spent a year working at Cadbury PLC, including as Financial Controller at one of their business units, before joining Accsys in 2010.

External Appointments
None

Background and Experience
Nick, born December 1944, has extensive board room experience in the timber industry, having previously been Chairman of Montague L Meyer Limited, Deputy Chairman and Chief Executive of Meyer International PLC. Nick is currently Executive Chairman of Consolidated Timber Holdings Limited, an innovative and substantial group of companies which imports, distributes and processes sustainable timber and timber products. Nick is also a former president of the Timber Trade Association of the United Kingdom.

External Appointments
Emeritus Chairman and Special Adviser of:
• Consolidated Timber Holdings Group Limited
• Executive Chairman of Hardwood Ltd

Board Appointment and Tenure

	Appointed	Tenure
Stephen Odell	23 June 2020	2 years
Robert Harris	29 November 2019	2 years
William Rudge	1 October 2012	9 years
Nick Meyer	17 May 2011	11 years

1 Tenure is calculated on number of complete years to 30 June 2022.

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Audit Committee

Nomination Committee

Remuneration Committee

	Chair of Committee	Non-Executive Director	Non-Executive Director	Non-Executive Director (Senior Independent Director)	Non-Executive Director
	Sue Farr	Sean Christie	Trudy Schoolenberg	Alexander Wessels	Louis Eperjesi

Background and Experience

Sue, born 1956 is a highly experienced marketing and communications professional who joined the Accsys Board in November 2014. Sue became part of the executive management team at Chime Communications PLC in 2003, and in 2017 was appointed as Special Advisor, stepping down from that role in 2020. Prior to that she was Europe MD of leading PR firm Golin Harris, the BBC’s first ever Director of Marketing and Communications, and Director of Corporate Affairs for Thames Television. She was a Non-Executive Director of Motivcom PLC from 2008–2014, a Trustee of the Historic Royal Palaces from 2007–2013 and previously a Non-Executive Director of Dairy Crest Group PLC and Millennium & Copthorne Hotels PLC. She has been Chairman of both the Marketing Group of Great Britain and The Marketing Society. A previous Advertising Woman of the Year, she was awarded an Honorary Doctorate by the University of Bedfordshire in 2010.

External Appointments
Non-Executive Director:
• British American Tobacco PLC
• Unlimited Marketing Group Limited
• Helical PLC

Background and Experience
Sean, born October 1957, was Group Finance Director of Croda International PLC from 2006 to 2015, a global manufacturer of speciality chemicals. Prior to joining Croda in 2006, Sean was Group Finance Director of Northern Foods PLC.# Governance

Directors and Senior Management

Board of Directors

Sean van Staden

Background and Experience
Sean van Staden is a Non-Executive Director and Chair of the Audit Committee. He served as a Non-Executive Director of KCOM Group PLC until 2007, of Eminate Limited, a wholly owned subsidiary of The University of Nottingham, of Cherry Valley Farms Limited until its sale in 2010 and of Produce Investments PLC. He is a Fellow of both the Chartered Institute of Management Accountants and the Association of Corporate Treasurers. Sean has extensive knowledge of ﬁnance and strategy in major businesses and is an experienced Audit Committee Chairman.

External Appointments
Non-Executive Director:
• Applied Graphene Materials PLC
• Turner & Townsend Ltd
• Optibiotix Health PLC

Trudy Schoolenberg

Background and Experience
Trudy has nearly 30 years’ experience working for blue-chip companies in the chemicals, engineering and high performance product sectors, including over 20 years with Royal Dutch Shell where she led business strategy and growth plans for Shell Chemicals, a business unit with a multi- billion dollar turnover. Trudy joined the Accsys Board on the 1 April 2018. As well as strategy and growth experience, Dr Schoolenberg has strong operational knowledge, gained both during her time at Shell and thereafter at Akzo Nobel, where following supply chain and research and development roles on Akzo’s $4 billion decorative paints Board, she subsequently had responsibility for delivering a new manufacturing plant in Newcastle.

External Appointments
Non-Executive Director:
• The Netherlands Petroleum Stockpiling Agency (COVA)
• Spirax-Sarco Engineering PLC (Senior Independent Director)
• Avantium N.V.

Alexander Wouters

Background and Experience
Alexander brings over 30 years of chemical, pharmaceutical and process industry knowledge and experience to Accsys. He is currently Chief Executive Ofﬁcer of Caldic, a leading global specialty ingredients and chemicals distributor. Alexander holds also a number of additional non-executive roles:
• Vice-Chairman of colour and speciality chemicals company Archroma.
• Non-Executive Boardmember of Agriﬁrm

With an MSc in Molecular Sciences, and an MBA, Alexander has a strong track record of improving business performance and transformational growth in his previous roles in the Netherlands, the USA, Switzerland and other international and global roles. He has held executive and management positions with DSM, Campina, and Unilever.

External Appointments
Non-Executive Director:
• Archroma (Vice Chairman)
• Agriﬁrm
• CEO of Caldic B.V

Louis Eperon

Background and Experience
Louis, born in 1962, joined the Accsys Board on 1 June 2022, following a successful 33 year career in the building materials sector. Louis was most recently CEO of Tyman Plc, a leading International supplier of engineered components and access solutions to the construction industry, between 2010 and 2019. Prior to Tyman he held senior executive roles in Kingspan Plc, Baxi Group Ltd, Lafarge SA and Caradon Plc. He brings a strong background of manufacturing and supply of building products in International markets, together with commercial, strategy development, M&A and change management experience.

External Appointments
Louis is currently a Non Executive Director of:
• Ibstock Plc
• The Cheltenham Trust (Chair of Trustees)

Board Appointment and Tenure

Name	Appointed	Tenure
Sean van Staden	27 November 2014	8 years
Trudy Schoolenberg	27 November 2014	8 years
Alexander Wouters	1 April 2018	4 years
Louis Eperon	18 September 2020	2 years
	14 June 2022	0 years

Senior Leadership Team

The Senior Leadership Team includes the two Executive Directors and the following individuals:

Accsys Technologies PLC – Annual Report and Financial Statements 2022
68

Natalia Bikkenina
Chief People Ofﬁcer

Background and Experience
Natalia is responsible for all aspects of global HR, including responsibility for developing a comprehensive global HR strategy which supports business growth and expansion, attracts and retains top talent and drives high performance. Natalia joined Accsys in September 2017 having worked in a number of international industrial and technology businesses. In her role, Natalia will also use her experience of working for start-ups and high growth companies to facilitate the Group expansion plan. Natalia has both an MBA and a degree in Languages.

Hans Pauli
Director of Corporate Development

Background and Experience
Hans has held senior ﬁnancial positions across the banking and bio-tech sectors and has signiﬁcant experience in investment, manufacturing, licensing and distribution. Hans holds a BA in Business Administration and has completed an MA in Fiscal Economics from the University of Amsterdam. His commercial career began in the banking sector where he worked for various institutions including Barclays, where he gained investment and M&A experience. He then worked for a number of bio- tech companies as Chief Financial Ofﬁcer, including Euronext-listed Pharming Group N.V. Hans is a Non-Executive Director of BioTech VC, MedSciences.

Nick Hartigan
General Counsel and Company Secretary

Background and Experience
Nick is responsible for the legal affairs of the Accsys Group and is also the Company Secretary. Nick has particular legal and regulatory expertise in corporate transactions, capital raisings (equity and debt), lender management and complex litigation. Nick qualiﬁed at a leading UK international law ﬁrm. He has gained extensive experience working with or for companies in the oil and gas, construction, building materials and manufacturing sectors. Nick joined Accsys in April 2022.

Eddie Pratt
Director of Business Development

Background and Experience
Eddie led the initial establishment of the wood acetylation business in 2003, subsequent ﬂotation as Accsys Technologies PLC, and development of both the Accoya® brand and the production facility in Arnhem. His in-depth knowledge of the business helps develop new markets and partnerships for Accsys and its branded products, including licensing and establishment of joint ventures. Eddie led the development and negotiation of the recently ﬁnalized Accoya USA joint venture with Eastman Chemical Company. Eddie’s earlier career was in investment banking, receiving his training with JP Morgan and working at its afﬁliate Saudi International Bank where he specialised in corporate and project ﬁnance.

Hal Stebbins
Director, Quality, Supply Chain & Customer Service

Background and Experience
Hal has spent most of his career leading global marketing, sales and services operations for a variety of businesses, including IBM’s forest products solutions team. His formal education culminated in graduating summa cum laude with an MBA in International Management from the Anderson School at the University of New Mexico. When he joined Accsys in 2007, Hal was initially responsible for the Group’s ﬁrst worldwide marketing strategy. Since then, Hal has led the growth of our international distributorship and licensing management. Currently he leads teams responsible for wood and chemical supply critical to production, customer service and quality assurance.

John Alexander
Group Sales Director

Background and Experience
John is responsible for all aspects of product sales for Accsys, managing a team across the globe. With a degree in Forestry and Forest Products from the University of Wales and an MSc in Timber Engineering from the University of Maine, USA, John’s career in the wood product industry started as technical manager at Jeld-Wen, the world’s largest manufacturer of windows and doors, and he subsequently moved to BSW Timber, the largest forestry and sawmilling group in the UK. Initially joining Accsys as Head of Product Development in 2010, John became Director of Sales and Product Development in 2015 and in 2020 tightened the focus of his role on sales activities andstrategy.

George Neel
Group Director of Marketing and Communications

Background and Experience
George joined Accsys in August 2019 with responsibility for marketing and communications across the Group. He and his team also lead ESG and sustainability strategy development, promotion and implementation across the organisation. George began his career at L’Oréal on the Graduate Management Scheme having studied Modern Languages at the University of Bristol. He subsequently worked at the drinks company Diageo in commercial planning before transitioning into marketing. George gained experience working in a series of European and Global marketing roles, most latterly heading up the European Shopper Marketing Team.

Francis Lenders
Managing Director, Accoya NL

Background and Experience
Francis joined Accsys as Site Managing Director for Arnhem in October 2020, responsible for day to day business and manufacturing operations for our facility in the Netherlands. With a Magna cum Laude degree in Commercial Engineering from The University of Antwerp, his business experience has included senior executive roles in supply chain and general management with The Quaker Oats Company, ISP – Ashland, Baxter International, and Elementisplc. He has built a wealth of operational, leadership and transformational experience with businesses across many industries including life sciences, medical devices, chemicals and manufacturing, and prior to joining Accsys was Operations Director for Van Hoorebeke Timber.

Jason Jones
Group HSE Director

Background and Experience
Jason Jones joined Accsys in November 2020 and is responsible for driving HSE across the business. A mechanical engineer by trade, Jason began his career at the British Vita business – Vitamol. In 1994, he joined the British Vita QHSE function as one of its Group HSE Managers to its global business. Jason subsequently established a HSE consultancy business before eventually joining Warburtons in 2011, as Head of HSE. In 2014, he became the European HSE Director for Ecobat Logistics, the worlds largest lead smelter and was responsible for HSE improvements across 16 European operations.

Overview

Financial Statements

Governance

Strategic Report# GOVERNANCE

STRATEGIC REPORT

CHAIRMAN’S INTRODUCTION TO GOVERNANCE

The Board is committed to maintaining high standards of corporate governance to help Accsys make a lasting impact in the world.

See our Compliance with the QCA Corporate Governance Code from page 75

Dear shareholder,

On the following pages we outline Accsys’ corporate governance frameworks and compliance.

Composition of the Board
Female 22%
Male 78%

Diversity of the Board
Non-Executive Chairman 1
Non-Executive Directors 6
Executive Directors 2

Non-Executive Director tenure (including Chairman)
0–3 years 3
3–6 years 1
6–9 years 1
9+ years 2

Note: Infographic sets out position as at 30 June 2022

Accsys Technologies PLC – Annual Report and Financial Statements 2022

I am pleased to introduce this report, which sets out the activities of the Board during the year and our governance arrangements. The Board is committed to maintaining high standards of corporate governance to help Accsys make a lasting impact on the world, deliver its strategic goals and achieve long-term success for the benefit of its stakeholders. I set out below in further detail key aspects of our governance performance.

Quoted Companies Alliance (QCA) Corporate Governance Code

Accsys has adopted the QCA Code and follows and reports against it on a comply-or-explain basis. As a company with strong values and purpose, this also shapes our relationships with our stakeholders from our employees, to our distributors, licensees and others. We want to ensure that our business is not only a commercial success, but also run in a responsible fashion as we continue to advance technologies for a better and more sustainable world. The Board believes that good governance plays a key part in Accsys’ ability to achieve its strategic aims, the successful long-term development of the Group, and the creation of value for all of our stakeholders. As such, corporate governance and social responsibility lies at the very core of our business and remains a key focus for the Board.

Key Governance Changes during the Year

During the financial year ending on 31 March 2022 there was one key change to the Company’s corporate governance and one key subsequent change to the Board’s composition.

On 17 September 2021, the Board constituted a Health, Safety and Environment (HSE) Committee in accordance with the articles of association of the Company. The HSE Committee’s responsibilities include, amongst other things, reviewing the Company’s HSE strategy, key health and safety matters and ensuring the Company has HSE policies, workplans and activities which are appropriate in light of the Company’s operational activities.

On 9 June 2022, the Company received notice of Nick Meyer’s intention to step down from the Board with effect from the end of the AGM due to be held later this year. I would like to thank Nick deeply for his significant contribution to Accsys over many years. Nick has helped steer the strategy and delivery of the Company over the last eleven years. His extensive knowledge of the timber industry and his remarkable people skills have been an invaluable asset to the Company for that time. I would also like to thank Nick personally, for helping my integration onto the Board.

On 14 June 2022, Louis Eperjesi joined the Board of Directors. I am delighted that Louis has joined the Accsys Board. Louis was most recently CEO of Tyman Plc, a leading international supplier of engineered components and access solutions to the construction industry, between 2010 and 2019. Prior to Tyman Louis held senior executive roles in a number of other leading building material/component suppliers. As such, Louis brings a strong background of manufacturing and supply of building products in international markets, together with commercial, strategy development, M&A and change management experience. His depth of experience in building products will be a great asset to the Board and Accsys generally.

In the following section we outline the Company’s approach to corporate governance and the QCA Code. For further detail on each section please refer to the Statement of Compliance of the QCA Code which can be found at www.accsysplc.com.

Stephen Odell
Non-Executive Chairman
30 June 2022

CORPORATE GOVERNANCE

The Board of Directors

During FY 2022 the Board comprised a Non-Executive Chairman, one Senior Independent Non-Executive Director, four further Non-Executive Directors and two Executive Directors. Following FY 2022 and as at the date of this Annual Report, one further Executive Director has been appointed to the Board (Louis Eperjesi).

During the year, serving Directors attended (by either video conference due to COVID-19 restrictions or in person where possible and as further detailed on page 74) the scheduled Board meetings that were held. In addition to the scheduled meetings, a number of ad hoc meetings were convened and there is frequent contact between all the Directors in connection with the Company’s business including Audit, Nomination and Remuneration Committee meetings which are held as required, but as a minimum twice per annum.

Directors are subject to re-election by the shareholders at Annual General Meetings. The Articles of Association provide that Directors will be subject to re-election at the first opportunity after their appointment and one-third of the Board shall submit to re-election each year.

Day to day operating decisions are made by the Executive Directors with support from the Senior Leadership Team.

Audit Committee composition, role and report for the year

The Audit Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported on. The responsibilities of the Audit Committee include approving certain related party transactions, and identifying irregularities in the management of the Company’s business, through consultation with the Company’s external auditors, and proposing remedial measures to the Board of Directors. The Audit Committee considers the independence and objectivity of the external auditors on an annual basis, with particular regard to non-audit services. The Audit Committee meets at least twice a year. The Audit Committee is entitled to obtain, at Accsys’ expense, independent legal, accounting or other professional advice on any matter it believes is necessary to do so.

Currently, the members of the Audit Committee are Sean Christie (Chairman), Stephen Odell, Trudy Schoolenberg, Sue Farr, Louis Eperjesi and Alexander Wessels.

Key matters addressed by the Committee during the year:

Financial reporting
- review of the integrity of key financial announcements (including the interim results)
- review of the Annual Report and Financial Statements to confirm the report as a whole was fair, balanced and understandable
- reviewed and discussed PwC’s reports to the Committee
- reviewed the going concern basis of accounting and the longer-term forecasts
- reviewed new accounting pronouncements and any potential impact for the Group’s financial reporting
External audit matters
- reviewed the independence, objectivity and effectiveness of PwC
- reviewed PwC’s external audit plan taking account of the scope, materiality and audit risks and agreeing the audit fees
- monitored the value of non-audit services provided by PwC, ensuring the services do not affect the auditors’ objectivity and independence
Risk management
undertook a detailed review of the Group’s risk register and the related mitigations, ensuring that risks are appropriately identified, evaluated and mitigated, as appropriate. See Risk section from page 42
Corporate governance
- reviewed changes in the field of corporate governance

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Nomination Committee Overview and duties

The Nomination Committee regularly reviews the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board and its Committees, taking account of the Company’s strategic priorities and other matters affecting the Company from time to time, and makes recommendations to the Board with regard to any changes. In exercising its role, the Directors have regard to the recommendations put forward in the QCA Corporate Governance Code.

Currently, Stephen Odell chairs the Nomination Committee and the other members are Sue Farr, Sean Christie, Trudy Schoolenberg, Louis Eperjesi and Alexander Wessels. The Terms of Reference for the Nomination Committee are available on the Company’s website (see ‘Investors’; ‘Corporate Governance’).# Board and chairperson independence

The majority of the Board of Directors are independent Non-Executive Directors who essentially have a supervisory role, providing appropriate challenge, strategic guidance and advice on certain areas. Both the Chairperson, Stephen Odell, and the Senior Independent Non-Executive Director, Trudy Schoolenberg, are independent. Appointments to the Board are controlled by the Nomination Committee. The Nomination Committee’s Terms of Reference state that a majority of Committee members should be independent Non-Executive Directors.

Board appointments and diversity

The Terms of Reference require the Nomination Committee to give full consideration to succession planning for Directors and the Senior Leadership Team in the course of its work, taking into account the challenges and opportunities facing the Company, the skills and expertise needed on the Board and Senior Leadership Team in the future and the length of service of the Board as a whole and the need for its membership to be regularly refreshed. The Nomination Committee is also required to oversee the development of a diverse pipeline for succession, having regard to diversity of gender, social and ethnic backgrounds, cognitive and personal strengths.

Remuneration Committee

The role of the Committee is to ensure that the remuneration policy and practices of the Company are designed to support strategy and promote long-term sustainable success, reward fairly and responsibly, with a clear link to corporate and individual performance, having regard to statutory and regulatory requirements. The role of the Committee also is to ensure that executive remuneration is aligned to Company purpose and values and linked to delivery of the Company’s long-term strategy. The Remuneration Committee has primary responsibility for the determination of the framework or broad policy for the remuneration of the Chair, Executive Directors, Company Secretary and Executive Committee members including pension rights and compensation payments. It will also review the performance of the Executive Directors and determine matters relating to their remuneration. Engagement of the Company with its Directors regarding the terms of their remuneration, require approval of the Remuneration Committee. The Remuneration Committee approves the granting of share options and other equity incentives to the Executive Directors pursuant to any share option scheme or equity incentive scheme in operation from time to time, as well as the overall amount of any share awards to the Senior Leadership Team. Currently, Alexander Wessels chairs (following a handover from Sue Farr as chair in September 2021) the Remuneration Committee and the other members are Stephen Odell, Sean Christie, Trudy Schoolenberg, Louis Eperjesi and Sue Farr.

HSE Committee

The HSE Committee was constituted in September 2021 and formulates, advises on, reviews and approves the HSE strategy, ambition and corporate actions of the Company. The Committee also, on behalf of the Board, reviews and monitors HSE matters connected to the Company’s activities and operations, endorses HSE policies, procedures and ensures the Company meets or exceeds HSE legal obligations. Currently, Trudy Schoolenberg chairs the HSE Committee and the other members are Alexander Wessels and Rob Harris.

OVERVIEW

FINANCIAL STATEMENTS

GOVERNANCE

STRATEGIC REPORT

Internal financial control

The Board is responsible for establishing and maintaining the Company’s system of internal financial control and places importance on maintaining a strong control environment. The key procedures which the Directors have established with a view to providing effective internal financial control are as follows:

the Company’s organisational structure has clear lines of responsibility;
the Company prepares a comprehensive annual budget that is approved by the Board. Monthly results are reported against the budget and variances are closely monitored by the Directors;
the Board is responsible for identifying the major business risks faced by the Company and for determining the appropriate courses of action to manage those risks.

The Directors recognise, however, that such a system of internal financial control can only provide reasonable, not absolute, assurance against material misstatement or loss.

Relations with shareholders

Communications with shareholders are given high priority. There is regular dialogue with shareholders including presentations after the Company’s preliminary announcement of the year-end results and six-monthly results. Subject to any restrictions on gatherings arising out of the COVID-19 pandemic, the Board uses the Annual General Meeting to communicate with investors and welcomes their participation. Again, subject to any restrictions due to the recent pandemic, the Chairman aims to ensure that the Directors are available at Annual General Meetings to answer questions.

Directors’ attendance record

The attendance record of individual Directors at meetings of the Board and its committees in the year to 31 March 2022 was as follows. Whilst the Executive Directors are not members of the standing committees they attend such meetings by invitation.

Director	Board meetings*	Audit Committee	Remuneration Committee	Nomination Committee	HSE Committee
	Attended / Serving	Attended / Serving	Attended / Serving	Attended / Serving	Attended / Serving
Stephen Odell	20 / 22	3 / 3	5 / 5	8 / 8	0 / 0
Robert Harris	22 / 22	3 / 0	5 / 0	8 / 0	2 / 2
Sean Christie	21 / 22	3 / 0	5 / 5	8 / 8	0 / 0
Sue Farr	16 / 22	3 / 3	5 / 5	8 / 8	0 / 0
Montague John ‘Nick’ Meyer**	18 / 22	3 / 0	5 / 0	7 / 0	0 / 0
William Rudge	22 / 22	3 / 0	4 / 0	4 / 0	0 / 0
Dr Geertrui ‘Trudy’ Schoolenberg	19 / 22	3 / 3	4 / 5	8 / 8	2 / 2
Alexander Wessels	19 / 22	3 / 3	4 / 5	6 / 8	2 / 2

Although the total number of Board meetings is 22, 3 of the meetings were convened as Board Committee meetings.
** Nick Meyer was determined to be a non-independent Director on 16 June 2020 and stepped down from membership of all Board Committees on that date. He was subsequently invited to join Committee meetings as a guest.

Notes
Whilst all Directors are not members of the Board Committees they attend by invitation. Figures in the left hand column denote the number of meetings attended and figures in the right hand column denote the number of meetings held whilst the individual held office.

Accsys Technologies PLC – Annual Report and Financial Statements 2022
74

Set out below are the ten principles of the Code and a summary explanation of how the Company currently complies with each key principle.

1. Establish a strategy and business model which promote long-term value for shareholders

| Compliant | Explanation * # 4. Embed effective risk management, considering both opportunities and threats, throughout the organisation

Compliant

Explanation Further Reading The Board meets regularly and is responsible for strategy, performance, approval of major capital projects and the framework of internal controls. To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Brieﬁng papers are distributed to all Directors in advance of Board meetings. The Board is responsible for establishing and maintaining the Company’s system of internal risk management, including in relation to its priority surrounding health, safety and the environment, and places importance on maintaining a strong ﬁnancial control environment. The key internal procedures which the Directors have established with a view to providing effective internal controls include clear lines of responsibility within the organisation structure, a comprehensive annual budget that is approved by the Board and the identiﬁcation of major business risks to enable appropriate action. Furthermore, monthly results are reported against the budget and variances are closely monitored by the Directors. The Audit Committee is responsible for monitoring compliance with accounting and legal requirements and for reviewing the annual and interim ﬁnancial statements prior to their submission for approval by the Board. The Risk Committee regularly meet and update a risk register which outlines the nature of principal risks facing the Company and any mitigating factors required to protect against such risks. The Risk Committee reports on the risk register to the Audit Committee and thereafter the Audit Committee reports on the same to the Board. The process to mitigate risks within the business can be found on page 42. See page 42 for further information on risk and riskmanagement. See www.accsysplc.com (‘Investors’ page) for the Company’s Corporate Governance QCA Compliance Statement, Sustainability Report, Modern Slavery Statement and Terms of Reference AuditCommittee. See the Audit Committee Report at page 72. See pages 6 to 65 for our Strategic Report.

5. Maintain the Board as a well-functioning, balanced team led by the Chair

Compliant

Explanation Further Reading The Board is comprised of a Non-Executive Chairman, six other Non-Executive Directors, one of whom acts as Senior Independent Director, and two Executive Directors. All Non- Executive Directors (including the Chairman) continue to be considered to be independent (other than Nick Meyer by reason of him having served on the Board for more than nine years) and are able to scrutinise matters and challenge the Executive Directors on an unencumbered basis. The Board has constituted four standing Committees, the Audit Committee, the Nomination Committee, the Remuneration Committee and the HSE Committee, with ad hoc committees constituted as required. Further information on the Board’s Committees is provided for on pages 72 and 73. In addition to regular scheduled Board meetings, there is frequent contact between all the Directors in connection with the Company’s business including Audit, Nomination and Remuneration Committee meetings which are held as required, but as a minimum twice perannum. Non-Executive Directors’ terms of appointment provide that they will spend as much time as necessary and/or reasonably requested by the Board for the fulﬁlment of their duties. This is anticipated to be in the order of 20 (or more) days per annum, although this is not deﬁnitive. All Executive Directors are engaged on a full time basis. Further information on the composition and roles of the Board can be found at pages 70 to 74, including attendance at, and number of, Board meetings and Committee meetings. See pages 70 to 74 for further information on the composition and role of the Board. See page 74 for further information on attendance at Board meetings. See www.accsysplc.com (‘Investors’ page) for the Company’s Corporate Governance QCA Compliance Statement, Sustainability Report, Modern Slavery Statement, Terms of Reference Audit Committee, Terms of Reference Nomination Committee, Terms of Reference Remuneration Committee and Terms of Reference HSE Committee.

6. Ensure that between them the Directors have the necessary up-to-date experience, skills andcapabilities

Compliant

Explanation Further Reading The Board is satisﬁed that it has the appropriate skills and balance of sector, ﬁnancial and public markets skills and experience as well as an appropriate balance of personal qualities and capabilities and where appropriate each Director keeps his/her skills up-to-date, for example by the completion of the Group’s online training programme, attendance at seminars, brieﬁngs and through literature. Biographies of Board members can be found on page 66 to 67. Expert advisors support the Group’s businesses and contribute relevant industry and commercial experience. These advisors are drawn from industry, ﬁnance, legal and other advisory groups. For example, Deloitte LLP (Deloitte) was appointed by the Nomination and Remuneration Committee as independent adviser to the Committee with effect from 9January 2018 (before the Committee was disaggregated into two separate Committees in 2019) and assisted the Board in the drafting of the Remuneration Policy that was approved by the shareholders at the 2021 AGM. Further information on the engagement and role of external advisors can be found in our Statement of Compliance of the QCA Code. All Directors have access to the advice and services of the Company Secretary and in-house legal counsel. In addition, procedures are in place to enable the Directors to obtain other independent professional advice (legal or otherwise) in the furtherance of their duties, if necessary, at the Company’s expense. See page 66 to 67 for the biographies of Board members. See www.accsysplc.com (‘Investors’ page) for the Company’s Corporate Governance QCA Compliance Statement.

7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

Compliant

Explanation Further Reading The Board undertakes an annual review process whereby each Director completes a ‘Board and Director Review and Evaluation Paper’, ensuring that the Board regularly undertakes a formal and rigorous evaluation of its own performance and that of its Committees and individual Directors. In addition, the performance of the Board, each Director and corporate governance generally was evaluated in 2021, by an independent corporate governance consultant to evaluate Board effectiveness, amongst other things. A subsequent internal review was undertaken in 2022. The results of a Board evaluation are shared with the Board as a whole while the results of any individual assessments remain conﬁdential between the Chairman and the Director concerned. The results of the most recent internal Board evaluation were discussed with the Board at a meeting in April 2021 and any areas for development were reviewed ahead ofdevelopment of an action plan for implementation. See www.accsysplc.com (‘Investors’ page) for the Company’s Corporate Governance QCA Compliance Statement.

8. Promote a corporate culture which is based on ethical values and behaviours

Compliant

Explanation Further Reading Since Accsys is an eco-friendly company that combines chemistry, technology and ingenuity to create high performance, sustainable wood building products, a focus on corporate governance and social responsibility lies at the very core of its business.# GOVERNANCE STRATEGIC REPORT

This is further demonstrated in our Environmental, Social and Governance statements (available at www.accsysplc.com ‘Investors’ page) and Sustainability Report. Accsys aims to reduce the use of environmentally-unfriendly building materials and products by the utilisation of its propriety technology and the introduction and uptake of its products around the world. The planet continues to consume endangered materials like tropical hardwood and non-renewable, high emitting building materials such as plastics, concrete and metals at an alarming rate. Accsys’ acetylated wood products offer alternative, sustainable new materials that resolve many of the environmental limitations that commonly used building materials have, whilst not compromising on performance. At present, Accoya® is the only building product perfectly ﬁtting in the bio-cycle of the circular economy while having the same performance as typical techno-cycle building products such as plastics and metals which cannot be renewed. The strategy and business model of the Company in relation to ethical values is readily promoted throughout and evident from the Company’s accreditations, a list of which can be found in the Statement of Compliance of the QCA Code. Accsys’ approach to ethical values within the Group is further set out in the Company’s 2020 Sustainability Report. See www.accsysplc.com (‘Investors’ page) for the Company’s Corporate Governance QCA Compliance Statement and Sustainability Report.

THE QCA CORPORATE GOVERNANCE CODE

9. Maintain governance structures and processes that are ﬁt for purpose and support good decision making by the Board

Compliant

Explanation

The Board meets regularly and is responsible for strategy, performance, approval of major capital projects and the framework of internal controls. To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Brieﬁng papers are distributed to all Directors in advance of Board meetings. During the year, the Board meetings are usually held in London with site visits scheduled to take place annually in Hull and Arnhem to ensure the Board has a deep understanding of the Group’s operations. Since late March 2020 and the outbreak of the COVID-19 pandemic, the majority of meetings have been held effectively via video-conference or in person where possible. In addition to the scheduled meetings there is frequent discussion between all the Directors in connection with the Company’s business including Audit, Nomination, Remuneration Committee and HSE Committee meetings which are held as required, but as a minimum twice per annum. Copies of the terms of reference for the Committees are available on the Corporate Governance page of our website, www.accsysplc.com. Day to day operating decisions are made by the Executive Directors with support from the Senior Leadership Team. The Board is responsible for the long-term success of the Company. There is a formal schedule of matters which are reserved for the Board, including matters relating to strategy and management, structure and capital, ﬁnancial reporting and controls, internal controls, contracts, communications, board memberships, remuneration, delegation of authority, corporate governance and Group policies. This schedule of ‘matters reserved’ is reviewed periodically, and was updated in September 2021 to reﬂect the Group’s evolution as a business and to update it in line with best corporate governance practice, as applicable forAccsys.

Further Reading

See www.accsysplc.com (‘Investors’ page) for the Company’s Corporate Governance QCA Compliance Statement, Sustainability Report, Modern Slavery Statement, Terms of Reference Audit Committee, Terms of Reference Nomination Committee and Terms of Reference Remuneration Committee. See Section 172 Statement from page 61.

10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

Compliant

Explanation

The Company regularly communicates with shareholders including presentations after the Company’s preliminary announcement of the year-end results and six monthly results and bi- annual webcasts. The Board uses the Annual General Meeting to communicate with investors and welcomes their participation. Furthermore, the Company issues regular news to its stakeholders via RNS, all of which are displayed on the Company website (News). Other constitutional and governance information, including relating to shareholder meetings and the outcome of shareholder votes, can also be found on the Company Website (Corporate Governance). As noted above, the Board has constituted four standing Committees, the Audit Committee, Nomination Committee, Remuneration Committee and HSE Committee, with ad hoc Committees constituted as required. The Audit Committee Report can be found at page 72 and Remuneration Report can be found at page 73, each of which reviews the work of the respective committee during the year. The Nomination Committee has also been engaged in the recent Board and Director internal evaluation carried out in 2022, together with succession planning for the Board.

Further Reading

See www.accsysplc.com (‘Investors’ page) for the Company’s Corporate Governance QCA Compliance Statement and News. See the Audit Committee Report at page 72. See the Remuneration Report at page 73.

OVERVIEW

FINANCIAL STATEMENTS

Accsys Technologies PLC – Annual Report and Financial Statements 2022 78

REMUNERATION REPORT

“ Our Policy is aligned with our purpose- led strategy, reflects best practice and the remuneration structure and mechanisms align Executive Director interests with the next phase of our ambitious growth journey and the creation of long-term sustainable valueall our stakeholders”

On behalf of the Board, I am pleased to present our Remuneration Report for the year ended 31 March 2022. I would like to extend my gratitude to my predecessor, Sue Farr, for her dedicated contribution and service as the previous Chair of the Committee. We obtained shareholder approval for our Remuneration Policy at last year’s AGM, with 99.92% of all votes cast in favour. The Board continues to believe that the Policy is aligned with our purpose-led strategy, reﬂects best practice and the remuneration structure and mechanisms align Executive Director interests with the next phase of our ambitious growth journey and the creation of long-term sustainable value for all our stakeholders. Shareholders have shown a similarly high level of support for our Directors’ Remuneration Report for the year ended 31 March 2021, with 98.82% of votes in favour. These high levels of support reﬂect ourresponsible approach to executive pay. For ease of reference, the policy table summarising the remuneration policy is included on pages 84 to 86. The full remuneration policy is available in the 2021 Annual Report on the Company’s website. The Annual Report on Remuneration (on pages 89 to 97) describes how the Directors’ Remuneration Policy has been applied for the period ended 31 March 2022, and how we intend to implement the Directors’ Remuneration Policy for the year ahead. This part of the report will be subject to anadvisory vote at our AGM.

Remuneration in the context of our businessperformance and outcomes forourkey stakeholders

The 2022 ﬁnancial year was another challenging year globally as the COVID-19 pandemic continued to impact our daily lives, presenting challenges to both our employees and the ambitious projects that we have in progress. During this time however, the health, safety and wellbeing of our employees has been our number one priority, together with the continued collaboration and safe working practices of customers, suppliers, contractors and other valued business partners. A number of valued operational and functional personnel have been hired into the business, together with investment into learning and development of our existing workforce. This has required us to further evolve our Accsys employee proposition to enable us to attract and retain the best talent in a dynamic employment market.

Group underlying EBITDA of €10.4m remained relatively ﬂat, primarily reﬂecting that the Arnhem plant remained at capacity levels with an increase in gross proﬁt driven by higher prices offset by higher other operating costs. Other operating costs increased year-on-year as a result of investment in Group organisational capabilities and people with increased headcount to support our future growth. EBITDA was lower than anticipated at the start of the year as a result of unplanned downtime associated with the Accoya plant in Arnhem and delays to the completion of the Hull plant following the termination of the EPC contract in June 2021.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 80

In addition to the focus and investment on expanding our global production capabilities, we have in parallel worked to advance our ESG and sustainability roadmap. We recognise the important role we play in the decarbonisation of the building materials sector as well as the societal force for good our products can have. We have successfully worked towards integrating ESG into our strategic framework, underpinned by our corporate values and purpose.

Incentive outcomes for the year ended31March 2022

The annual bonus for the year was based on a combination of stretching performance targets linked to EBITDA, progression of the Hull plant, supply chain optimisation, progression of the Accoya® USA plant, additional growth options and the development of our ESG agenda. As in previous years, 25% of the Finance Director’s annual bonus is based on achievement of personal performance targets.# REMUNERATION REPORT

Overall, and taking into account financial and strategic and personal performance, the bonus outcomes were 32.5% and 36.875% of the maximum (125% of salary), equivalent to 40.625% and 46.094% of base salary, for the CEO and Finance Director respectively. Further detail on the individual outcomes and performance against the targets is set out on page 92 of this report. In line with the Remuneration Policy, 20% of the bonus earned will be issued in deferred shares to be held for at least two years, strengthening alignment of executive and shareholder interests.

The LTIP awards granted in 2019 are due to vest in June 2022. These awards are based on EBITDA per share in FY21 (60% weighting) and Sales Volume (40% weighting), measured for three years. Because the EBITDA threshold and Sales Volume threshold were not achieved the overall vesting was nil. The Committee considers the incentive outcomes to be reflective of the overall performance of the Group during the relevant period and no discretion was exercised in respect of the outcomes.

LTIP awards – grant 2021

The 2021 LTIP awards were granted to the CEO, Finance Director and other participants on 23 June 2021. The LTIP awards are nil priced options over ordinary shares of €0.05 each in the Company. In line with the Remuneration Policy approved at the 2021 AGM, the CEO and Finance Director were granted awards of 215,178 and 100,851 shares respectively (equivalent to 125% and 100% of salary). As reported last year these awards are subject to stretching performance targets based on EBITDA (60%), Sales Volume (30%) and ESG (10%). Further details are set out on page 93.

Board changes

Louis Eperjesi was appointed a Non-Executive Director on 14 June 2022. The details of Louis’ remuneration are set out on page 90.

Remuneration – at a glance

Accsys believes in the following core pay principles which underpin our pay policies:

Alignment with purpose and values – our purpose of ‘Changing Wood to Change the World’ guides our strategy and actions and sustainability is at the heart of what we do. Our remuneration framework should align with long-term sustainable success and reflect the importance of our ESG strategy, and we promote personal development opportunities for all employees.
Pay for performance – ‘be ambitious’ is a core Accsys value, and we operate a simple and transparent pay for performance culture throughout the organisation.
Attract, retain and motivate – ensure that pay opportunities across the Group enable us to attract and retain talent to drive the next phase of growth with motivated employees.

We operate a simple and transparent overall structure. The key components and features of our framework are summarised in the table below.

Salary

Salaries are normally reviewed annually by the Committee, taking into account relevant factors that may include individual performance, corporate performance, changes to an individual’s role and responsibilities, and appropriate market data.
As disclosed last year, following a review of market positioning against companies of similar size and complexity in the UK market where we primarily recruit for executive talent, we found that base salaries have fallen significantly behind the market.
For FY23:
- the salary increase for the CEO will be 7% to £317,790. This is consistent with our stated intention to increase the CEO salary to c.£360k phased over the three-year life of the policy.
- the salary increase for the Finance Director will be 2% to £177,480.
Salary increases for the CEO and Finance Director will be effective 1 July 2022. Following the successful fundraising in May 2022, the Committee determined that these increases would be deferred until October 2022 and backdated to 1st July 2022.

Benefits and pension

Benefits consist of private medical insurance and life insurance.
Pension allowance of 8% of salary, aligned with other employees in the business in the UK.

Annual bonus

Maximum annual bonus opportunity of 125% of base salary.
Target opportunity of 62.5% of salary.
Based on a mix of financial, strategic and operational objectives, with stretching targets.
20% deferral into fixed number of shares for two years, strengthening alignment of executive and shareholder interests. No leaver provisions.
Malus and clawback provisions apply.

Long-term incentive plan

In line with the Policy, it is currently intended that the 2022 LTIP grants will be a fixed number of shares, delivering alignment with shareholders over the life of the Policy. It is intended that the maximum number of nil priced options to be granted to the CEO and Finance Director in FY23 is 215,178 and 100,851 shares respectively (in line with the maximum number of LTIP options granted in FY22).
The number of shares that vest will be subject to performance measured over a period of three years.
Given the recent timing of the equity capital raise in May 2022 and the importance of completing the Arnhem expansion and Hull plant construction projects over the next months, the Committee has decided that the performance targets for LTIPs to be awarded this calendar year 2022 should be set following a further review of the Group’s strategy which is to be carried out in Autumn 2022. Awards are expected to be subject to appropriately stretching performance metrics.
Vested awards are subject to an additional two-year holding period, aligned with best practice for UK-listed and Dutch companies and in excess of typical practice for AIM-listed companies.
Malus and clawback provisions apply.

Shareholding guidelines

Executive Directors are expected to build up and retain a shareholding of at least 250% of salary for CEO and 225% of salary for Finance Director.

REMUNERATION REPORT continued

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Our Policy retains the flexibility to offer incentive award opportunities above those set out above if appropriate in the circumstances. It retains the discretions for the Committee to provide a maximum bonus opportunity up to the formal cap of 200% of salary in respect of a particular financial year or to make annual LTIP awards of up to 300% of salary.

Looking ahead – key focus areas for the Committee for 2023

Whilst Accsys staff numbers have increased during the 2022 financial year to support the Group’s growth agenda, we have faced challenges in the availability of talent. We will continue to review our approach to remuneration to ensure that it continues to support our strategic priorities. The Committee is mindful of the need to attract and retain high-calibre individuals in an increasingly competitive market and to remunerate executives fairly and responsibly. In light of the above we have adopted an agile salary policy to reflect external / internal demands for talent. We will be reviewing our approach to long term incentives for staff below the Board to ensure our incentives provide an appropriate retention and motivational incentive. As noted previously due to the volatile macroeconomic environment and strategic review to be undertaken later in the year, the Committee is reviewing the 2022 LTIP measures and targets. The 2022 LTIP for the Executive Directors will be subject to appropriately stretching performance metrics that will be set following strategic review in September 2022.

2022 AGM

The Remuneration Committee remains committed to operating remuneration arrangements which align with our strategic priorities and the best interests of our stakeholders. We believe the approach we have adopted is appropriate and responsible and I look forward to receiving your support at our AGM.

Yours sincerely

Alexander Wessels
Chair of the Remuneration Committee
30 June 2022

Context for executive pay

This report is prepared in accordance with the UK regulations for reporting executive pay. Our dual listing on AIM in the UK and NYSE Euronext in the Netherlands, combined with our UK incorporated status, means that we fall within the definition of a ‘quoted company’ in the UK Companies Act. Accordingly, and exceptionally amongst AIM companies, we are legally required to comply with the regulations for reporting and approval of Directors’ remuneration by companies listed on the main market, including a binding vote on the Directors’ Remuneration Policy.

Directors’ Remuneration Policy

Our remuneration policy was approved by shareholders at our AGM on 17 September 2021, supported by over 99% of the votes cast. We have set out below the policy table. Our full remuneration policy is set out in the 2021 Annual Report available in the Investors section of the Company’s website at www.accsysplc.com.

| Element | Purpose and operation | Maximum # REMUNERATION REPORT

Accsys Technologies PLC – Annual Report and Financial Statements 2022

OVERVIEW

FINANCIAL STATEMENTS

Notes to the Policy table:

Deferred shares and LTIP awards which vest under this Policy may benefit from the right to receive an amount equal to the value of, if applicable, any dividends which would have been paid on vested shares up to the time of vesting (or where the award is subject to a holding or deferral period, up to the time of release).
The Annual Incentive Plan and LTIP contain malus and clawback provisions in the event of a material misstatement of results, censure by a regulatory authority or any other serious damage to the Company reputation, or fraud or gross misconduct. The cash and, if applicable, share elements of the Annual Incentive Plan may be clawed back for a period of three years from the date on which the Annual Incentive Plan payment is made. Awards under the LTIP may be cancelled or reduced (prior to vesting), or clawed back for a period of three years post vesting.
The remuneration framework for other employees is based on broadly consistent principles used to determine the policy for Executive Directors. All executives and senior managers are generally eligible to participate in some form of annual incentive arrangement. Participation in the LTIP may be extended to executives, senior managers and other key staff, with LTIP performance conditions generally consistent across all levels. Individual salary and pension levels and incentive award sizes vary according to the level of seniority and responsibility.
The choice of the performance measures applicable to the Annual Incentive Plan reflects the Committee’s view that incentives should be aligned to the Group’s key annual financial, strategic and ESG objectives. For the LTIP, the measures and targets for the FY23 award will be determined in September 2022 following the next review of the Group’s strategy. The Committee’s intention is that the LTIP measures should provide a suitable balance between incentivising the execution of the Company’s long-term capacity expansion programme and ensuring the delivery of profit growth alongside that operational delivery. For both the Annual Incentive Plan and the LTIP, the Committee sets challenging targets taking into account the Board’s objectives for the business. Performance conditions may be amended or substituted by the Committee if an event occurs which causes the Committee to determine an amended or substituted performance condition would be more appropriate and not materially more or less difficult to satisfy. The Committee may use its discretion to adjust payouts under the Annual Incentive Plan and LTIP to Executive Directors, within the range of the minimum to maximum opportunity, including reducing it down to zero. Such discretion will only be used where the Committee believes that performance against the prescribed targets does not accurately reflect the Company’s underlying performance.
The Committee reserves the right to make any remuneration payments and/or payments for loss of office (including exercising any discretion available to it in connection with such payments) notwithstanding that they are not in line with the Policy set out above where the terms of the payment either agreed: (i) prior to the Policy set out above came into effect; (ii) during the term of, and were consistent with, any previous policy approved by shareholders; or (iii) at a time when the relevant individual was not a Director of the Company and, in the opinion of the Committee, the payment was not in consideration for the individual becoming a Director of the Company.
The terms of any deferred shares or LTIP shares may be adjusted to take account of a Company reorganisation, such as a variation of capital, rights issue, demerger or special dividend. In respect of the shareholding guideline, vested but unexercised LTIP shares and the 20% deferred element of the Annual Incentive Plan will count towards the guideline (on a net of tax basis). It is anticipated that the level of shareholding set out in the guideline will normally be met within five years of appointment as an Executive Director (or from the date that the increased shareholding guideline comes into effect i.e. from the approval of this Policy). The Committee will take into account LTIP vesting levels and personal circumstances when assessing progress against the guideline.

REMUNERATION REPORT continued

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Directors’ service contracts

The notice periods under the service contracts of the current Executive Directors are summarised in the following table:

Name	Notice period from individual (months)	Notice period from Company (months)
Robert Harris	6	6
William Rudge	6	6

Executive Directors’ service contracts, which do not contain expiry dates, provide that compensation provisions for termination without notice will include salary, certain fixed benefits, and pension. In the case of both the CEO and Finance Director, sums may be paid in instalments and decrease or cease if the individual finds an alternative role. The Company’s general policy on recruiting a new Executive Director is to provide a service contract terminable after six months. However the Committee reserves the right to introduce a longer notice period (of up to 12 months) which would reduce to six months over time. Provisions for compensation for termination would normally follow those described above. Directors’ service contracts are kept available for inspection at the Company’s registered office.

Outside appointments

Subject to Board approval, Executive Directors are permitted to accept (and retain the fees from) outside appointments on external boards as long as these are not deemed to interfere with the business of the Group.

Policy Table for Non-Executive Directors (NEDs)

Element	Purpose and operation	Maximum	Performance measures
Chairman and NEDs	Fees for the Chairman and for the NEDs are set by the Board (excluding the NEDs). Fees are based on the responsibilities and time commitment of the role.	N/A	N/A

The Chairman receives a single fee. NED fees include a base fee and may include additional fees for other Board or Committee duties. Supplementary fees may be paid for other responsibilities or time commitments. Fees are paid in cash. NEDs are not eligible to participate in incentive arrangements or receive pension provision or other beneﬁts. Non-Executive Directors may be reimbursed for business expenses (and any associated tax liabilities) incurred when travelling in performance of duties. There is no prescribed maximum annual increase or fee level. Fee levels are reviewed on a periodic basis, with reference to the time commitment of the role and market levels in companies of comparable size and complexity.

NED contracts

The NEDs, including the Chairman, have letters of appointment which set out their duties and responsibilities. Appointment is for a ﬁxed term of three years, terminated by three months’ notice on either side.

Name	Unexpired term (months)
Nick Meyer	16
Stephen Odell	12
Sean Christie	17
Sue Farr	17
Trudy Schoolenberg	21
Alexander Wessels	14
Louis Eperjesi	36

Notes:
1. Nick Meyer has completed his full term (being nine years plus an extension of two years) and has notiﬁed the Board of his intention to step down from the Board with effect from the end of the AGM due to be held later this year.
2. Louis Eperjesi was appointed on 14 June 2022.

Consideration of employment conditions elsewhere in the Group

As explained in the general policy section of the Remuneration Policy, the Committee takes into account Group-wide pay and employment conditions. The Committee reviews the average Group-wide base salary increase and bonus costs and is responsible for all discretionary and all-employee share arrangements, and major beneﬁts including by reference to benchmarking data provided by third parties. The Committee did not consult directly with employees in preparing the Directors’ Remuneration Policy, but feedback on reward policies and /or remuneration is gathered directly or indirectly through employees surveys is gathered via employee surveys and Remuneration Committee discussions about employee value proposition.

Consideration of shareholder views

The Committee consulted with major shareholders in respect of the development of this Remuneration Policy in 2021. We thank shareholders for their time and input into this process. The feedback received was taken into account in ﬁnalising the Policy. During each year, the Committee considers shareholder feedback received in relation to the AGM, along with any additional feedback received through other engagement. The Committee also regularly reviews the Policy in the context of published shareholder guidelines.

Implementation of the Remuneration Policy for the year ending 31 March 2023

A summary of how the Directors’ Remuneration Policy will be applied during the 2023 ﬁnancial year is set out below.

Base salary

Base salaries effective for FY23 for the Executive Directors are set out below:

Name	FY23	FY22	% increase
Robert Harris	£317,790	£297,000	7%
William Rudge	£177,480	£174,000	2%

As set out on page 82, following a review of market positioning against companies of similar size and complexity in the UK market where we primarily recruit for executive talent which was carried out last year, we found that base salaries had fallen signiﬁcantly behind the market. The 7% increase for FY23 set out above is consistent with our stated intention to increase the CEO salary to c.£360k phased over the three-year life of the policy, subject to the continued performance of Accsys.

Pension arrangements

In accordance with the Policy, the Executive Directors will receive pension contributions (or cash supplements) of 8% of base salary, in line with the pension contribution for wider employees.

Annual bonus

For the year ending 31 March 2023, the maximum annual bonus opportunity will be 125% of salary in accordance with the Policy. 20% of any earned bonus will be deferred in shares for two years. Payouts will be determined based on the delivery of stretching ﬁnancial, operational and personal objectives with the weightings for the various components as follows:

	Weighting (% of bonus)
	CEO
Group EBITDA	45%
Cash management	15%
Progression with the Hull plant	15%
Raw materials supply	10%
ESG Agenda development	5%
Progression with Accoya USA JV plant construction	10%
Sub-total	100%
Personal objectives	—
Total	100%
	Finance Director
Group EBITDA	33.75%
Cash management	11.25%
Progression with the Hull plant	11.25%
Raw materials supply	7.5%
ESG Agenda development	3.75%
Progression with Accoya USA JV plant construction	7.5%
Sub-total	75%
Personal objectives	25%
Total	100%

The Committee believes that the underlying targets are commercially sensitive and cannot be disclosed at this stage. The Committee retains the discretion to award a bonus in excess of 125% (but within the policy limit of 200%) in the event of exceptional events resulting in signiﬁcant unexpected value creation for the Group.

Long-term incentives

For FY23 the CEO and Finance Director will be granted awards of options of 215,178 and 100,851 shares respectively (in line with the maximum number of share options granted in FY22). The 2022 LTIP awards are expected to be subject to stretching performance metrics. As set out above, given the recent equity capital raise and current focus on completion of the 4th reactor expansion and Hull plant construction, the Committee has decided that the performance targets for LTIPs to be awarded this calendar year 2022 should be set following a further review of the Group’s strategy which is to be carried out in Autumn 2022. Awards are expected to be subject to appropriately stretching performance metrics.

Non-Executive Directors

The fees for the Non-Executive Directors (NED) are shown in the table below.

Metric	Year ending March 2023	Year ended March 2022
Chairman fee	£97,000	£90,000
Base NED fee	£45,000	£41,820
Additional fees:
Non-UK Resident Non-Executive Director Fee	£4,000	£4,000
Senior Independent Director	£5,400	£5,228
Committee chairmanship per Committee	£5,400	£5,228

With effect from 17 September 2021, Non-UK resident Non-Executive Directors‘ fees are supplemented by an additional fee of £4,000 p.a. to take account of the additional time commitment required by non-UK resident Accsys Non-Executive Directors (including but not limited to travelling to Board meetings). As disclosed last year, as NED fees have not increased since FY20 we conducted a review of fees for FY23. The proposed increases recognise:

The wider workforce received 2.9% in FY21 and 2.4% increase in FY22 and further wider workforce increase of circa. 3-4% is proposed across the Accsys Group which will include inﬂationary, merit increase, promotional and market adjustments. Where applicable, higher individual market adjustment increases have taken effect to reﬂect relative market position of selected roles.
The increase in size and complexity of the Company and time commitment and contribution from the whole Board required to deliver the Company’s growth ambitions.
Our dual AIM and Euronext listing compared to a typical AIM listed company.

Remuneration received by Directors in the year ended 31 March 2022 (audited)

Directors’ remuneration for the 2022 ﬁnancial year (and for the prior 2021 ﬁnancial year) is shown in the following tables:

Currency	Salary/ Fees	Beneﬁts in Kind	Pension	Total Fixed Remuneration	Annual Bonus	LTIPs Vested/ Expected to Vest	Total Variable Remuneration	2022 Total Remuneration
EUR
Executive Directors
Robert Harris	£ 295	3	23	321	121	–	121	442
William Rudge	£ 173	2	14	189	80	–	80	269
Non-Executive Directors
Sean Christie	£ 47	–	–	47	–	–	–	47
Sue Farr	£ 44	–	–	44	–	–	–	44
Montague John ‘Nick’ Meyer	£ 42	–	–	42	–	–	–	42
Trudy Schoolenberg	£ 49	–	–	49	–	–	–	49
Stephen Odell	£ 90	–	–	90	–	–	–	90
Alexander Wessels	£ 47	–	–	47	–	–	–	47

Currency	Salary/ Fees	Beneﬁts in Kind	Pension	Total Fixed Remuneration	Annual Bonus	LTIPs Vested/ Expected to Vest	Total Variable Remuneration	2021 Total Remuneration
EUR
Executive Directors
Robert Harris	£ 271	2	23	296	212	–	212	508
William Rudge	£ 159	2	14	175	114	52	166	341
Non-Executive Directors
Sean Christie	£ 44	–	–	44	–	–	–	44
Sue Farr	£ 44	–	–	44	–	–	–	44
Montague John ‘Nick’ Meyer	£ 39	–	–	39	–	–	–	39
Trudy Schoolenberg	£ 44	–	–	44	–	–	–	44
Stephen Odell 5	£ 59	–	–	59	–	–	–	59
Alexander Wessels 6	£ 22	–	–	22	–	–	–	22

Figures are shown in thousands. Figures are shown in the currency in which the majority of remuneration is received. The ﬁnal column converts remuneration into the Company’s reporting currency using the monthly exchange rate when the costs are incurred.
1 Salaries for the Directors were reduced by 20% for four months during the initial COVID period, during FY21.
2 Taxable beneﬁts for the Executive Directors in the year included private medical insurance and life insurance.
3 For 2021, the actual value of the 2018 LTIP award which vested in June 2021 is shown and is based on the actual share price on the date of vesting. For 2022, none of the 2019 LTIP award vested.
4 Robert Harris received cash in lieu of pension.
5 Stephen Odell was appointed to the Board on 23 June 2020 and to Chairman on 18 September 2020; his remuneration in the prior year table above reﬂects his time in service during the prior year.
6 Alexander Wessels was appointed to the Board on 18 September 2020.

Annual bonus for the year ended 31 March 2022 (audited)

For the year ended 31 March 2022, the maximum annual bonus opportunity was 125% of salary in accordance with the Policy.# REMUNERATION REPORT

Payouts were determined based on performance, taking into account the delivery of stretching financial and operational objectives with the weightings for the various components as follows:

	CEO (% of bonus)	FD (% of bonus)	Maximum Outcome	Maximum Outcome
Group Objectives:
Group EBITDA (including Tricoya®)	50%	37.5%	25%	18.75%
Progression with Hull plant	25%	18.75%	10%	7.5%
Acetyls supply	10%	7.5%	5%	3.75%
ESG agenda	5%	3.75%	10%	7.5%
Strategic progress	10%	7.5%	5.625%	0%
Sub-total – Group Objectives:	100%	75%	55.625%	37.5%
Personal Objectives:	–	25%	–	12.5%
Final bonus outcome (% of maximum)	32.5%	36.875%

The detailed performance targets remain commercially sensitive and cannot be disclosed at this time. Overall, and taking into account the personal performance element for the CFO, the bonus outcomes were 32.5% and 36.875% of the maximum (125%) for the CEO and Finance Director respectively. The Committee believes this outcome is an appropriate reflection of performance against objectives in the year.

LTIP vesting in respect of performance to the year ended 31 March 2022 (audited)

The 2019 LTIP awards (see table below) are expected to vest in June 2022 by reference to EBITDA (60% weighting) and Sales Volume (40% weighting) performance over a three-year period.

	Weighting (% of award)	Threshold	Maximum	Actual performance	Vesting (% maximum)	Total vesting (% of maximum)
EBITDA per share in FY22	60%	€0.10	€0.22	€0.08 per share	0%	0%
Sales Volume in FY22	40%	82,000m³	100,000m³	59,649m³	0%	0%

Vesting is on a straight-line basis between points in the schedule. There is no vesting for performance below the threshold.
Appropriate adjustments may be made to ensure fair and consistent performance measurement over the performance period in line with the business plan and intended stretch of the targets at the point of award.
EBITDA per share targets are set and determined so as to exclude licensing income.
Sales Volume is defined as combined sales volume (in cubic metres, or equivalent) of Accoya® and Tricoya®.
Vesting of the Sales Volume component will be subject to the achievement of a threshold level of EBITDA.

The 2019 LTIP award was granted on 25 June 2019 to the Finance Director and on 2 December 2019 to the CEO. Both elements of the plan (EBITDA per share, and Sales Volume) in FY22 resulted in nil payout. The Committee did not exercise discretion in respect of this award.

Scheme interests awarded during the year (audited)

In line with the Policy, 2021 awards were made to the Executive Directors on 23 June 2021, as set out below.

Type of Award	Basis of award granted	Face value of award €000s	% of maximum vesting for threshold performance	Performance period
Robert Harris	Nil cost options	125% of salary	370	25%
William Rudge		100% of salary	173	25%

¹ Face value determined using share price determined at grant of €1.72 per share, being the issue price of the Company’s equity issuance in June 2021.

The performance targets for these awards are as follows:

	Weighting (% of award)	Threshold	Maximum	Vesting (% of maximum)
EBITDA per share in FY24	60%	€0.15	€0.24	25%
Cumulative Sales Volume (FY22–FY24)	30%	267,000m³	297,000m³	100%
ESG – Improvement in reporting ratings	10%	33% on attaining each of the three-year milestones: Y1 – Attain investor ESG external rating/score Y2 – Improve/maintain ESG external rating/score Y3 – Improve/maintain ESG external rating/score

Vesting is on a straight-line basis between the above points.
Appropriate adjustments may be made to ensure fair and consistent performance measurement over the performance period in line with the business plan and intended stretch of the targets at the point of award.

Payments to past Directors (audited)

There were no payments to past Directors during the year.

Payments for loss of office (audited)

There were no payments for loss of office during the year.

Statement of Directors’ shareholdings and share interests (audited)

	Shares beneficially held¹ as at 31 March 2022	Vested but unexercised LTIPs	Unvested LTIP awards²
Robert Harris	44,444	–	524,511
William Rudge	268,557	128,643	236,851
Sean Christie	83,369	–	–
Sue Farr	35,000	–	–
Montague John ‘Nick’ Meyer	74,189	–	–
Stephen Odell	–	–	–
Trudy Schoolenberg	44,444	–	–
Alexander Wessels	–	–	–
Louis Eperjesi	–	–	–

¹ Includes shares held by connected persons.
² Includes 0% of the 2019 LTIP expected to vest between June and December 2022 as disclosed above.

There has been no change in the beneficial holdings of the Directors between the year end and the date of this report, except that Robert Harris subscribed for 65,041 shares, Stephen Odell subscribed for 40,650 shares and Montague John “Nick” Meyer for 81,300 shares as part of the capital raise which the Company completed on 25 May 2022.

The unvested LTIP awards consist of 2019, 2020 and 2021 LTIP awards. The performance conditions for the 2019 and 2021 awards are summarised in the sections above. The performance conditions for the 2020 award are summarised in the table below.

2020 LTIP

	Weighting (% of award)	Threshold	Stretch	Maximum	Vesting (% of maximum)
EBITDA per share in FY23	60%	€0.14	€0.19	€0.24	25%
Total Sales Volume	40%	90,000m³	105,000m³	112,720m³	70%

Vesting is on a straight-line basis between the above points.
Appropriate adjustments may be made to ensure fair and consistent performance measurement over the performance period in line with the business plan and intended stretch of the targets at the point of award.
EBITDA per share targets are set and determined to exclude licensing income.
Sales Volume is defined as combined sales volume (in cubic metres, or equivalent) of Accoya® and Tricoya®.
Vesting of the Sales Volume component will be subject to the achievement of a threshold level of EBITDA.

Relative importance of spend on pay

During the year ended 31 March 2022, the total pay for all Group employees increased by 18% to €17,007,000 (2021: €14,394,000). There were no dividends or share buybacks in either year.

	FY 22	FY 21	Difference as a percentage vs FY21	FY20	Difference as a percentage vs FY20
Remuneration for all employees	€17,007,000	€14,394,000	18%	€12,249,000	39%
		€14,394,000	18%	€12,249,000

Annual percentage change in remuneration of Directors and employees

The following table has been prepared in accordance with the UK reporting regulations.

	Chief Executive remuneration²	Finance Director remuneration	Non-Executive Chairman	Average Non-Executive Director remuneration⁴	Average of all employees of UK PLC
Salary/ fees¹	FY20 to FY21 (7%)	3%	0%	(5%)	(1%)
	FY21 to FY22 9%	9%	0%	7%	(13%)
Benefits	FY20 to FY21 0%	8%	N/A	N/A	10%
	FY21 to FY22 2%	3%	N/A	N/A	(14%)
Bonus	FY20 to FY21 5%	57%	N/A	N/A	14%
	FY21 to FY22 (43%)	(30%)	N/A	N/A	(63%)

¹ Table above includes a 20% reduction in salary for the Chief Executive, Finance Director and Non-Executive Directors for the period April to July 2021. For the remaining UK employees below the Senior Management Team, any reduction in salary for the initial COVID-19 period was repaid, therefore the repayment has been included in the table above.
² Robert Harris (Chief Executive) was appointed to the Board on 20 November 2019. In the above table, the annual change from FY20 to FY21 for his salary, benefits and bonus have used annualised FY20 salary, benefits, and bonus awarded amounts to provide an effective year-on-year comparison.
³ Stephen Odell was appointed Chairman on 18 September 2020. In the above table, the annual change in FY20 to FY21 is based on his annualised FY20 fees an effective year on year comparison.
⁴ Average Non-Executive Director remuneration comparison includes adjustment for annualised salary for Alexander Wessels, who was appointed to the Board on 18 September 2020.
⁵ The 13% decrease in average UK PLC employee salary is attributed to the further employee growth of blue collar employees, with lower salary levels.

Performance graph and CEO remuneration

The following graph shows the Company’s performance for the past ten years on the London Stock Exchange AIM compared with the performance of the FTSE AIM All Share index. The FTSE AIM All Share index has been selected for this comparison as it is a broad-based index which the Directors believe closely reflects the performance of other companies with similar characteristics to the Company.

Since joining in late 2019, the CEO’s total remuneration together with the proportion attributable to bonus or vested incentives is as set out in the table below:

	2013 €'000	2014 €'000	2015 €'000	2016 €'000	2017 €'000	2018 €'000	2019 €'000	2020 (P.Clegg)¹ €'000	2020 (R.Harris)² €'000	2021 (R.Harris) €'000	2022 (R.Harris) €’000
Total remuneration	627	676	783	613	1,632	502	809	477	216	579	519
% Bonus of Total	46%	51%	54%	36%	18%	32%	26%	16%	38%	43%	27%
% Bonus of Cap	N/A	N/A	68%	33%	48%	28%	36%	17%	33%	41%	21%
% vested LTIPs of maximum	N/A	N/A	N/A	N/A	58%	N/A	50%	45%	N/A	N/A	N/A

As no formal cap or maximum bonus existed before 2015, no figure has been disclosed setting out this percentage.

Performance Graph

Consideration of matters relating to Directors’ remuneration

The Remuneration Committee consisted of Alexander Wessels (Committee Chairman), Stephen Odell, Trudy Schoolenberg, and Sean Christie. All members of the Remuneration Committee (including the Chairman on appointment) are considered to be independent.# DIRECTORS' REPORT

for the year ended 31 March 2022

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Statement of voting at general meeting

The AGM held on 17 September 2021 included an ordinary resolution in respect of the approval of the Directors’ Remuneration Report (excluding the Remuneration Policy) for the year ended 31 March 2021. 109,668,788 (98.82%) votes were cast for the resolution, 1,304,803 against and 54,662 withheld.

At the AGM held on 17 September 2021, an ordinary resolution was passed in respect of the approval of the Directors’ Remuneration Policy for the year ended 31 March 2021. 100,572,490 (99.92%) votes were cast for the resolution, 81,332 against and 10,374,431 withheld.

OVERVIEW

FINANCIAL STATEMENTS

STRATEGIC REPORT

The Directors present their report together with the audited consolidated financial statements for the year ended 31 March 2022.

Results and dividends

The consolidated statement of comprehensive income for the year is set out on page 117, and shows the profit for the year. The Directors do not recommend the proposal of a final dividend in respect of the current year, consistent with the prior year.

Principal activities and review of the business

The principal activities of the Group are the production and sale of Accoya® solid wood and Tricoya® wood elements, technology and product development as well as the licensing of technology for the production and sale of Accoya® and Tricoya® via the Company’s subsidiaries, Titan Wood Limited, Titan Wood B.V., Titan Wood Technology B.V., Titan Wood Inc., Accoya Color UK Limited, Tricoya Technologies Limited, Tricoya UK Limited, Accsys (Accoya USA) Holdings LLC, Accsys USA Holdings Inc and its joint venture Accoya USA, LLC (collectively the ‘Group’).

Manufactured through the Group’s proprietary acetylation processes, these products exhibit superior dimensional stability and durability compared with alternative natural, treated and modified woods as well as more resource intensive man-made materials.

A review of the business is set out in the Chairman’s Statement on page 6 and the Chief Executive’s Report on page 26.

Accsys Technologies PLC is a public limited company, which has securities admitted to trading on London Stock Exchange AIM and admitted to trading on Euronext Amsterdam, and incorporated and domiciled in the UK. The address of its registered office is set out on the back page inside cover.

Business model and Strategy

The Business model and Strategy section, from page 16, sets out the Company’s strategy, business model and key performance indicators.

Financial instruments

Details of the use of financial instruments by the Company and its subsidiary undertakings are set out in note 32 of the financial statements.

Share issues

In May 2021, 20,005,325 Placing Shares and 2,418,918 Open Offer Shares were issued as part of the capital raise to fund the Company’s investment in expanding its Accoya® business into North America through the construction of a new Accoya® plant in the USA through its joint venture, Accoya USA LLC, with Eastman Chemical Company (see note 28), as well as to provide additional capital to support the Company’s continued growth. The Shares were issued at a price of €1.65 (£1.40) per ordinary share, raising gross proceeds of €36.7 million (before expenses).

Between June and September 2021, a total of 629,460 shares were issued following the exercise of nil cost options, granted under the Company’s 2013 Long Term Incentive Plan (‘LTIP’).

In February 2022, following the subscription by employees in the prior year for shares under the Employee Share Participation Plan (the ‘Plan’), 189,931 shares were issued as “Matching Shares” at nominal value under the Plan. In addition, various employees newly subscribed under the Plan for 193,424 Shares at an acquisition price of €2.015 per share, with these shares issued to a trust, to be released to the employees after one year, together with an additional share on a matched basis (subject to continuing employment within the Group).

DIRECTORS’ REPORT

for the year ended 31 March 2022

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Principal risks and uncertainties

The business, financial condition or results of operations of the Group could be adversely affected by any of the risks set out in the Strategic Report. The Group’s systems of control and protection are designed to help manage and control risks to an appropriate level rather than to eliminate them. The Directors consider that the principal risks to achieving the Group’s objectives are set out in the Strategic Report.

Greenhouse gas (GHG) emissions

Greenhouse gas emissions data for the period 1 April 2021 to 31 March 2022 can be found in the Sustainability report on page 60 and is incorporated into the Directors’ Report by cross-reference. Further details concerning the environmental impact of our products as a whole are detailed in the Sustainability Report.

Directors

The Directors of the Company during the year and up to the date of signing the financial statements were:

Michael ‘Sean’ Christie
Susan Jane Mair (known as Sue Farr)
Robert Harris Montague
John ‘Nick’ Meyer
Stephen Odell
William Rudge
Geertrui ‘Trudy’ Schoolenberg
Alexander Wessels

Louis Eperjesi became a Director on 14 June 2022.

Directors’ indemnities

The Company maintains Directors’ and officers’ liability insurance which gives appropriate cover for legal action brought against its Directors. The policy was in force throughout the period and at the date of the approval of these financial statements.

Employment policies

The Group promotes diversity and inclusion with respect to recruitment and selection, through to training and development, appraisal and promotion to retirement. It is our policy to promote an environment free from discrimination, harassment and victimisation, where everyone will receive equal treatment regardless of gender, colour, ethnic or national origin, disability, age, marital status or sexual orientation. All decisions relating to employment practices will be objective, free from bias and based solely upon work criteria and individual merit.

Information on the gender ratio of our employees is available in the Sustainability section on page 53.

Health and safety

Health and safety is a priority at all levels of the Group, in particular taking into account the chemical industry in which Accsys operates. Group companies have a responsibility to ensure that all reasonable precautions are taken to provide and maintain working conditions for employees and visitors alike, which are safe, healthy and in compliance with statutory requirements and appropriate codes of practice.

OVERVIEW

FINANCIAL STATEMENTS

STRATEGIC REPORT

The avoidance of occupational accidents and illnesses is given a high priority. Detailed policies and procedures are in place to minimise risks and ensure appropriate action is understood in the event of an incident. The Group HSE Director has oversight over Health and Safety for the Group and in addition dedicated health and safety personnel are retained at the Group’s manufacturing facilities. In September 2021 the Board of Directors constituted a HSE Committee to, amongst other things, review health, safety and environmental strategy, matters arising from the Company’s activities and operations and endorse HSE policies, workplans and activities.

Significant shareholdings

So far as the Company is aware (further to formal notification), the following shareholders held legal or beneficial interests in ordinary shares of the Company exceeding 3% as at 31 March 2022:

Shareholder	Percentage
Teslin Capital Management	16.2%
De Engh B.V.	10.3%
BGF	7.1%
Decico BV	5.4%
VP Participaties B.V.	5.0%
Janus Henderson Investors	4.9%
London & Amsterdam Trust Company Limited	4.7%
ABN AMRO Private Banking	3.8%
Saxo Bank	3.3%
Fidelity International	3.2%

There are no restrictions in respect of voting rights.

Going concern

The Directors have formed a judgement, at the time of approving the financial statements that there is a reasonable expectation that the Group has access to adequate resources to continue in operational existence for at least the next 12 months. Further details are set out in note 1 to these financial statements.

Corporate Governance

The Company’s statement on corporate governance can be found in the Corporate Governance Report on page 72 of these financial statements. The Corporate Governance Report forms part of this Directors’ report and is incorporated into it by cross-reference.

Registered office

The Company’s registered office is Brettenham House, 19 Lancaster Place, London, WC2E 7EN.

Disclosure of information to auditors

Each of the persons who is a Director at the date of the approval of the Annual Report confirms that:

So far as the Director is aware, there is no relevant audit information of which the Company’s auditors are unaware; and
The Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

DIRECTORS’ REPORT continued

for the year ended 31 March 2022

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Independent auditors

PricewaterhouseCoopers LLP (PwC) has been the external auditor of the Company since April 2010.# OVERVIEW

FINANCIAL STATEMENTS

Directors’ responsibilities pursuant to DTR4

The Directors confirm to the best of their knowledge:
* The Group financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002, as it applies in the European Union and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group.
* The Annual Report includes a fair review of the development and performance of the business and the financial position of the Group and the parent Company, together with a description of the principal risks and uncertainties that they face.

Nick Hartigan
Company Secretary
30 June 2022

GOVERNANCE

STRATEGIC REPORT

Directors’ responsibilities

The Directors are responsible for preparing the Annual Report, the Directors’ Remuneration Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with UK-adopted international accounting standards and the parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 ‘Reduced Disclosure Framework’ and applicable law). The Group financial statements are also prepared in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002, as it applies in the European Union and the Dutch Financial Markets Supervision Act.

Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of the profit or loss of the Group and parent 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 UK-adopted international accounting standards and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, have been followed for the Group financial statements and United Kingdom Accounting Standards, comprising FRS 101, have been followed for the parent 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 parent Company will continue in business.

The Directors are responsible for safeguarding the assets of the Group and parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group and parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and parent Company and enable them to ensure that the financial statements and the Directors’ Remuneration Report comply with the Companies Act 2006.

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 are responsible for presenting the consolidated financial statements in compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic Format (“ESEF Regulation”).

Directors’ confirmations

The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and parent Company’s position and performance, business model and strategy.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES in respect of the financial statements

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Each of the Directors, whose names and functions are listed in the Directors’ Report confirm that, to the best of their knowledge:
* the parent Company financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 ‘Reduced Disclosure Framework’, and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the parent Company;
* the Group financial statements, which have been prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and
* the Strategic Report (including but not limited to Chairman’s Statement, Chief Executive’s Report and Financial Review) includes a fair review of the development and performance of the business and the position of the Group and parent Company, together with a description of the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the Directors’ Report is approved:
* so far as the Director is aware, there is no relevant audit information of which the Group and parent Company’s auditors are unaware; and
* they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group and parent Company’s auditors are aware of that information.

Accsys Technologies PLC – Annual Report and Financial Statements 2022

to the members of Accsys Technologies PLC

INDEPENDENT AUDITORS’ REPORT

Report on the audit of the financial statements

Opinion

In our opinion:
* Accsys Technologies PLC’s group financial statements and company financial statements (the “financial statements”) give a true and fair view of the state of the group’s and of the company’s affairs as at 31 March 2022 and of the group’s profit and the group’s cash flows for the year then ended;
* the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
* the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework”, and applicable law); and
* the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and the Dutch Financial Markets Supervision Act.

We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual Report”), which comprise: the Consolidated Statement of Financial Position and the Company Statement of Financial Position as at 31 March 2022; the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Cash Flow, and the Consolidated and Company Statement of Changes in Equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.

Separate opinion in relation to international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union

As explained in note 1 to the financial statements, the group, in addition to applying UK-adopted international accounting standards, has also applied international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. In our opinion, the group financial statements have been properly prepared in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), International Standards on Auditing issued by the International Auditing and Assurance Standards Board (“ISAs”) and applicable law. Our responsibilities under ISAs (UK) and ISAs are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.# Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to other listed entities of public interest, and the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. To the best of our knowledge and belief, we declare that non-audit services prohibited by either the FRC’s Ethical Standard or Article 5(1) of Regulation (EU) No 537/2014 were not provided. We have provided no non-audit services to the company in the period under audit.

Our audit approach

Overview

Audit scope

We performed full scope audits over three reporting units, audit work over material financial statement line items for four reporting units including the joint venture entity in North America and the new subsidiary formed in the 2022 financial year and audit procedures over revenue in respect of the subsidiary business in North America, which cumulatively accounted for approximately 100% (2021: 100%) of the group’s revenue.
As the group audit team, we maintained regular contact with our component team in the Netherlands throughout the planning and execution of their work. The audit in respect of the North America subsidiary business was carried out by the group team in the United Kingdom.

Key audit matters

Going concern (group and company)
Impairment of non-current assets (group)
Cost capitalisation of Property, Plant and Equipment (group)

Materiality

Overall group materiality: 1,100,000 EUR (2021: 900,000 EUR) based on 1% of total revenue.
Overall company materiality: 950,000 EUR (2021: 800,000 EUR) based on 1% of total assets.
Performance materiality: 825,000 EUR (2021: 675,000 EUR) (group) and 712,000 EUR (2021: 600,000 EUR) (company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 106

Our audit approach continued

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit. The impact of COVID-19, which was a key audit matter last year, is no longer included because of its limited impact on and improved trading of the group for 2022. Otherwise, the key audit matters below are consistent with last year.

| Key audit matter | How our audit addressed the key audit matter # INDEPENDENT AUDITORS’ REPORT

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry in which they operate.

The group’s accounting process is structured around a central finance function in the UK. The accounting records for each of the territories in which the group operates is managed through the central finance function except for the Netherlands entity which maintains their own accounting records and controls and reports to the central finance function in the UK through the submission of management reporting packs.

We used our component auditor (PwC Netherlands) to perform the audit of complete financial information in respect of the subsidiary in that territory who are familiar with the local laws and regulations. In order to direct and supervise the group audit, the group engagement team sent detailed instructions to the component audit team. This included communication of the areas of focus and other required communications.

The group consolidation, financial statement disclosures and a number of complex items were audited by the group engagement team at the head office. These included the going concern assessment, share based payments, tax accounting and impairment assessment in respect of non-current assets.

Taken together, these procedures gave us the evidence we needed for our opinion on the financial statements as a whole.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

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

	Financial statements – group	Financial statements – company
Overall materiality	1,100,000 EUR (2021: 900,000 EUR).	950,000 EUR (2021: 800,000 EUR).
How we determined it	1% of total revenue	1% of total assets
Rationale for benchmark applied	Given that the business is in a growth stage, revenue was considered the most appropriate measure to use and is a generally accepted benchmark.	The company is a non-trading holding company and accordingly we conclude that total assets is an appropriate benchmark.

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Our audit approach continued

Materiality continued

For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of materiality allocated across components was between €45,000 to €900,000. Certain components were audited to a local statutory audit materiality that was also less than our overall group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes.

Our performance materiality was 75% (2021: 75%) of overall materiality, amounting to 825,000 EUR (2021: 675,000 EUR) for the group financial statements and 712,000 EUR (2021: 600,000 EUR) for the company financial statements. In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range was appropriate.

We agreed with those charged with governance that we would report to them misstatements identified during our audit above 55,000 EUR (group audit) (2021: 44,000 EUR) and 40,000 EUR (company audit) (2021: 38,000 EUR) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern basis of accounting included:

Understanding of the approach adopted by management through discussions with appropriate individuals within and outside the finance function and in particular with the group CFO;
Tested the integrity of the model, used for management’s going concern assessment covering the period through to 30 June 2023, by recalculating certain outputs and checking the mathematical accuracy of the formulas within the model. We also performed the following:
- agreeing the forecasts to the FY23 board approved budget;
- testing the accuracy of the inputs of the model by agreeing back to source documentation; and
- obtaining loan agreements for covenant workings and recomputing financial covenants in the models.
Using our knowledge from the audit and the assessment of management’s ability to forecast accurately, we applied our own stress test to management’s downside cash flow forecasts and in particular to the timing and additional costs/delays in respect of the completion of the Hull plant and reactor 4 in Arnhem. We considered the potential mitigating actions included in management’s downside case and assessed whether those are within the control of the group.
We have challenged management on the appropriateness of disclosures within the annual report on Page 121 and in note 1 of the group financial statements and Page 168 and Note 1 of the company financial statements in respect of going concern and are satisfied that they are appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s and the company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and the company’s ability to continue as a going concern. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report based on these responsibilities.

With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included. Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.# Strategic report and Directors’ Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’ Report for the year ended 31 March 2022 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors’ Report.

Directors’ Remuneration

In our opinion, the part of the Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 112

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for presenting and marking up the consolidated financial statements in compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic Format (“ESEF Regulation”).

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) and ISAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to UK corporation tax legislation, UK employment legislation and equivalent local laws and regulations applicable to the significant component team, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to achieve desired financial results and management bias in accounting estimates. The group engagement team shared this risk assessment with the component auditors so that they could include appropriate audit procedures in response to such risks in their work.

to the members of Accsys Technologies PLC

INDEPENDENT AUDITORS’ REPORT continued

OVERVIEW STRATEGIC REPORT 113113 GOVERNANCE FINANCIAL STATEMENTS

Audit procedures performed by the group engagement team and/or component auditors included:

Gaining an understanding of the legal and regulatory framework applicable to the group and the industry in which it operates and considering the risk of acts by the group which were contrary to applicable laws and regulations, including fraud. We held discussions with group management and the group’s legal counsel, including consideration of known or suspected instances of non-compliance with laws and regulation, that could give rise to a material misstatement in the group and company financial statements.
Challenging assumptions and judgments made by management in its significant accounting estimates, in particular in relation to the going concern assessment, impairment of non-current assets and cost capitalisation of property, plant and equipment (see related key audit matters above).
We did not identify any key audit matters relating to irregularities, including fraud. We also addressed the risk of management override of internal controls, including testing journals, and evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements in accordance with ISAs (UK) is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 114

Responsibilities for the financial statements and the audit continued

Auditors’ responsibilities for the audit of the financial statements continued

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s and company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s and company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group and company to express an opinion on the consolidated financial statements.

We are responsible for the direction, supervision and performance of the group and company audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.# INDEPENDENT AUDITORS’ REPORT

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied to the members of Accsys Technologies PLC.

INDEPENDENT AUDITORS’ REPORT continued

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115

GOVERNANCE

FINANCIAL STATEMENTS

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. It is also our responsibility to assess whether the consolidated financial statements have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:
* we have not obtained all the information and explanations we require for our audit; or
* adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or
* certain disclosures of directors’ remuneration specified by law are not made; or
* the company financial statements and the part of the Remuneration Report to be audited are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

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116

Report on other legal and regulatory requirements

We have checked the compliance of the consolidated financial statements of the company as at 31 March 2022 with the relevant statutory requirements set out in the ESEF Regulation that are applicable to financial statements. That is, for the company:
* The consolidated financial statements are prepared in a valid xHTML format;
* The XBRL markup of the consolidated financial statements uses the core taxonomy and the common rules on markups specified in the ESEF regulation.
* In our opinion, the consolidated financial statements of the company as at 31 March 2022, identified as Accsys Technologies PLC – Annual Report and Financial Statements 2022, have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation.

Richard Porter (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
30 June 2022

to the members of Accsys Technologies PLC

INDEPENDENT AUDITORS’ REPORT continued

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117

GOVERNANCE

FINANCIAL STATEMENTS

Note	2022 €’000	2021 €’000	Underlying	Exceptional items and other adjustments*	Total	Underlying	Exceptional items and other adjustments*	Total
Accoya® wood revenue	105,053	–	105,053	9 1,095	–	9 1,095
Tricoya® panel revenue	1,459	–	1,459	2,091	–	2,091
Licence revenue	416	–	416	419	–	419
Other revenue	13,924	–	13,924	6,198	–	6,198
Total revenue	3	120,852	–	120,852	99,803	–	99,803
Cost of sales		(84,852)	–	(84,852)	(66,714)	–	(66,714)
Gross profit		36,000	–	36,000	33,089	–	33,089
Other operating costs	4	(31,541)	(136)	(31,677)	(28,559)	103	(28,456)
Operating profit		8	4,459	(136)	4,323	4,530	103	4,633
Finance income	10	–	–	–	1	–	1
Finance expense	11	(2,893)	544	(2,349)	(3,250)	(900)	(4,150)
Share of net loss from joint venture accounted for using the equity method	28	(261)	–	(261)	(144)	–	(144)
Profit/(Loss) before taxation		1,305	408	1,713	1,137	(797)	340
Tax (expense)	12	(1,015)	–	(1,015)	(1,251)	–	(1,251)
Profit/(Loss) for the year		290	408	698	(114)	(797)	(911)
Items that may be reclassified to profit or loss
Gain/(loss) arising on translation of foreign operations	15	3	–	15	3	5	5
Gain/(loss) arising on foreign currency cash flow hedges		–	66	66	–	192	192
Total other comprehensive income/(loss)		15	3	66	219	5	192	197
Total comprehensive gain/(loss) for the year		443	474	917	(109)	(605)	(714)
Total comprehensive gain/(loss) for the year is attributable to:
Owners of Accsys Technologies PLC		2,083	474	2,557	1,279	(605)	674
Non-controlling interests		(1,640)	–	(1,640)	(1,388)	–	(1,388)
Total comprehensive gain/(loss) for the year		443	474	917	(109)	(605)	(714)
Basic and diluted profit/(loss) ordinary share	14	€0.01	€0.01	€0.01	€0.00

The notes on pages 121 to 165 form an integral part of these financial statements.
* See note 5 for details of exceptional items and other adjustments.

for the year ended 31 March 2022

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

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118

Registered Company 05534340

	Note	2022 €’000	2021 €’000
Non-current assets
Intangible assets	16	10,834	10,865
Investment accounted for using the equity method	28	3,216	326
Property, plant and equipment	17	176,661	139,557
Right of use assets	18	4,632	4,859
Financial asset at fair value through profit or loss	19	–	195,343
155,607
Current assets
Inventories	22	20,371	12,262
Trade and other receivables	23	16,934	12,314
Cash and cash equivalents	29	42,054	47,598
Corporation tax receivable		43	5
Derivative financial instrument		13	4
79,797	72,491
Current liabilities
Trade and other payables	24	(29,880)	(29,810)
Obligation under lease liabilities	18	(1,024)	(948)
Short term borrowings	29	(11,654)	(9,664)
Corporation tax payable		(3,184)	(1,863)
(45,742)	(42,285)
Net current assets		34,055	30,206
Non-current liabilities
Obligation under lease liabilities	18	(4,193)	(4,584)
Other long term borrowing	29	(52,335)	(44,626)
Financial guarantee	31	–	–
(56,528)	(49,210)
Net assets		172,870	136,603
Equity
Share capital	25	9,638	8,466
Share premium account		223,326	189,598
Other reserves	26	114,701	114,635
Accumulated loss		(210,505)	(213,263)
Own shares		(6)	(36)
Foreign currency translation reserve		190	37
Capital value attributable to owners of Accsys Technologies PLC		137,344	99,437
Non-controlling interest in subsidiaries		35,526	37,166
Total equity		172,870	136,603

The financial statements on pages 117 to 165 were approved by the Board of Directors on 30 June 2022 and signed on its behalf by

Robert Harris
Director

William Rudge
Director

The notes on pages 121 to 165 form an integral part of these financial statements.

as at 31 March 2022

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

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GOVERNANCE

FINANCIAL STATEMENTS

	Share capital ordinary €000	Share premium €000	Other reserves €000	Own Shares €000	Foreign currency translation reserve €000	Accumulated Loss €000	Total equity attributable to equity shareholders of the company €000	Non- Controlling interests €000	Total Equity €000
Balance at 01 April 2020	8,114	186,390	112,551	–	32	(214,394)	92,693	34,442	127,135
Profit/(Loss) for the year	–	–	–	–	–	477	477	(1,388)	(911)
Other comprehensive income for the year	–	–	192	–	5	–	197	–	197
Share based payments	–	–	–	–	–	717	717	–	717
Shares issued	352	–	–	(36)	–	(63)	253	–	253
Premium on shares issued	–	3,215	–	–	–	–	3,215	–	3,215
Share issue costs	–	(7)	–	–	–	–	(7)	–	(7)
Issue of subsidiary shares to non- controlling interests	–	–	1,892	–	–	–	1,892	4,112	6,004
Balance at 31 March 2021	8,466	189,598	114,635	(36)	37	(213,263)	99,437	37,166	136,603
Profit/(Loss) for the year	–	–	–	–	–	2,338	2,338	(1,640)	698
Other comprehensive income for the year	–	–	66	–	153	–	219	–	219
Share based payments	–	–	–	–	–	463	463	–	463
Shares issued	1,172	–	–	30	–	(43)	1,159	–	1,159
Premium on shares issued	–	35,922	–	–	–	–	35,922	–	35,922
Share issue costs	–	(2,194)	–	–	–	–	(2,194)	–	(2,194)
Balance at 31 March 2022	9,638	223,326	114,701	(6)	190	(210,505)	137,344	35,526	172,870

Share capital is the amount subscribed for shares at nominal value (note 25). Share premium account represents the excess of the amount subscribed for share capital over the nominal value of these shares, net of share issue expenses. Share issue expenses comprise the costs in respect of the issue by the Company of new shares. See note 26 for details concerning Other reserves. Non-controlling interests relate to the investment of various parties into Tricoya Technologies Limited and Tricoya UK Limited (notes 9 and 27). Foreign currency translation reserve arises on the re-translation of the Group’s USA subsidiary’s net assets which are denominated in a different functional currency, being US dollars. Accumulated losses represent the cumulative loss of the Group attributable to the owners of the parent.

The notes on pages 121 to 165 form an integral part of these financial statements.# CONSOLIDATED STATEMENT OF CASH FLOW

for the year ended 31 March 2022

Accsys Technologies PLC – Annual Report and Financial Statements 2022

	2022 €’000	2021 €’000
Profit before taxation before exceptional items and other adjustments	1,305	1,137
Adjustments for:
Amortisation of intangible assets	74	80
Depreciation of property, plant and equipment, and right of use assets	5,419	4,934
Net finance expense	2,891	3,352
Equity-settled share-based payment expenses	46	71
Accsys portion of Licence fee received from joint venture	600	600
Share of net loss of joint venture	261	144
Currency translation (gains)/loss	(171)	110
Cash inflows from operating activities before changes in working capital and exceptional items	11,513	11,797
Exceptional Items in operating activities (see note 5)	(133)	–
Cash inflows from operating activities before changes in working capital	11,380	11,797
(Increase) in trade and other receivables	(5,058)	(159)
(Decrease) in deferred income	(33)	(42)
(Increase)/Decrease in inventories	(8,110)	4,670
Increase in trade and other payables	4,034	3,864
Net cash from operating activities before tax	2,213	20,130
Tax received	56	71
Net cash from operating activities	2,269	20,201

Cash flows from investing activities
Interest received	–	5
Investment in property, plant and equipment	(44,612)	(11,674)
Foreign exchange deal settlement related to hedging of Hull Capex	190	(258)
Investment in intangible assets	(714)	(682)
Investment in joint venture	(3,751)	(1,070)
Net cash (used in) investing activities	(48,887)	(13,679)

Cash flows from financing activities
Proceeds from loans	54,500	–
Other finance costs	(392)	(80)
Interest Paid	(2,241)	(1,831)
Repayment of lease liabilities	(1,089)	(1,308)
Repayment of loans/rolled up interest	(46,939)	(2,474)
Proceeds from issue of share capital	37,094	3,468
Proceeds from issue of subsidiary shares to non-controlling interests	–	6,004
Share issue costs	(2,194)	(7)
Net cash from financing activities	38,739	3,772

Net (decrease)/increase in cash and cash equivalents	(7,879)	10,294
Effect of exchange rate changes on cash and cash equivalents	2,335	66
Opening cash and cash equivalents	47,598	37,238
Closing cash and cash equivalents	42,054	47,598

The notes on pages 121 to 165 form an integral part of these financial statements.

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121

1. Accounting Policies

Basis of accounting

The Group’s financial statements have been prepared under the historical cost convention (except for certain financial instruments and equity investments which are measured at fair value), in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. In addition, the financial statements are also prepared in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and the Dutch Financial Markets Supervision Act. On 31 December 2020, IFRS as adopted by the European Union at that date, was brought into UK law and became UK-adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. The Group transitioned to UK-adopted International Accounting Standards in its consolidated financial statements on 1 April 2021. This change constitutes a change in accounting framework. However, there is no impact on recognition, measurement or disclosure in the period reported as a result of the change in framework.

Going Concern

Exceptional Items

Exceptional items are events or transactions that fall outside the ordinary activities of the Group and which by virtue of their size or incidence, have been separately disclosed in order to improve a reader’s understanding of the financial statements. These include items relating to the restructuring of a significant part of the Group, impairment losses (or the reversal of previously recorded exceptional impairments), expenditure relating to the integration and implementation of significant acquisitions and other one-off events or transactions, such as re-financing of Group borrowings. See note 5 for details of exceptional items.

NOTES TO THE FINANCIAL STATEMENTS

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1. Accounting Policies continued

Business combinations

Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the Group as if they formed a single entity. Inter-company transactions and balances between Group companies are therefore eliminated in full. The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated statement of financial position, the acquirer’s identifiable assets, liabilities, and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. As allowed under IFRS 1, some business combinations effected prior to transition to IFRS, were accounted for using the merger method of accounting. Under this method, assets and liabilities are included in the consolidation at their book values, not fair values, and any differences between the cost of investment and net assets acquired were taken to the merger reserve. The majority of the merger reserve arose from a corporate restructuring in the year ended 31 March 2006 which introduced Accsys Technologies PLC as the new holding company. Further details concerning the Tricoya® Consortium are included in note 9.

Revenue from contracts with customers

Revenue is measured at the fair value of the consideration receivable. Revenue is recognised to the extent that it is highly probable that a significant reversal will not occur based on the consideration in the contract. The following specific recognition criteria must also be met before revenue is recognised.

Manufacturing revenue

Revenue is recognised from the sale of goods at a point in time and is measured at the amount of the transaction price received in exchange for transferring goods. The transaction price is the expected consideration to be received, to the extent that it is highly probable that there will not be a significant reversal of revenue in the future. Revenue is recognised when the Group’s performance obligations under the relevant customer contract have been satisfied. Manufacturing revenue includes the sale of Accoya® wood, Tricoya® panels and other revenue, principally relating to the sale of acetic acid.

Licensing fees and Marketing income

Licence fees and marketing income are recognised over the period of the relevant agreements according to the specific terms of each agreement or the quantities and/or values of the licensed product sold.# NOTES TO THE FINANCIAL STATEMENTS

OVERVIEW STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

The accounting policy for the recognition of licence fees is based upon satisfaction of the performance obligations set out in the contract such as an assessment of the work required before the licence is signed and subsequently during the design, construction and commissioning of the licensees’ plant, with an appropriate proportion of the fee recognised upon signing and the balance recognised as the project progresses to completion. Marketing revenue, when the Company acts as principal, is recognised based on the actual work completed in the period. The amount of any cash or billings received but not recognised as income is included in the financial statements as deferred income and shown as a liability.

Finance income

Interest accrues using the effective interest method, i.e. the rate that discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset.

Finance expenses and borrowing costs

Finance expenses include the fees, interest and other finance charges associated with the Group’s loan notes and credit facilities, which are expensed over the period that the Group has access to the loans and facilities. Foreign exchange gains or losses on the loan notes are included within finance expenses. Interest on borrowings directly relating to the construction or production of qualifying assets are capitalised until such time as the assets are substantially ready for their intended use or sale. Where funds have been borrowed specifically to finance a project, the amount capitalised represents the actual borrowing costs incurred. Where the funds used to finance a project form part of general borrowings, the amount capitalised is calculated using a weighted average of rates applicable to relevant general borrowings of the Group during the construction period.

Share based payments

The Company awards nil cost options to acquire ordinary shares in the capital of the Company to certain Directors and employees. The Company has also previously awarded bonuses to certain employees in the form of the award of deferred shares of the Company. In addition the Company has established an Employee Share Participation Plan under which employees subscribe for new shares which are held by a trust for the benefit of the subscribing employees. The shares are released to employees after one year, together with an additional, matching share on a 1 for 1 basis. The fair value of options and deferred shares granted are recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and is charged to the consolidated statement of comprehensive income over the vesting period during which the employees become unconditionally entitled to the options or shares. The fair value of share options granted is measured using a modified Black Scholes model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest only where vesting is dependent upon the satisfaction of service and non-market vesting conditions. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options which eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Pensions

The Group contributes to certain defined contribution pension and employee benefit schemes on behalf of its employees. These costs are charged to the consolidated statement of comprehensive income on an accruals basis.

Accsys Technologies PLC – Annual Report and Financial Statements 2022

Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the consolidated statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date together with any adjustment to tax payable in respect of previous years. Current tax includes the expected impact of claims submitted by the Group to tax authorities in respect of enhanced tax relief for expenditure on research and development. Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for:
* the initial recognition of goodwill;
* the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination;
* differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Recognition of deferred tax assets is restricted to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (the functional currency). For the purposes of the consolidated financial statements, the results and financial position of each Group company are expressed in Euro, which is the functional currency of the parent Company, and the presentation currency of the consolidated financial statements. In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional currencies are recognised at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognised in profit or loss in the period in which they arise. For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average monthly exchange rates prevailing in the month in which the transaction took place. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in the foreign currency translation reserve. Such translation differences are reclassified to profit and loss only on disposal or partial disposal of the overseas operation.

Foreign exchange hedging

The Group has adopted IFRS 9 hedge accounting in respect of the cash flow hedging instruments that it uses to manage the risk of foreign exchange movements impacting on future cash flows and profitability. The Group has prospectively assessed the effectiveness of its cash flow hedging using the ‘hedge ratio’ of quantities of cash held in the same currency as future foreign exchange cash flow quantities related to committed investment in plant and equipment. The Group has undertaken a qualitative analysis to confirm that an ‘economic relationship’ exists between the hedging instrument and the hedged item. It is also satisfied that credit risk will not dominate the value changes that result from that economic relationship. At the end of each reporting period the Group measures the effectiveness of its cash flow hedging and recognises the effective cash flow hedge results in Other Comprehensive Income and the Hedging Effectiveness Reserve within Equity, together with its ineffective hedge results in Profit and Loss. Amounts are reclassified from the Hedging Effectiveness Reserve to Profit and Loss when the associated hedged transaction affects Profit and Loss. Further details are included in note 5.

Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and the Group will comply with the attached conditions. When the grant relates to an expense item, it is recognised as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. Where the grant relates to an asset they are credited to a deferred income account and released to the statement of comprehensive income over the expected useful life of the relevant asset on a straight line basis.

Goodwill

Goodwill arising on the acquisition of a subsidiary undertaking is the difference between the fair value of the consideration paid and the fair value of the identifiable assets and liabilities acquired. It is capitalised, and is subject to annual impairment reviews by the Directors. Any impairment arising is charged to the consolidated statement of comprehensive income.# 1. Accounting Policies

Joint venture

The Group has entered into a joint venture agreement with Eastman Chemical Company, forming Accoya USA LLC. The Group applies IFRS 11 for this joint arrangement, and following assessment of the nature of this joint arrangement, has determined it to be a joint venture. Interest in the joint venture is accounted for using the equity method, after initially being recognised at cost. Further details concerning the Accoya USA LLC joint venture with Eastman Chemical Company are included in note 28.

Other intangible assets

Intellectual property rights, including patents, which cover a portfolio of novel processes and products, are shown in the financial statements at cost less accumulated amortisation and any amounts by which the carrying value is assessed during an annual review to have been impaired. At present, the useful economic life of the intellectual property is considered to be 20 years.

Internal development costs are incurred as part of the Group’s activities including new processes, process improvements, identifying new species and improving the Group’s existing products. Research costs are expensed as incurred. Development costs are capitalised when all of the criteria set out in IAS 38 ‘Intangible Assets’ (including criteria concerning technical feasibility, ability and intention to use or sell, ability to generate future economic benefits, ability to complete the development and ability to reliably measure the expenditure) have been met. These internal development costs are amortised on a straight line basis over their useful economic life, between 8 and 20 years.

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Accounting Policies continued

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any impairment charged. Cost includes the original purchase price of the asset as well as costs of bringing the asset to the working condition and location of its intended use. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset, except freehold land, over its expected useful life on a straight line basis, as follows:

Plant and machinery

These assets comprise pilot plants and production facilities. These facilities are depreciated from the date they become available for use over their useful lives of between 5 and 20 years

Office equipment

Useful life of between 3 and 5 years

Leased land and buildings

Land held under a finance lease is depreciated over the life of the lease

Freehold land

Freehold land is not depreciated

Impairment of non-financial assets

The carrying amount of non-current non-financial assets of the Group is compared to the recoverable amount of the assets whenever events or changes in circumstances indicate that the net book value may not be recoverable, or in the case of goodwill, annually. The recoverable amount is the higher of value in use and the fair value less cost to sell. In assessing the value in use, the expected future cash flows from the assets are determined by applying a discount rate to the anticipated pre-tax future cash flows. An impairment charge is recognised in the consolidated statement of comprehensive income to the extent that the carrying amount exceeds the assets’ recoverable amount. The revised carrying amounts are amortised or depreciated in line with Group accounting policies. A previously recognised impairment loss, other than on goodwill, is reversed if the recoverable amount increases as a result of a reversal of the conditions that originally resulted in the impairment. This reversal is recognised in the consolidated statement of comprehensive income and is limited to the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised in prior years. Assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units) for purposes of assessing impairment.

Leases

To the extent that a right-of-control exists over an asset subject to a lease, a right-of-use asset, representing the Group’s right to use the underlying leased asset, and a lease liability, representing the Group’s obligation to make lease payments, are recognised in the consolidated statement of financial position at the commencement of the lease. The right-of-use asset is measured initially at cost and includes the amount of initial measurement of the lease liability, any initial direct costs incurred, including advance lease payments, and an estimate of the dismantling, removal and restoration costs required in terms of the lease. Depreciation is charged to the consolidated income statement so as to depreciate the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The lease term shall include the period of an extension option where it is reasonably certain that the option will be exercised. Where the lease contains a purchase option the asset is written off over the useful life of the asset when it is reasonably certain that the purchase option will be exercised. The lease liability is measured at the present value of the future lease payments, including variable lease payments that depend on an index and the exercise price of purchase options where it is reasonably certain that the option will be exercised, discounted using the interest rate implicit in the lease, if readily determinable. If the implicit interest rate cannot be readily determined, the lessee’s incremental borrowing rate is used. Finance charges are recognised in the consolidated income statement over the period of the lease.

Lease expenses for leases with a duration of one year or less and low-value assets are not recognised in the consolidated statement of financial position, and are charged to the consolidated income statement when incurred. Low-value assets are determined based on quantitative criteria. The Group has used the following practical expedients permitted by the standard:
• The use of a single discount rate to a portfolio of leases with reasonably similar characteristics
• Reliance on previous assessments on whether leases are onerous
• The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

Inventories

Raw materials, which consist of unprocessed timber and chemicals used in manufacturing operations, are valued at the lower of cost and net realisable value. The basis on which cost is derived is a first-in, first-out basis. Finished goods, comprising processed timber, are stated at the lower of weighted average cost of production or net realisable value. Costs include direct materials, direct labour costs and production overheads (excluding the depreciation/depletion of relevant property and plant and equipment) absorbed at an appropriate level of capacity utilisation. Net realisable value represents the estimated selling price less all expected costs to completion and costs to be incurred in selling and distribution.

Fair value measurement

Assets and liabilities that are measured at fair value, or where the fair value of financial instruments has been disclosed in notes to the financial statements, are based on the following fair value measurement hierarchy:
• level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
• level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and
• level 3 – inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

Specific valuation methodologies used to value financial instruments include:
• the fair values of foreign exchange contracts are calculated as the present value of expected future cash flows based on observable yield curves and exchange rates; and
• other techniques, including discounted cash flow analysis, are used to determine the fair values of other financial instruments

Financial assets

Financial assets and financial liabilities are recognised in the Group’s consolidated statement of financial position when the Group becomes party to the contractual provisions of the instrument. Financial assets are initially measured at fair value and in the case of investments not at fair value through profit or loss, fair value plus directly attributable transaction costs. Except where a reliable fair value cannot be obtained, unlisted shares held by the Group are classified as fair value through other comprehensive income and are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in other comprehensive income, with dividends recognised in profit or loss. Where it is not possible to obtain a reliable fair value, these investments are held at cost less provision for impairment. Loans and receivables, which comprise non-derivative financial assets with fixed and determinable payments that are not quoted on an active market, are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Accsys Technologies PLC – Annual Report and Financial Statements 2022
128

for the year ended 31 March 2022
NOTES TO THE FINANCIAL STATEMENTS continued
OVERVIEW
STRATEGIC REPORT
127
127
GOVERNANCE
FINANCIAL STATEMENTS# Accounting Policies continued

Financial assets

Trade and other receivables

Trade receivables are initially recognised at fair value and are subsequently measured at amortised cost using the effective interest rate method, less allowance for impairments. The Group has elected to apply the IFRS 9 practical expedient option to measure the value of its trade receivables at transaction price, as they do not contain a significant financing element. The Group applies IFRS 9’s ‘simplified’ approach that requires companies to recognise the lifetime expected losses on its trade receivables. At the date of initial recognition, the credit losses expected to arise over the lifetime of a trade receivable are recognised as an impairment and are adjusted, over the lifetime of the receivable, to reflect objective evidence reflecting whether the Group will not be able to collect its debts.

Cash and cash equivalents

Cash and cash equivalents in the consolidated statement of financial position comprise cash at bank and in hand and short-term deposits, including liquidity funds, with an original maturity of three months or less. For the purpose of the statement of consolidated cash flow, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Cash and cash equivalents includes cash pledged to ABN Amro as collateral for the $20million Letter of credit provided to FHB. See note 29.

Financial liabilities

Other financial liabilities

Trade payables and other financial liabilities are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. Loans and other borrowings are initially recognised at the fair value of amounts received net of transaction costs and subsequently measured at amortised cost using the effective interest method. There have been no modifications to the terms of the Group’s loan agreements requiring disclosure under IFRS 9.

Financial guarantee contracts

Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially measured at fair value, which is determined based on the present value of the difference in cash flows between the contractual payments required under the FHB borrowing (provided to the Company’s joint venture – Accoya USA) and the payments that are estimated to be required without the guarantee being provided by Accsys to FHB. To calculate the fair value of the guarantee, the present value calculation is then weighted by the probability of the guarantee being called by FHB. Where guarantees in relation to loans or other payables of associates are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of the investment.

Share capital

Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Group’s shares are classified as equity instruments.

Segmental Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Executive Officer. The Chief Executive Officer is responsible for allocating resources and assessing performance of the operating segments and has been identified as steering the committee that makes strategic decisions.

for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued
OVERVIEW STRATEGIC REPORT 129129
GOVERNANCE FINANCIAL STATEMENTS

Alternative Performance Measures

The Group presents certain measures of financial performance, position or cash flows in the Annual Report and financial statements that are not defined or specified according to IFRS (International financial reporting standards). These measures, referred to as Alternative Performance Measures (APMs), are prepared on a consistent basis for all periods presented in this report, with the addition of adjusted cash and adjusted net debt in the year. The most significant APMs are:

Net debt

A measure comprising short term and long-term borrowings (including lease obligations) less cash and cash equivalents. Net debt provides a measure of the Group’s net indebtedness or overall leverage.

Underlying EBITDA

Operating profit/(loss) before Exceptional items and other adjustments, depreciation and amortisation and includes the Group’s attributable share of our USA joint venture’s underlying EBITDA. Underlying EBITDA provides a measure of the cash-generating ability of the business that is comparable from year to year.

Underlying EBIT

Operating profit/(loss) before Exceptional items and other adjustments and includes the Group’s attributable share of our USA joint venture’s underlying EBIT. Underlying EBIT provides a measure of the operating performance that is comparable from year to year.

Effective interest rate

Net interest expense (excluding capitalisation of interest) expressed as a percentage of trailing 13-month average net debt provides a measure of the cost of borrowings.

Net Debt / Underlying EBITDA

Net debt divided by trailing 12-month underlying EBITDA. A measure of the Group’s net indebtedness relative to its cash-generating ability.

Accoya® Manufacturing margin

Accoya® segmental underlying gross profit excluding Accoya® underlying licence revenue and marketing services expressed as a percentage over Accoya® segmental total revenue excluding Accoya® underlying licence revenue and marketing services. Accoya® Manufacturing margin provides a measure of the profitability of the Accoya® operations relative to revenue.

Adjusted cash

Cash & cash equivalents less remaining cash committed to be invested into Accoya USA Joint Venture and restricted cash. See note 29.

Adjusted Net Debt

Net Debt less remaining cash committed to be invested into Accoya USA Joint Venture. See note 29.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 130

2. Accounting judgements and estimates

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Accounting estimates

Goodwill

The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy stated above. The recoverable amounts of cash-generating units have been determined based on value in use calculations. These calculations require the use of judgements in relation to discount rates and future forecasts (See note 16 & 17). The recoverability of these balances is dependent upon the level of future licence fees and manufacturing revenues. While the scope and timing of the production facilities to be built under the Group’s existing and future agreements remains uncertain, the Directors remain confident that revenue from own manufacturing, existing licensees, new licence or consortium agreements will be generated, demonstrating the recoverability of these balances.

Intellectual property rights (IPR) and property, plant and equipment

The Group tests the carrying amount of the intellectual property rights and property, plant and equipment whenever events or changes in circumstances indicate that the net book value may not be recoverable. These calculations require the use of estimates in respect of future cash flows from the assets by applying a discount rate to the anticipated pre-tax future cash flows. Within this process, the Group makes a number of key assumptions including operating margins, discount rates, terminal growth rates and forecast cash flows. Additional information is disclosed in note 16 & 17, which highlights the estimates applied in the value-in-use calculations for those CGUs that are considered most susceptible to changes in key assumptions and the sensitivity of these estimates. The Group also reviews the estimated useful lives at the end of each annual reporting period (See note 16 & 17). The price of Accoya® wood and the raw materials and other inputs vary according to market conditions outside of the Group’s control. Should the price of the raw materials increase greater than the sales price or in a way which no longer makes Accoya® competitive, then the carrying value of the property, plant and equipment or IPR may be in doubt and become impaired. The Directors consider that the current market and best estimates of future prices mean that this risk is limited.

Commercial negotiations

The Group is party to a number of commercial negotiations in the ordinary course of business. Management consults with internal and external experts, and utilises its best estimate to account for any relevant financial effect from these negotiations (including the value of amounts to be capitalised and any payables or provisions required to settle such negotiations), when they become apparent.

Accounting judgements

In preparing the Consolidated Financial Statements, management has to make judgments on how to apply the Group’s accounting policies and make estimates about the future. The critical judgements that have been made in arriving at the amounts recognised in the Consolidated Financial Statements and the key sources of uncertainty that have a significant risk of causing a material adjustment to the carrying value of assets and liabilities in the next financial year are discussed below:

Revenue recognition

The Group has considered the criteria for the recognition of fee income from licensees over the period of the agreement and is satisfied that the recognition of such revenue is appropriate. The recognition of fees is based upon satisfaction of the performance obligations set out in the contract such as an assessment of the work required before the licence is signed and subsequently during the construction and commissioning of the licensees’ plant, with an appropriate proportion of the fee recognised upon signing and the balance recognised as the project progresses to completion.# NOTES TO THE FINANCIAL STATEMENTS

OVERVIEW STRATEGIC REPORT 131

GOVERNANCE FINANCIAL STATEMENTS

Financial asset at fair value through profit or loss

The Group also considers the recoverability of amounts before recognising them as income. Revenue is recognised to the extent that it is highly probable that a significant reversal will not occur.

The Group has an investment in listed equity shares carried at nil fair value as a reliable fair value cannot be obtained since there is no active market for the shares and there is currently uncertainty around the future funding of the business. The Group makes appropriate enquiries and considers all of the information available to it in order to determine the fair value (See note 19).

Consolidation of subsidiaries

The Group considers all relevant facts and circumstances when assessing whether it meets the IFRS 10 requirements to consolidate Tricoya Technologies Limited (TTL) and Tricoya UK Limited (Tricoya UK). The Group has consolidated the results of TTL and Tricoya UK as subsidiaries, as it exercises the power to govern the entities in accordance with IFRS 10. See note 9.

Joint venture

The Group considers all relevant facts and circumstances when assessing whether it meets the IFRS 11 requirements to account for Accoya USA LLC as a joint venture. The Group has equity accounted for Accoya USA LLC within these financial statements. See note 28.

New standards and interpretations in issue at the date of authorisation of these financial statements:

New standards, amendments and interpretations

The following amendments to Standards and a new Interpretation have been adopted for the financial year beginning on 1 April 2021:

COVID-19-Related Rent concessions – Amendments to IFRS16;
Interest Rate Benchmark Reform – Amendments to IFRS 9, IAS 39 and IFRS 7; and
Property, plant and equipment under construction and proceeds from sales – Amendments to IAS16.

The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

New standards, amendments and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 31 March 2022 reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 132

3. Segmental reporting

The Group’s business is the manufacturing of and development, commercialisation and licensing of the associated proprietary technology for the manufacture of Accoya® wood, Tricoya® wood elements and related acetylation technologies. Segmental reporting is divided between corporate activities, activities directly attributable to Accoya®, to Tricoya® or research and development activities.

Accoya®

Segment	Year ended 31 March 2022	Year ended 31 March 2021
	Underlying €’000	Exceptional items & Other Adjustments €’000
Accoya® wood revenue	105,053	–
Licence revenue	400	–
Other revenue	13,879	–
Total Revenue	119,332	–
Cost of sales	(83,435)	–
Gross profit	35,897	–
Other operating costs	(19,116)	(133)
Profit from operations	16,781	(133)
Profit from operations	16,781	(133)
Accoya® USA EBITDA	(261)	–
EBIT	16,520	(133)
Depreciation and amortisation	4,787	–
EBITDA	21,307	(133)

Revenue includes the sale of Accoya®, licence income and other revenue, principally relating to the sale of acetic acid and other licensing related income. Revenue also includes sales of lower visual grade Accoya® to Tricoya® customers for the purposes of producing Tricoya® panels as a temporary work-around until the dedicated Tricoya® Hull plant is operational.

All costs of sales are allocated against manufacturing activities in Arnhem and in Barry (Wales) unless they can be directly attributable to a licensee. Other operating costs include all costs associated with the operation of the Arnhem and Barry manufacturing sites, including directly attributable administration, sales and marketing costs. See note 5 for explanation of Exceptional items and other adjustments.

Average headcount = 162 (2021: 140) for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued OVERVIEW STRATEGIC REPORT 133

The below table shows details of reconciling items to show both Accoya® EBITDA and Accoya® Manufacturing gross profit, both including and excluding licence and licensing related income, which has been presented given the inclusion of items which can be more variable or one-off.

	2022 €’000	2021 €’000
Accoya® segmental underlying EBITDA	21,307	21,426
Accoya® underlying Licence revenue	(400)	(400)
Accoya® segmental underlying EBITDA (excluding. Licence Income)	20,907	21,026
Accoya® segmental underlying gross profit	35,897	32,924
Accoya® underlying Licence revenue	(400)	(400)
Accoya® manufacturing gross profit	35,497	32,524
Accoya® Manufacturing Margin	29.8%	33.4%

	2022 €’000	2021 €’000
Accoya® manufacturing gross profit – €’000	35,497	32,524
Accoya® sales volume – m³	59,649	60,466
Accoya® manufacturing gross profit – m³	595	538

Tricoya®

Segment	Year ended 31 March 2022	Year ended 31 March 2021
	Underlying €’000	Exceptional items & Other Adjustments €’000
Tricoya® panel revenue	1,459	–
Licence revenue	16	–
Other revenue	45	–
Total Revenue	1,520	–
Cost of sales	(1,417)	–
Gross profit	103	–
Other operating costs	(3,811)	(3)
Loss from operations	(3,708)	(3)
Loss from operations	(3,708)	(3)
Depreciation and amortisation	505	–
EBITDA	(3,203)	(3)

Revenue and costs are those attributable to the business development of the Tricoya® process and establishment of Tricoya® Hull Plant. Other operating costs includes pre-operating costs for the Tricoya® Hull Plant. See note 5 for explanation of Exceptional items and other adjustments.

Average headcount = 36 (2021: 22), noting a substantial proportion of the costs to date have been incurred via recharges from other parts of the Group or have resulted from contractors.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 134

3. Segmental reporting continued

Corporate

Segment	Year ended 31 March 2022	Year ended 31 March 2021
	Underlying €’000	Exceptional items & Other Adjustments €’000
Accoya® wood revenue	–	–
Licence revenue	–	–
Other revenue	–	–
Total Revenue	–	–
Cost of sales	–	–
Gross result	–	–
Other operating costs	(7,430)	–
Loss from operations	(7,430)	–
Loss from operations	(7,430)	–
Depreciation and amortisation	805	–
EBITDA	(6,625)	–

Corporate costs are those costs not directly attributable to Accoya®, Tricoya® or Research and Development activities. This includes management and the Group’s corporate and general administration costs including the head office in London. See note 5 for explanation of Exceptional items and other adjustments.

Average headcount = 37 (2021: 29)

Research and Development

Segment	Year ended 31 March 2022	Year ended 31 March 2021
	Underlying €’000	Exceptional items & Other Adjustments €’000
Accoya® wood revenue	–	–
Licence revenue	–	–
Other revenue	–	–
Total Revenue	–	–
Cost of sales	–	–
Gross result	–	–
Other operating costs	(1,184)	–
Loss from operations	(1,184)	–
Loss from operations	(1,184)	–
Depreciation and amortisation	68	–
EBITDA	(1,116)	–

Research and Development costs are those associated with the Accoya® and Tricoya® processes. Costs exclude those which have been capitalised in accordance with IFRS (see note 16).

Average headcount = 9 (2021: 9) for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued OVERVIEW STRATEGIC REPORT 135

Total

Segment	Year ended 31 March 2022	Year ended 31 March 2021
	Underlying €’000	Exceptional items & Other Adjustment €’000
Accoya®/Tricoya® revenue	106,512	–
Licence revenue	416	–
Other revenue	13,924	–
Total Revenue	120,852	–
Cost of sales	(84,852)	–
Gross profit	36,000	–
Other operating costs	(31,541)	(136)
Profit from operations	4,459	(136)
Finance income	–	–
Finance expense	(2,893)	544
Investment in joint venture	(261)	–
Profit/(Loss) before taxation	1,305	408

See note 5 for details of Exceptional items and other adjustments.# Reconciliation of Underlying EBIT and EBITDA

	Year ended 31 March 2022	Year ended 31 March 2021
	Underlying €’000	Exceptional items & Other Adjustments €’000
Profit from operations	4,459	(136)
Accoya® USA EBITDA	(261)	–
EBIT	4,198	(136)
Depreciation and amortisation	6,164	–
EBITDA	10,362	(136)

Analysis of Revenue by geographical area of customers:

	2022 €’000	2021 €’000
UK and Ireland	43,053	41,890
Rest of Europe	45,980	36,888
Americas	21,069	13,170
Rest of World	10,750	7,855
Total	120,852	99,803

Revenue generated from two customers exceeded 10% of Group revenue of 2022. These two customers represented 37% & 34% of the revenue from the United Kingdom and Ireland, relating to Accoya® revenue. Revenue generated from two customers exceeded 10% of Group revenue of 2021. This included 36% & 40% of the revenue from the United Kingdom and Ireland, relating to Accoya® revenue.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 136

3. Segmental reporting continued

Assets and liabilities on a segmental basis:

	Accoya® 2022 €’000	Tricoya® 2022 €’000	Corporate 2022 €’000	R&D 2022 €’000	TOTAL 2022 €’000
Non-current assets	91,278	99,718	4,119	228	195,343
Current assets	36,899	4,425	33,452	5,021	79,797
Current liabilities	(19,399)	(21,112)	(5,156)	(75)	(45,742)
Net current assets/(liabilities)	17,500	(16,687)	28,296	4,946	34,055
Non-current liabilities	(2,826)	(1,252)	(52,339)	(111)	(56,528)
Net assets/(liabilities)	105,952	81,779	(19,924)	5,063	172,870

	Accoya® 2021 €’000	Tricoya® 2021 €’000	Corporate 2021 €’000	R&D 2021 €’000	TOTAL 2021 €’000
Non-current assets	64,994	85,696	4,620	297	155,607
Current assets	34,752	13,134	19,567	5,038	72,491
Current liabilities	(16,706)	(18,933)	(6,576)	(70)	(42,285)
Net current assets/(liabilities)	18,046	(5,799)	12,991	4,968	30,206
Non-current liabilities	(21,798)	(9,990)	(17,262)	(160)	(49,210)
Net assets/(liabilities)	61,242	69,907	349	5,105	136,603

Analysis of non-current assets (Other than financial assets and deferred tax):

	2022 €’000	2021 €’000
UK	107,861	90,344
Other countries	83,251	61,032
Un-allocated – Goodwill	4,231	4,231
Total	195,343	155,607

The segmental assets in the current year were predominantly held in the UK and mainland Europe (Prior Year UK and mainland Europe). Additions to property, plant, equipment and intangible assets in the current year were predominantly incurred in the UK and mainland Europe (Prior Year UK and mainland Europe). There are no significant intersegment revenues.

for the year ended 31 March 2022
NOTES TO THE FINANCIAL STATEMENTS continued
OVERVIEW STRATEGIC REPORT
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GOVERNANCE FINANCIAL STATEMENTS

4. Other operating costs

Other operating costs consist of the operating costs, other than the cost of sales, associated with the operation of the plant in Arnhem, Barry, the offices in Dallas and London and certain pre-operating costs associated with the plant in Hull:

	2022 €’000	2021 €’000
Sales and marketing	5,121	3,847
Research and development	1,116	1,030
Other operating costs	6,856	6,013
Administration costs	12,284	11,932
Exceptional Items and other adjustments	136	(103)
Other operating costs excluding depreciation and amortisation	25,513	22,719
Depreciation and amortisation	6,164	5,737
Total other operating costs	31,677	28,456

Administrative costs include costs associated with Business Development and Legal departments, Intellectual Property as well as Human Resources, IT, Finance, Management and General Office and includes the costs of the Group’s head office costs in London and the US Office in Dallas. The total cost of €25,513,000 in the current period includes €3,309,000 in respect of the Tricoya® segment, compared to €3,002,000 in the previous year. Group average headcount increased from 199 in the year to 31 March 2021, to 244 in the year to 31 March 2022. During the period, €714,000 (2021: €682,000) of internal development & patent related costs were capitalised and included in intangible fixed assets, including €488,000 (2021: €524,000) which were capitalised within Tricoya Technologies Limited (‘TTL’). In addition €375,000 of internal costs have been capitalised in relation to our current Arnhem Accoya® plant expansion project (2021: €336,000) and €739,000 of internal costs have been capitalised in relation to our plant build in Hull, UK (2021: €38,000). Both are included within tangible fixed assets.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 138

5. Exceptional items and other adjustments

	2022 €’000	2021 €’000
Redundancy costs in relation to purchase of assets to grow Accoya® Color production	(133)	–
Early termination of loans – redemption fee & accelerated amortisation of transaction costs	(1,619)	–
Total exceptional items	(1,752)	–
Foreign exchange differences arising on Tricoya® & Corporate cash held – Operating costs	(3)	103
Foreign exchange differences arising on Loan Notes – incl. in Finance expense	231	(900)
Foreign exchange differences on Tricoya® – Other comprehensive income/(loss)	8	18
Foreign exchange differences on Corporate USD cash held for investment in to USA JV – incl. in Finance expense	2,080	–
Revaluation of USD cash pledged to ABN Amro – incl. in Finance expense	(148)	–
Revaluation of FX forwards used for cash-flow hedging – Other comprehensive income/ (loss)	58	174
Total other adjustments	2,226	(605)
Tax on exceptional items and other adjustments	–	–
Total exceptional items and other adjustments	474	(605)

Exceptional Items

In July 2021, Accsys entered into a sale and purchase agreement with Lignia Wood Company Limited and its administrators, to acquire certain assets, equipment and technology along with its manufacturing plant in Barry, Wales for a consideration of €1.2m, including €0.5m for raw wood inventory (see note 34). The purchased assets will enable Accsys to grow production and availability of Accoya® Color more rapidly, accelerating the launch of the product into more geographic markets and for more product applications. As part of this purchase, redundancy costs of €133,000 were incurred in relation to staff at the Barry site. In October 2021, Accsys completed the refinance of its Group debt facilities, with a new bilateral agreement with ABN Amro. Loans previously held with ABN Amro, Cerdia Produktions GmbH, Bruil, Volantis and Business Growth Fund (BGF) where repaid. In addition to simplifying our debt arrangements, this has helped significantly reduce our cost of debt going forward. Early redemption fees totalling €1.4m were paid, and the amortisation of previously capitalised transaction fees related to these repaid loans was accelerated.

Other Adjustments

Foreign exchange differences in the Tricoya® segment have occurred due to pounds sterling held within the consortium for the ongoing Hull plant build and to a lesser extent, pounds sterling held within the Corporate segment for future sterling corporate costs. The effective portion of the foreign exchange movement is recognised in other comprehensive income, with the ineffective portion recognised in Operating costs. Foreign exchange differences in the Corporate segment have also occurred due to US dollars held for investment into the Accoya USA Joint Venture. Following the May 2021 equity raise, the amount raised to invest into Accoya USA was translated into US dollars and held in cash ensuring that foreign exchange movements did not decrease the amount raised below the future US dollar investment into Accoya USA. This treatment did not meet the requirements for hedge accounting under IFRS 9, Financials instruments, and therefore the foreign exchange gain on the revaluation of the US dollars has been accounted for in Finance expenses. Foreign exchange differences also arise on the pounds sterling denominated loan notes, entered into in a prior period (see note 29). These exchange rate differences are included as finance expenses.

for the year ended 31 March 2022
NOTES TO THE FINANCIAL STATEMENTS continued
OVERVIEW STRATEGIC REPORT
139
GOVERNANCE FINANCIAL STATEMENTS

6. Employees

	2022 €’000	2021 €’000
Staff costs (including Directors) consist of:
Wages and salaries	17,007	14,394
Social security costs	2,620	2,206
Other pension costs	1,381	1,008
Share based payments	140	869
Total	21,148	18,477

Pension costs relate to defined contribution plan contributions. The average monthly number of employees, including Executive Directors, during the year was as follows:

	2022	2021
Sales and marketing, administration, research and engineering	134	112
Operating	110	87
Total	244	199

7. Directors’ remuneration

	2022 €’000	2021 €’000
Directors’ remuneration consists of:
Directors’ emoluments	931	1,187
Company contributions to money purchase pension schemes	43	41
Total	974	1,228

Compensation of key management personnel included the following amounts:

	Salary, bonus and short term benefits €’000	Pension €’000	Share based payments charge €’000	2022 Total €’000	2021 Total €’000
Rob Harris	492	27	49	568	612
William Rudge	301	16	(9)	308	390
Total	793	43	40	876	1,002

The Group made contributions to one (2021: one) Director’s personal pension plan, with Robert Harris receiving cash in lieu of pension. The figures in the above table are impacted by foreign exchange noting that the remuneration for R Harris and W Rudge are denominated in Pounds Sterling.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 140

8.## 11. Finance expense

	2022 €’000	2021 €’000
Arnhem land and buildings lease ﬁnance charge	183	187
Interest on loans	2,282	2,767
Interest on lease liabilities	139	144
Other ﬁnance expenses	289	152
Total underlying ﬁnance expenses	2,893	3,250
Exceptional items and other adjustments
Foreign exchange (gain)/loss on loan notes	(231)	900
Revaluation of USD cash pledged to ABN Amro	148	–
Early termination of loans – redemption fee & accelerated amortisation of transaction costs	1,619	–
Foreign exchange (gain)/loss on Corporate USD cash held for investment in to USA JV	(2,080)	–
	–	900

for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued
OVERVIEW STRATEGIC REPORT 143143 GOVERNANCE FINANCIAL STATEMENTS

12. Tax expense

	2022 €’000	2021 €’000
(a) Tax recognised in the statement of comprehensive income comprises:
Current tax charge
UK Corporation tax on losses for the year	–	–
Research and development tax (credit)/expense in respect of current year	(314)	24
	(314)	24
Overseas tax at rate of 15%	24	11
Overseas tax at rate of 25%	1,305	1,216
Deferred Tax
Utilisation of deferred tax asset	–	–
Total tax charge reported in the statement of comprehensive income	1,015	1,251

	2022 €’000	2021 €’000
(b) The tax charge for the period is higher than the standard rate of corporation tax in the UK (2022 & 2021: 19%) due to:
Proﬁt/(Loss) before tax	1,713	340
Expected tax charge at 19% (2021 – 19%)	325	65
Expenses not deductible in determining taxable proﬁt	142	153
Over provision in respect of prior years	–	–
Tax losses for which no deferred income tax asset was recognised	541	880
Effects of overseas taxation	320	130
Research and development tax charge in respect of prior years	(190)	79
Research and development tax (credit) in respect of current year	(123)	(56)
Total tax charge reported in the statement of comprehensive income	1,015	1,251

In March 2021, the UK Government announced that from 1 April 2023 the corporation tax rate will increase to 25% from 1 April 2023. There is no material impact on the Group’s current and deferred taxation balances.

	Deferred tax assets	Deferred tax liabilities
	2022	2021
At 1 April	–	–
Credited/(charged) to the consolidated income statement	484	–
At 31 March	484	–

Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reﬂected in these ﬁnancial statements.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 144

13. Dividends Paid

	2022 €’000	2021 €’000
Final Dividend €Nil (2021: €Nil) per Ordinary share proposed and paid during year relating to the previous year’s results	–	–

14. Basic and diluted proﬁt/(loss) per ordinary share

The calculation of proﬁt per ordinary share is based on proﬁt after tax and the weighted average number of ordinary shares in issue during the year.

	2022	2021
	Underlying	Total
Basic earnings per share
Weighted average number of Ordinary shares in issue (‘000)	190,446	190,446
Proﬁt/(Loss) for the year attributable to owners of Accsys Technologies PLC (€’000)	1,930	2,338
Basic proﬁt/(loss) per share €	0.01	0.01
Diluted earnings per share
Weighted average number of Ordinary shares in issue (‘000)	190,446	190,446
Equity options attributable to BGF	8,449	8,449
Weighted average number of Ordinary shares in issue and potential ordinary shares (‘000)	198,895	198,895
Proﬁt/(Loss) for the year attributable to owners of Accsys Technologies PLC (€’000)	1,930	2,338
Diluted proﬁt/(loss) per share €	0.01	0.01

for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued
OVERVIEW STRATEGIC REPORT 145145 GOVERNANCE FINANCIAL STATEMENTS

15. Share based payments

The Group operates a number of share schemes which give rise to a share based payment charge. The Group operates a Long Term Incentive Plan (‘LTIP’) in order to reward certain members of staff including the Senior Management team and the Executive Directors.

Options – total

The following ﬁgures take into account options awarded under the LTIP, together with share options awarded in previous years under the 2008 Share Option schemes.# 15. Share based payments

Long Term Incentive Plan (‘LTIP’)

Outstanding options granted are as follows:

Date of grant	Number of outstanding options at 31 March 2022	Number of outstanding options at 31 March 2021	Weighted average remaining contractual life, in years 2022	Weighted average remaining contractual life, in years 2021
1 August 2011	90,000	–	0.3	–
19 September 2013 (LTIP)	599,880	918,226	1.5	2.5
24 June 2016 (LTIP)	183,320	494,433	4.3	5.3
20 June 2017 (LTIP)	326,999	326,999	5.3	6.3
18 June 2018 (LTIP)	185,840	185,840	6.3	7.3
25 June 2019 (LTIP) 1	475,258	541,049	7.3	8.3
20 November 2019 (LTIP) 1	105,699	105,699	7.7	8.7
23 December 2019 (LTIP) 1	41,468	41,468	7.8	8.8
15 July 2020 (LTIP)	1,172,290	1,267,657	8.3	9.3
23 June 2021 (LTIP)	868,889	–	9.3	–
Total	3,959,643	3,971,371	6.8	6.5

1 622,425 nil cost options are outstanding in the 2019 LTIP award at 31 March 2022 but no options are estimated to vest on the relevant vesting dates in the 2022 calendar year.

Movements in the weighted average values are as follows:

	Weighted average exercise price	Number
Outstanding at 01 April 2020	€ 0.01	4,670,808
Granted during the year	€ 0.00	1,326,966
Forfeited during the year	€ 0.00	(766,954)
Exercised during the year	€ 0.00	(1,259,449)
Expired during the year	€ 0.00	–
Outstanding at 31 March 2021	€ 0.01	3,971,371
Granted during the year	€ 0.00	918,659
Forfeited during the year	€ 0.00	(210,928)
Exercised during the year	€ 0.00	(629,459)
Expired during the year	€ 0.50	(90,000)
Outstanding at 31 March 2022	€ 0.00	3,959,643

The exercise price of options outstanding at the end of the year was €nil (for LTIP options) (2021: €nil and €0.50) and their weighted average contractual life was 6.8 years (2021: 6.5 years). Of the total number of options outstanding at the end of the year 1,296,039 (2021: 1,829,658) had vested and were exercisable at the end of the year.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 146

15. Share based payments continued

Long Term Incentive Plan (‘LTIP’)

In 2013, the Group established a Long Term Incentive Plan, the participants of which are key members of the Senior Management Team, including Executive Directors. The establishment of the LTIP was approved by the shareholders at the AGM in September 2013.

2013 LTIP Award performance conditions and 2016 outcome

The LTIP in 2013 awarded 4,103,456 nil cost options and 2,472,550 vested in the ﬁnancial year end 31 March 2017. 599,880 nil cost options remain as at 31 March 2022 after allowing for forfeitures and options exercised in the year.

2016 LTIP Award performance conditions and 2019 outcome

The LTIP in 2016 awarded 1,070,255 nil cost options and 494,433 vested in the ﬁnancial year end 31 March 2020. 183,320 nil cost options remain as at 31 March 2022 after allowing for forfeitures and options exercised in the year.

2017 LTIP Award performance conditions and 2020 outcome

The LTIP in 2017 awarded 1,087,842 nil cost options and 326,999 vested in the ﬁnancial year end 31 March 2021. 326,999 nil cost options remain as at 31 March 2022 after allowing for forfeitures and options exercised in the year.

2018 LTIP Award performance conditions and 2021 outcome

The LTIP in 2018 awarded 1,170,160 nil cost options and 185,840 vested in the ﬁnancial year end 31 March 2022. 185,840 nil cost options remain as at 31 March 2022 after allowing for forfeitures and options exercised in theyear.

Awards made in year ended 31 March 2020 and LTIP Award performance conditions

During the year ended 31 March 2020, a total of 810,520 LTIP awards were made primarily to members of the Senior Management team including the Executive Directors:

The performance targets for 686,049 of these awards are as follows:

Metric	Weighting (% of award)	Threshold	Target	Maximum	Vesting (% of maximum)
EBITDA per share in FY22	60%	€0.10	€0.14	€0.22	70%
Total sales volume in FY22 (m 3 )	40%	82,000	86,000	100,000	100%

Vesting is on a straight-line basis between the above points.
Appropriate adjustments may be made to ensure fair and consistent performance measurement over the performance period in line with the business plan and intended stretch of the targets at the point of award.
EBITDA per share targets are set and determined so as to exclude licensing income.
Sales Volume is deﬁned as combined sales volume (in cubic metres, or equivalent) of Accoya® and Tricoya®.

Element	Element A (EBITDA per share)	Element B (Sales volume growth)
Grant date	25 Jun 19	25 Jun 19
Share price at grant date (€)	1.32	1.32
Exercise price (€)	0.00	0.00
Expected life (years)	3	3
Contractual life (years)	10	10
Vesting conditions (Details set out above)	EBITDA	Sales volume growth
Risk free rate	-0.74%	-0.74%
Expected volatility	20%	20%
Expected dividend yield	0%	0%
Fair value of option (€)	1.221	1.221

for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued
OVERVIEW STRATEGIC REPORT
147147
GOVERNANCE FINANCIAL STATEMENTS

On 20th November 2019 and 23rd December 2019, a total of 147,167 LTIP awards (included in the 686,049 LTIP awards above) were made to 2 new employees with the same performance targets as illustrated above. The fair value of these awards were €1.05 per option. The remaining 124,471 of the awards made in summer 2019 were speciﬁc to individuals dedicated to the Tricoya® consortium with performance measures linked to progress and development of the Tricoya® plant and its subsequent operation. The fair value of these options were €1.221 on their Grant date. All of the above awards, made in the year ended 31 March 2020 are subject to a three year performance period (i.e.year end March 2022) and a further two year holding period. In addition, awards are also subject to malus/ claw-back provisions. As at 31 March 2022, no share options are estimated to vest.

Awards made in July 2020 and LTIP Award performance conditions

During the prior year, a total of 1,326,966 LTIP awards were made primarily to members of the Senior Management team including the Executive Directors:

The performance targets for 1,255,829 of these awards are as follows:

Metric	Weighting (% of award)	Threshold	Stretch	Maximum	Vesting (% of maximum)
EBITDA per share in FY23	60%	€0.14	€0.19	€0.24	70%
Total sales volume in FY23 (m3)	40%	90,000	105,000	112,720	100%

Vesting is on a straight-line basis between points in the schedule.
Appropriate adjustments may be made to ensure fair and consistent performance measurement over the performance period in line with the business plan and intended stretch of the targets at the point of award.
EBITDA per share targets are set and determined so as to exclude licensing income.
Sales Volume is deﬁned as combined sales volume (in cubic metres, or equivalent) of Accoya® and Tricoya®.
Vesting of the Sales Volume component will be subject to the achievement of a threshold level of EBITDA.

Element	Element A (EBITDA per share)	Element B (Sales volume growth)
Grant date	15 July 20	15 July 20
Share price at grant date (€)	1.00	1.00
Exercise price (€)	0.00	0.00
Expected life (years)	3	3
Contractual life (years)	10	10
Vesting conditions (Details set out above)	EBITDA	Sales volume growth
Risk free rate	-0.69%	-0.69%
Expected volatility	20%	20%
Expected dividend yield	0%	0%
Fair value of option (€)	0.998	0.998

The remaining 71,137 of the awards made in summer 2020 were speciﬁc to individuals dedicated to the Tricoya® consortium with performance measures linked to progress and development of the Tricoya® plant and its subsequent operation. The fair value of these options were €0.998 on their Grant date. All of the above awards, made in summer 2020 are subject to a three year performance period (i.e. year end March 2023) and a further two year holding period. In addition, awards are also subject to malus/ claw-back provisions.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 148

15. Share based payments continued

Long Term Incentive Plan (‘LTIP’) continued

Awards made in July 2021 and LTIP Award performance conditions

During the year, a total of 918,659 LTIP awards were made primarily to members of the Senior Management team including the Executive Directors:

The performance targets for 863,624 of these awards are as follows:

Metric	Weighting (% of award)	Threshold	Maximum	Vesting (% of maximum)
EBITDA per share in FY24	60%	€0.15	€0.24	100%
Cumulative Sales Volume (FY22 to FY24) (m 3 )	30%	267,000	297,000	100%
ESG – improvement in reporting ratings	10%	33%		100%
on attaining each of the 3-year milestones: Y1 – Attain investor ESG external rating/score Y2 – Improve or at least maintain ESGexternalrating/score Y3 – Improve or at least maintain ESGexternalrating/score

Vesting is on a straight-line basis between points in the schedule.
Appropriate adjustments may be made to ensure fair and consistent performance measurement over the performance period in line with the business plan and intended stretch of the targets at the point of award.
EBITDA per share targets are set and determined so as to exclude licensing income.
Sales Volume is deﬁned as combined sales volume (in cubic metres, or equivalent) of Accoya® and Tricoya®.

Element	Element A (EBITDA per share)	Element B (Sales volume growth)	Element C (ESG Reporting Metrics)
Grant date	23 Jun 21	23 Jun 21	23 Jun 21
Share price at grant date (€)	2.06	2.06	2.06
Exercise price (€)	0.00	0.00	0.00
Expected life (years)	3	3	3
Contractual life (years)	10	10	10
Vesting conditions (Details set out above)	EBITDA	Sales volume growth	ESG reporting metrics
Risk free rate	-0.67%	-0.67%	-0.67%
Expected volatility	20%	20%	20%
Expected dividend yield	0%	0%	0%
Fair value of option (€)	2.060	2.060	2.060

The remaining 55,035 of the awards made in summer 2021 were speciﬁc to individuals dedicated to the Tricoya® consortium with performance measure linked to progress and development of the Tricoya® plant and its subsequent operation. The fair value of these options were €2.06 on their Grant date. All of the above awards, made in summer 2021 are subject to a three year performance period (i.e.# NOTES TO THE FINANCIAL STATEMENTS

OVERVIEW STRATEGIC REPORT

149 2008 Share Option schemes

Awards made in earlier years had no impact on the income statement in the current or prior year and with the smaller number of options remaining at the beginning of the current financial year, expiring during the year, no further details have been disclosed.

Employee Benefit Trust – Share bonus award

Following a share issue on 23 June 2020 as part of the annual bonus, in connection with the employee remuneration and incentivisation arrangements for the period from 1 April 2019 to 31 March 2020, 629,217 Ordinary shares awarded in the prior year vested. No similar award was made during the year ended 31 March 2022.

Employee Share Participation Plan

The Employee Share Participation Plan (the ‘Plan’) is intended to promote the long term growth and profitability of Accsys by providing employees with an opportunity to acquire an ownership interest in new Ordinary shares (‘Shares’) in the Company as an additional benefit of employment. Under the terms of the Plan, the Company issues these Shares to a trust for the benefit of the subscribing employees. The Shares are released to employees after one year, together with an additional Share on a 1 for 1 matched basis provided the employee has remained in the employment of Accsys at that point in time (subject to good leaver provisions). The Plan is in line with industry approved employee share plans and is open for subscription by employees once a year following release of the interim financial results. The maximum amount available for subscription by any employee is €5,000 per annum.

In January 2022 various employees subscribed for a total of 193,424 Shares at an acquisition price of €2.02 per Share. Also during the year, 1 for 1 Matching shares were awarded in respect of subscriptions that were made in the previous year as a result of the participants continuing to remain in employment at the point of vesting. 189,931 matching shares were issued to employees in January 2022.

Accsys Technologies PLC – Annual Report and Financial Statements 2022

150 16. Intangible assets

	Internal Development costs €’000	Intellectual property rights €’000	Goodwill €’000	Total €’000
Cost
At 1 April 2020	7,187	74,051	4,231	85,469
Additions	277	405	–	682
At 31 March 2021	7,464	74,456	4,231	86,151
Additions	178	536	–	714
At 31 March 2022	7,642	74,992	4,231	86,865
Accumulated amortisation
At 1 April 2020	2,146	72,337	–	74,483
Amortisation	364	439	–	803
At 31 March 2021	2,510	72,776	–	75,286
Amortisation	384	361	–	745
At 31 March 2022	2,894	73,137	–	76,031
Net book value
At 31 March 2022	4,748	1,855	4,231	10,834
At 31 March 2021	4,954	1,680	4,231	10,865
At 31 March 2020	5,041	1,714	4,231	10,986

Refer to note 17 for the recoverability assessment of these intangible assets.

for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued

OVERVIEW STRATEGIC REPORT

151 17. Property, plant and equipment

	Land and buildings €’000	Plant and machinery €’000	Ofﬁce equipment €’000	Total €’000
Cost or valuation
At 1 April 2020	17,976	125,691	3,243	146,910
Additions	–	20,742	651	21,393
Foreign currency translation (loss)	–	–	(9)	(9)
At 31 March 2021	17,976	146,433	3,885	168,294
Additions	–	41,012	461	41,473
Foreign currency translation (loss)	–	–	7	7
At 31 March 2022	17,976	187,445	4,353	209,774
Accumulated depreciation
At 1 April 2020	637	22,696	1,454	24,787
Charge for the year	358	3,249	351	3,958
Foreign currency translation (loss)	–	–	(8)	(8)
At 31 March 2021	995	25,945	1,797	28,737
Charge for the year	358	3,550	461	4,369
Foreign currency translation (loss)	–	–	7	7
At 31 March 2022	1,353	29,495	2,265	33,113
Net book value
At 31 March 2022	16,623	157,950	2,088	176,661
At 31 March 2021	16,981	120,488	2,088	139,557
At 1 April 2020	17,339	102,995	1,789	122,123

Plant and machinery assets with a net book value of €93,560,000 are held as assets under construction and are not depreciated, relating to the Hull Plant, and €30,593,000 relating to the further expansion of the Arnhem Plant (31 March 2021: €80,853,000 relating to the Hull Plant, €5,716,000 relating to the Arnhem Plant).

The carrying value of the property, plant and equipment, internal development costs and intellectual property rights are split between two cash generating units (CGUs), representing the Accoya® and Tricoya® segments and the carrying value of Goodwill is allocated to the Accoya® segment. The recoverable amount of these CGUs are determined based on a value-in-use calculations which uses cash flow projections based on latest board approved financial budgets. Cash flows have been projected for a period of 5 years plus a terminal value discounted at a pre-tax discount rate of 10.5% (2021: 10.5%) and a 1.8% growth rate to determine their present value.

Accsys Technologies PLC – Annual Report and Financial Statements 2022

152 17. Property, plant and equipment continued

The key assumptions used in the value in use calculations are:
• the manufacturing revenues, operating margins & future licence fees estimated by management,
• the completion of construction of additional facilities on time (and associated output),
• the long term growth rate and
• the discount rate.

The Directors have determined that there has been no impairment to either CGU. The Directors have considered whether a reasonably possible change in assumptions may result in an impairment. The CGU most susceptible to an impairment given a change in assumptions is the Tricoya® CGU. Key assumptions applied to this CGU were as follows:
• a discount rate of 10.5%,
• a long-term sales growth rate of 1.8%, and
• Gross margin of approximately 40%.

The headroom in the value-in-use model for this CGU would be reduced to nil if the following adverse changes to those key assumptions were made in isolation:
• a 1.3% increase to the discount rate,
• a 1.8% reduction in the long-term sales growth rate and
• a 3% decrease to Gross margin.
• an increase of 84% above assumed remaining costs to complete the plant.

18. Leases

(i) Amounts recognised in the statement of financial position

The statement of financial position shows the following amounts relating to leases:

	2022 €’000	2021 €’000
Right-of-use assets
Properties	4,023	4,113
Equipment	569	671
Motor Vehicles	40	75
	4,632	4,859

	2022 €’000	2021 €’000
Minimum lease payments
Amounts payable under lease liabilities:
Within one year	1,250	1,208
In the second to fifth years inclusive	2,390	2,631
After five years	3,972	4,369
Less: future finance charges	(2,395)	(2,676)
Present value of lease obligations	5,217	5,532

Additions to the right-of-use assets during the financial year were €801,000 (2021: €1,303,000).

for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued

OVERVIEW STRATEGIC REPORT

153 (ii) Amounts recognised in the statement of profit and loss

The statement of profit and loss shows the following amounts relating to leases:

	2022 €’000	2021 €’000
Depreciation charge of right-of-use assets
Properties	807	664
Equipment	209	279
Motor Vehicles	34	33
	1,050	976
Interest expense (included in finance cost)	322	331
Expense relating to short-term leases (included in cost of goods sold and administrative expenses)	83	30
Expense relating to leases of low-value assets that are not shown above as short-term leases (included in administrative expenses)	20	2
Expense relating to variable lease payments not included in lease liabilities (included in administrative expenses)	–	–

The total cash outflow for leases in 2022 was €1,089,000 (2021: €1,308,000).

The Group’s leasing activities and how these are accounted for: The Group leases various offices, land, equipment and cars. Rental contracts are typically made for fixed periods of 1-10 years, although, if appropriate, a longer term may be entered into. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.

Lease extension options and lease termination options are only included in the calculation of the lease liability if there is reasonable certainty that they will be exercised. Some of the Group’s leases have extension and termination options attached to them. Lease extension options and lease termination options are only included in the calculation of the lease liability if there is reasonable certainty that they will be exercised.

Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the statement of comprehensive income over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right of use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
• Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payments that are based on an index or a rate;
• Amounts expected to be payable by the lessee under residual value guarantees;
• The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
• Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.# NOTES TO THE FINANCIAL STATEMENTS continued

18. Leases

The lease payments are discounted using the Group’s incremental borrowing rate, being the rate that the Group would have to pay to borrow the funds necessary to obtain an asset of similar economic environment within similar terms and conditions.

Right of use assets are measured at cost comprising the following:
* The amount of initial measurement of lease liability;
* Any lease payments made at or before the commencement date less any lease incentives received;
* Any initial direct costs; and
* Restoration costs.

Payments associated with short-term leases and leases of low value are recognised on a straight-line basis as an expense in the statement of comprehensive income. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise of small items of ofﬁce furniture and equipment.

19. Financial asset at fair value through proﬁt or loss

	2022 €’000	2021 €’000
Share held in Cleantech Building Materials PLC	–	–

Accsys Technologies PLC has previously purchased a total of 21,666,734 unlisted ordinary shares in Diamond Wood China. On 23 December 2016, Cleantech Building Materials PLC acquired Diamond Wood China. On 19 April 2017 Cleantech Building Materials acquired the 21,666,734 shares previously owned by the Company and in return the Company has been issued with 520,001 shares in Cleantech Building Materials PLC, a listed company trading on the Nasdaq First North market in Copenhagen. There continues to be no active market for these shares as at 31 March 2022, and there is signiﬁcant uncertainty over the future of Cleantech Building Materials PLC. As such a reliable fair value cannot be calculated and the investment is carried at a nil fair value (2021: nil). A total of 498,522 shares were held at 31 March 2022.

20. Deferred taxation

The Group has a recognised deferred tax asset of €484,000 (2021: €nil) offsetting a recognised deferred tax liability of €484,000 (2021: €nil). See note 12. The Group also has an unrecognised deferred tax asset of €42m (2021: €30m) which is largely in respect of trading losses of the UK subsidiaries and has been calculated using the tax rate which is expected to be applicable when the tax losses are expected to be utilised (see note 12 for the announced increase in UK tax rates to 25% from 1 April 2023). The deferred tax asset has been recognised only to the extent of the deferred tax liability, due to the uncertainty of the timing of future expected proﬁts of the related legal entities which is dependent on the proﬁts attributable to licensing and future manufacturing income.

21. Subsidiaries

A list of subsidiary investments, including the name, country of incorporation and proportion of ownership interest is given in note 4 to the Company’s separate ﬁnancial statements.

22. Inventories

	2022 €’000	2021 €’000
Raw materials and work in progress	16,978	7,339
Finished goods	3,393	4,923
Total	20,371	12,262

The amount of inventories recognised as an expense during the year was €67,697,839 (2021: €60,907,693). The cost of inventories recognised as an expense includes a net credit of €20,212 (2021: credit of €2,739) in respect of the inventories sold in the period which had previously been written down to net realisable value.

23. Trade and other receivables

	2022 €’000	2021 €’000
Trade receivables	13,162	9,836
Other receivables	736	575
VAT receivable	2,203	1,013
Prepayments	833	890
Total	16,934	12,314

The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value. Trade and other receivables in the above table are stated net of provision for doubtful debts. The majority of trade and other receivables is denominated in Euros, with €3,342,000 of the trade and other receivables denominated in US Dollars (2021: €1,597,000).

The age of receivables past due but not impaired is as follows:

	2022 €’000	2021 €’000
Up to 30 days overdue	1,248	409
Over 30 days and up to 60 days overdue	–	6
Over 60 days and up to 90 days overdue	–	–
Over 90 days overdue	24	49
Total	1,272	464

In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the trade receivables from the date credit was initially granted up to the reporting date. Included in the provision are trade receivables and accrued income with a balance of €25,002,000 (2021: €25,002,000).

Movement in provision for doubtful debts:

	2022 €’000	2021 €’000
Balance at the beginning of the year	25,002	25,239
Net (decrease)/increase of impairment	–	(237)
Balance at the end of the year	25,002	25,002

24. Trade and other payables

	2022 €’000	2021 €’000
Trade payables	16,655	9,451
Other taxes and social security payable	1,754	1,104
Accruals and deferred income	11,471	19,255
Total	29,880	29,810

The increase in Trade and other payables primarily relates to the timing of accruals associated with the construction of the Hull plant with actual cash payments being lower, reﬂecting the timing of milestone payments in relation to construction.

25. Share capital

	2022 €’000	2021 €’000
Allotted – Equity share capital
Ordinary shares of €0.05 each (2021: 169,324,264 Ordinary shares of €0.05 each)	9,638	8,466
Total	9,638	8,466
(Note: 2022: 192,761,322)

All ordinary shares are called up, allotted and fully paid.

In the year ended 31 March 2021:
* 1,259,449 shares were issued on 12 May 2020 following the exercise of nil cost options, granted under the Company’s 2013 Long Term Incentive Plan (‘LTIP’).
* 727,250 shares were issued to an Employee Beneﬁt Trust (‘EBT’) on 29 June 2020 at nominal value, in lieu of cash bonuses for the year ended 31 March 2020. These shares will vest on 1 July 2021, subject to the employees continuing employment within the Group.
* In February 2021, following the subscription by employees in the prior year for shares under the Employee Share Participation Plan (the ‘Plan’), 198,219 shares were issued as “Matching Shares” at nominal value under the Plan. In addition, various employees newly subscribed under the Plan for 195,524 Shares at an acquisition price of €1.43 per share, with these shares issued to a trust, to be released to the employees after one year, together with an additional share on a matched basis (subject to continuing employment within the Group).
* On 26 March 2021, the Company announced that Lombard Odier Asset Management (USA) Corp on behalf of 1798 Volantis Catalyst Fund II Ltd (‘Volantis’) exercised options over a total of 4,655,667 ordinary shares in the Company for a total consideration of £2,779,898.77 (exercise price of £0.5971 per ordinary share) (see note 30 to the ﬁnancial statements).

In the year ended 31 March 2022:
* In May 2021, 20,005,325 Placing Shares and 2,418,918 Open Offer Shares were issued as part of the capital raise to fund the Company’s investment in expanding its Accoya® business into North America through the construction of a new Accoya® plant in the USA through its joint venture, Accoya USA LLC, with Eastman Chemical Company (see note 28), as well as to provide additional capital to support the Company’s continued growth. The Shares were issued at a price of €1.65 (£1.40) per ordinary share, raising gross proceeds of €36.7 million (before expenses).
* Between June and September 2021, a total of 629,460 shares were issued following the exercise of nil cost options, granted under the Company’s 2013 Long Term Incentive Plan (‘LTIP’).
* In February 2022, following the subscription by employees in the prior year for shares under the Employee Share Participation Plan (the ‘Plan’), 189,931 shares were issued as “Matching Shares” at nominal value under the Plan. In addition, various employees newly subscribed under the Plan for 193,424 Shares at an acquisition price of €2.015 per share, with these shares issued to a trust, to be released to the employees after one year, together with an additional share on a matched basis (subject to continuing employment within the Group).

26. Other reserves

	Capital redemption reserve €000	Merger reserve €000	Hedging Effectiveness reserve €000	Other reserve €000	Total Other reserves €000
Balance at 01 April 2020	148	106,707	37	5,659	112,551
Total comprehensive income for the period	–	–	192	–	192
Issue of subsidiary shares to non-controlling interests	–	–	–	1,892	1,892
Balance at 31 March 2021	148	106,707	229	7,551	114,635
Total comprehensive income for the period	–	–	66	–	66
Balance at 31 March 2022	148	106,707	295	7,551	114,701

The closing balance of the capital redemption reserve represents the amounts transferred from share capital on redemption of deferred shares in a previous year. The merger reserve arose prior to transition to IFRS when merger accounting was adopted. The hedging effectiveness reserve reﬂects the total accounted for under IFRS 9 in relation to the Tricoya® & Corporate segments (see note 1). The other reserve represents the amounts received for subsidiary share capital from non-controlling interests net with the carrying amount of non-controlling interests issued (see note 27).

27. Transactions with non-controlling interests

In the year ended 31 March 2021:
* On 15 June 2020, TTL issued 281,919 shares to Titan Wood Limited for a consideration of €0.6m. An additional 68,081 shares were issued to non-controlling interests for a consideration of €0.1m.
* On 2 July 2020, TTL issued 90,956 shares to Titan Wood Limited for a consideration of €0.2m.An additional 416,694 shares were issued to non-controlling interests for a consideration of €0.8m and an additional 495,310 shares were issued in consideration for continued provision of discounted Accoya® to MEDITE for market seeding purposes. On 29 October 2020, TTL issued 1,862,356 shares to Titan Wood Limited for a consideration of €3.7m. An additional 498,987 shares were issued to non-controlling interests for a consideration of €1.0m. On 31 December 2020, BP Ventures’ share capital of TTL was acquired by INEOS Acetyls Investments Limited (“INEOS”). As a result the non-controlling interests’ shareholdings were amended to: INEOS (8.5%), MEDITE (11.3%), BGF (2.6%), Volantis (1.1%). On 17 July 2020, Tricoya UK issued 486,572 Ordinary shares to Tricoya Technologies Ltd for a consideration of €1.0m. An additional 1,600,530 shares were issued to non-controlling interests for consideration of €1.6m. On 29 October 2020, Tricoya UK issued 3,972,686 Ordinary shares to Tricoya Technologies Ltd for a consideration of €4.0m. An additional 2,452,798 shares were issued to non-controlling interests for consideration of €2.5m. On 31 December 2020, BP Chemicals’ share capital of Tricoya UK was acquired by INEOS. As a result the non-controlling interests’ shareholdings were amended to: INEOS (30.0%, MEDITE 8.2%). In the year ended 31 March 2022: No shares were issued in the year ended to 31 March 2022. The total carrying amount of the non-controlling interests in TTL and Tricoya UK at 31 March 2022 was €35.53m (2021: €37.17m).

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27. Transactions with non-controlling interests continued

In November 2021, Accsys agreed a new €17m loan to Tricoya UK to be used towards the Hull plant construction project alongside existing funding in place for Tricoya UK. The loan accrues interest, which is rolled up, at a rate between 5.25 and 6.75% above EURIBOR. The loan is secured and is repayable by 30 September 2023. At 31 March 2022, the Group had lent to Tricoya UK €8.8m under the facility. The Group recognised an increase in other reserves as summarised below.

	2022 €’000	2021 €’000
Opening Balance	8,127	6,235
Carrying amount of non-controlling interests issued	–	(4,112)
Consideration paid by non-controlling interests	–	6,004
Share issue costs relating to non-controlling interests	–	–
Excess of consideration paid recognised in Group’s equity	8,127	8,127

28. Investment in Joint Venture

In August 2020, Accsys together with Eastman Chemical Company formed a new company, Accoya USA LLC, with the intention to construct and operate an Accoya® wood production plant to serve the North American market. The new company has been formed with Accsys having a 60% equity interest and Eastman having a 40% equity interest, with the two parties assessed to jointly control the entity as defined under IFRS 11 – Joint arrangements. Accoya USA is accounted for as a joint venture and equity accounted for within the financial statements. A technology licence has also been entered into with Accoya USA LLC so that front-end engineering and design for the proposed plant in the USA can be completed. The plant is designed to initially produce approximately 40,000 cubic metres of Accoya® per annum and to allow for cost-effective expansion.

In March 2022, the final investment decision was made to proceed with the construction of the US facility. The total construction and start-up costs for the facility, including the initial two reactors, are expected to be approximately $136 million (‘Total project cost’). $66 million of the Total Project cost will be funded by equity contributions from Accsys (60%) and Eastman (40%). Accsys’ pro-rata share is $39.6 million (€34.9 million) of which $5.6 million (€4.8 million) has already been contributed to Accoya USA by 31 March 2022. Eastman has contributed $3.8 million to Accoya USA by 31 March 2022. $70 million of the Total Project cost, will be funded through an eight-year term loan to Accoya USA, LLC from First Horizon Bank (‘FHB’) of Tennessee, USA. FHB are also providing a further $10 million revolving line of credit to be utilised to fund working capital. The FHB term loan is secured on the assets of Accoya USA and will be supported by Accoya USA’s shareholders, including $50 million through a limited guarantee provided on a pro-rata basis, with Accsys’ 60% share representing $30 million (see note 31). The interest rate varies between 1.3% to 2.1% over USD LIBOR. Principal repayments commence one year following the completion and start-up of the facility, and are calculated on a ten-year amortisation period.

The carrying amount of the equity-accounted investment is as follows:

	2022 €’000	2021 €’000
Opening balance	326	–
Investment in Accoya® USA	3,751	1,070
Less: Accsys proportion (60%) of Licence fee received	(600)	(600)
Loss for the year	(261)	(144)
Closing balance	3,216	326

for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued
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159
GOVERNANCE
FINANCIAL STATEMENTS

29. Commitments under loan agreements

	2022 €’000	2021 €’000
Amounts payable under loan agreements:
Within one year	11,654	9,664
In the second to fifth years inclusive	52,335	44,626
In greater than five years	–	–
Present value of loan obligations	63,989	54,290
Within one year	12,973	12,012
In the second to fifth years inclusive	59,506	49,714
After five years	–	–
Less future finance charges	(8,490)	(7,436)
Present value of loan obligations	63,989	54,290

Refinancing of Group Debt Facilities

In October 2021 Accsys completed the refinance of its Group debt facilities through a new bilateral agreement with ABN AMRO, one of Accsys’ existing relationship banks. The new €60m 3-year bilateral facilities agreement with ABN AMRO comprised a:

€45m Term Loan Facility and,
€15m Revolving Credit Facility (‘RCF’).

The €45m Term Loan was fully utilised to repay all of the Group’s existing debt, with the exception of the NatWest facility held by the Tricoya® consortium which remains in place.

The Term Loan is partially amortising, with 5% of the principal repayable per annum after 18 months.
The applicable interest rate for the Term Loan varies between an all in cost of 1.75% and 3.25% depending on net leverage, resulting in a significant improvement compared to the previous facilities which had a weighted average cost of approximately 6%.
The RCF interest rate will similarly vary, but between 2.0% and 3.5% above EURIBOR. The RCF was subsequently increased to €25 million as part of the Accoya USA financing referred to below, with approximately €20 million utilised for the Letter of credit provided by ABN Amro to FHB in support of the Accoya USA JV funding arrangements, leaving approximately €5 million available as headroom on the facility. The €5m remaining headroom was undrawn at 31 March 2022.

The new facilities are secured against the assets of the Group which are 100% owned by the Company and include customary covenants such as net leverage and interest cover which are based upon the results and assets which are 100% owned by the Company.

Tricoya® facility:

In March 2017 the Company’s subsidiary, Tricoya UK Limited entered into a six-year €17.2 million finance facility agreement with Natwest Bank plc in respect of the construction and operation of the Hull Plant. The facility is secured by fixed and floating charges over all assets of Tricoya UK Limited. At 31 March 2022, the Group had €9.9m (2021: €9.3m) borrowed under the facility. The facility is to be drawn down as required, and facility repayments will commence 12 months after practical completion of the Hull Plant. Interest will accrue at Euribor plus a margin, with the margin ranging from 325 to 475 basis points. The facility will require re-financing with its term running until 31 March 2023. A €3m increase to the quantum of the facility is being sought given the additional costs identified for the Hull project but has not yet been agreed. As a result, while Natwest remains supportive of the project, the facility is in technical default given the unfunded cost overrun within Tricoya UK.

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Commitments under loan agreements continued

Accoya USA facility & De Engh facility:

In March 2022 the Company’s joint venture, Accoya USA agreed an eight-year $70 million loan from First Horizon Bank (‘FHB’) of Tennessee, USA in respect of the construction and operation of the Accoya® USA plant. FHB are also providing a further $10 million revolving line of credit to be utilised to fund working capital. The FHB term loan is secured on the assets of Accoya USA and is supported by Accoya USA’s shareholders, including $50 million through a limited guarantee provided on a pro-rata basis, with Accsys’ 60% share representing US$30 million (see note 28 & 31). The interest rate varies between 1.3% to 2.1% over USD LIBOR. Principal repayments commence one year following the completion and start-up of the facility, and are calculated on a ten-year amortisation period. Accoya USA is equity accounted for in these financial statements, therefore this Borrowing in not included in the Group’s borrowings. (See note 28).

To support Accsys’ limited guarantee, Accsys provided a $20 million Letter of Credit (‘LC’) to FHB. The LC is issued by ABN AMRO, utilising part of the revolving credit facility agreed in October 2021. To further support the LC, Accsys agreed a €10 million convertible loan with De Engh BV Limited (‘De Engh’), an investment company based in the Netherlands (the ‘Convertible Loan’). The Convertible Loan proceeds were placed with ABN AMRO solely as cash collateral to enable ABN AMRO to grant the $20 million LC to FHB. The Convertible Loan is unsecured and carries an interest margin of 6.75% above Euribor. Accsys expects to fully repay the Convertible Loan within two years.If the Convertible Loan is not repaid within this period, De Engh has an option (from the end of year two) to convert the outstanding loan balance to ordinary shares in Accsys at €2.30 per share (representing a 31% premium to the closing share price on 3 March 2022), otherwise the interest rate increases by 2% in year three and by a further 2% the following year if the loan has not been repaid or converted after 3 years. The maximum term of the Convertible Loan is 3.5 years.

Reconciliation to net debt:

	2022 €’000	2021 €’000
Cash and cash equivalents	42,054	47,598
Less: Amounts payable under loan agreements	(63,989)	(54,290)
Amounts payable under lease liabilities (note 18)	(5,217)	(5,532)
Net debt	(27,152)	(12,224)

Restricted cash

The cash and cash equivalents disclosed above and in the Consolidated statement of cash ﬂow includes $10 million which is pledged to ABN Amro as collateral for the $20million Letter of credit provided to FHB (see note 28 & 31).

Reconciliation to adjusted cash and adjusted net debt:

	2022 €’000	2021 €’000
Cash and cash equivalents	42,054	47,598
Less: Remaining cash committed to be contributed to Accoya USA	(27,857)	–
Less: Cash pledged to ABN for Letter of Credit	(9,852)	–
Adjusted cash	4,345	47,598
Net debt	(27,152)	(12,224)
Less: Remaining cash committed to be contributed to Accoya USA	(27,857)	–
Adjusted net debt	(55,009)	(12,224)

for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued

OVERVIEW STRATEGIC REPORT
161161
GOVERNANCE FINANCIAL STATEMENTS

Liabilities from ﬁnancing activities
	Borrowings €’000	Leases €’000	Sub-total €’000	Cash €’000	Total €’000
Net debt as at 01 April 2020	(57,313)	(5,121)	(62,434)	37,238	(25,196)
Cash ﬂows	2,474	1,308	3,782	10,294	14,076
Decrease in Cerdia Loan from Termination fee	3,200	–	3,200	–	3,200
New leases	–	(1,303)	(1,303)	–	(1,303)
Foreign exchange adjustments	(900)	(76)	(976)	66	(910)
Other changes	(1,751)	(340)	(2,091)	–	(2,091)
Net debt as at 31 March 2021	(54,290)	(5,532)	(59,822)	47,598	(12,224)
Cash ﬂows	(7,561)	1,089	(6,472)	(7,879)	(14,351)
New leases	–	(801)	(801)	–	(801)
Foreign exchange adjustments	231	(7)	224	2,335	2,559
Other changes	(2,369)	34	(2,335)	–	(2,335)
Net debt as at 31 March 2022	(63,989)	(5,217)	(69,206)	42,054	(27,152)

Equity options

On the 29 March 2017, the Company announced the formation of the Tricoya® Consortium and as part of this, funding was agreed with BGF and Volantis. In addition to the issue of the Loan Notes, which have since been repaid as part of the Group re-ﬁnance in October 2021 (see note 29), the Company granted options over Ordinary Shares of the Company to BGF and Volantis exercisable at a price of £0.62 per Ordinary Share at any time until 31 December 2026 (the ‘Options’). 5,838,954 Options were issued to BGF and 3,217,383 Options were issued to Volantis. In addition, the Company agreed to use its reasonable endeavours to obtain shareholder authority at the subsequent General Meeting to grant to BGF a further option in respect of 2,610,218 Ordinary Shares and to grant to Volantis a further option in respect of 1,438,284 Ordinary Shares (the ‘‘Additional Options’’). The necessary resolutions were passed at the General Meeting held on 21 April 2017 and accordingly the Additional Options were converted to Options. On 26 March 2021, the Company announced the Options issued to Volantis had been exercised in full for a total consideration of £2,779,898.77 payable to the Company, representing an exercise price per Ordinary Share of £0.62 as agreed on 29 March 2017 (adjusted to £0.5971 following a subsequent share issuance in April 2017). At 31 March 2022 a total 8,449,172 Options exist attributable to BGF. This represents 4.4% (2021: 5%) of the issued share capital of the Company as at 31 March 2022. See notes 29 & 35 for details on the convertible loan agreed with De Engh BV Limited.

Guarantee provided to FHB

In March 2022 the Company’s joint venture, Accoya USA agreed an eight-year $70million loan from First Horizon Bank (‘FHB’) of Tennessee, USA in respect of the construction and operation of the Accoya® USA plant and a further $10 million revolving line of credit to be utilised to fund working capital (see note 28 & 29). The FHB term loan is supported by Accoya USA’s shareholders, including US$50 million through a limited guarantee provided on a pro-rata basis, with Accsys’ 60% share representing $30 million (see note 28). To support Accsys’ limited guarantee, Accsys provided a US$20 million Letter of Credit, issued by ABN Amro, to FHB (see note 29). The $30 million limited guarantee provided to FHB is held at a fair value of € nil, representing a present value calculation of €8.8 million weighted by the estimated probability of FHB calling on the guarantee being 0%.

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32. Financial instruments

Financial instruments

Lease liabilities

Lease creditors of €5,217,000 as at 31 March 2022 (2021: €5,532,000) relates to various ofﬁces, land, equipment and cars that the Group leases (see note 18).

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders. The capital structure of the Group consists of cash and cash equivalents and equity attributable to owners of the parent Company, comprising share capital, reserves and accumulated losses. The Board reviews the capital structure on a regular basis. As part of that review, the Board considers the cost of capital and the risks associated with each class of capital. Based on the review, the Group will balance its overall capital structure through new share issues and the raising of debt if required. The Group’s strategy is to lower Net Debt / EBITDA ratio to approximately 2.5x over the longer term while remaining within covenant levels set in its ABN Amro and Natwest loan facilities. One of the key covenants under the ABN Amro facility is the Net Debt/EBITDA ratio based upon the results and assets which are 100% owned by the Company, with the covenant test reducing over time from an initial maximum of 4x to 2.5x. On this basis, Net Debt/ EBITDA ratio was calculated at 2.93 for the year ending 31 March 2022. No ﬁnal dividend is proposed in 2022 (2021: €nil). The Board deems it prudent for the Company to protect as strong a statement of ﬁnancial position as possible during the current phase of the Company’s growth strategy.

Financial Instruments by category

2022/€‘000
| | Fair value hierarchy | At amortised cost | At fair value though proﬁt or loss | At fair value through OCI | Total |
| :------------ | :------------------- | :---------------- | :--------------------------------- | :------------------------ | :---- |
| Financial assets | | | | | |
| Trade and other receivables | | 13,898 | – | – | 13,898 |
| Financial asset investments | Level 2 | – | – | – | – |
| Derivative ﬁnancial instruments (FX forward) | Level 2 | – | 3 | – | 3 |
| Cash and cash equivalents | | 42,054 | – | – | 42,054 |
| Total | | 55,952 | 3 | – | 55,955 |

2021/€‘000
| | Fair value hierarchy | At amortised cost | At fair value though proﬁt or loss | At fair value through OCI | Total |
| :------------ | :------------------- | :---------------- | :--------------------------------- | :------------------------ | :---- |
| Financial assets | | | | | |
| Trade and other receivables | | 10,411 | – | – | 10,411 |
| Financial asset investments | Level 2 | – | – | – | – |
| Derivative ﬁnancial instruments (FX forward) | Level 2 | – | 134 | – | 134 |
| Cash and cash equivalents | | 47,598 | – | – | 47,598 |
| Total | | 58,009 | 134 | – | 58,143 |

for the year ended 31 March 2022

NOTES TO THE FINANCIAL STATEMENTS continued

OVERVIEW STRATEGIC REPORT
163163
GOVERNANCE FINANCIAL STATEMENTS

2022/€‘000
| | Fair value hierarchy | At amortised cost | At fair value though proﬁt or loss | At fair value through OCI | Total |
| :---------------- | :------------------- | :---------------- | :--------------------------------- | :------------------------ | :---- |
| Financial liabilities | | | | | |
| Borrowings – loans | | (63,989) | – | – | (63,989) |
| Lease liabilities | | (5,217) | – | – | (5,217) |
| Trade and other payables | | (16,655) | – | – | (16,655) |
| Derivative ﬁnancial instruments (FX forward) | Level 2 | – | – | – | – |
| Total | | (85,861) | – | – | (85,861) |

2021/€‘000
| | Fair value hierarchy | At amortised cost | At fair value though proﬁt or loss | At fair value through OCI | Total |
| :---------------- | :------------------- | :---------------- | :--------------------------------- | :------------------------ | :---- |
| Financial liabilities | | | | | |
| Borrowings – loans | | (54,290) | – | – | (54,290) |
| Lease liabilities | | (5,532) | – | – | (5,532) |
| Trade and other payables | | (9,451) | – | – | (9,451) |
| Derivative ﬁnancial instruments (FX forward) | Level 2 | – | – | – | – |
| Total | | (69,273) | – | – | (69,273) |

Money market deposits are held at ﬁnancial institutions with high credit ratings (Standard & Poor’s rating of A). All assets and liabilities mature within one year except for the lease liabilities, for which details are given in note 18 and loans, for which details are given in note 29. Trade payables are payable on various terms, typically not longer than 30 to 60 days with the exception of some major capex items.

Market risk

The Group’s activities expose it primarily to the ﬁnancial risks of changes in foreign currency exchange rates and interest rates.

Financial risk management objectives

The Group’s treasury policy is structured to ensure that adequate ﬁnancial resources are available for the development of its business whilst managing its currency, interest rate, counterparty credit and liquidity risks. TheGroup’s treasury strategy and policy are developed centrally and approved by the Board.

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32. Financial instruments continued

Foreign currency risk management

The Group’s functional currency is the Euro with the majority of operating costs and balances denominated in Euros. An increasing proportion of costs will be incurred in pounds sterling as the Group’s activities associated with the Tricoya® plant in Hull increase, although future revenues will be in Euros or other currencies. The Group’s Loan Notes, which were issued to fund these UK based operations, are denominated in pounds sterling. A smaller proportion of expenditure is incurred in US dollars and pounds sterling. In addition some raw materials, while priced in Euros, are sourced from countries which are not within the Eurozone. The Group monitors any potential underlying exposure to other exchange rates.The Group holds a proportion of the cash associated with the Tricoya® Consortium in pounds sterling and has purchased fx forward contracts with a nominal amount of £5.85m (2021: nominal amount of £5.85m) to reﬂect the expected costs associated with the construction of the plant in Hull and are accordingly accounted for as a cash ﬂow hedge. The Group also holds US Dollar Cash which is committed to be contributed into Accoya USA. Following the May 2021 equity raise, the amount raised to invest into Accoya USA was translated into US dollars and held in cash ensuring that foreign exchange movements did not decrease the amount raised below the future US dollar investment into Accoya USA. This treatment did not meet the requirements for hedge accounting under IFRS 9, Financials instruments, and therefore the foreign exchange gain on the revaluation of the US dollars has been accounted for in Finance expenses. (See note 5). If exchange rates changed by 5% from exchange rates at 31 March 2022, the effect on the P&L from the revaluation of:
* Trade Receivables – P&L impact would not be material. The details of the Trade receivables per Currency is disclosed in note 23 with the US Dollar receivables held in Titan Wood Inc, which has a US Dollar reporting currency.
* Trade payables – P&L impact would be approximately €260,000.

Interest rate risk management
The Group’s borrowings have variable interest rates based on a relevant benchmark (ie. EURIBOR) plus an agreed margin. Surplus funds are invested in short term interest rate deposits to reduce exposure to changes in interest rates. The Group does not currently enter into any interest rate hedging arrangements, although will review the need to do so in respect of the variable interest rate loan facilities.

Credit risk management
The Group is exposed to credit risk due to its trade receivables receivable from customers and cash deposits with ﬁnancial institutions. The Group’s maximum exposure to credit risk is limited to their carrying amount recognised at the balance sheet date. The Group ensures that sales are made to customers with an appropriate credit history to reduce the risk where this is considered necessary. The Directors consider the trade receivables at year end to be of good credit quality including those that are past due (see note 23). The Group is not exposed to any signiﬁcant credit risk exposure in respect of any single counterparty or any group of counterparties with similar characteristics other than the balances which are provided for as described in note 23. The Group has credit risk from ﬁnancial institutions. Cash deposits are placed with a group of ﬁnancial institutions with suitable credit ratings in order to manage credit risk with any one ﬁnancial institution. All Financial institutions utilised by the Group, and with which the Group holds cash balances have investment grade credit ratings.

Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board, which has built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash ﬂows and matching the maturity proﬁle of ﬁnancial assets and liabilities. See note 18 & 29.

Fair value of ﬁnancial instruments
In the opinion of the Directors, there is no material difference between the book value and the fair value of all ﬁnancial assets and ﬁnancial liabilities.

for the year ended 31 March 2022
NOTES TO THE FINANCIAL STATEMENTS continued

OVERVIEW STRATEGIC REPORT

165 GOVERNANCE FINANCIAL STATEMENTS

33. Capital Commitments

	2022 €’000	2021 €’000
Contracted but not provided for in respect of property, plant and equipment	8,327	10,808

Included in the above, are amounts relating to the Tricoya® plant under construction in Hull and committed items related to the Reactor 4 expansion project in Arnhem. The above table excludes the remaining cash committed to be contributed to Accoya USA. See note 28 & 29.

34. Purchase of assets to grow Accoya® Color production

In July 2021, Accsys entered into a sale and purchase agreement with Lignia Wood Company Limited and its administrators, to acquire certain assets, equipment and technology along with its manufacturing plant in Barry, Wales. The purchased assets will enable Accsys to grow production and availability of Accoya® Color more rapidly, accelerating the launch of the product into more geographic markets and for more product applications. The following assets were purchased:

	2022 €’000
Intellectual property	55
Equipment	695
Inventory	486
	1,236

35. Related party transactions

Loan from De Engh BV Limited

As part of the Accoya USA JV funding arrangements, Accsys provided a $20 million Letter of Credit (‘LC’) to FHB. (see note 29 & 31) To support the LC, Accsys agreed a €10 million convertible loan with De Engh BV Limited (‘De Engh’), an investment company based in the Netherlands (the ‘Convertible Loan’) and a Accsys shareholder holding 10.4% of Accsys’ issued share capital at 31 March 2022. The Convertible Loan proceeds were placed with ABN AMRO solely as cash collateral to enable ABN AMRO to grant the $20 million LC to FHB. The Convertible Loan is unsecured and carries an interest margin of 6.75% above Euribor. Accsys expects to fully repay the Convertible Loan within two years. If the Convertible Loan is not repaid within this period, De Engh has an option (from the end of year two) to convert the outstanding loan balance to ordinary shares in Accsys at €2.30 per share (representing a 31% premium to the closing share price on 3 March 2022), otherwise the interest rate increases by 2% in year three and by a further 2% the following year if the loan has not been repaid or converted after 3 years. The maximum term of the Convertible Loan is 3.5 years.

36. Events occurring after 31 March 2022

Capital raise

In May 2022, Accsys completed a successful Placing for an issue of shares in the Company, raising gross proceeds of approximately €20 million. The net proceeds of the Issue will be used to strengthen the Company’s balance sheet, increase liquidity headroom and fund additional costs to complete the Arnhem Plant Reactor 4 (“R4”) capacity expansion. The Issue will also provide increased working capital in FY23 to support the wider Accsys organisation in what is a pivotal year, as the equivalent of an additional 60,000m 3 of new capacity projects are due to come online, increasing the total capacity at Group level to 120,000m 3 .

Accsys Technologies PLC – Annual Report and Financial Statements 2022

166

Registered Company 05534340

COMPANY STATEMENT OF FINANCIAL POSITION

as at 31 March 2022

Note	2022 €’000	2021 €’000
Non-current assets
Investments in subsidiaries	4	17,018
Right of use assets	26	53
Financial asset at fair value through profit or loss	5	–
		17,044
Current assets
Debtors	6	261,139
Cash at bank and in hand	9	9,841
		270,980
Creditors: amounts falling due within one year	7	(14,113)
Net current assets		256,867
Creditors: amounts falling due after more than one year	8/9	(52,340)
Net assets		221,571
Capital and reserves
Called up Share capital	10	9,638
Share premium account		223,326
Reserve for own shares		(6)
Capital redemption reserve		148
Profit and loss account		(11,535)
Total shareholders’ funds		221,571

The financial statements were approved by the Board and authorised for issue on 30 June 2022 and signed on its behalf by:

Robert Harris William Rudge
Director Director

The notes on pages 168 to 175 form an integral part of the parent Company financial statements.

167 OVERVIEW STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS

NOTES TO THE COMPANY FINANCIAL STATEMENTS

1. Accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

The separate financial statements of Accsys Technologies PLC (‘the Company’) have been prepared in accordance with Financial Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101) for the year ended 31 March 2022. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of land and buildings and derivative financial assets and financial liabilities measured at fair value through profit or loss, and in accordance with the Companies Act 2006.

COMPANY STATEMENT OF CHANGES IN EQUITY

	Called up Share capital €000	Share premium account €000	Capital redemption Reserve €000	Own Shares €000	Profit and loss account €000	Total Shareholders Funds €000
At 01 April 2020	8,114	186,390	148	–	(3,562)	191,090
Loss for the financial year	–	–	–	–	(3,955)	(3,955)
Share based payments	–	–	–	–	717	717
Shares issued	352	–	–	(36)	(63)	253
Premium on shares issued	–	3,215	–	–	–	3,215
Share issue costs	–	(7)	–	–	–	(7)
Balance at 31 March 2021	8,466	189,598	148	(36)	(6,863)	191,313
Loss for the financial year	–	–	–	–	(5,092)	(5,092)
Share based payments	–	–	–	–	463	463
Shares issued	1,172	–	–	30	(43)	1,159
Premium on shares issued	–	35,922	–	–	–	35,922
Share issue costs	–	(2,194)	–	–	–	(2,194)
Balance at 31 March 2022	9,638	223,326	148	(6)	(11,535)	221,571

The profit and loss account includes €8,010,000 of non-distributable reserves arising from the liquidation of Accsys Chemicals Limited in the year ended 31 March 2007. The profit and loss account also includes €10,527,000 of non-distributable reserves relating to share based payments.

Accsys Technologies PLC – Annual Report and Financial Statements 2022

168 NOTES TO THE COMPANY FINANCIAL STATEMENTS# The preparation of ﬁnancial statements in conformity with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signiﬁcant to the ﬁnancial statements are disclosed in note 2 of the Group ﬁnancial statements. The following exemptions from the requirements of IFRS have been applied in the preparation of these ﬁnancial statements, in accordance with FRS 101:

The Company has taken advantage of the exemption in FRS 101, and has not disclosed information required by the standard as the consolidated ﬁnancial statements, in which the Company is included, provide equivalent disclosures for the Group under IFRS 7 ‘Financial instruments: disclosures’.
The Company has taken advantage of the exemption available under FRS 101 and not disclosed related party transactions with wholly owned subsidiary undertakings.
The Company has taken advantage of the exemption available under FRS 101 and the requirements of IAS 7 to not disclose a Statement of Cash Flows.

As permitted under section 408 of the Act the Company has elected not to present its own proﬁt and loss account for the year. The loss for the ﬁnancial year was €5,092,000 (2021: €3,955,000).

Going concern

The Company ﬁnancial statements are prepared on a going concern basis, which assumes that the Company will continue in operational existence for the foreseeable future, and at least 12 months from the date these ﬁnancial statements are approved. As part of the Company’s going concern review, the Directors have assessed the Company’s trading forecasts, working capital requirements and covenant compliance for the foreseeable future under a base case scenario, taking into account the Company’s ﬁnancial resources including the current cash position and banking and ﬁnance facilities which are currently in place (see note 29 in the Group ﬁnancial statements for details of these facilities) and the possible further impact of supply chain disruption. The Directors have also assessed a severe but plausible downside scenario with reduced sales volumes, lower gross margin and a delay in the timing of production from R4 in Arnhem beyond the current expected operational date of Q2, FY23. These forecasts indicate that, in order to continue as a going concern, the Company is dependent on achieving certain operating performance measures relating to the production and sales of Accoya® wood from the plant in Arnhem with the collection of on-going working capital items in line with internally agreed budgets. The Directors’ have also considered the possible amount and timing of capital expenditure required to complete the Tricoya® plant in Hull noting that should additional funding be required beyond what has been committed by the Tricoya® consortium partners to date, further consent would be required by the Tricoya® consortium partners for funding to be contributed. There are a sufﬁcient number of alternative actions and measures within the control of the Company that can and would be taken in order to ensure on-going liquidity including reducing/deferring costs in some discretionary areas as well as larger capital projects if necessary.

OVERVIEW STRATEGIC REPORT
169

169

GOVERNANCE FINANCIAL STATEMENTS
169

GOVERNANCE FINANCIAL STATEMENTS

The Directors believe that while some uncertainty always inherently remains in achieving the budget, in particular in relation to market conditions outside of the Company’s control, under both the base scenario and severe but plausible downside scenario, there is sufﬁcient liquidity and covenant headroom such that there is no material uncertainty with respect to going concern and have prepared the ﬁnancial statements on this basis. Therefore the Directors believe that the going concern basis is the most appropriate on which to prepare the ﬁnancial statements.

Investments

Except where a reliable fair value cannot be obtained, unlisted shares held by the Company are stated at historical cost less any provision for impairment.

Share based payments

When the parent entity grants options over equity instruments directly to the employees of a subsidiary undertaking, then in the parent company ﬁnancial statements the effect of the share based payment is capitalised as part of the investment in the subsidiary as a capital contribution, with a corresponding increase in equity. The fair value of the options granted is measured using a modiﬁed Black Scholes model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reﬂect the actual number of share options that vest only where vesting is dependent upon the satisfaction of service and non-market vesting conditions. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options which eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Deferred taxation

Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes except for deferred tax assets which are only recognised to the extent that the Company anticipates making sufﬁcient taxable proﬁts in the future to absorb the reversal of the underlying timing differences. Deferred tax balances are not discounted.

Dividends

Financial assets

Debtors & Cash at bank and in hand

The Company follows the Group’s accounting policies for Debtors and Cash. See note 1 to the Group ﬁnancialstatements.

Financial liabilities

Trade payables and other ﬁnancial liabilities are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Accsys Technologies PLC – Annual Report and Financial Statements 2022
170

NOTES TO THE COMPANY FINANCIAL STATEMENTS continued

Accounting policies continued

Accounting judgements

In preparing the Financial Statements, management has to make judgments on how to apply the accounting policies and make estimates about the future. The critical judgements that have been made in arriving at the amounts recognised in the Financial Statements and the key sources of uncertainty that have a signiﬁcant risk of causing a material adjustment to the carrying value of assets and liabilities in the next ﬁnancial year are discussed below:

Financial asset at fair value through proﬁt or loss

The Company has an investment in listed equity shares carried at nil fair value as a reliable fair value cannot be obtained since there is no active market for the shares and there is currently uncertainty around the future funding of the business. The Company makes appropriate enquiries and considers all of the information available to it in order to determine the fair value.

Carrying value of intercompany receivables and investments in subsidiaries

The recoverable amounts of these balances have been determined based on value in use calculations. These calculations require the use of judgements in relation to discount rates and future forecasts. The recoverability of these balances is dependent upon the level of future licence fees and manufacturing revenues relating to group companies. While the scope and timing of the production facilities to be built under the Group’s existing and future agreements remains uncertain, the Directors remain conﬁdent that revenue from own manufacturing, existing licensees, new licence or consortium agreements will be generated, demonstrating the recoverability of these balances.

2. Proﬁt and loss account

A loss of €5,092,000 (2021: €3,955,000) is dealt with in the Company ﬁnancial statements of Accsys Technologies PLC. The Directors have taken advantage of the exemption available under section 408 of the Companies Act 2006 and not presented a proﬁt and loss account for the Company.

Fees payable to the Company’s auditors for the audit of the Group’s annual ﬁnancial statements was €145,000 (2021: €73,000). Fees payable to the Company’s auditors for the audit of the Company’s subsidiaries was €110,000 (2021: €84,000), fees payable to Component auditors for audit of subsidiaries was €117,000 (2021: 98,000), fees payable for audit related assurance services and was €36,000 (2021: €34,000) and other audit related services €nil (2021: €14,000). The information disclosed in the Group’s consolidated ﬁnancial statements under IFRS2 ‘Share-based payment’ is within note 15, providing further information regarding the Company’s equity settled share based payment arrangements.

3. Employees

The Company had no employees other than Executive Directors (2022: 2 and 2021: 2) during the current or prioryear. Non-executive Directors received emoluments in respect of their services to the Company of €375,000 (2021: €320,000). Details have been included in the Remuneration Report. The Company did not operate any pension schemes during the current or preceding year.

OVERVIEW STRATEGIC REPORT
171

171

GOVERNANCE FINANCIAL STATEMENTS
171

GOVERNANCE FINANCIAL STATEMENTS

4.# 4. Investments in subsidiaries

Cost	€’000
At 1 April 2020	20,518
Share based payments	717
At 31 March 2021	21,235
Share based payments	463
At 31 March 2022	21,698

Impairment	€’000
At 1 April 2020 and 1 April 2021 and 31 March 2022	4,680

Net book value	€’000
At 31 March 2022	17,018
At 31 March 2021	16,555
At 31 March 2020	15,838

The Directors have considered the recoverability of the carrying values, taking into account the net assets as well as the long term expected performance of the subsidiaries and do not consider that any impairment is currently required. The recoverable amount is determined based on a value in use calculation which uses cash flow projections based on Board approved financial budgets. Cash flows have been projected for a period of 5 years plus a terminal value discounted at a pre-tax discount rate of 10.5% per annum (2021: 10.5%) and a 1.8% growth rate to determine their present value. The key assumption used in the value in use calculations is the level of future licence fees and manufacturing revenues prudently estimated by management over the budget period. These have been based on past experience and expected future revenues but are limited to existing assets and those under construction.

The following were the principal subsidiary undertakings at the end of the year and have all been included in the financial statements:

Subsidiary undertakings	Class	2022 % shares and voting rights held	2021 % shares and voting rights held
Titan Wood Technology BV (Netherlands)	Ordinary	100	100
Titan Wood BV (Netherlands)	Ordinary	100	100
Titan Wood Limited (UK)	Ordinary	100	100
Titan Wood Inc (USA)	Ordinary	100	100
Accsys (Accoya USA) Holdings LLC (USA)	Ordinary	100	100
Accsys USA Holdings Inc (USA)	Ordinary	100	100
Tricoya Technologies Limited (UK)	Ordinary	77	77
Tricoya UK Limited (UK)	Ordinary	47	47
Accoya Color UK Limited (UK)	Ordinary	100	–

Joint venture undertakings	Class	2022 % shares and voting rights held	2021 % shares and voting rights held
Accoya USA LLC (USA)	Ordinary	60	60

The shares in Titan Wood BV, Titan Wood Inc, Accsys (Accoya USA) Holdings LLC, Accsys USA Holdings Inc, Accoya USA LLC, Accoya Color UK Limited, Tricoya Technologies Ltd and Tricoya UK Ltd are held indirectly by the Company.
1 Non-controlling interests shareholdings are detailed in note 9 & 27 of Group financial statements.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 172
NOTES TO THE COMPANY FINANCIAL STATEMENTS continued

Investments in subsidiaries continued

The principal activities of these companies were as follows:

Titan Wood Technology B.V.
The provision of technical and engineering services to licensees, and the technical development of acetylation opportunities.
Titan Wood B.V.
The manufacture and sale of Accoya® acetylated wood.
Titan Wood Limited
Establishing global market penetration of Accoya® and Tricoya® as the premium wood and wood elements brands respectively for external applications requiring durability, stability and reliability through the licensing of the Group’s proprietary process for wood acetylation.
Titan Wood Inc.
Provision of Sales, Marketing and Technical services.
Accsys (Accoya USA) Holdings LLC
Holdings company
Accsys USA Holdings Inc
Holdings company
Tricoya Technologies Limited
Engaged in the commercialisation of technology for the production of Tricoya® Wood Elements around the world.
Tricoya UK Limited
The construction and operation of manufacturing plant for Tricoya® wood chips as the premium wood elements brand for external applications requiring durability, stability and reliability.
Accoya Color UK Limited (UK)
The manufacture colored acetylated wood.
Accoya USA LLC
The construction and operation of a manufacturing plant for Accoya® acetylated wood to serve the North American market.

Registered office of subsidiaries:
* P.O. Box 2147, 6802 CC, Arnhem, The Netherlands
** Brettenham House, 19 Lancaster Place, London, WC2E 7EN, United Kingdom
*** 5000 Quorum Drive, Suite 620, Dallas, Texas 75254, U.S.A

5. Financial asset at fair value through profit or loss

	2022 €’000	2021 €’000
Shares held in Cleantech Building Materials PLC	–	–

Accsys Technologies PLC has previously purchased a total of 21,666,734 unlisted ordinary shares in Diamond Wood China. On 23 December 2016, Cleantech Building Materials PLC acquired Diamond Wood China. On 19 April 2017 Cleantech Building Materials acquired the 21,666,734 shares previously owned by the Company and in return the Company has been issued with 520,001 shares in Cleantech Building Materials PLC, a listed company trading on the Nasdaq First North market in Copenhagen. There continues to be no active market for these shares as at 31 March 2022, and there is significant uncertainty over the future of Cleantech Building Materials PLC. As such a reliable fair value cannot be calculated and the investment is carried at a nil fair value (2020: nil). A total of 498,522 shares were held at 31 March 2022.

OVERVIEW STRATEGIC REPORT 173173 GOVERNANCE FINANCIAL STATEMENTS 173 GOVERNANCE FINANCIAL STATEMENTS

6. Debtors

	2022 €’000	2021 €’000
Amounts owed by Group undertakings	260,994	193,966
Prepayments and accrued income	145	159
	261,139	194,125

The amounts owed by Group undertakings currently have no repayment plans in place, however the intention is for the Group’s subsidiaries to repay this balance in the future. A repayment plan will be determined and commence for the loan when the subsidiaries have surplus cash and the Group requires the cash for other purposes. The Directors have considered the recoverability of the balances, taking into account the net assets as well as the long term expected performance of the subsidiaries and do not consider that any impairment is currently required. The recoverable amount is determined based on a value in use calculation which uses cash flow projections based on latest board approved financial budgets. Cash flows have been projected for a period of 5 years plus a terminal value discounted at a pre-tax discount rate of 10.5% (2021: 10.5%) and a 1.8% growth rate to determine their present value. Refer to note 17 of the Group financial statements for the key assumptions and sensitivity analysis for this calculation.

7. Creditors: amounts falling due within one year

	2022 €’000	2021 €’000
Trade creditors	228	133
Amounts owed to Group undertakings	11,708	11,638
Obligation under lease liabilities	10	16
Short term borrowings	1,870	4,662
Accruals and deferred income	297	186
	14,113	16,635

The amounts owed to Group undertakings are payable upon demand and are unsecured.

8. Commitments under lease liabilities

	2022 €’000	2021 €’000
Amounts payable under lease liabilities:
Within one year	10	16
In the second to fifth years inclusive	4	14
After five years	–	–
Less: future ﬁnance charges	–	(1)
Present value of lease obligations	14	29

Accsys Technologies PLC – Annual Report and Financial Statements 2022 174
NOTES TO THE COMPANY FINANCIAL STATEMENTS continued

9. Commitments under loan agreements

	2022 €’000	2021 €’000
Amounts payable under loan agreements:
Within one year	1,935	6,436
In the second to ﬁfth years inclusive	59,506	18,070
After five years	–	–
Less future ﬁnance charges	(7,236)	(2,937)
Present value of loan obligations	54,205	21,569

The balance relates to loans with ABN and DeEngh. Further details can be found in note 29 of the Group financial statements.

10. Called up Share capital

	2022 €’000	2021 €’000
Allotted – Equity share capital Ordinary shares of €0.05 each (2021: 169,324,264 Ordinary shares of €0.05 each)	9,638	8,466
	9,638	8,466
192,761,322

All ordinary shares are called up, allotted and fully paid.

In the year ended 31 March 2021:
* 1,259,449 shares were issued on 12 May 2020 following the exercise of nil cost options, granted under the Company’s 2013 Long Term Incentive Plan (‘LTIP’).
* 727,250 shares were issued to an Employee Benefit Trust (‘EBT’) on 29 June 2020 at nominal value, in lieu of cash bonuses for the year ended 31 March 2020. These shares will vest on 1 July 2021, subject to the employees continuing employment within the Group.
* In February 2021, following the subscription by employees in the prior year for shares under the Employee Share Participation Plan (the ‘Plan’), 198,219 shares were issued as “Matching Shares” at nominal value under the Plan. In addition, various employees newly subscribed under the Plan for 195,524 Shares at an acquisition price of €1.43 per share, with these shares issued to a trust, to be released to the employees after one year, together with an additional share on a matched basis (subject to continuing employment within the Group).
* On 26 March 2021, the Company announced that Lombard Odier Asset Management (USA) Corp on behalf of 1798 Volantis Catalyst Fund II Ltd (‘Volantis’) exercised options over a total of 4,655,667 ordinary shares in the Company for a total consideration of £2,779,898.77 (exercise price of £0.5971 per ordinary share) (see note 30 to the Group financial statements).

OVERVIEW STRATEGIC REPORT 175175 GOVERNANCE FINANCIAL STATEMENTS 175 GOVERNANCE FINANCIAL STATEMENTS

	2022	2021
Loss for the ﬁnancial year	(5,092)	(3,955)
Share based payments charged to subsidiaries	463	717
Proceeds from issue of shares	37,094	3,567
Share issue costs	(2,194)	(7)
Shares issued related to Employee share plans	(43)	(63)
Own shares	30	(36)
Net increase in shareholders’ funds	30,258	223
Opening shareholders’ funds	191,313	191,090
Closing shareholders’ funds	221,571	191,313

12. Dividends Paid

	2022	2021
Final Dividend €Nil (2021: €Nil) per Ordinary share proposed and paid during year relating to the previous year’s results	–	–

13. Deferred taxation

The Company has an unrecognised deferred tax asset of €6.4m (2021: €3.6m) which is largely in respect of trading losses and has been calculated using the tax rate which is expected to be applicable when the tax losses are expected to be utilised (see note 12 to the Group ﬁnancial statements for the announced increase in UK tax rates to 25% from 1 April 2023). The deferred asset has not been recognised due to the uncertainty of the timing of future expected proﬁts of the fellow subsidiary (in which the Company is in the same tax group) attributable to licensing activities.

Accsys Technologies PLC – Annual Report and Financial Statements 2022 176

SHAREHOLDER INFORMATION

Accsys Technologies PLC is a public limited company incorporated in the United Kingdom

Directors

Sean Christie Non-Executive Director
Sue Farr Non-Executive Director
Robert Harris Chief Executive Ofﬁcer
Nick Meyer Non-Executive Director
Stephen Odell Non-Executive Chairman
William Rudge Finance Director
Trudy Schoolenberg Non-Executive Director
Alexander Wessels Non-Executive Director
Louis Eperjesi Non-Executive Director

Company Secretary

Nicholas Hartigan

Company Number

05534340

Registered Ofﬁce

Brettenham House
19 Lancaster Place
London, WC2E 7EN

Bankers

Barclays Bank
- One Churchill Place
- London, E14 5HP
NatWest Bank
- 250 Bishopsgate
- London, EC2M 4AA
ABN AMRO Bank
- Velperweg 37
- 6824 BM Arnhem
- The Netherlands

Registrars

SLC Registrars
PO Box 5222
Lancing, BN99 9FG

Independent Auditors

PricewaterhouseCoopers LLP
Chartered Accountants and Statutory auditors
1 Embankment Place
London, WC2N 6RH

Lawyers

Slaughter & May
One Bunhill Row
London, EC1Y 8YY

Joint Broker and Nomad

Numis Securities Ltd
45 Gresham St
London EC2V 7BF

Joint Broker

Investec Bank PLC
30 Gresham Street
London, EC2V 7QP

Corporate Access

ABN AMRO Bank N.V
The Netherlands
Gustav Mahlerlaan 10
1082 PP Amsterdam
Netherlands

Investor Relations

FTI Consulting
200 Aldersgate Street
Barbican
London, EC1A 4HD

www.accoya.com
www.tricoya.com
www.accsysplc.com

Accsys Technologies PLC
Brettenham House
19 Lancaster Place
London WC2E 7EN
+44 (0)20 7421 4300

Accsys ®, Accoya ®, Tricoya ® and the Trimarque Device are registered trademarks owned by Titan Wood Limited (‘TWL’), a wholly owned subsidiary of Accsys Technologies PLC, and may not be used or reproduced without written permission from TWL, or in the case of the Tricoya ® registered trademark, from Tricoya Technologies Limited, who have exclusive rights to exploit the Tricoya ® brand.

This report is printed on 100% recycled paper made from post-consumer waste. Both the mill and printer are FSC TM Certified and follow ISO 14001 environmental procedures. Our printer is also elemental chlorine free, uses vegetable based inks and is carbon neutral. The lamination on the cover comes from a sustainable resource and its main component is not derived from fossil fuels. It complies with the International Standard ASTM D6954 on molecular weight, carbonyl index (CI) and eco-toxicity and is consistent with a microplastic-free, non-toxic degradation process, in accordance to the ecotoxicity requirements of the OECD 207, 222, 211 and 202 standards.

AI assistant

ACCSYS TECHNOLOGIES PLC — Annual Report (ESEF) 2022

CHANGING WOOD TO CHANGE THE WORLD

ACCSYS IS A FAST-GROWING BUSINESS WITH A PURPOSE

GOVERNANCE FINANCIAL STATEMENTS

01 STRATEGIC REPORT OVERVIEW

Sustainability

Our Strategy

Corporate Governance

Corporate Governance

Financial Statements

Shareholder Information

02 KEY HIGHLIGHTS

Financial highlights

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

Operational and ESG highlights

OUR BUSINESS AT A GLANCE

OUR PURPOSE

Our values

STRATEGIC REPORT OVERVIEW

Key Accsys Locations

Our Products

Overview

Our strategy

Better and greener wood products

2022 Performance

Capital Raise

ESG

Further reading

Our Board

Looking ahead

Investment proposition

LOW ENVIRONMENTAL IMPACT

SUSTAINABLY SOURCED

SCALABLE

WORLDWIDE ACCREDITATIONS

ORGANISED

GOVERNANCE

FINANCIAL STATEMENTS

09 STRATEGIC REPORT

OVERVIEW

CASE STUDY

10

OUR PRODUCTS

Accoya comparison chart

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

11

OVERVIEW

SUSTAINABILITY

PERFORMANCE

FINISH

Certiﬁcation

12

A SIGNIFICANT GROWTH OPPORTUNITY

Overview

Market size

OUR MARKET

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

13

Demand drivers

Industry demand drivers

Market share and growth

Megatrends

continued

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

Shifting consumer priorities

Lifestyle changes

Product applications

Competitive advantage and material substitution

Targeted segment penetration

DECKING

ACCSYS TECHNOLOGIES PLC Annual Report (ESEF) 2022