PROTECTING

LIVES

ANNUAL REPORT AND ACCOUNTS 2023

AVON PROTECTION PLC ANNUAL REPORT AND ACCOUNTS 2023

PROTECTING

LIVES

FINANCIAL HEADLINES

$243.8m

Revenue

$21.2m

Adjusted operating prot

40.3c

Adjusted basic earnings pershare

(48.0)c

Basic loss per share

$(12.6)m

Operating loss from

continuingoperations

29.6c

Dividend per share

7.0%

Cash conversion

1.94x

Leverage

$135.8m

Closing order book

WHO WE ARE

Our purpose is Protecting Lives. It’s something

everyone in this business cares passionately about.

WHAT WE DO

Our mission is to provide unparalleled protection for

those who protect us, giving them the confidence to tackle

challenging situations and helping them get home safe.

HOW WE DO IT

Our core beliefs are the things that are most important to

us as a business and as individuals: the behaviours we want

to encourage, the standards we hold ourselves to and the

characteristics we display when we’re at our best.

Fearlessness Integrity Excellence Resilience Collaboration Execution

Together, these core beliefs spell FIERCE – a mnemonic

that sums up how passionate we all feel about the

outcome of our work.

HIGHLIGHTS

OUR STARSTRATEGY

WILL HELP US

REALISE OUR

POTENTIAL

CONTENTS

Overview

1 Highlights

2 At a Glance

4 Investment Case

6 Chair’s Statement

Strategic Report

10 Market Overview

12 Product Portfolio

16 Business Model

18 CEO’s Review

24 Strategy in Action

32 KPIs

36 Stakeholder Engagement

41 Sustainability

50 TCFD

57 Financial Review

62 Risk Management

Governance

72 Chair’s Introduction to Governance

74 Board of Directors

76 Corporate Governance

80 Nomination Committee Report

82 Audit Committee Report

86 Remuneration Committee Report

108 Directors’ Report

Adjusted Performance Measures

114 Adjusted Performance Measures

Financial Statements

122 Independent Auditor’s Report

129 Consolidated Statement of ComprehensiveIncome

130 Consolidated Balance Sheet

131 Consolidated Cash Flow Statement

132 Consolidated Statement of Changes in Equity

133 Accounting Policies and Critical

AccountingJudgements

138 Notes to the Group Financial Statements

166 Parent Company Balance Sheet

167 Parent Company Statement

of Changes in Equity

168 Parent Company Accounting Policies

170 Notes to the Parent Company FinancialStatements

174 Notice of Annual General Meeting

180 Glossary of Abbreviations

181 Shareholder Information

STRENGTHEN

Strengthen the fundamentals

to provide a stable platform

for transformation

Read more on page 22

Strengthen the fundamentals

to provide a stable platform for

transformation

Organically grow the core and

scale up emerging opportunities

Leverage innovation to drive

further growth

Improve efficiency and working

capital turns

STRENGTHEN TRANSFORM ADVANCE REVOLUTIONISE

...AND OUR COMMITMENT TO ENSURING A SUSTAINABLE FUTURE...

Read more on page 16

Avon Protection plc Annual Report and Accounts 2023

...AND AN EMBEDDED CULTURE TO DRIVE STRATEGY DELIVERY

Fearlessness:

We seize

opportunities and take

calculated risks.

Integrity:

We do what’s

right, using good

judgement to ensure

we always do things

we are proud of.

Excellence:

We passionately strive

to protect life through

innovative solutions,

people and processes.

Resilience:

No matter the

circumstances, we

exhibit a will to win.

Collaboration:

We believe in the

power of teams,

working across the

business and with

our customers to

become stronger.

Execution:

We have fun, are

high impact and

are empowered to

vigorously deliver

ourpriorities.

OUR STRATEGIC

BUSINESS UNITS

RESPIRATORY PROTECTION

We have an extensive history of providing respiratory protection and a

comprehensive knowledge of our customers’ requirements for respirators,

powered and supplied air systems, filters, spares andaccessories.

$156.9m

Revenue

18.7%

Adjusted operating prot margin

501

Number of employees

Number of sites

HEAD PROTECTION

We have a deep understanding of traumatic brain injury which enables

us to design next generation ballistic and bump protection helmets, as

well as helmet liner and retention systems.

$86.9m

Revenue

(9.3)%

Adjusted operating prot margin

422

Number of employees

Number of sites

Read more on page 12 Read more on page 14

OVERVIEW

Annual Report and Accounts 2023 Avon Protection plc

STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

INVESTMENT CASE

WE HAVE STRONG

FOUNDATIONS

AND EXTRAORDINARY

POTENTIAL

2. LEADING TECHNOLOGY

• Cumulative R&D of $34 million over the last 3 years

• World leading, innovative protection provided by our helmets,

respirators and rebreathers

• Uniquely positioned to lead future technology programmes for

head and respiratory protection

• Deep material science, product design and manufacturing

capability, aligned to customer priorities and future threats

• Decades of experience protecting the lives of NATO

militaries and first responders

1. ADDRESSING INCREASING GLOBAL

THREATS BY PROTECTING THE LIVES

OF THOSE WHO PROTECT US

• A major supplier of integrated protective solutions to the U.S.

Department of Defense and other NATO countries

• Supportive addressable markets growing at 2-4% CAGR

• Global instability and current conflicts driving demand and

emphasising the importance of soldier and first responder

protection

3. RESILIENT COMPETITIVE

ADVANTAGE

• Platform lifecycles support deep customer partnerships and long-

term revenue visibility

• Recertification and extensive qualification requirements provide

strong barriers to entry

• Brands represents trust and reliability - long-term reputation for

product excellence essential given high cost of failure

• Extensive installed product base and broad accessory offering

provides stable after-market revenue

Avon Protection plc Annual Report and Accounts 2023

Focus on disciplined

capital allocation

insupport of growth

in coremarkets and

maximisation

ofreturns

1-2x

net debt – EBITDA

THROUGH OUR STAR STRATEGY, WE HAVE DEVELOPED

STRATEGIC INITIATIVES WITH A FOCUS ON PROTECTING

MORE LIVES THROUGH OUR INNOVATIVE PRODUCTS

AND DELIVERING IMPROVED MARGINS, CASH FLOW

AND RETURNS ON CAPITAL FOR OUR SHAREHOLDERS.

CAPITAL ALLOCATION POLICY FOCUSED ON EARNINGS RECOVER

AND DRIVING SUSTAINABLE TOPLINE GROWTH

Transformation initiatives and

organic investment in R&D

Deliver strong margin progression

and revenue growth

Reduce debt

Increase balance sheet flexibility

and minimise interest cost to

allow compounding of returns

Sustainable through-cycle dividend

payout ratio

2.5-3.0x EPS cover throughcycle

Inorganic investment inbolt-ons

Only where value-creative and

supportive of strategy acceleration

5. TRANSFORMATION DRIVING

ACCELERATED FINANCIAL

ANDESGPERFORMANCE

• Robust plan to deliver mid-teens margins, improved ROIC and

strong cash conversion

• An innovative culture with a well-invested asset base and

engaged workforce driving future growth

• Disciplined approach to capital allocation

• Focused on delivering responsibly for all stakeholders; new

transformation plan and five-year targets reducing scrap

and CO

emissions

4. WELL POSITIONED FOR

ABOVEMARKET GROWTH

• Organic revenue growth underpinned by strong positions on

multi-year programmes

• Sole sourced or primary sourced on key programmes of record

• Long history of partnering with customers on break-through

technology

• Strong channel to market allows for rapid commercialisation of

new technology

OVERVIEW

Annual Report and Accounts 2023 Avon Protection plc

STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

It has been a busy year of change across a number of important areas.

We have refreshed and strengthened the Executive management team,

led by Jos Sclater who joined the Board as CEO in January 2023, working

alongside Rich Cashin, who joined as CFO in March 2022. Under their

leadership, the Group has been reorganised into two Strategic Business

Units, Respiratory Protection and Head Protection, with respective

business Presidents appointed to the Executive Committee. This approach

has led to increased accountability and ownership of delivery in both

business units and has improved the ability of the Board to both oversee

and scrutinise performance. Following the reorganisation, the Board has

been excited to oversee the development and launch of our new STAR

strategy, which is already delivering encouraging results, together with a

refreshed mission, vision and core beliefs for the Group.

Vision, mission and core beliefs

Avon Protection is a world leader in respiratory and head protection

solutions. Over the last six months, we have engaged our team to help us

refresh our vision, mission and core beliefs, using feedback and ideas from

every part of the business to define the things that really matter to us all –

and the kind of business we want to be.

We are an organisation made up of over 900 people, in five main locations

around the U.K. and North America, coming from a wide variety of

backgrounds. The thing we all have in common – the golden thread that

binds us together – is our shared purpose of Protecting Lives. We provide

unparalleled protection for those who protect us. That is something

everyone in this business cares passionately about. It is why we come to

work – and it is what motivates us, every day, to do the best work we can.

Strategy and results

Our new vision and mission are underpinned by the STAR strategy which was

developed by a broad-based team of employees from across the Group. Our

STAR strategy is designed to drive value creation and is made up of the following

four key elements. Strengthen: Strengthen the fundamentals to provide a stable

platform for transformation; Transform: Improve efficiency and working capital

turns; Advance: Organically grow the core and scale up emerging opportunities;

Revolutionise: Leverage innovation to drive further growth.

The strategy is designed to improve financial performance over the next

five-year period through growing revenues, margin expansion, improved

return on invested capital and strong cash conversion while advancing our

sustainability priorities of protecting lives and reducing scrap waste and

carbon emissions. More information can be found on page 22.

We’ve started the process to reposition the business as a high performing

defence company focused on protecting the lives of those who protect

us. I am pleased with the rapid progress made in a limited time but it is

the start of a journey. Our results this year are in-line with our expectations

with an order book to support growth in 2024. We saw strong revenue

growth in Head Protection following the commencement of deliveries

of the Next Generation Integrated Head Protection System (NG IHPS)

helmets, which partially offset expected weaker demand in Respiratory

Protection. It will take some time to get us where we want to be but I am

increasingly confident in the medium-term outlook.

TOGETHER WE PUT

OURPEOPLE FIRST

CHAIR’S STATEMENT

I WOULD LIKE TO START BY THANKING OUR PEOPLE WHO HAVE WORKED

HARDER THAN EVER THIS YEAR TO DELIVER SIGNIFICANT PROGRESS ACROSS

A NUMBER OF IMPORTANT AREAS.

Dividend

The Board is recommending a final dividend of 15.3 cents per share which,

together with the 14.3 cents per share interim dividend, gives a total

dividend for the year of 29.6 cents. The Board has reviewed our dividend

policy in line with our capital allocation policy. More information can

be found on page 158. From a dividend perspective we believe that an

appropriate level of distribution is for dividend payments to be between

2.5 and 3x covered by EPS through the cycle.

Avon Protection plc Annual Report and Accounts 2023

Our sustainability agenda

The Board has overall responsibility for our sustainability agenda,

disclosure and reporting, with the Sustainability Steering Committee

responsible for setting the Group’s sustainability strategy and overseeing

its implementation. The Committee is chaired by our CFO, Rich Cashin, and

also attended by our CEO, Jos Sclater, and the Presidents of each SBU.

During the period, the Committee met on five occasions to review

progress and agree sustainability-related targets as we continue to

develop our sustainability agenda. Our sustainability commitments and

progress are discussed in detail on pages 41 to 49. Underpinning our

mission, vision and values is a commitment to operate the Group in a

way that is sensitive to and protects the current and future needs of the

communities and customers that we serve, our colleagues, our supply

chain and the planet.

Health, safety and wellbeing of our people

Protecting the health, safety and wellbeing of our people remained a

key priority in 2023. In line with our goal of zero harm, we continued to

actively promote a strong safety culture at all our sites and accident rates

remained very low.

The Board uses a Global Employee Advisory Forum as its employee

engagement mechanism and this has generated a meaningful dialogue

between the Board and the Group’s employees during the period. This

year we have also increased the number of townhall meetings held across

all sites and following Jos’ appointment as CEO he visited all sites and met

with all employees face to face.

Governance and the Board

Good governance is an integral part of the Company’s success and the

Board brings together a diverse range of relevant skills and expertise.

There has continued to be change in the membership of the Board this

year. When Paul McDonald stepped down from the Board as CEO on 30

September 2022, I took over as Executive Chair for an interim period until

Jos Sclater joined as CEO on 16 January 2023, when I reverted to Chair of

the Board. Jos has quickly established himself as a strong addition to the

Board and I am pleased with the progress he and Rich have made since his

appointment. The Board currently comprises two Executive Directors, three

independent Non-Executive Directors and myself as Chair. After seven years

on the Board, Chloe Ponsonby has decided that she will step down during

2024 following an increase in her executive responsibilities. The Board

regularly reviews its composition to ensure it has the necessary breadth and

depth of skills and experience to support the development of the Group

and we will replace Chloe with an individual with the right set of skills and

experience to bolster the strength of the Board. Chloe will step down when

her replacement is appointed and Victor Chavez will take over at that time

as Chair of the Remuneration Committee.

As Chair, I have engaged with our major shareholders at various points

during 2023 to understand their views and have ensured that these

are communicated to the Board. We conducted an internal Board

performance evaluation this year and remain confident that the Board

continues to operate effectively together at a high standard. Full details

of this year’s evaluation are contained in the Governance section of this

Annual Report.

Looking ahead to a new chapter of growth

2023 has been an important year for the Group. The Executive

management team have done a great job in organising and focusing

resources to deliver our compelling STAR strategy. I do not underestimate

the challenges of executing the new strategy, but I am confident that

Avon Protection is now well positioned for a new chapter of growth, whilst

continuing to pursue its purpose of protecting lives.

Bruce Thompson

Chair

21 November 2023

STRATEGY IN ACTION

TOGETHER WE

STRENGTHEN

CREATION OF TWO STRATEGIC

BUSINESS UNITS

We have moved fast to develop our new STAR strategy and

took meaningful steps forward in 2023, focusing initially on

strengthening the fundamentals with quick wins to build

short-term momentum. This included implementing anew

operating model with two Strategic Business Units (SBUs)

called Respiratory Protection and Head Protection.

Each SBU has its own focused leadership team with the

responsibility and empowerment to deliver their own specific

strategic objectives to support our growth ambitions.

Development of improved performance management

processes is well underway, with objectives, key results,

andfull financial performance statements incorporated at

anSBU level.

NOT ONLY HAS THE

REORGANISATION ENABLED

US TO HAVE GREATER INSIGHT

INTO BUSINESS PERFORMANCE,

BUT IT HAS ALSO PROVIDED

EMPOWERMENT AND

ACCOUNTABILITY TO THE TEAMS.

OVERVIEW

Annual Report and Accounts 2023 Avon Protection plc

STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSFINANCIAL STATEMENTSADJUSTED PERFORMANCE MEASURES

STRATEGIC

REPORT

Avon Protection plc Annual Report and Accounts 2023

CONTENTS

Strategic Report

10 Market Overview

12 Product Portfolio

16 Business Model

18 CEO’s Review

24 Strategy in Action

32 KPIs

36 Stakeholder Engagement

41 Sustainability

50 TCFD

57 Financial Review

62 Risk Management

2023 HAS BEEN A TRANSFORMATIVE

YEAR FOR THE GROUP. WE HAVE

UNDERTAKEN SIGNIFICANT CHANGES

THAT HAVE RESHAPED THE VERY

CORE OF OUR BUSINESS.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

1. U.S. DEPARTMENT

OF DEFENSE

What we have seen

The U.S. DOD remains the largest

defence market in the world, with a

requested budget for the 2024 fiscal

year of $842 billion. As per the 2023

National Security Strategy, global

priorities consist of out-competing

China as assertiveness grows around the

Indo-Pacific region, and constraining

Russia amidst the continuation of the

invasion of Ukraine. Additionally, the U.S.

DOD released its Strategy for Countering

Weapons of Mass Destruction in 2023

and its first Biodefense Posture Review,

highlighting an increased focus on

defending against biological threats and

building a force that can fight and win in

a CBRN environment.

How we are responding

Within Head Protection, we received the second delivery

order worth $38 million from the U.S. Army under NG IHPS

helmet contract, and the second delivery order worth $6.7

million from the U.S. Defense Logistics Agency under the

second-generation Advanced Combat Helmet (ACH GEN II)

contract. The combination of these two will position us as the

leading supplier of ballistic helmets into the U.S. DOD.

In Respiratory Protection, we continue to be the sole-source

supplier of M50, M53A1 and M69 masks into the U.S. DOD, and

have secured funding to develop the next generation of filters.

We have taken steps to right-size the Respiratory Protection

SBU in light of U.S. DOD forecasts.

Link to strategy

Link to risk

2. COMMERCIAL

AMERICAS

What we have seen

We continue to see increased risk

of CBRN and ballistic threats from

terrorist attacks, civil unrest and

organised crime.

First responders are ever expected

to react to these shifting threat

environments, and require increased

levels of protection often associated

with military applications.

How we are responding

We launched our new line of EPIC Ballistic helmets into the

Commercial Americas market earlier this year, showcasing

the combination of our joint world-leading technologies in

both ballistic shells and liner & retention systems.

We also made our FM50 and C50 respirators, along with a

curated selection of accessories, available to the U.S. civilian

market for the first time via the Team Wendy website, which

provides a platform to expand into a new and growing

market with our existing portfolio of products.

Link to strategy

Link to risk

3. U.K. &

INTERNATIONAL

What we have seen

Following the Russian invasion of

Ukraine last year, we continue to see

a greater focus from NATO countries

of defence, with added pressures for

spend to reach 2% of GDP or higher.

How we are responding

We continue to supply NATO forces with our respiratory

portfolio via our sole-source framework contract with the

NATO Support and Procurement Agency (NSPA), with an

eighth country joining since the start of the contract in 2021.

We also received an order for our EXOSKIN CBRN boots and

gloves under the three year framework contract we won this

year, showcasing the strength of the platform in providing

our entire range of CBRN protective capabilities.

Link to strategy

Link to risk

Bids and contracts

Recruiting and

retaining talent

Strategy execution

and new product

development

Manufacturing

Political and

economic stability

Financial controls

Sustainability

Security and cyber

Compliance and

internal controls

Defence sector

concentration

Risks

Links

Advance

Revolutionise

Transform

Strengthen

Strategy

Read more about our risk

management on page 62

MARKET OVERVIEW

OUR CORE MARKETS

MACRO CHANGES

Avon Protection plc Annual Report and Accounts 2023

20212030 REVENUE OPPORTUNITY CAGR*

8.5%

U.S. DOD

1.9%

U.S. DOD

1.3%

Commercial Americas

2.8%

Total opportunity CAGR

1.9%

Commercial Americas

2.4%

U.K. & International

2.3%

U.K. & International

Respiratory Protection

Head Protection

U.S. DOD

Commercial Americas

U.K. & International

RESPIRATORY PROTECTION

2023 Revenue by SBU

HEAD PROTECTION

$76.7m

$57.5m

$109.6m

$86.9m

$156.9m

2023 Revenue by Market

* Based on forecast data supplied by Renaissance Strategic Advisors in 2021. We expect to match or exceed these growth rates as we increase share within our markets.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

PRODUCT PORTFOLIO

RESPIRATORY

PROTECTION

EXAMPLES OF OUR RESPIRATORY PORTFOLIO

Our leading range of respiratory protection

includes respirators, powered and supplied

air systems, filters, spares and accessories,

as well as underwater systems and CBRN

protective wear.

RESPIRATORS

SPARES & ACCESSORIES

CBRN PROTECTIVE WEAR

POWERED & SUPPLIED AIR

RESPIRATORS

Our 50 series respirators utilise shared key technologies, offering maximum

protection against CBRN threats. With multiple tailored variants, we meet diverse

customer needs effectively and comprehensively. The M50 and FM50 masks are

the most advanced military general service respiratory protection masks to date,

offering significant improvement in comfort, usability, operational effectiveness

and protection. The C50 mask is based on the M50 and is the leading mask used by

U.S. law enforcement agencies, offering high protection, outstanding field of vision

and superior comfort. The PC50 was developed for budget challenged prisons,

correctional officers, border control and other non-CBRN requirements that require

protection in dangerous and contaminated environments. TheFM53 and FM54

masks were developed specifically for specialist applications where the user needs

to respond to ever-changing operational conditions.

We manufacture the General Service Respirator (GSR) which is the standard

issue to all U.K. service personnel across the Army, RAF and Navy; the GSR

twin-canister, single-visor design is to the U.K. MOD’s precise specification and

features high performance filtrationtechnology.

SPARES AND

ACCESSORIES

We offer service support

to global customers

through replacement filters,

spares, accessories and

communication systems,

providing through-life

support to our range of

respirators and other life

sustainingequipment.

ESCAPE HOODS

Our NH15 escape hood

provides portable protection.

Theultra-low profile makes

it more convenient to carry

and enhances the range

of respiratory protection

available to escape a

hostilesituation.

Avon Protection plc Annual Report and Accounts 2023

EUROPEAN MILITARY

CONTINUE TO SELECT

OUR MISSIONCRITICAL

PROTECTION

We have recently welcomed orders from a new

European military for both FM50 respirators

and EXOSKIN CBRN boots and gloves under our

NSPAcontracts.

This military joins several other NATO nations, including

Belgium, Denmark, Finland, the Netherlands, Norway,

Latvia and Lithuania, in deploying our FM50 respirators

to protect its armed forces. But most significantly, this

is the first NATO nation to place an order for our boots

and gloves under the recently awarded three-year

framework contract.

While these orders may be relatively small in scale,

they hold huge significance for us as they demonstrate

how our NSPA framework contracts serve as a robust

platform for showcasing our extensive CBRN portfolio

to NATO nations and partners. They also reaffirm our

steadfast partnership with NATO in bolstering CBRN

protection capabilities across the alliance.

NATO nations utilising our NSPA contracts

POWERED AND

SUPPLIED AIR

Designed for specialist capabilities,

our complementary value-added

subsystems extend operational

capability. Our range of Powered

Air Purifying Respirators (PAPR),

Self-Contained Breathing

Apparatus (SCBA) or a combination

of the two (CS-PAPR) can be

deployed with our respirators to

provide clean, breathable air.

UNDERWATER

SYSTEMS

Our MCM100 is a fully closed

circuit, electronically controlled,

mixed gas rebreather suitable

for a range of specialist military

or tactical diving disciplines,

such as mine clearance or

explosivesdisposal.

THERMAL

IMAGING

CAMERAS

Our Mi-TIC range of Thermal

Imaging Cameras includes the

lightest and smallest thermal

imagers available certified to

comply with NFPA 1801:2021,

alongside a wider range of

cameras developed from the

sametechnology.

CBRN PROTECTIVE

WEAR

With an extensive knowledge of

military and first responder CBRN

requirements, wedeveloped

the EXOSKIN-B1 CBRN boots

and EXOSKIN-G1 CBRN gloves,

designed to meet the unique

requirements of the modern

warfighter and tactical operator.

PRODUCT IN ACTION

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

PRODUCT PORTFOLIO CONTINUED

HEAD

PROTECTION

Our head protection

portfolio is focused on next

generation ballistic and

bump protection helmets,

as well as helmet liner

andretention systems.

HELMETS

LINER & RETENTION

SYSTEMS

EXAMPLES OF OUR HEAD PROTECTION PORTFOLIO

ACH GEN II

The Advanced Combat

Helmet Generation II (ACH

GEN II) is a new lighter

weight version of the U.S.

military’s general issue

ballistic helmet, making it

more comfortable for the

user to wear.

NG IHPS

The Next Generation

Integrated Head Protection

System (NG IHPS) is one of

four major components

of the U.S. Army’s Soldier

Protection System. The NG

IHPS provides lightweight

and high performance

head protection to

U.S. soldiers.

EPIC

The EPIC range features

three models tailored

to the needs of first

responders. Leveraging

advanced ballistic helmet

technology, the new

helmet series features

lightweight high-

performance material

paired with our Team

Wendy liner systems for

premium comfort.

EXFIL

BALLISTIC SL

The EXFIL Ballistic is the

general issue ballistic

helmet for the Australian

Defence Force, whilst

the EXFIL Ballistic SL is

used by elite teams and

agencies around the

world including LAPD

andBrazilian DPF.

EXFIL LTP

The EXFIL LTP

(Lightweight, Tactical,

Polymer) bump helmet

provides impact

protection and a stable,

comfortable platform for

mounting night vision and

other accessories.

HELMETS

Avon Protection plc Annual Report and Accounts 2023

EXFIL LTP DELIVERY FOR U.S.

NAVAIRCOMMUNITY

Our EXFIL LTP bump helmet, which is ideal for maritime

environments, was chosen by the U.S. NAVAIR, which supports

the supply of equipment for the U.S. Navy, to protect shore-based

marine maintainers and the aviation maintenance crew. This crew

is responsible for the U.S. Navy’s flight deck operations on aircraft

carriers and the maintenance and repair of aircraft on board.

WE’RE PROUD TO MEET CUSTOMER

NEEDS AND ENHANCE MAINTAINER

SAFETY AS OUR INNOVATIVE HELMET

PLATFORM GAINS GLOBAL INTEREST

FROMALLIEDNAVAL FLEETS.

10k

helmets delivered to U.S. Naval Air Systems Command

PRODUCT IN ACTION

SAR

BACKCOUNTRY

The SAR Backcountry is

the firstpurpose-built

search and rescue helmet

to provide accessory

mounting capabilities while

meeting key industrial

and mountaineering

performance standards.

CAM FIT

RETENTION

SYSTEM

The CAM FIT Retention

System uses a micro-

adjustable BOA Fit

System that stabilises the

weight of the helmet by

distributing light, even

pressure around the head.

ZORBIUM

ACTION PAD

ZAP 7PAD NSN

LINER SYSTEM

Since 2005, the ZAP 7-Pad

NSNLiner System is the

standardissue system

authorised for use in all U.S.

Army, U.S. Marine Corps

and U.S. Navy ground

combat helmets. More

than seven million pad

sets have been supplied

since the programme’s

inception.

EPIC AIR LINER

SYSTEM

The EPIC Air design utilises

proven Zorbium foam

technology, offering

leading-edge impact

protection without

adversely affecting weight

or heat dissipation.

EXFIL

MARITIME

LINER SYSTEM

The EXFIL Maritime

Liner System features

sealed pads optimised

to withstand routine

exposure to water. The

liner’s quick-drying

capability helps reduce

the added helmet system

weight and discomfort that

results from waterlogged

helmet pads.

LINER AND RETENTION SYSTEMS

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

BUSINESS MODEL

Our products and services maximise the capabilities ofourcustomers

and create value for all our key stakeholdergroups.

OUR COMPETITIVE ADVANTAGES

AN EFFECTIVE

BUSINESS MODEL

Provide world-class

service, training

and aftercare

Reinvest

for growth

Understand

customer needs

Research and

development

Design and

manufacture life-

saving products

Bid for and win

new programmes

and contracts

PROTECTING

MORE LIVES

Market positions

Our market-leading positions are protected

by our world-leading technologies, high

value brands, significant barriers to entry

andintellectual property rights.

Our partnerships

We maintain strong relationships with a

diverse customer base ofglobal militaries

and first responders, where we work in

tandemtodevelop and deliver specific

protective needs.

Our people

We have extensive in-house capabilities

across all of our functions, withempowerment

and trust at the centre of what we do to get

thebestout of our people.

HOW WE CREATE VALUE

Avon Protection plc Annual Report and Accounts 2023

THE VALUE WE CREATE

Employees

Our people are essential in enabling us to meet our customers’

requirements, and we must provide a happy, healthy and

rewarding environment to allow our employees to thrive.

Initiatives include Balance@Avon, our employee resource

group which aims to help develop and promote our female

leaders of the future; LinkedIn Learning, our e-learning

platform; our network of Culture Champions who promote the

views and interests of our employees across our sites; and a

wide range of health awareness initiatives.

Communities

We acknowledge the responsibility we have to the local

communities our sites operate in and look to contribute in

more ways than just providing employment opportunities.

In this year alone we have made over $124k in donations

to local charities and organisations including hospices,

schools, emergency service providers and community

groups, in addition to our partnerships with Team Forces and

Forces Wives Challenge, and our donation of 20% of sales

generated via the Team Wendy e-commerce site to The Honor

Foundation on Giving Tuesday.

Customers

We understand the criticality of our products in enabling

our customers to perform life-endangering tasks in service

of protecting others. Our products are designed to meet

the specific demands of our users, and the highest quality

standards are upheld to ensure they work without fail when

they are neededmost.

Environment

The climate impacts the life-threatening situations in which

our products and services help save lives. Working towards

our net zero goal, building in more circularity and the targeted

use of resources will help us mitigate and adapt to protect our

planet. This year we have established focused sustainability

targets for us to deliver against over the next five years.

Suppliers

Our supply chain is essential in the timely delivery of our life-

saving products, and we maintain robust partnerships with our

extensive supplier network, whilst ensuring they abide by the

same ethical and moral standards that we do.

Shareholders

Through successful management of the business and

execution of our STAR strategy, we return value to our

shareholders via dividends and reinvesting in the business to

drive future growth and margin expansion.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Lots done. Lots to do.

2023 has been a transformative year for the Group. We have undertaken

significant changes that have reshaped the very core of our business.

This journey has seen us realign our structure into two Strategic Business

Units, a move designed to improve delivery, focus and accountability.

We launched our new STAR strategy to realise our potential and deliver

revenue growth, mid-teens operating margins and improved cash flow.

Furthermore, we have defined a combined purpose, mission, vision and

set of values that unite our entire business under a shared ethos with a

view to accelerating strategy execution.

We have maintained high levels of energy through the continued

execution of our STAR strategy and we have made significant progress

in each of the key areas, which is a testament to the dedication and

determination of our team.

Strengthen

In the period, we have wound-down and subsequently exited the

Armour business on-time and to plan, with the successful delivery of

all outstanding obligations. As well as giving us an immediate financial

benefit, this also enables us to fully focus on the objectives and priorities

within the continuing business, whilst freeing up space to optimise helmet

manufacturing within our Irvine facility.

The Group has diligently worked to implement the new operating model

announced at the half year results, with the creation of two Strategic

Business Units (SBUs) for Respiratory Protection and Head Protection, each

with focused leadership teams who are empowered and accountable

for delivering our STAR strategy. Development of improved performance

management processes is well underway, with objectives, key results and

full financial performance reports incorporated at an SBU level.

We have continued to strengthen our teams in many key areas including

finance, sales, programme management, engineering, and HR. Importantly,

we have strengthened the operational leadership teams at our Salem and

Irvine facilities, which is essential in ensuring the successful delivery of the

U.S. DOD contracts which underpin the growth of the Head Protection

business in the coming years.

Following the lower than expected demand for our respiratory products in

the year, we took decisive action to right-size the capacity of the business.

In Head Protection, we have improved productivity following the exit from

the Armour business. Altogether, we have reduced headcount by around

100 people through these initiatives.

TOGETHER WE REALISE

OUR POTENTIAL

CEO’S REVIEW

AVON PROTECTION HAS EXTRAORDINARY POTENTIAL

AND CAN SIGNIFICANTLY IMPROVE GROWTH,

MARGINS AND ROIC.

During the second half, we have also developed a reinvigorated purpose,

mission, vision and values and are excited to start sharing this across the

Group. To create something that is reflective of our collective aspirations,

we initiated a comprehensive process that invited employees to provide

their feedback through surveys and focus groups. These insights were

invaluable and provided the foundations upon which our shared values

were developed, aligning us as a company with a clear direction and

shared ethos. Our Group will be more aligned than ever before, united in

our goal to protect lives and provide unparalleled support to those who

protect us, all of which is underpinned by our STAR strategy.

Avon Protection plc Annual Report and Accounts 2023

Transform

Whilst the majority of the year has been focused on strengthening

and stabilising the business, attention has now turned to a number of

transformational initiatives which are at the core of ensuring we can

deliver mid-teens operating margins, and improved return on capital and

cash flow.

The transformation programme has been split into five work streams

with dedicated teams, and most importantly defined costs and benefits.

Furthermore, we have aligned the incentives of the business to these

initiatives with a greater focus on profit and average working capital turns

for our annual bonus scheme, and an emphasis on 2026 earnings and ROIC

for our longer-term incentive plans.

The first and single biggest lever within transformation is footprint

optimisation. Within Head Protection initiatives include insourcing the

production of our EXFIL Ballistic SL helmets, the movement of finishing

for our new EPIC range of helmets to Cleveland, and the consolidation of

high-volume ACH GEN II production into Cleveland and Salem. All of these

initiatives deliver good margin improvements and support the future

growth of the Head Protection business. We have further initiatives in our

pipeline which will help us accelerate further.

Secondly comes operational excellence. Laying the groundwork for a

culture of continuous improvement will be essential in driving efficiency

and growing margins as we move forward, and we took some important

first steps in the second half of the year. Regular Kaizens have been

implemented at all our sites, with a number of significant improvements

already realised, including reducing the scrap rate for NG IHPS, as well

as the creation of a funnel of Kaizens for the new year. To further drive

operational improvement we have developed a new set of operational

metrics with consistency across the SBUs; these will be rolled out to all sites

at a value stream level along with a reinvigorated operational tier system

in the new year.

STRATEGY IN ACTION

TOGETHER WE

TRANSFORM

INTRODUCING OUR

TRANSFORMATION PROGRAMME

The Transform point of our STAR strategy focuses on five pillars:

footprint optimisation, operational excellence, commercial

optimisation, functional excellence and programme management

excellence. Each of these pillars presents opportunities to reduce

costs, realise efficiencies and improve working capital turns.

The chart below shows how our transformation initiatives are

progressing through our transformation gates, with the degree

of shading in each star showing the assessment of progress so

far. Over the next three years we should expect to see all the stars

filled in.

We’ve made excellent progress validating the value of our footprint

optimisation, operational excellence and functional excellence

programmes, but have some more work to do on validating

procurement opportunities. We have found some quick wins

in commercial optimisation but have not yet validated the full

opportunity.

Importantly, we have nearly finished planning the footprint

optimisation and functional excellence programmes and will move

firmly into execution this year. This is important because it means

we will see the full benefits of these initiatives in 2026 and some

earlier than that.

Footprint

Optimisation

Operational

Excellence

Commercial

Optimisation

Functional

Excellence

Programme

Management

Excellence

Appraise Plan Execute

Value

validated

Initiative

identified and

value estimated

Implementation

planned

Benefit

realised

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Transform continued

Commercial optimisation focuses on streamlining our product offerings

and routes to market, whilst ensuring we are fully leveraging our market

leading positions. The introduction of the good, better, best range of EPIC

helmets has been very successful, with the majority of customers choosing

the top end EPIC specialist variant. Within Respiratory Protection we have

identified a number of pricing optimisation opportunities on products

where we do not currently make acceptable levels of margin.

The final two workstreams of functional excellence and programme

management excellence are at the earlier stages of their execution, but

important first steps have taken place with a number of opportunities

identified to improve functional efficiency, reduce waste, and improve

productivity. We will also be expanding the Kaizen methodology outside

of operations to drive similar levels of improvement in other areas of the

business including HR, finance and new product introduction.

We estimate that the total cash cost for these transformation initiatives

will total between $10-12 million in 2024, including $1-2 million of capital

expenditure. The transformation expenses are expected to be recognised

as exceptional cost. There will be further transformation costs in 2025, with

a sharp decrease expected in 2026.

Advance – Respiratory Protection

A lot of the effort within Respiratory Protection this year has focused on

rebuilding the sales pipeline, either by innovation of new products or new

channels to market.

Earlier in the year we announced that we had been awarded a framework

contract by the NSPA, to supply our EXOSKIN range of CBRN protective

boots and gloves, and this was followed up later in the year by the first

order under the contract from a NATO customer. Importantly this serves

as the first country to have procured against both the boots and gloves

contract and the existing framework contract for FM50 masks, evidencing

the robust platform the contracts provide for showcasing our extensive

CBRN portfolio to NATO nations and partners.

We have made good progress strengthening our relationship with the

U.S. DOD programme office and are seeing significantly higher levels of

collaboration on future product developments. We do not expect this to

translate into increased U.S. DOD demand this year, which will be impacted

by a gap in filter production. Going forwards, we will level load the filter

line to avoid this happening again.

We are continuing to focus on capturing the underwater market with our

world-leading rebreather technology, and see a strong pipeline which

we expect to enable us to expand our customer base beyond the NATO

countries that we have already won contracts with.

Looking forward, we will focus on the launch of our revolutionary new

Modular Integrated Tactical Respirator (MiTR) mask and goggle system

via our Quick Launch process, increasing sales of our complete CBRN

portfolio including our new protective suit developed in partnership with

OPEC CBRNe and importantly start to see returns from sales of rebreathers

following many years of continuous product development.

Advance – Head Protection

Within Head Protection, the focus has been on ensuring we have the

capacity and capability to fulfil the demand against our U.S. DOD

contracts.

The ramp-up of NG IHPS production has made significant progress,

and in total over 12,000 helmets were successfully produced, approved

and delivered within the year. We expect to deliver around 24,000 NG

IHPS helmets in 2024. This, in combination with the award of a five-

year extension to the J&A contract, underpins growth within the Head

Protection business.

Formal FAT approval for ACH GEN II has been received, which represents an

important milestone in de-risking this programme. We will now move into

the ramp-up phase of this programme, but with the lessons learned from

the successful launches of both NG IHPS and EPIC this year, I am confident

that we will start production in H1.

The new EPIC range of ballistic helmets that launched earlier in the

year demonstrates the collaboration across our Head Protection sites,

combining the ballistic helmet technology that was developed for the

ACH GEN II programme with the Team Wendy liner systems to provide a

lightweight, high-performance helmet with premium comfort and a best-

in-class performance to weight ratio. Initial interest and orders have been

very promising with around 10,000 ordered to date.

The focus for 2024 remains on improving productivity and scrap rates as

we ramp-up production to drive margins up to an acceptable level.

CEO’S REVIEW CONTINUED

THE NEW EPIC RANGE OF BALLISTIC HELMETS THAT LAUNCHED EARLIER

IN THE YEAR DEMONSTRATES THE COLLABORATION ACROSS OUR HEAD

PROTECTION SITES, COMBINING THE BALLISTIC HELMET TECHNOLOGY

THAT WAS DEVELOPED FOR THE ACH GEN II PROGRAMME, WITH THE

TEAM WENDY LINER SYSTEMS TO PROVIDE A LIGHTWEIGHT, HIGH

PERFORMANCE HELMET WITH PREMIUM COMFORT, AND A BESTINCLASS

PERFORMANCE TO WEIGHT RATIO TO THE FIRST RESPONDER MARKET.

Avon Protection plc Annual Report and Accounts 2023

Revolutionise

Revolutionise focuses on a longer-term horizon and we have made a

number of important first steps in the year.

Our Head Protection team has started work on the next generation of

bump helmets, as well as leveraging the Ceradyne technology into new

high-performance helmets for the commercial market.

We have also had success in securing a number of funded research and

development programmes, which further demonstrates the strong

partnerships we hold with our customers in collaborating on the next

generation of protective technologies. Within Respiratory Protection we

received funding for the development of the next generation of filters,

as well as funding for the development of new diving masks and shallow

water rebreathers to complement our underwater portfolio. In Head

Protection we continue to be one of the leading experts in traumatic brain

injury mitigation and have received funding to continue our research in

this area.

Sustainability

We protect lives; it’s ingrained within our culture and is at the heart of

everything we do, which is why sustainability is so important to us. We

recognise we are at the start of our sustainability journey so have been

focused on developing a high-level sustainability vision linked to our

purpose and strategy.

During the period, we evolved our sustainability agenda by redefining

and expanding the four distinct pillars which underpin our sustainability

agenda to better reflect our key stakeholders, each of whom has an

important role to play in our journey. These are now known as our planet,

our supply chain, our customers and our colleagues and communities.

Within each pillar, we have identified priority objectives which will be

closely monitored by the Board. Targets have been agreed against these

ambitions and will help drive positive momentum. Each pillar also has a

number of other focus areas that support the priority objectives and are

necessary for us to manage as part of our day-to-day stewardship.

Capital allocation policy

We have completed a review of our capital allocation policy and have

introduced a new framework. First and foremost, we want to focus our

attention and resources on capitalising on the growth opportunities ahead

of us, whilst maximising the returns from these growth opportunities

through the targeted transformation activities detailed above. Our second

focus is to reduce debt to enable flexibility and minimise our interest

costs. Thirdly, while we recognise the importance of dividends to some

of our shareholders, we want to ensure that these distributions are sized

appropriately and, importantly, set at a level from which they can grow

as business performance starts to improve on a sustainable basis. With

this in mind, we believe that an appropriate level of distribution is for

dividend payments to be between 2.5 and 3x covered by adjusted basic

EPS through the cycle.

Beyond these three core principles, in the medium term we will consider

inorganic bolt-on opportunities with the express requirement that they

accelerate the delivery of our strategy. However, we do not anticipate

considering inorganic investments until we have meaningfully improved

profitability in the Head Protection business and reduced debt to a more

comfortable level.

Jos Sclater

CEO

21 November 2023

STRATEGY IN ACTION

TOGETHER WE

ADVANCE

A NEW STANDARD OF SELF

CONTAINED BREATHING APPARATUS

This year we saw our upgraded ST54 enhanced multi-

mission Self-Contained Breathing Apparatus (SCBA) receive

certification to the NFPA 1986 Standard on Respiratory

Protection Equipment for Tactical and Technical Operations,

including NIOSH CBRN certification.

Achieving this standard, together with the NIOSH CBRN

certified FM54 respirator, reinforces our product as the top

choice tactical SCBA solution for law enforcement, first

responder and Special Forces user groups operating in the

harshest respiratory threat environments.

The team made improvements to the system to achieve this

certification, including upgraded breathing performance

with reduced exhalation resistance, and the addition of a new

clear outsert with higher abrasion resistance. Comfort for the

user has also been improved, with enhanced stability and

weightdistribution.

IT HAS BEEN A REAL HONOUR

TO WORK ON THIS STRATEGIC

PRIORITY WITH TALENTED PEOPLE

ACROSS THE BUSINESS, AND

PROVIDE OUR USERS WITH A

COMFORTABLE, CUSTOMISABLE

HIGH PERFORMANCE SYSTEM.

Colin Horne, Global Category Manager – Specialist Respiratory

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

CEO’S REVIEW CONTINUED

DEVELOPING OUR

STAR STRATEGY

Developing our strategy

To develop our STAR strategy, the Respiratory and Head Protection SBUs

united their expertise, bringingtogether diverse teams in a series of

workshops.

An intense focus was placed on determining the levels of ambition for the

Respiratory and Head Protection product families, conducting a thorough

analysis of their strengths and weaknesses, and meticulously mapping out

the threats and opportunities within existing, adjacent and new market

spaces. With a comprehensive agenda, the teams actively engaged in

activities designed to explore these critical areas, pushing their boundaries

to think critically about the business’ strategy, available resources, methods

for measuring success and the evolving market landscape.

This collective effort, driven by the active participation of over

40employees, played a pivotal role in the strategic evolution of the

business, crucially helping to improve buy in and reduce execution risk.

Linking to our sustainability pillars

Improve efficiency and

working capital turns

TRANSFORM

Organically grow the

core and scale up

emerging opportunities

ADVANCE

Leverage innovation

to drive further growth

REVOLUTIONISE

Strengthen the fundamentals

to provide a stable platform

for transformation

STRENGTHEN

Read more on page 42

Our planet

Our colleagues and communities

Our customers

Our supply chain

STRENGTHEN

TRANSFORM

REVOLUTIONISE

ADVANCE

Avon Protection plc Annual Report and Accounts 2023

OUTLINING OUR

JOURNEY

STABILISE

MIDTEENS OPERATING MARGINS

CONTINUOUS

IMPROVEMENTS

GROWTH

R&D

SALES

2023 20262024 20272025 2028 2029

STRENGTHEN

TRANSFORM

ADVANCE

REVOLUTIONISE

OUR PLAN IN DETAIL

Strengthen

The Strengthen element of our

STAR strategy is focused on our

concerted efforts to reinforce

the foundational aspects of our

operations, thereby facilitating

significant enhancements in our

ability to deliver exceptional value

to our customers with speed

andprecision.

Transform

The Transform element of our

STAR strategy embodies our

commitment to achieving

substantial gains in efficiency

and working capital turnover

by concentrating on proven

transformational strategies and

tactics. This includes streamlining

processes, optimising resources

and embracing innovative

approaches to drive positive

change throughout the business,

ultimately enhancing our overall

performance and sustainability.

Advance

The Advance element of our STAR

strategy represents our strategic

focus on organic growth in our

core business while simultaneously

scaling up emerging business

models. We achieve this by

tailoring strategic initiatives for

each SBU. This element emphasises

our commitment to nurturing and

expanding our existing strengths

while innovating and diversifying

to adapt to evolving market

dynamics, ensuring long-term

success and sustainability.

Revolutionise

The Revolutionise element of

our STAR strategy underscores

our pursuit of thrilling, long-term

opportunities by harnessing our

core competencies to fuel growth

through innovative approaches

and market expansion. This

strategic element emphasises

our dedication to exploring new

horizons and embracing disruptive

innovations to drive sustainable,

transformative change while

venturing into new markets,

making us a frontrunner in our

industry’s evolution.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

STRENGTHENING

TOGETHER

STRATEGY IN ACTION

STRENGTHENING TOGETHER

CLAIR’S STORY

This year we embarked on a transformative

journey to define a new vision, mission and

values, and provide a renewed sense of purpose

and direction.

Throughout this process we have engaged with

our employees through surveys, workshops and

focus groups. Their insights and candid feedback

were invaluable in guiding our efforts and

ensuring alignment with their perspectives to

shape the new vision, mission and values.

I am incredibly proud of the work that has been

accomplished this year and to have been a part of

it, seeing the collaboration between teams and

the generation of a diverse range of ideas. Our

new vision, mission and values are not just words

on a wall; they are the foundation of a renewed

commitment to our customers, our employees

and the communities we serve.

Clair Randall

Director of Corporate Communications

Avon Protection plc Annual Report and Accounts 2023

2424

STRENGTHENING

TOGETHER

ACHIEVEMENTS OVER THE YEAR

Effective operating model

Clear strategy with resources aligned

to strategic initiatives

Strong management team

Initial right sizing complete

High impact performance

management implemented

Successfully exited the

Armour business

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Annual Report and Accounts 2023 Avon Protection plc

TRANSFORMING

TOGETHER

STRATEGY IN ACTION CONTINUED

TRANSFORMING TOGETHER

RAUL’S STORY

We’re focused on growing and formalising our continuous

improvement culture to continue to explore new ways to improve

processes, stay competitive, increase quality and output and improve

the work environment.

I am proud to have been part of a cross-functional team that has

undertaken six months of projects across our facility in Salem, looking

to improve efficiencies and maximise our available floor space.

Several pieces of equipment and tools have been repurposed at our

other facilities, actions have been taken to enhance the sustainability

of our processes and there has been a focus on improving 5S.

The team has risen to the challenge and these projects and Kaizens

have reinvigorated a sense of continuous improvement culture and

unity, while providing development opportunities for our teams.

Kaizens are continuing across the sites, looking to observe, analyse,

plan and action changes to enhance our manufacturing performance

and reduce non-value-added activities. This is supported by training

across all functions by our continuous improvement teams.

Raul Vargas

Salem Helmet Value Stream Manager

Avon Protection plc Annual Report and Accounts 2023

TRANSFORMING

TOGETHER

FUTURE OBJECTIVES

Footprint optimisation

Further steps to improve gross margin

Operational excellence

Implement funnel of improvement

initiatives targeting scrap reduction

andproductivity improvement

Commercial optimisation

Improved pricing on priority low-margin

SKUs and optimised route to market

Functional excellence

Implement identified opportunities

Programme management excellence

Transformation governance and

control embedded

ACHIEVEMENTS OVER THE YEAR

Footprint optimisation

EPIC finishing and assembly moved

to Cleveland

ACH GEN II capacity ramp up to move

toCleveland, in addition to Salem

Operational excellence

Continuous improvement culture

andcapability

Standard operating metrics implemented

Commercial optimisation

EPIC good, better, best strategy

implemented

Identified pricing optimisation

opportunities

Functional excellence

Detailed plan created for

finance excellence

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Annual Report and Accounts 2023 Avon Protection plc

ADVANCING

TOGETHER

STRATEGY IN ACTION CONTINUED

ADVANCING TOGETHER

DARON’S

STORY

This year we launched the EPIC line of ballistic helmets. This

was the first collaboration across the three Head Protection

sites and is the result of the innovative synergies between

Avon Protection, Team Wendy and Avon Protection Ceradyne

coming to life. The EPIC helmet range leverages the latest

U.S. DOD ballistic protection technology pedigree from

Avon Protection Ceradyne, with exceptional head protection

from Team Wendy liner and retention systems, and seamless

integration with Avon Protection respirators. The new line

offers our law enforcement officers scalable options for

exceptional protection atan economical price.

It was a proud moment to see the output of work from

extraordinary individuals in cross-functional teams

bringing this EPIC range to life and delivering innovation

to our customers. From initial validation and prototypes,

to manufacturing process set-up and marketing collateral

completion, our teams displayed dedication and unique

collaboration throughout the process to bring this product to

the market.

Currently available to the Americas first responder market,

we’re looking forward to expanding the offering to our

e-commerce website and building a strong pipeline of

opportunities with militaries across the globe as we expand

into EMEA regions.

Daron Shank

Product Category Manager

Avon Protection plc Annual Report and Accounts 2023

HEAD

PROTECTION

ACHIEVEMENTS OVER THE YEAR

NG IHPS

Signed five-year IDIQ with contract ceiling

of$676 million

FAT approval received ahead of the competition

ACH GEN II

IDIQ with 5 years remaining and a contract

ceiling of $204 million

FAT approval, ahead ofcompetition

EPIC

Strong demand for new EPIC helmet with ACH

GEN II technology

Successful production ramp-up

FUTURE OBJECTIVES

NG IHPS

Productivity and scrap improvements

ACH GEN II

Ramp up production to meet

customer demand

EPIC/EXFIL

Increase production further with lower

cycle time

Refresh EXFIL range and embed

Ceradyne shell technology

Pads

Increase production to meet

higher demand

Improve productivity and reduce scrap

RESPIRATORY

PROTECTION

ACHIEVEMENTS OVER THE YEAR

Boots and Gloves

Won the NSPA contract and received first major

order from a NATO customer

U.S. DOD

High levels of collaboration on future

productdevelopment

Rebreathers

Strong pipeline

FUTURE OBJECTIVES

Launch MiTR

Use our Quick Launch process to launch

revolutionary new respiratory and eye

protection system

Rebreathers

Convert pipeline into profitable growth

Complete CBRN solution

Sell ensemble through existing channel

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Annual Report and Accounts 2023 Avon Protection plc

REVOLUTIONISING

TOGETHER

STRATEGY IN ACTION CONTINUED

REVOLUTIONISING TOGETHER

HENRY’S STORY

Our journey with the MiTR project has been nothing short of

transformative. From its inception, when our engineering team’s

ingenuity met the U.S. DOD’s needs to receiving very positive customer

feedback from customer trials and DSEI 2023.

The most rewarding aspect has been the opportunity to develop

something revolutionary from the ground up. MiTR is about

understanding the nuanced needs of our end users and we recognise

that unparalleled protection isn’t solely about intensity; it’s also about

reducing burden. MiTR, with its innovative integration of respiratory

and ocular protection, lightens the load for our soldiers, enabling

them to execute their crucial roles with heightened confidence

andefficiency.

The efforts of the design engineering team haven’t just expanded

Avon Protection’s product portfolio; they’ve created a new category

in respiratory protection. I’m proud to be part of a team that not only

envisions unparalleled protection but actively pioneers it. Together,

we’re not just developing gear; we’re shaping the future by protecting

those who protect us.

Henry Chadwick

Senior Design Engineer

Avon Protection plc Annual Report and Accounts 2023

REVOLUTIONISING

TOGETHER

ACHIEVEMENTS OVER THE YEAR

Rebreathers

Secured U.K. MOD funding for new

underwater masks

Secured U.K. MOD funding to develop

shallow water rebreather

Next Generation Helmet Technology

NG Bump helmet developed and in

evaluation

Increasing customer funding for next

generation traumatic brain injury

mitigation technology

FUTURE OBJECTIVES

Next Generation Helmet Technology

Funding to further advance ballistic

protection and prevent traumatic

brain injury

Non-Ballistic Offerings

Introduce Next Generation Bump Helmet

Broaden SAR helmet into adjacent markets

High PerformanceRifle Rated Helmets

Gain momentum with portfolio expansion

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Annual Report and Accounts 2023 Avon Protection plc

KPIS

Our strategy is underpinned by a variety of KPIs, enabling us to monitor

itsimplementation, as well as overall business performance.

HOW WE MEASURE

FINANCIAL KPIs

CLOSING ORDER BOOK

Reason for choice

Provides a level of confidence of revenue

tobe recognised in the next financial year.

How we calculate

This is measured as the value of future

revenue attached to orders not yet fulfilled.

Comments on results

We have seen strong growth in our Head

Protection order book, which includes

$59million of orders for NG IHPS and

$20million for ACH GEN II.

Link to STAR

$135.8m

+12.3%

$135.8m

$120.9m

$116.5m

FY23

FY22

FY21

ORGANIC CONSTANT CURRENCY REVENUE GROWTH

Reason for choice

Indicates the rate at which the Group’s

business activity is changing over time.

How we calculate

Growth in revenue comparing current period

revenue with prior period revenue translated

at 2023 exchange rates.

Comments on results

Revenue was down 7.5%, with a decline in

Respiratory Protection following a very strong

prior year from the NSPA contract, partially

offset by growth in Head Protection.

Link to STAR

(7.5)%

-1,610bps

8.6%

(7.5)%

FY23

FY22

ADJUSTED OPERATING PROFIT MARGIN

Reason for choice

Provides a measure of the underlying

profitability of the continuing activities of

the business.

How we calculate

The ratio of adjusted operating profit to

revenue. Adjusted operating profit is defined

as operating profit excluding exceptional

items and discontinued operations.

Comments on results

Our margins are down slightly on the prior

year, with lower revenue in the higher

margin Respiratory Protection business

and manufacturing ramp-up costs in Head

Protection, offset by favourable Respiratory

Protection product mix, lower freight costs

and lower central overheads.

Link to STAR

8.7%

-20bps

8.7%

8.9%

13.4%

FY23

FY22

FY21

PRODUCT DEVELOPMENT % OF REVENUE

Reason for choice

Provides a measure of the Group’s investment

in new products and processes, which

provides the foundation for the Group’s

future growth.

How we calculate

Total expenditure on R&D expressed as a

percentage of revenue. R&D expenditure

includes amounts funded by customers,

capitalised expenditure and amounts

expended directly to the income statement.

Comments on results

We continue to invest in the next generation

of technologies, with a small decline

in expenditure offset by the reduction

in revenue.

Link to STAR

4.2%

+10bps

4.2%

4.1%

5.5%

FY23

FY22

FY21

Avon Protection plc Annual Report and Accounts 2023

Transform Advance RevolutioniseStrengthen

Strategy

Links

CASH CONVERSION

Reason for choice

Provides a measure of the management of

working capital and the ability to convert

profits to cash.

How we calculate

The ratio of cash generated from operations

before the effect of exceptional items, as a

percentage of adjusted EBITDA.

Comments on results

Cash conversion was poor in the period,

primarily driven by increased receivables

following high levels of sales in the

final quarter.

Link to STAR

7.0%

-14,430bps

151.3%

83.2%

FY23

FY22

FY21

AVERAGE WORKING CAPITAL TURNS

Reason for choice

Provides a measure of the management of

working capital for the Group.

How we calculate

Average Working Capital Turn (AWCT)

istheratio of the 12 month average

month-end working capital (defined as the

total of inventory, receivables and payables

excluding lease liabilities) to revenue.

Comments on results

The decrease in working capital turns was

caused by increased inventory in Head

Protection relating to ramp up of U.S.

DOD helmet programmes, along with

delays in shipping a significant Respiratory

Protection order.

Link to STAR

3.7

-1.8 turns

3.7

5.5

FY23

FY22

ADJUSTED EARNINGS PER SHARE

Reason for choice

Measures the ability to generate a return

toshareholders.

How we calculate

Adjusted profit for the year divided by the

weighted average number of shares in issue.

Adjusted profit excludes exceptional items

and discontinued operations.

Comments on results

With a consistent number of shares,

thedecline in earnings per share follows

thedecline in profits.

Link to STAR

40.3c

-14.4c

40.3c

54.7c

88.3c

FY23

FY22

FY21

RETURN ON INVESTED CAPITAL

8.7%

-30bps

Reason for choice

Measures the profitability and efficiency

ofinvested capital.

How we calculate

Return on invested capital (ROIC) is

calculatedas adjusted operating profit

overaverage invested capital.

Comments on results

ROIC was consistent year on year, with the

reduction in operating profit offset by a

lower capital base following an impairment

to goodwill.

Link to STAR

8.7%

9.0%

FY23

FY22

Financial KPIs relate to the continuing operations of the Group, and exclude any impact of discontinued operations. More detail on the adjusted measures

can be found in Adjusted Performance Measures (APMs) section.

Prior year figures have been restated to reflect the discontinuation of the Armour business.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

KPIS CONTINUED

Non-financial metrics are just as important in ensuring

theeffective delivery of our strategy.

HOW WE MEASURE

OPERATIONAL KPIs

EMPLOYEE ENGAGEMENT

Reason for choice

Our people are crucial to delivering the

future success of the Group. This provides an

objective way to assess how engaged our

employees are with the business.

How we calculate

Employee engagement is measured through

regular surveys which ask employees to

respond to five statements on a scale from

strongly disagree to strongly agree.

Comments on results

Since 2022 when the business experienced

a high level of change, reorganisation, and

reduced performance, we have seen positive

momentum with employee engagement. The

2023 survey highlighted employee’s anticipation

with a new CEO joining and a refreshed vision,

mission and values. We look forward to seeing

the impact on employee engagement in FY24.

Link to STAR

67%

+1,200bps

67%

55%

68%

FY23

FY22

FY21

HEALTH AND SAFETY

Reason for choice

We want to keep everyone safe and well

with the support of a strong health and

safety culture.

How we calculate

We track this using a Lost Time Incident Rate,

which measures the number of lost time

incidents per 1,000employees.

Comments on results

We have seen an increase in the number of

lost time incidents this year, but we continue

to actively promote a strong safety culture

at all of our sites. During the period we have

rolled out our safety hub training to all U.K

employees and have piloted a cloud-based

environmental health and safety and quality

management solution in the U.S.

Link to STAR

+180%

FY23

FY22

FY21

GENDER DIVERSITY

Reason for choice

A diverse and inclusive workforce is critical

to ensure innovative thinking and business

growth. Gender diversity at senior levels ensures

our people are led by a leadership team that is

representative of our gender-diverse workforce

and the communities in which we operate.

How we calculate

This is measured as the number of females in

leadership positions, expressed as a percentage.

Comments on results

Due to both the reorganisation and leavers

during the period, we did not see an

increase in gender diversity at senior levels.

Our Balance@Avon initiative continues to

drive programmes that aim to develop and

encourage female talent and the Board

remains committed to championing more

females into leadership roles.

Link to STAR

19%

-200bps

19%

21%

29%

FY23

FY22

FY21

Avon Protection plc Annual Report and Accounts 2023

ONTIME DELIVERY

Reason for choice

Ensuring we are meeting the delivery

expectations of our customers is a core

component of maintaining high levels of

customer satisfaction.

How we calculate

We calculate this based on the percentage

of orders which are delivered on time to our

customers’ expectations.

Comments on results

We are pleased to see strong progress on

improving our rate of on-time deliveries,

which is essential given the criticality of the

products that we supply.

Link to STAR

95%

+1300bps

95%

82%

FY23

FY22

Links

SUPPLIER QUALITY

Reason for choice

Partnering with our suppliers to ensure

the best quality materials are used in our

products underpins value for our customers.

How we calculate

We measure this using defective parts per

million, which is calculated by taking the

number of defective units in a sample size,

dividing that by the total sample size, and

multiplying by 1 million.

Comments on results

We have seen an increase in defective parts

per million as we work through the ramp-up

in production with Head Protection, but we

continue to make good progress improving

our partnership with our suppliers to meet

our goals of reducing this figure.

Link to STAR

1,242

+40.7%

1,242

883

1,041

FY23

FY22

FY21

ENVIRONMENT

Reason for choice

Our mission to be a growing business with

a shrinking environmental impact, targeting

net zero by 2045 and reducing our absolute

scope 1 and 2 greenhouse gas (GHG)

emissions.

How we calculate

We measure the success of this with an

intensity ratio calculated using the amount

of scope 1 and 2 GHG emissions per $m

of revenue.

Comments on results

This year we restated the KPI to account for

the closure of our Armour business. This saw

our intensity ratio drop from 39.9 to 24.5 in

FY22. We have utilised the restated data to set

our emission reduction targets against.

Link to STAR

28.7

+17.1%

28.7

24.5

26.4

FY23

FY22

FY21

Transform Advance RevolutioniseStrengthen

Strategy

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

OUR PEOPLE

Strategy

STAKEHOLDER ENGAGEMENT

ENGAGING WITH

OUR STAKEHOLDERS

The Board acknowledges positive interaction with all stakeholders is

key to underpinning positive engagement and fully informed decision

making on material issues. As part of ensuring the requirements of section

172 are met and the interests of all stakeholders have been considered,

stakeholder engagement by the Board and the wider business takes place

across the Group at all levels. The Board recognises that to ensure the

continued success of the Group, all decisions must be taken with regard

to the long-term outcome of any course of action and its impact on all

stakeholders, including the Group’s employees, shareholders, customers

and suppliers, and the communities within which we operate. Throughout

the year, our Directors have had regard, amongst other matters, to the:

• likely consequences of any decision in the long term;

• interests of the Company’s employees;

• need to foster the Company’s business relationships with suppliers,

customers and others;

• impact of the Company’s operations on the community and

theenvironment;

• desirability of the Company maintaining a reputation for high standards

of business conduct; and

• need to act fairly as between members of the Company.

Further information on how the Board has discharged its duties and

considered the factors relating to section 172 are found throughout

ourAnnual Report, with specific details included in the Sustainability

andGovernance sections of this report.

Our people drive our culture and

continuous engagement with

them is fundamental to ensure

an engaged employee base that

supports how we do business,

andwhich is at the heart of our

ability to drive value creation.

• We hold an annual engagement survey

for employees to share their feedback and

identify the areas for improvement. Focus

areas in 2023 highlighted the need for more

empowerment within our teams and greater

visibility from leadership.

• From this feedback, the Group has

been split into SBUs to help increase

empowerment and responsibility at the

business unit level. SBU leadership holds

monthly briefings with employees to

provide them with progress on strategic

priorities, and the Executive Committee’s

quarterly meetings are held at different

sites throughout the year to provide our

teams with the chance to interact directly

and openly askquestions.

• We have a network of Culture Champions

across our sites promoting the views and

interests of our employees and monitoring

the impact of actions from the Employee

Opinion Survey.

• Our employees have played a central role in

developing our new STAR strategy. Over 40

employees were involved throughout the

development process, and all employees

were invited to share feedback via surveys or

workshops. Their feedback has shaped our

strategic priorities.

• In developing our new Company values, our

employees have been at the forefront of the

process and our long-term decision making.

They have had the opportunity to contribute

and shape our new values and we look

forward to moving forward and embedding

these within our business.

Read more on page 22

Read more about our employee engagement

on page 46

Transform

Advance RevolutioniseStrengthen

Strategy

Avon Protection plc Annual Report and Accounts 2023

CUSTOMERS

Strategy

Our customers are at the forefront

of our employees’ minds, and

we are proud of the products we

create for the end users. We partner

closely with our customers and gain

feedback from multiple levels within

the user base to design products

which enhance their performance,

efficiency andcapability.

• Throughout our development pipeline, via

dedicated channels, User Advisory Councils

and attendance at industry events, we

engage with our customers and end-users to

ensure we are responding to their developing

needs and are quick to identify future

opportunities. Engagement on product

development this year has included the MiTR,

our new range of EPIC helmets and new

underwater military diving technologies.

• This year we launched a customer survey to

ask for feedback on how Avon Protection

ranks in the areas of product quality and

training, tech support and service centres, as

well as customer service and sales support.

Feedback from this survey has driven

enhanced training and technical service

capability, in addition to closer collaboration

with customers on product design and

existing line improvement.

• We engaged with a number of key customers

during the development of our STAR strategy

to ensure we captured our position in the

market, our strengths and opportunities

in the eyes of our customers and their

future expectations and requirements from

the industry.

COMMUNITIES

Strategy

We have an established community

initiative focused on economic,

social and environmental

sustainability in our local

communities. We continually work

with and for the communities in

which we operate, recognising our

role as a major local employer and

our responsibilities with regard to

any impact we have on them and

theenvironment.

• In addition to our charitable giving

programme which aims to support the

organisations and causes close to our

employees, we have also partnered with

Forces Wives Challenge, a social enterprise

that unites women who have partners in

the Armed Forces through adventure and

challenge, and Team Forces, which helps

to fund sport, challenge and adventure in

the armed forces community in order to

improve health, wellbeing and recovery.

During the period we donated $124,706

tocharitable causes.

• We signed the Women in Defence U.K.

Charter, which is our official pledge to

committing to build and sustain a gender-

balanced environment for our people.

Read more on page 47

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

STAKEHOLDER ENGAGEMENT CONTINUED

SHAREHOLDERS

Strategy

The Group regards regular

communications with shareholders

as extremely important to

understand their views and

concerns and ensure their ongoing

investment and support.

• Regular dialogue takes place through open

and frequent conversations. The AGM and

half year and full year results provide a chance

for a series of direct meetings to take place.

• There has been positive interaction from

shareholders on the new STAR strategy,

with the focus on delivery and operational

performance. Other areas of conversation

focused on the wind-down of the Armour

business, details on the ramp-up of helmet

programmes, and new product sales.

• This year we have also consulted with our

major shareholders and invited feedback on

the Directors’ Remuneration Policy. We have

received favourable responses and have

held follow-up meetings with a number

of shareholders to discuss the new policy.

This direct engagement with shareholders

representing c.45% of our issued share capital

helped shape the Committee’s thinking and

development of the new policy, which was

recommended to the Board for approval and

will be subject to a binding shareholder vote

at the 2024 Annual General Meeting (AGM).

SUPPLIERS

Strategy

We strive to build long-term

relationships with our suppliers,

and ensure they adhere to our

supplier code of conduct and quality

expectations. We continuously

engage with our suppliers to

develop our knowledge and

product range.

• Through site visits and supplier audits, we

retain key engagement with our suppliers

and our supplier code of conduct ensures

they adhere to our standards.

• During 2023 we have engaged with suppliers

on our environmental targets, including

working with waste companies toimprove

recovery and recycling rates andworking

with our transportation networkto

calculateemissions.

• We believe in fostering sustainable

partnerships and driving economic growth

within our communities and we aim to

provide the maximum opportunities to

work with small businesses within our

procurement processes. Our small business

team works hard to identify and maximise

the use of small business concerns, including

small disadvantaged, women-owned,

service-disabled, and veteran-owned

businesses. Through this dedicated team, we

engage with small businesses to continuously

improve this programme.

Transform Advance RevolutioniseStrengthen

Strategy

Read more on the work we have undertaken

with suppliers in the Sustainability Report

on page 42

Avon Protection plc Annual Report and Accounts 2023

Non-financial and sustainability information statement

The table below illustrates where stakeholders can find information in respect of non-financial and sustainability matters, as required by the Companies

Act 2006. We disclose non-financial information in the Sustainability section and throughout the Strategic Report as well as other referenced pages.

Wehave a range of policies and guiding principles, some of which are published on our website, www.avon-protection-plc.com, or summarised within

our Code of Conduct.

Topic Our policies and guiding principles Where to read more

Environmental matters and climate-

related disclosures

• Sustainability agenda

• Health and Safety Policy*

Page 41 Introduction to sustainability

Page 44 Environment

Page 50 TCFD disclosure

Employees

• Code of Conduct**

• Careers policy**

• Gender pay gap reporting**

• Employee engagement

• Respectful Workplace Policy*

• Speak Up*

• Health and Safety Policy*

Page 36 Stakeholder engagement

Page 46 Social

Page 48 Governance

Respect for human rights

• Code of Conduct**

• Modern Slavery Statement**

Page 46 Social

Page 48 Governance

Anti-corruption and bribery matters

• Anti-Bribery and Corruption Policy*

• Gifts and Hospitality Policy*

• Code of Conduct**

Page 48 Governance

Social matters

• Charitable Giving Policy*

• Code of Conduct**

Page 46 Social

Business model

Page 16 Business model

KPIs

Page 32 Financial and non-financial KPIs

Principal risks

Page 62 Principal risks and risk management

* Available to employees via Avon Protection intranet but not published externally.

** Published on Avon Protection website and available to employees.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Avon Protection plc Annual Report and Accounts 2023

SUSTAINABILITY

WE PROTECT:

OUR SUSTAINABILITY

AGENDA

Highlights

• Undertook extensive employee engagement to reaffirm our overall

direction and identify opportunities to streamline initiatives within our

sustainability agenda.

• Sustainability Steering Committee meetings dedicated to developing

our sustainability agenda.

• The Board agreed on our sustainability objectives and targets.

• We integrated and aligned our approach to sustainability through our

STAR strategy.

Our approach to sustainability

We recognise our operations around the world impact a broad range

of sustainability areas. We understand we must make progress in each

of them to ensure we protect society. Identifying material issues and

reflecting them in our sustainability agenda ensure we are progressing in

the areas that matter most to our key stakeholders and addressing areas of

potential risks and opportunities.

We undertook our first materiality assessment in FY22 to identify material

environmental, social and governance (ESG) issues, which means they have

the potential to substantively affect our ability to create value in the short,

medium and long term, and are of importance to our stakeholders. We

received feedback from employees, customers and shareholders during

this process through surveys, peer reviews and one-to-one interviews

which was presented in the 2022 Annual Report and Accounts.

We launched our sustainability agenda last year which was based around

four pillars which considered the five most material sustainability areas

presented during this work.

Read more about our materiality assessment on our website

Progress

This year we have been focused on delivering the detail behind our four

pillars. We are taking a pragmatic approach by setting targets over the

next five years to align with our business planning process.

During FY23 we evolved our sustainability agenda by undertaking

strategy consolidation; the pillars have been redefined and expanded to

better reflect our key stakeholders, each of whom has an important role

to play in our sustainability journey. We also identified initiatives already

underway or planned that could be streamlined and managed through

our sustainability agenda.

Governance

The Sustainability Steering Committee took part in three dedicated

sessions. These sessions enabled us to determine our level of ambition,

agree priority objectives which share synergies with our STAR strategy and

agree targets to be delivered through our sustainability agenda which runs

through to 2028.

Oversight from the Sustainability Steering Committee and members of the

Executive Committee, as well as extensive employee engagement, ensures

we focus on initiatives across the business that will deliver successful

results. Our plan is to continuously assess, calibrate and build on this

agenda as we become more knowledgeable about sustainability.

Our sustainability agenda

Our sustainability agenda is underpinned by four distinct pillars: our planet,

our supply chain, our customers and our colleagues and communities.

Within each pillar, we have identified priority objectives, which will require

initiatives to be established and will be closely monitored by the Board.

Targets have been agreed against these ambitions and will help drive

forward engagement. Each pillar also has a number of other focus areas

that support the priority objectives and are necessary for us to manage as

part of our day-to-day stewardship.

Alignment to United Nations SDGs

The United Nations Sustainable Development Goals (SDGs) are a collection

of 17 global objectives adopted by the United Nations in 2015 to eradicate

poverty, protect the planet and build a peaceful and prosperous world. We

continue to contribute to the SDGs through our sustainability agenda and

have identified five SDGs which our four pillars align to. Throughout the year

we undertake projects that contribute to other aspects of sustainability as

part of our everyday stewardship and may also influence other SDGs.

An example of our contribution to SDG 12 (responsible consumption and

production) was our work to improve operational efficiencies and reduce

the amount of non-recyclable material used in our packaging of the

FM61EU filters, which are deployed by NATO nations. Whilst reducing the

amount of non-recyclable materials, we also improved the durability of the

packaging to avoid the bag being punctured and losing its vacuum seal,

rendering the filters unusable and supporting our customers to reduce

waste from consumables.

Alignment with our STAR strategy

The development of our STAR strategy has been an opportunity to

align our sustainability agenda with our Group strategic priorities. The

Sustainability Steering Committee was informed by this process when

determining our priority objectives and focus areas.

Read more on page 22

Protecting runs through our culture and is at the heart of everything

wedotohelpprotect lives. This extends to ensuring a sustainable

futureforusallthrough our approach to sustainability.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

SUSTAINABILITY CONTINUED

OUR PILLARS

We are proud to introduce our sustainability targets which cover each of our four pillars.

During the period we have been focused on collecting baseline data and establishing

targets aligned with our STAR strategy to enable us to report on progress against our

objectives in FY24. We have continued to drive sustainability with our focus areas in

mind and can report on highlights from the year.

OUR PLANET

Strategy

OUR SUPPLY CHAIN

Strategy

The climate impacts the life-

threatening situations in which our

products and services help save

lives. Working towards our climate

goal, building in more circularity

and the targeted use of resources

will help us mitigate and adapt to

protect our planet.

UN SDGs

Our 2028 targets

• 5% reduction per annum scope 1 and

2 GHG emissions asapercentage of

revenue (2021base year)

• 5% reduction per annum scrap

(percentage of scrap)

• 5% increase in revenue per square

foot annually

Highlights

• We wound down the Armour business during the period;

emissions associated with this business are no longer part

of the Group’s continuing carbon footprint. This resulted

in us restating an improved baseline and intensity target

against which we have set our 5% reduction target.

• Net zero teams were established during the period to

identify and implement opportunities to reduce energy

use and GHG emissions. A plan is in place to meet our GHG

reductions next year; see page 45.

• Purchase of low emission electricity has been reviewed

and implemented where viable. We have reviewed

opportunities for on-site renewable energy generation

which we will continue to monitor.

• A requirement for each site to undertake Kaizens quarterly

has been established to drive efficiency and develop

employee lean thinking, with these starting in FY23.

Ensuring a continuous supply of

high quality, ethically sourced

raw materials and components is

critical for us as a trusted partner.

Supporting our value chain

partners on their sustainability

journey will ensure a resilient

supply chain that protects the

needs of our planet, customers

and suppliers.

UN SDGs

Our 2025 target

• 80% of our supply chain is reviewed

against enhanced criteria (by spend)

Highlights

• We worked with waste suppliers to drive improvements in

data collection and improve opportunities to reduce waste

to landfill.

• We have used Environmentally Extended Input-Output

(EEIO) modelling to estimate carbon emissions from

purchased goods which has identified materials and

suppliers to focus our efforts on.

• We worked with our largest transport suppliers to increase

data collection associated with calculating our scope 3

emissions from category 4 (upstream transportation).

• We have retained our Joint Supply Chain Accreditation

Avon Protection plc Annual Report and Accounts 2023

OUR CUSTOMERS

Strategy

OUR COLLEAGUES AND COMMUNITIES

Strategy

Our customers carry out vital

work in life-threatening situations

– often in support of protecting

the community. They can safely

perform with confidence knowing

that we protect at every interface

with our products and services.

From innovative design, to use,

aftercare and data protection,

we meet the changing needs of

ourcustomers.

UN SDGs

Our 2028 targets

• Revenue increase revenue from new

products (5 years)

• 4–7% R&D expenditure as a % of revenue

• Support our customers

Highlights

• We introduced our FM50 and C50 respirators to the

U.S. civilian market, providing wider access to our life-

saving products.

• Our upgraded ST54 SCBA received certification to the

NFPA 1986 Standard on Respiratory Protection Equipment

for Tactical and Technical Operations, including NIOSH-

CBRN certification, demonstrating to our customers that

our products meet the most demanding standards.

• We achieved 4.2% R&D expenditure as a percentage

of revenue during FY23, with R&D expenditure in

Respiratory Protection including the development of

the next generation of filters and diving masks. In Head

Protection, we stand at the forefront of traumatic brain

injury mitigation, harnessing funding to continue our vital

research in this critical area. Working hand-in-hand with

our customers on research and development programmes

will continue to be an area of importance for us as we

ensure our products align with their unique requirements.

Our mission is only achievable as

a result of our exceptional, highly

engaged colleagues. As a major

employer in the areas we operate

in, community engagement is

important to us, ensuring we

contribute an inclusive workplace,

with strong values and new

opportunities for current and

future colleagues.

UN SDGs

Our 2028 targets

• 2.5% annual improvement in employee

engagement

• Support local communities

• Support diversity, equity, and inclusion

• Fill more vacancies with internal hires

and promotions

Highlights

• 40+ employees were actively engaged in developing our

STAR strategy. Everyone within the business also had the

opportunity to contribute via surveys and focus groups.

• We launched a mentoring programme which is accessible

to all employees.

• In October 2022 we approved a significant annual pay

adjustment which reflected the impact rising costs are

having on our employees.

• We contributed $124,706 to charities and good

causes through our charitable giving programme and

continued to support the Teams Forces Foundation as a

Bronze member.

• We continued to create an environment where all females

in the business can thrive by celebrating International

Women’s Day, conducting our Develop x Balance

training workshop and becoming committed to being a

menopause-friendly workplace.

Transform Advance RevolutioniseStrengthen

Strategy

Links

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

SUSTAINABILITY CONTINUED

ENVIRONMENT

Kaizens have continued at all sites throughout the year which have identified

opportunities to improve processes and are likely to have resulted in additional

energy consumption improvements.

Carbon disclosures

A representative at each of our sites has responsibility for the reporting of

energy use throughout the year. The collected data allows us to calculate and

monitor carbon emissions.

This year we restated our baseline scope 1 and 2 emissions to account for

our exit of the Armour business. This significantly lowered our scope 1 and 2

emissions and intensity metric. This adjustment has been factored into target

setting and means we have set our targets against a much lower and more

challenging baseline for next year.

In FY23, we reported our carbon emissions amount to 6,986 (tCO

e location

based); of this, the U.K. accounted for 32%. U.K emissions have increased despite

reduced energy use due in part to the conversion factors applied. Our market

based scope 2 emissions reflect the sourcing decisions during the period which

will be fully realised in FY24, demonstrating a 1.4% reduction in scope 1 and

2 globally. With a revenue of $243.8 million this gives us an intensity figure of

28.7 tCO

e per $m of revenue. The exit of our Armour business was a significant

project and this year we restated our intensity figure to reflect this, resulting in a

39% improvement for FY22 (restated from 39.9 tCO

e per $million revenue).

Scope 3 emissions

In FY23, we assessed the most relevant and influenceable elements of our

scope 3 emissions. We conducted a screening exercise to determine this,

considering factors such as ability to influence, anticipated size, sector guidance

and data accessibility, which identified several exclusions not relevant to our

business model; category 14 franchises and category 15 investment. We

identified categories which were not expected to significantly contribute to

total scope 3 emissions, where reporting would be impractical and difficult

to calculate; category 10 processing of sold products, category 11 use of sold

products and category 12 end of life treatment of sold products.

Based on this work and the use of EEIO modelling, purchased goods are

understood to be the largest contributor to our footprint. We will work towards

improving our disclosure of material scope 3 categories and will disclose this in

full by 2025. We intend to build a more precise knowledge of emissions from

purchased goods and plan to do this through the collection of scope 1 and 2

data from our supply chain which will be included in an enhanced survey.

Water usage

We centralised the reporting of water usage from all manufacturing sites with

the exception of one facility that does not receive water bills. Water usage is

limited to mainly domestic use, for drinking, sanitary disposal and landscaping

and this year we can report that across two sites we used 15,046m

of water.

Where water discharges do occur due to product testing, they are disposed of

in line with local government procedures.

Waste

We established centralised tracking and monitoring of different waste streams

by destination for all manufacturing sites which will enable us to report waste

figures for all manufacturing sites in FY24. This year we can report across two

sites that we disposed 567 tonnes of waste.

We have worked with our waste carriers to understand our waste disposal

opportunities and started to assess the associated carbon emissions. One

site installed a waste compactor to generate waste handling efficiencies and

reduce the number of waste collection trips.

We carried out an awareness campaign and and provided information on

the waste hierarchy to help employees make better waste disposal choices.

Alongside this we updated waste signage for certain waste streams to

improve visibility of opportunities to recycle and discourage the use of general

waste bins.

Any hazardous waste generated, as defined by the Control of Substances

Hazardous to Health and U.S. Environmental Protection Agency, isdisposed of

in line with local guidelines.

HIGHLIGHTS

• Cadillac facility certified to ISO 14001

• Net zero teams established at each site

• Irvine site switched to low emissions electricity

• Waste and water reporting centralised

Site management

We strive to operate to high standards and we operate an environmental

management system. In addition to maintaining our existing ISO 14001

accreditation at two sites, we have achieved further certification atour site in

Cadillac bringing this to three out of five manufacturing sites.

Net zero journey

Last year we identified seven action areas for the business to focus on and

verify over the coming years, to reduce our scope 1 and 2 emissions, and in

parallel begin assessment of scope 3 emissions. These actions include:

1. embed a net zero mindset and assign accountability;

2. assess energy efficiency options;

3. assess renewable electricity options;

4. reduce natural gas consumption;

5. reduce other scope 1 impacts;

6. consider residual emissions; and

7. assess scope 3 emissions.

During FY23, cross-functional net zero teams were established at each site

to encourage collaboration and increase engagement in support of net zero

action 1. Each team reviewed the net zero actions with a focus on actions

2 and 3 where there were possible win-wins. The outputs were used to set

targets for next year.

We plan to achieve our emission reductions next year, largely supported by

actions 2 to 4 and underpinned by employee engagement (action 1). Next

year we will review this exercise and intend to expand the scope to align it

with our five year business planning process.

Energy consumption

Our energy consumption in FY23 was 27,058 MWh; of this, the U.K.

accounted for 45% of global energy use, we continue to see a reduction in

energy use across our U.K. sites. Following the exit of the Armour business

and resulting restatement we can see an improved trend for our U.S. sites.

This year we are reporting 6.5% increase in the Group’s energy use.

While verifying net zero actions, our net zero teams identified opportunities

to reduce energy consumption which were actioned this year:

• An air loss survey carried out in Cadillac identified 47 air leaks which have

been resolved.

• Two sites have been switching to LED lighting and where suitable

automating lighting systems.

• One site has undertaken window tinting and door upgrades to improve

temperature regulation and reduce loss of heat and air.

• A process for press temperature reductions has been established for

periods of inactivity and encouraged through operator engagement and

improved signage.

Avon Protection plc Annual Report and Accounts 2023

Environmental incidents

There have been no environmental incidents as defined by the U.K. or U.S.

Environment Agencies at any of our sites or in relation to our supply chain

throughout the 2023 financial year.

Greenhouse gas emission data (tonnes CO

FY23 FY22

FY21

2,4

Scope 1

U.K. 942 905 1,184

Outside U.K.

1,418 1,120 809

Total 2,360 2,025 1,993

Scope 2 (location)

U.K. 1,280 1,294 1,461

Outside U.K. 3,347 3,129 2,930

Total 4,627 4,423 4,391

Scope 2 (market)

U.K. 1,366 1,465 1,399

Outside U.K. 3,173 3,139 2,978

Total 4,539 4,604 4,377

Total gross scope 1 and 2 (location)

U.K. 2,221 2,199 2,645

Outside U.K. 4,765 4,249 3,739

Total 6,986 6,448 6,384

Intensity measure

Tonnes CO

e (scope 1 and 2) per$m

of revenue

28.7 24.5 26.4

Scope 3 2,975 2,148 1,997

Business travel 1,207 382 80

Fuel and energy related 1,768 1,766 1,917

Energy consumption scope 1 and 2 (MWh)

U.K. 11, 393 11,6 4 8 13,356

Outside U.K. 15,665 13,764 13,456

Total 27,058 25,412 26,812

1 Relevant reporting period 1 October to 30 September.

2 2021 and 2022 data has been restated to account for the exit of our Armour business.

3 2021 scope 1 data has been restated to account for missing data that exceeded our materiality

threshold (5% emission variance) and we have assessed and revised our baseline.

4 Team Wendy was acquired in November 2020; however, data for the Cleveland facility is

included for the full 2021 financial year to provide a base year.

5 Market-based emission factors only include CO

6 The intensity figure is based on the adjusted emissions baseline and the adjusted revenue

which excludes the Armour business.

Net zero milestones

FY21 FY22 FY23 FY24 and beyond

• Baseline.

• Committed to achieving

net zero by 2045 at the

latest by reducing our

absolute scope 1 and 2

GHG emissions.

• Data collection

and reporting

methodology improved.

• We identified seven

net zero actions for the

business to focus on

and verify.

• Set targets over the next five years

aligned to business planning process.

• Exit of Armour business resulted in a

restatement of our carbon emissions.

• Established net zero teams at each site

to verify net zero actions.

• Carried out a screening of our

scope3emissions.

• Assessed low emission electricity

andpurchased where viable.

• Integration of carbon emission target

into FY24 five-year business planning

process to support net zero action 1.

• This year’s emission reductions

to be achieved through net zero

actions 2 to 4.

• Net zero teams to review and expand

net zero site plans beyond one year

to enable us to report on a Group net

zero plan and align this to our business

planning process.

Data has been compiled according to the ‘operational control’ approach

in the Greenhouse Gas Protocol Corporate Accounting and Reporting

Standard and aligns to Streamlined Energy and Carbon Reporting. Data

covers a 12-month period in line with our financial reporting period.

Overall consumption has been calculated using invoiced data for the

reporting period. Estimated data is used where invoice data is not available

within the timeline for consolidation of year end data. Two small offices

use estimated emissions based on Carbon Risk Real Estate Monitor data for

heating and electricity consumption per square foot.

Emissions factors for most of scope 1, 2 (U.K. only) and 3 have been

calculated using 2020, 2021 and 2022 U.K. Government GHG Conversion

Factors, and methodologies published by the Department for Business,

Energy and Industrial Strategy. The most up-to-date EPA eGRID

conversions are used for U.S. electricity. For 2023 reporting the most recent

electricity U.S. factors are 2021.

We have applied the GHG Protocol data hierarchy to the market-based

method. We have obtained emissions factors for the relevant tariff and/

or supplier for the applicable year. If sites consume carbon-free electricity

this has been applied to the calculations. Where these are not available

in the U.S., we use the U.S. Green-e Energy Residual Mix Emissions Rate or

location-based emission factors in the absence of contractual information.

The carbon-free generated energy is verified via emission-free energy

certificates. The certificates are managed and cleared by third party PJM

Environmental Information Services’ Generation Attribute Tracking System.

They ensure veracity by creating standards which verify no double selling

of the same certificate. Avon Protection has purchased certificates to cover

100% load at one location starting inJune 2023.

Scope 1 and 2 sources (location based) have been divided by the annual

revenue to provide the intensity ratio (tCO

e per $m).

Business travel data (air only) is taken from our travel management companies.

For more information please see the accompanying document document

that will be available early next year on our website

Environmental data

1,2

FY23 FY22

Water usage (m

) 15,046 13,521

Waste (tonnes)

567 499

1 Relevant reporting period 1 October to 30 September.

2 Includes data from two manufacturing sites. This data set will be expanded to all

manufacturing sites in FY24 where data is available.

3 Excludes the weight from hazardous waste disposal in our U.K. facility.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

HIGHLIGHTS

SUSTAINABILITY CONTINUED

Employee engagement

We are committed to improving engagement across all sites and providing

an environment where all employees can fulfil their potential.

Maintaining high levels of communication with all employees is a focus

across the Group. When Jos Sclater joined the business, he visited each

site within his first six weeks to introduce himself to all employees, set

out his vision and invite all questions. Throughout the year our Executive

Committee has regularly visited all sites and hosted events to provide an

update on performance, strategy and future focus areas.

We greatly value employee feedback and have continued our initiative to

celebrate and enhance the culture at Avon Protection. Culture champions

have been selected from each level of the organisation with the intention

of playing a crucial role in maintaining an open communication culture

within the Group. Their roles include speaking to our employees on

matters such as leadership, learning and development, and social

connection. This year we expanded our network to ensure our remote

workers were represented, recognising the unique challenges this

Group may face.

74% of employees took part in our annual Employee Opinion Survey

which provides them with further opportunity to provide feedback and

suggest improvements on aspects such as leadership, communication,

employee engagement, team culture and the work environment. Results

from these surveys are presented to the Board of Directors, the Executive

Committee and wider leadership teams with areas of improvement. Our

Culture Champions support the implementation of these changes and

give feedback to employees.

We undertook a series of engagement activities during the development

of our new STAR strategy recognising that our people and culture are

paramount to our success. We invited 40+ employees representing a

cross-section of functions and experience levels to be actively involved

in the process which included participation in a series of workshops. We

also appointed Strategy Champions and provided opportunities for all

employees to offer feedback via surveys. We were pleased with the level

of engagement this process received and intend to utilise our Strategy

Champions to review the strategy process more frequently to ensure it

remains relevant and fit for our changing business.

Health, safety and wellbeing

Our goal is zero harm and we actively promote a safety culture. We have

mandatory training and policies in place for all production employees on

workplace safety and practices.

Demonstrating our commitment to safety, we target an incident rate of

zero, this year across all sites, we recorded a total of 15 workplace lost time

cases. We have successfully rolled out training to all U.K. employees using

an online hub and we piloted and rolled out a cloud-based environmental

health and safety and quality management solution at a U.S. site. This

automates safety, risk and compliance processes.

The health and wellbeing of our employees is important to us and

throughout the year we share resources with them on how to look after

their mental and physical wellbeing. We hold a multitude of wellbeing

webinars based on key topics throughout the year, such as work-life

balance, exercise and seasonal nutrition.

To reinforce the importance we place on providing more support, we

partnered with Mental Health at Work to implement a Mental Health

Allies network across the business. Mental Health Allies are a network of

trained employees who have volunteered to be available to anyone in

the organisation who would like a confidential one-to-one conversation

and are familiar with policies and procedures and can signpost to further

resources within and outside our business if needed. By providing this

network of skilled listeners, an informal and trusted network of mental

health support is created.

• 74% participation in our annual Employee

Opinion Survey

• 40+ Employees involved in developing our

STAR strategy

• Introduced our Mental Health Allies network

forpeer to peer support

• Launched a mentoring programme which is

accessible to all employees

• $124k has been donated to charitable giving

causes in FY23

SOCIAL

Avon Protection plc Annual Report and Accounts 2023

Diversity, equity and inclusion

We are committed to the fair treatment and full participation of all people

and recognise diversity provides a better culture for all.

Female representation across our Executive Committee and direct reports

is 19% and we are committed to improving this in the future. Across all

employees, we have achieved a ratio of 44.8% (416 out of 928) female and

55.2% (512 out of 928) male).

We continue to support our pledge to improve the balance of female to

male employees across our sites and as part of this we have signed the

Women in Defence U.K. charter for the second year. The charter reflects

our aspirations to see women represented and empowered across the

defence sector and our intention to work with fellow industry leaders to

enhance the gender balance.

Our well established Balance@Avon initiative continues to motivate,

empower and support all employees, particularly those who may feel

that they are in the minority. The Balance@Avon team has also rolled out a

mentoring programme which was made available to all employees across

our sites. As part of this, mentors and mentees received formalised training

from a professional tutor. We also continued to create an environment

where all females in the business can thrive by celebrating International

Women’s Day, conducting our first Develop x Balance training workshop

and becoming committed to being a menopause-friendly workplace.

Our U.S. sites report equal employment opportunities data annually

to the U.S. Government and to the State of California under pay equity

requirements. Affirmative action plans are also in place which outline

goals for women and minorities, veterans and people with disabilities

byestablishment.

Our average U.K. gender pay gap for FY22 (reported in April 2023) is 36.4%.

The pay gap is due to the Company having more women in operations

and assembly roles in the lowest quartile (57.1%) compared to more men

in the top quartile (80%) and does not stem from paying men and women

differently for the same or equivalent work. While the percentage of

men in the upper quartile pay has reduced since FY20, our existing focus

to address the gender balance at our Company leadership team levels

continues through initiatives such as Balance@Avon, which will help to

close the overall pay gap with more female representation at this level.

Read more about our gender pay gap data on our website

Personal development

We strive to provide an environment that offers training and development

opportunities for all. We have continued with our Professional

Development Programme, a year-long talent development programme,

with the aim to identify, encourage and support the next generation

of internal talent to contribute to the business beyond the scope of

their current roles. Participants set personal development targets which

are worked on for the year with internal mentor support. Mentors are

Executive Committee members who provide a source of advice and

support for the participants in addition to their line manager.

Our talent management process, which we call the Global Performance

Management Process (GPMP), is a critical tool that enables the Group to

ensure all employees are working towards goals aligned with business

objectives, and their career aspirations and development needs are being

discussed and reviewed. We also continue to focus on early careers,

giving those at the beginning of their career journey help and support

that they need to establish a successful and fulfilling career through

work experience, internships, placement years, apprenticeships and

graduateprogrammes.

We believe our employees thrive the most when they can improve and

enhance their skill sets and work on their personal development. We

provide our employees with access to tools, such as LinkedIn Learning, to

help with their career progression and personal development in whichever

way works best for them. With over 1,000 hours of LinkedIn Learning

viewed over the past year, it has proven to be an invaluable tool for our

employees to complete online courses in any areas of interest to progress

their career paths and expand knowledge.

Pay and benefits

In October 2022 we approved a significant annual pay adjustment which

reflected the impact rising costs are having on our employees.

We have continued to seek guidance from an HR consultant to help us

define our remuneration philosophy and review pay and benefits in order

to retain and attract talented individuals.

Community engagement

We continually work with and for the communities in which we operate,

recognising our role as a major local employer. We sponsored two

programmes in partnership with Bath Rugby: Attacking Maths and Girls’

Participation Hubs, with the aim of creating a positive social impact in our

local region. These sessions promote health and wellbeing and develop

numeracy skills.

We have recently expanded our support to the Team Forces Foundation,

a charity that provides financial grants to help make sport and adventure

more accessible to those who serve in the British Armed Forces. Through

this, we sponsored the Forces Wives Challenge on its Ride to Freedom

in June 2023. The team of eight military wives completed its horse ride

across the testing terrain of the Pyrenees to demonstrate the power that

adventure can have on those living with physical disabilities, mental health

and chronic illnesses.

In addition to partnering with not-for-profit and charitable organisations,

we continue to encourage our employees to use the charitable giving

programme through which employees can request donations or match

funding for causes close to them. This year our incredible employees

across our sites have participated in fire walks, hikes, abseiling and

marathons in support of their local communities. Over $124k has been

donated to charitable causes during the period.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

SUSTAINABILITY CONTINUED

HIGHLIGHTS

• Launched our annual Code of Conduct training

• Mandatory cybersecurity training

campaign launched

GOVERNANCE

Avon Protection plc Annual Report and Accounts 2023

Code of Conduct

Our Code of Conduct (‘the Code’) is a Company-wide policy that defines

the standards of behaviour for everyone who acts for or on behalf of Avon

Protection. The Code requires all our representatives to comply with the

laws and regulations in the countries in which we operate. We understand

that implementing the Code across all the markets we do business in can

be challenging given the potentially complex differences. We therefore

assess and manage any risks and the processes behind these to ensure

we maintain the highest ethical standards. To support employees, we

have launched annual Code of Conduct training to raise awareness and

cover key areas of the Code such as protecting and handling Company

resources, conflicts of interest and bribery, diversity and inclusion and

being alert to unsafe scenarios. We encourage everyone to report any

behaviour, which may be a breach of the Code, or is unethical or illegal,

through our confidential ‘Speak Up’ system.

Read more about our Code of Conduct on our website

Bribery and corruption

We have implemented systems to advocate our zero-tolerance approach

to bribery and corruption to ensure the highest standards of governance

and ethics. Employees can give honest feedback or express concerns if

there are any practices that they feel uncomfortable with, allowing us to

take corrective actions when mistakes happen. Our approach to bribery

and corruption outlined in the Code commits us to conducting business

fairly, impartially and in compliance with local laws and regulations and

to act with integrity and honesty in our business relationships. In the

next year, we plan to conduct training on anti-bribery and corruption

demonstrating the importance we place on this.

To ensure we only work with third parties whose standards are consistent

with our own, all agents and distributors are obliged by written agreement

to comply with the standards set out in the Code.

Modern slavery

We are fully committed to respecting the human rights of all those

working with or for us. We do not accept any form of child or forced

labour and we will not do business with any party who fails to uphold

these standards. We have a zero-tolerance approach to modern slavery

and are committed to acting with integrity in all business dealings and

relationships and to implementing and enforcing effective measures

to ensure modern slavery is not taking place in the business or its

supply chains.

Find our Modern Slavery Act Statement on our website

Respectful Workplace Policy

Our success depends on our people. Avon Protection values its employees

and is committed to equality of opportunity in all employment practices,

policies and procedures. We are committed to providing a workplace

culture that is free of harassment, intimidation, bias and discrimination

and a working environment where every employee is treated with dignity

and respect.

Speak Up

The ‘Speak Up’ platform is designed for all employees to anonymously

report any behaviour which may be a breach of the Code or Respectful

Workplace Policy, or is unethical or illegal. The Board retains oversight of

all matters raised through Speak Up, with regular reports submitted to the

Audit Committee.

Supply chain

We have an established supplier Code of Conduct in place and undertake

supplier audits to ensure suppliers adhere to our standards. This sets

a minimum set of requirements for our suppliers to adhere to and

encourages suppliers to implement their own Code of Conduct for their

employees and to cascade this throughout their supply chain. If suppliers

have concerns regarding any matters covered in the Code, we expect

them to bring these to our attention.

We have retained our JOSCAR membership which ensures companies

only use products and solutions of the highest quality and comply with

best practices which helps the supplier and buyer. This membership is a

collaborative tool used by the aerospace, defence and security industry to

act as a single repository for pre-qualification and compliance information.

Using JOSCAR can determine if a supplier is ‘fit for business’.

Data and cybersecurity

As a contractor to militaries, we handle defence-related data. Through our

work with the U.S. DOD we are subject to the International Traffic in Arms

Regulations (ITAR) which mandate that access to data related to defence

and military technologies is restricted to U.S. citizens only. A violation

of ITAR could result in fines and/or loss of export licences. As with many

organisations, we face risks from external threats that could cause sensitive

data to be lost, corrupted or accessed by unauthorised users, leading to

financial or reputational loss.

Cybersecurity training and auditing is a key line of defence for the

Group and continues to support us as we work towards meeting the

requirements of the Cybersecurity Maturity Model Certification (CMMC

2.0). CMMC 2.0 is a requirement for all contractors and subcontractors

of the U.S. DOD, as the model brings together many cybersecurity

requirements to better protect Controlled Unclassified Information.

We launched a mandatory cybersecurity training campaign to help

foster our security culture and covered modules on physical security and

cybersecurity as well as how to report suspicious emails, and we are on

track to be compliant with CMMC 2.0 requirements.

Product development

Product safety and quality is at the core of all our business practices

and we place high value on the business assurance that comes with our

ISO9001:2015 certified quality management system. We are certified to this

at all five manufacturing sites. The majority of our products are approved

to customer industry safety standards which involves rigorous testing such

as NIOSH and CE. Our production employees receive mandatory product

safety training, and all our products undergo internal safety and quality

testing programmes. Where standards require, external safety audits are

conducted on our products.

We recognise it is essential to develop products that generate long-term

value for the business and do not compromise the environment and

community in which we operate or influence through the products life

cycle. As we work towards our net zero commitment, we will be reviewing

our product’s scope 3 emissions which will inform our transition over time

to reduce GHG emissions generated through the life cycle of our products.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

TCFD

OUR APPROACH

TO TCFD

TCFD COMPLIANCE STATEMENT

In accordance with the Listing Rule 9.8.6 R(8), we confirm Avon Protection has made climate-related financial disclosures consistent with the four Task

Force on Climate-related Financial Disclosure (TCFD) recommendations and 11 recommended disclosures. This includes consideration of section C of the

TCFD Annex entitled ‘Guidance for all sectors’ excluding full scope 3 disclosure and limited cross-industry climate-related metrics

due to limitations in our

data; in 2024 we will focus on developing capabilities, identifying material cross-industry climate-related metrics and data collection to enable disclosure

of full scope 3 emissions and additional cross-industry climate-related metrics, in our annual report for the period ending 30 September 2025.

GOVERNANCE

a. Describe the Board’s oversight of climate-related risks

and opportunities

The Board oversees and has overall responsibility for our Group risk

framework including the management of climate-related risks and

opportunities and delivery of our sustainability agenda. Our four

Board Committees act on behalf of the Board and each have distinct

responsibilities relating to sustainability and climate matters.

Our CFO, Rich Cashin, is the Executive Director with responsibility for

overseeing our sustainability agenda across the business, which includes

climate-related risks and opportunities, and chairs our Sustainability

Steering Committee (‘Steering Committee’). The Steering Committee

meets bi-monthly and is responsible for ensuring the Board and its

Committees are updated on all key climate-related matters.

In FY22 we developed our first set of non-financial KPIs including a metric

related to climate change which are presented to the Board annually.

Board highlights

• Sustainability and climate matters have been discussed as an agenda

item at Board meetings on two occasions this year. This included

reviewing and approving our climate-related objectives and targets,

which are delivered through our sustainability agenda.

• A key deliverable for the year was the establishment of our new Group

strategy. This milestone deliverable will improve the Board’s visibility of

a number of key metrics and targets including those related to climate

and sustainability which will be included in the quarterly reporting

starting in Q1 FY24, this will replace existing processes.

• The Audit Committee reviews climate-related risks and opportunities

alongside other risks on a quarterly basis as part of the Group risk framework;

in addition it reviews the updated climate register annually. This year

the Board specifically considered our revised and expanded climate

disclosures in context of the changing regulatoryenvironment.

• In July, the Executive Committee discussed the sustainability objectives

and targets with regard to strategy; this included a scope 1 and 2

emission target.

Read more about:

Our governance structure on page 76

Our Board of Directors on page 74

Our Pillars on page 42

b. Describe management’s role in assessing and

managing climate-related risks and opportunities

Management is responsible for assessing and managing climate-related

risks and opportunities at an operational level. To ensure a centralised

approach the Steering Committee was established in 2022, chaired by

our CFO. The Steering Committee liaises with management teams on

sustainability and climate matters and the outcomes of these discussions

are reported at the bi-monthly meetings.

Management highlights

• The Steering Committee dedicated three sessions during the period

to review and validate the sustainability agenda, one of which was led

by our external sustainability consultant. During these meetings the

Steering Committee set ambitions for delivering progress through our

sustainability agenda and established formal objectives and targets.

Targets were selected that had synergies between climate, sustainability

and our Group strategy.

• We recognise the importance of ensuring our management has the

necessary knowledge and skills to understand and manage climate-

related risks and opportunities. In December 2022, our sustainability

team delivered sessions to the Executive Committee and site

management to introduce them to our sustainability agenda and

climate-related risks and opportunities.

• Cross-functional working groups were established during the period

to identify opportunities to reduce energy use and carbon emissions.

These net zero teams encouraged collaboration between departments

and identified additional opportunities to reduce our impact that would

not have been achieved without this broad engagement.

• The Steering Committee utilised employee engagement forums

extensively to provide feedback on the sustainability agenda and the

proposed set of objectives and targets.

• The updated strategy process will improve the management of risk

including climate-related risk by integrating risk management into

strategic priorities.

1 Further assessment of materiality is required to determine the relevance of reporting the

following cross-industry climate-related metric categories; transition risks, physical risks,

climate-related opportunities, capital deployment and internal carbon prices. Following this

assessment we will establish data collection processes and plan to disclose these metrics in

fullin our Annual Report & Accounts for the period ending 30 September 2025.

Avon Protection plc Annual Report and Accounts 2023

GOVERNANCE CO NTINUED

STRATEGY

a. Describe the climate-related risks and opportunities

the organisation has identified over the short,

medium and long term

This year we reviewed our climate-related risks and opportunities and

refined those we deemed material. We also enhanced our qualitative

understanding of these material climate-related risks and opportunities

viathe use of two scenarios.

Through this we identified the primary scenario with the greatest impact

for each risk, and categorised their financial impact in the short, medium

and long term. The results of this assessment are presented on the

following page. Against each material climate-related risk and opportunity

we have developed our strategic response.

We determined appropriate time horizons for considering the impact of

climate change on the Group based on financial and planning periods.

Short term – 2024 to 2028

Aligns to our five-year business planning process and sustainability targets.

Medium term – 2028 to 2038

Aligns to multi-year contracts and market.

Long term – 2038 to 2045

Aligns to Avon Protection’s commitment to being net zero by 2045 at the

latest by reducing absolute scope 1 and 2 GHG emissions.

Process for identifying material risks

An extensive list of climate-related risks and opportunities relevant to Avon

Protection has been identified using data sources such as climate change

and relevant sector literature, peer review and TCFD guidance.

Each division identifies its own climate-related risks and opportunities and

assesses them alongside the wider risk landscape for likelihood and impact

using bespoke financial and non-financial impact measures as outlined on

page 62. This is a measurement of net risk and considers the effectiveness

of existing mitigations. The Group uses divisional scoring and relevance to

strategic priorities to determine climate-related risks and opportunities to

undergo further analysis.

This final list of risks and opportunities is selected for climate scenario analysis,

undergoing expanded analysis by SBU. This ensures Avon Protection prioritises

resources in managing the most material climate-related impacts.

Read more on page 62

Physical risks

We have considered the susceptibility of all of our operations to physical risks

arising from climate change focusing our analysis on our five manufacturing

sites located in the U.K. and U.S. Sites are routinely audited against five

natural hazards which identified low flooding exposure, and no significant

wind, hailstorm or fire exposures across all our sites (though wildfire

mapping is currently limited). We have supplemented this analysis with

water stress analyses (based on the Aqueduct Water Risk Atlas) covering all

our manufacturing sites which align with our climate scenarios.

Our Board Committees’ oversight of sustainability and climate-related risks and opportunities

Board of Directors

The Board oversees and has

overall responsibility for our

Group risk framework

including the management

of climate-related risks and

opportunities and delivery

of our sustainability agenda.

Audit Committee See page 82

(Meets quarterly)

Principally responsible for overseeing our Group risk framework including the effectiveness of the management of

climate-related risks and opportunities.

Nomination Committee See page 80

(Meets quarterly)

Responsible for ensuring the membership of the Board and the pipeline for succession planning purposes reflect diversity.

Remuneration Committee See page 86

(Meets quarterly)

Responsible for remuneration policies and packages, including considering the suitability of establishing climate and

sustainability targets in the executive remuneration structure.

Executive Committee

(Meets monthly)

Responsible for overseeing the delivery of our sustainability agenda through strategic priorities including decarbonising

our operations and value chain to meet our emissions reduction target.

Our management teams

Steering Committee – The Steering Committee is comprised of

leaders from across the business, including members of the Executive

Committee, the Risk Committee and the sustainability team, and has

oversight of all sustainability activities including managing and accessing

climate-related risks and opportunities. The Steering Committee is

responsible for overseeing the delivery of a sustainability agenda,

making recommendations to the Board and Board Committees, and

communicating with the business and management teams.

SBU management teams – The SBU management teams oversee

divisional integration of risk management into each strategic priority

including the consideration of climate-related risk.

Risk Committee – The Committee provides an internal review of the Group

risk framework and makes recommendations to the Audit Committee.

Sustainability team – The sustainability team manages the agenda and

provides updates to the Steering Committee at every meeting. It has day-

to-day oversight of climate matters and is responsible for ensuring data

such as our greenhouse gas emissions is collected and reported.

Net zero team – The site-based working groups are made up of

environmental specialists and functional representatives. The teams were

established to identify and co-ordinate opportunities to reduce energy

usage and emissions at each site and report to the sustainability team

on progress.

Employee engagement forum – Feedback is sought directly from a

cross-section of employees or business functions on sustainability and

climate matters through surveys and focus groups to soundboard ideas.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

TCFD CONTINUED

Category Description

Primary potential

financialimpact

Short

2024–2028

Medium

2028–2033

Long

2033–2045

Scenario

with greatest

financial

impact Strategic response

TRANSITIONAL RISKS

Policy and legal

Carbon pricing

and taxation

The introduction of taxes or other costs associated with GHG emitting

fuels and operations may result in increased cost of products and services

both purchased and sold by Avon Protection.

Increase in operating costs via

taxes and levies for energy and

fueluse.

Insignificant Low/

medium

Medium/

high

<2˚C We are reducing exposure to GHG through our sustainability targets to 2028 which are aligned

to our STAR strategy. This includes a scope 1 and 2 GHG emission target as well as a target for

enhanced supplier engagement to allow us to improve visibility of value chain GHG emissions.

To negate risk from cost changes we negotiate fixed price protection and price escalation clauses

to ensure we remain profitable over the duration of contracts. We also operate in a specialist

market where there are only a few manufacturers that currently meet the stringent requirements

of our customers and who will be subject to similar cost challenges.

Regulation and policy

burden and exposure

to litigation

Failure to manage stakeholder expectations relating to climate-related

issues may result in fines and reputational damage and limit our access

toinvestment.

Greater regulatory requirements

result in additional operating costs.

Insignificant Low Low

<2˚C Emerging policy and regulations are monitored and escalated through our governance structure

as appropriate. Where additional support is required, the business utilises external experts in

sustainability and climate matters to advise our teams.

Technology

Shift to low carbon

technologies

Decarbonisation of our operations may require additional investment to

transition equipment and infrastructure to lower emission technologies.

Capital expenditure required to

reduce emissions and switching

energy sources.

Low Low/

medium

Low/

medium

<2˚C We have established cross-functional net zero teams at each of our manufacturing sites to

identify, monitor and action initiatives to reduce energy and GHG emissions. Initial focus for

these teams has been on energy efficiencies and investments that can be quickly implemented

such as LED lighting retrofits. Purchase of low emission electricity has also been reviewed and

implemented where viable.

Net zero teams will continue to develop further initiatives and track emerging technologies and

related investment cases for renewable alternatives.

Market

Changing customer

requirements

Changing customer preferences and sensitivity to environmental factors

could mean our existing technology is unable to meet requirements set in

new bids or contracts.

Shift in customer requirements

results in loss of revenue and early

retirement of products.

Insignificant Low Medium

<2˚C We maintain close relationships with customers, working collaboratively to understand

their future requirements and ensuring these are factored into product development at the

earliest stage.

PHYSICAL RISKS

Acute and chronic – changing weather patterns and extreme weather events

Disruption to operations

Operational exposure to extreme weather events such as heatwaves, fires,

high winds and flooding varies depending on the particular hazard and

site. Overall, such events may reduce productivity and/or result in costs to

repair damage.

Loss of revenue whilst sites are not

fully operational, higher insurance

premiums to mitigate potential

loss of profit or repair costs.

Low Low/

medium

Low/

medium

>2˚C All sites comply with and adhere to local climate-related public instruction and guidance,

and have suitable insurance cover. We will continue to monitor the sites’ exposure to extreme

weather events and update business continuity planning.

Disruption to supply chain

and access to materials

Our supply chain could become susceptible to climate-related disruption

which may impact our access to raw materials and ability to deliver

against orders.

Loss of revenue through delays to

production, increased costs when

obtaining alternative supplies

ofmaterial.

Insignificant Low Low

>2˚C We have alternative sources for raw materials used in key products to mitigate risk from the loss

of critical suppliers and look to identify dual sources as part of new product approvals. Where

this isn’t possible, sole source dependencies are subject to enhanced monitoring.

OPPORTUNITIES

Physical – increased

demand

Increased occurrence and severity of natural hazards associated with

climate change may impact the global security environment and demand

for our range of protective equipment within existing and new markets.

Increased sales opportunities for

our existing products with new

and existing customers.

Low Medium Medium/

high

>2˚C We believe there are opportunities for increased demand within both climate scenarios and

continue to invest in research and development so we are well placed to deliver innovative

solutions that meet customer requirements.

As an example, we see an opportunity within helmets for our enhanced protection solutions as

a result of a shift to more levels of people working in dangerous environments such as search

and rescue.

Transitional – resource

efficiency

Focus on energy efficiency and reduction of waste to reduce emissions

may generate savings in raw materials and energy use.

Reduced reliance on fossil fuels

and material consumption

efficiencies result in reduced

materials and production costs.

Low Low Medium

<2˚C We plan to undertake quarterly Kaizen activities at each of our sites and educate employees

on lean thinking to identify opportunities to be more efficient with resources. The first of these

Kaizen activities has taken place in 2023.

Avon Protection plc Annual Report and Accounts 2023

Category Description

Primary potential

financialimpact

Short

2024–2028

Medium

2028–2033

Long

2033–2045

Scenario

with greatest

financial

impact Strategic response

TRANSITIONAL RISKS

Policy and legal

Carbon pricing

and taxation

The introduction of taxes or other costs associated with GHG emitting

fuels and operations may result in increased cost of products and services

both purchased and sold by Avon Protection.

Increase in operating costs via

taxes and levies for energy and

fueluse.

Insignificant Low/

medium

Medium/

high

<2˚C We are reducing exposure to GHG through our sustainability targets to 2028 which are aligned

to our STAR strategy. This includes a scope 1 and 2 GHG emission target as well as a target for

enhanced supplier engagement to allow us to improve visibility of value chain GHG emissions.

To negate risk from cost changes we negotiate fixed price protection and price escalation clauses

to ensure we remain profitable over the duration of contracts. We also operate in a specialist

market where there are only a few manufacturers that currently meet the stringent requirements

of our customers and who will be subject to similar cost challenges.

Regulation and policy

burden and exposure

to litigation

Failure to manage stakeholder expectations relating to climate-related

issues may result in fines and reputational damage and limit our access

toinvestment.

Greater regulatory requirements

result in additional operating costs.

Insignificant Low Low

<2˚C Emerging policy and regulations are monitored and escalated through our governance structure

as appropriate. Where additional support is required, the business utilises external experts in

sustainability and climate matters to advise our teams.

Technology

Shift to low carbon

technologies

Decarbonisation of our operations may require additional investment to

transition equipment and infrastructure to lower emission technologies.

Capital expenditure required to

reduce emissions and switching

energy sources.

Low Low/

medium

Low/

medium

<2˚C We have established cross-functional net zero teams at each of our manufacturing sites to

identify, monitor and action initiatives to reduce energy and GHG emissions. Initial focus for

these teams has been on energy efficiencies and investments that can be quickly implemented

such as LED lighting retrofits. Purchase of low emission electricity has also been reviewed and

implemented where viable.

Net zero teams will continue to develop further initiatives and track emerging technologies and

related investment cases for renewable alternatives.

Market

Changing customer

requirements

Changing customer preferences and sensitivity to environmental factors

could mean our existing technology is unable to meet requirements set in

new bids or contracts.

Shift in customer requirements

results in loss of revenue and early

retirement of products.

Insignificant Low Medium

<2˚C We maintain close relationships with customers, working collaboratively to understand

their future requirements and ensuring these are factored into product development at the

earliest stage.

PHYSICAL RISKS

Acute and chronic – changing weather patterns and extreme weather events

Disruption to operations

Operational exposure to extreme weather events such as heatwaves, fires,

high winds and flooding varies depending on the particular hazard and

site. Overall, such events may reduce productivity and/or result in costs to

repair damage.

Loss of revenue whilst sites are not

fully operational, higher insurance

premiums to mitigate potential

loss of profit or repair costs.

Low Low/

medium

Low/

medium

>2˚C All sites comply with and adhere to local climate-related public instruction and guidance,

and have suitable insurance cover. We will continue to monitor the sites’ exposure to extreme

weather events and update business continuity planning.

Disruption to supply chain

and access to materials

Our supply chain could become susceptible to climate-related disruption

which may impact our access to raw materials and ability to deliver

against orders.

Loss of revenue through delays to

production, increased costs when

obtaining alternative supplies

ofmaterial.

Insignificant Low Low

>2˚C We have alternative sources for raw materials used in key products to mitigate risk from the loss

of critical suppliers and look to identify dual sources as part of new product approvals. Where

this isn’t possible, sole source dependencies are subject to enhanced monitoring.

OPPORTUNITIES

Physical – increased

demand

Increased occurrence and severity of natural hazards associated with

climate change may impact the global security environment and demand

for our range of protective equipment within existing and new markets.

Increased sales opportunities for

our existing products with new

and existing customers.

Low Medium Medium/

high

>2˚C We believe there are opportunities for increased demand within both climate scenarios and

continue to invest in research and development so we are well placed to deliver innovative

solutions that meet customer requirements.

As an example, we see an opportunity within helmets for our enhanced protection solutions as

a result of a shift to more levels of people working in dangerous environments such as search

and rescue.

Transitional – resource

efficiency

Focus on energy efficiency and reduction of waste to reduce emissions

may generate savings in raw materials and energy use.

Reduced reliance on fossil fuels

and material consumption

efficiencies result in reduced

materials and production costs.

Low Low Medium

<2˚C We plan to undertake quarterly Kaizen activities at each of our sites and educate employees

on lean thinking to identify opportunities to be more efficient with resources. The first of these

Kaizen activities has taken place in 2023.

Overall, the Group has assessed the potential impact of climate change to be low in the short term (to 2028). Beyond 2028 although there are potential

costs associated with climate change, these are balanced with significant opportunity for increased demand for our protective products in a changing

global security environment.

Potential annual financial impact

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

a. Describe the climate-related risks and opportunities

the organisation has identified over the short,

medium and long term continued

One of our sites has been identified as being located in an area of very

high water stress which was present under both climate scenarios. This site

is also susceptible to earthquakes which is factored into its insurance and

business continuity planning.

Our scenarios anticipate the occurrence of extreme weather events will

change over time and we will continue to monitor sites’ susceptibility and

update methodologies for assessing resilience.

High risk exposure to natural hazards and weather events by site.

Country Site Water Stress Earthquake

U.K. Melksham, Wiltshire

U.S.

Cadillac, Michigan

Irvine, California X X

Cleveland, Ohio

Salem, New Hampshire

b. Describe the impact of climate-related risks and

opportunities on the organisation’s businesses,

strategy and financial planning

Products and services

Government policies and climate change awareness are beginning

to alter the bid and tender processes in countries with strong climate

commitments. As our products are critical to protecting users in

life-threatening situations we do not see sustainability and climate

performance taking precedence over user safety. There is, however, an

opportunity to lead innovation through the development of lower impact

products, where these do not compromise on performance or capability.

We partner closely with our customers and obtain continuous feedback

from the user base to design products which meet their developing

sustainability needs. This makes customers a key stakeholder in our

sustainability journey, and we have recognised this through the

establishment of our customer pillar.

See more on pages 37 and 43

Operations and supply chain

Our operational footprint covers five manufacturing sites across two

developed markets which are expected to have increasing levels of

climate scrutiny. The potential cost associated with GHG emitting fuels

and shift to decarbonise our operations may increase cost to make or

purchase products. There is also a low risk that climate change could

disrupt our ability to operate in certain locations or disrupt our ability to

source products.

We have committed to reducing absolute scope 1 and 2 emissions to zero

by 2045 at the latest (our ‘net zero commitment’).

This year we have established targets which form part of our sustainability

agenda and align to our STAR strategy including an emissions target and

a plan to undertake enhanced supply chain screening which will help to

inform us of emissions hotspots in our supply chain.

During FY23 we established net zero teams at each site to identify and

implement easy wins that will help us to achieve our emissions reductions.

They also identified emerging technologies and assessed the long-term

feasibility of purchasing renewables or low emission electricity.

Alongside this we have been focused on footprint optimisation and each

site has undertaken a series of Kaizens to drive efficiency and develop

employee lean thinking. This will continue to be a focus of our STAR

strategy and will support our net zero efforts.

Read more on page 22

Investment in research and development

We may have to invest in new and alternative technologies to meet our

own net zero commitment and meet customer requirements.

We have set a target for research and development investment within our

sustainability agenda to 2028. This is the first step in aligning investment in

new products with our sustainability goals.

Read more on page 20 and 21

Access to capital

Poor ESG performance could reduce our access to investment overtime if

we do not deliver against our commitments.

Over the medium to long term, we consider continued progress towards

our net zero commitment and wider climate objectives will prevent any

negative impact on access to debt or equity funding.

Acquisition or divestment

Climate-related metrics for future acquisition targets would be assessed

during due diligence where material and relevant information is available.

During the period, the Group divested its Armour manufacturing

operations in Lexington. Emissions associated with this site are therefore

no longer part of the Group’s continuing carbon footprint which resulted

in us restating our baseline.

Financial planning process

We recognise that climate-related risks and opportunities can have

financial impact on revenues, costs and expenditures; see table on

pages 52 and 53. The related impact on financial reporting estimates and

judgements is summarised on page 137.

This is the first year we have included an emission-based target in our

budget, supported by planned FY24 initiatives. We recognise this is

the first step in maturing our financial planning process and ensuring

delivery of emissions reduction targets. A similar process is planned to be

incorporated into next year’s updated five-year plan.

We carried out an impact assessment for climate risks and opportunities

on the overall Group and SBU operations. This identified the related

primary financial metric and impact thereon, as summarised in the table

on page 52.

STRATEGY C ONTINUED

TCFD CONTINUED

Avon Protection plc Annual Report and Accounts 2023

STRATEGY C ONTINUED

c. Describe the resilience of the organisation’s strategy,

taking into consideration different climate-related

scenarios, including a 2

C or lower scenario

Approach to scenario analysis

TCFD recommends the use of climate scenarios to assess the resilience of

businesses to climate change. This is the second year Avon Protection has

used scenario analysis to assess potential risks and opportunities related to

climate change, and their resulting impact on Group strategy.

In 2022, we received technical advice to help select appropriate

climatescenarios.

This year we built upon previous qualitative analysis by applying scenarios

to climate-related risks and opportunities and assessing their impact on

key financial metrics.

Our climate scenarios

Our two climate scenarios align with TCFD guidance, and use economic

constraints associated with the International Panel on Climate Change’s

(IPCC) Shared Socioeconomic Pathway 2 middle of the road scenario:

• >4°C informed by RCP

8.5 is an extreme physical risk scenario.

Under this scenario there is no additional action policy or regulatory

interventions which leads to global temperatures rising between

4.1–4.8°C by 2100.

• <2°C informed by RCP

2.6 is an extreme transitional risk scenario. Under

this scenario, early action is taken to rapidly reduce greenhouse gas

emissions and limit global warming to 2°C or lower by 2100.

1 The IPCC adopted the Representative Concentration Pathway (RCP) to provide plausible

descriptions of how the future may evolve with respect to a range of variables including socio-

economic change, technological change, energy and land use, and emissions of greenhouse

gases and air pollutants.

We have made the following assumptions:

• Avon Protection’s business activities will be static over time. This means

impacts have been considered for the existing operating model, current

locations and product portfolio.

• Mutual exclusivity has been assumed for each risk and scenario when in

reality they may occur in parallel (aggregated) or offset each other.

• No action has been taken by Avon Protection to mitigate or limit the

impacts of each risk.

Resilience statement

The output of scenario analysis indicated that transitional risks could have

a greater impact in a <2°C or lower scenario. The development of our

sustainability agenda focuses our efforts on material themes which will

help the business build resilience to the effects of policy, legal, technology

and market risk across its strategic priorities. The inclusion of targets

to reduce emissions and encourage resource efficiency provide Avon

Protection the opportunity to maximise potential cost savings.

The potential impact of physical risks could be more pertinent in the >4°C

scenario. Each site is sufficiently insured for the physical risks they are

exposed to.

We have strong relationships with customers and are well positioned to

maximise opportunities in increased demand offered by both scenarios.

The impact of climate change on costs is not expected to be material,

after considering the strategic response we have in place and the potential

opportunities which manifest under both scenarios.

We recognise that scenario analysis will be developed over time. As

we launch our new STAR strategy we will look at further opportunities

to build climate change consideration into our strategic priorities

andreviewresilience.

RISK MANAGEMENT

a. Describe the organisation’s processes for identifying

and assessing climate-related risks

In 2021, sustainability (including climate-related risks and opportunities)

was identified as emerging risk and was added to our Group register as a

principal risk in 2022.

In 2022, we worked with a sustainability consultant to initially support us in

identifying climate-related risks and opportunities. The identification and

assessment of climate-related risks and opportunities has now been fully

integrated into the Group risk management process.

This year we reviewed and assessed our material climate-related risks and

opportunities (see process of identifying material risk outlined in Strategy

section part a).

See how we identify and manage risk on page 62 for details on our

approach to determining relevance of climate-related risks against other

risks using bespoke impact assessment measures.

Read more on page 62

b. Describe the organisation’s processes for managing

climate-related risks

The SBU management team is responsible for the identification,

assessment, management and reporting of climate-related risks specific

to delivering their divisions’ strategy in accordance with the Group

riskframework.

The Risk Committee reviews the divisional risk registers, providing a

second level of assurance, confirming which risks are considered high for

reporting to the Audit Committee.

The Audit Committee reviews high Group climate risks. This year we

introduced risk appetite into the discussion which was set by the Board

and established a desired approach to risk mitigation, a process we hope

to advance and embed into the STAR strategy.

We review our climate register annually, an exercise supported by

members of the Executive Committee and SBU management, assessing

financial impacts over different time horizons for our climate scenarios

(seesummary table provided in Strategy section).

This was the first time our climate register was reviewed by the

AuditCommittee.

The overall process ensures material risks are covered by an appropriate

existing or planned strategic response.

c. Describe how processes for identifying, assessing and

managing climate-related risks are integrated into the

organisation’s overall risk management

See Risk Management section parts a and b

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

METRICS AND TARGETS

a./c. Metrics used to assess climate-related risks and

opportunities and the targets we use to manage

the risks and opportunities and performance

against targets

The table on page 52 illustrates the key metrics we use to assess and

manage our climate-related risks and opportunities. We have selected

these as the data is readily available and comparable. Progress has been

made to expand yearly reporting to include water usage and waste in line

with stakeholder expectations.

Targets and progress

During the period we have evolved our sustainability agenda; the pillars

have been redefined and expanded to ensure we consider sustainability

matters relevant to all key stakeholders. Targets for each pillar were

selected based on ambition of the business, alignment to Group

strategy, consideration of climate-related risks and opportunities and

regulatoryrequirements.

Within our sustainability agenda, we have committed to reducing our

scope 1 and 2 emissions by 5% relative to revenue per annum (intensity)

which supports us in starting our journey to achieving net zero by 2045

at the latest by reducing our absolute scope 1 and 2 emissions (2021

baseline). We plan to meet our interim target and net zero commitment

through seven actions which are described on page 44. Meeting this

interim target over the next five years will reduce our exposure to

increased pricing of GHG emissions or costs of carbon offset, encourage

efficiencies and reduce likelihood of negative stakeholder feedback. We

still consider tonnes of CO

e per $m of revenue as the most appropriate

operational key performance indicator to manage climate-related risks and

opportunities facing the business.

We have also established targets which indirectly support the reduction

of scope 1, 2 and 3 emissions. These metrics are considered relevant to

our climate-related risks and opportunities, in particular, carbon price and

taxation, transitional resource efficiency and regulation and policy burden,

exposure to litigation.

• We have set an annual scrap reduction target of 5% per year as a

percentage of scrap, to 2028.

• We have set an annual target to increase revenue per square foot by 5%

per year, to 2028.

• We have set a target to screen 80% of our supply chain by 2025

(perspend), against enhanced sustainability criteria.

The launch of our STAR strategy was a key deliverable for the business

and as such climate-related objectives did not feature as part of the

bonus scheme this year for the Executive Committee. The STAR strategy

establishes a platform for assigning accountability to our Executive

Committee and its management team and the Remuneration Committee

will be developing new policies to reflect these changes. It’s not

anticipated that sustainability objectives will feature; rather they are

embedded across the delivery of strategic priorities. Noting a portion

of Executive Director bonus this year is attributed to the delivery of ESG

targets as set out on page 93.

b. Disclose scope 1, scope 2, and scope 3 greenhouse gas

(GHG) emissions and the related risks

We report our scope 1, 2 and 3 emissions, in compliance with Streamlined

Energy and Carbon Reporting.

During the period and in line with expectation we assessed the most

relevant and influenceable elements of our scope 3 emissions. We

conducted a screening exercise to determine this, considering factors

such as ability to influence, anticipated size, sector guidance and data

accessibility which identified several exclusions and areas of data

shortcomings detailed on page 44. Based on this work and the use of EEIO

modelling, purchased goods is understood to be the largest contributor

to our footprint; as we mature our scope 3 calculations we will disclose

additional categories and aim for full disclosure by 2025.

TCFD CONTINUED

Avon Protection plc Annual Report and Accounts 2023

SIGNIFICANT

GROWTH

OPPORTUNITY

September

2023

1 October

2022 Change

Organic

change

(constant

currency)

Continuing operations

Orders received $258.7m $267.9m (3.4)% (2.9)%

Closing order book $135.8m $120.9m 12.3% 10.9%

Revenue $243.8m $263.5m (7.5)% (7.5)%

Adjusted

EBITDA $35.7m $38.8m (8.0)% (13.6)%

Adjusted

EBITDA margin 14.6% 14.7% (10bps) (110bps)

Adjusted

operating profit $21.2m $23.4m (9.4)% (18.5)%

Adjusted

operating profit margin 8.7% 8.9% (20bps) (120bps)

Adjusted

net finance costs $(7.2)m $(3.7)m 94.6% 100.0%

Adjusted

profit before tax $14.0m $19.7m (28.9)% (37.5)%

Adjusted

taxation $(1.9)m $(3.1)m

Adjusted

profit/(loss) after tax $12.1m $16.6m

Adjusted

basic earnings per share 40.3c 54.7c (26.3)% (35.2)%

Total dividend per share 29.6c 44.9c (31.4)%

Net debt excluding lease liabilities $64.5m $44.2m 45.9%

Cash conversion 7.0% 151.3%

Return on invested capital

8.7% 9.0%

Statutory results

Operating (loss)/profit from continuing operations

$(12.6)m $11.0m

Net finance costs $(7.6)m $(5.0)m

(Loss)/profit before tax from continuing operations $(20.2)m $6.0m

Taxation $3.8m $(0.3)m

(Loss)/profit after tax from continuing operations $(16.4)m $5.7m

Profit/(loss) from discontinued operations

$2.0m $(13.3)m

Loss for the period $(14.4)m $(7.6)m

Basic loss per share

(48.0)c (25.1)c

Net debt $85.4m $68.0m

1 At 30 September 2023 Armour operations have fully closed. Armour has therefore been classified as a discontinued operation, including restatement of prior period comparatives.

2 The Directors believe that adjusted measures provide a useful comparison of business trends and performance. Adjusted results exclude exceptional items and discontinued operations. The term

adjusted is not defined under IFRS and may not be comparable with similarly titled measures used by other companies.

3 Reported operating loss includes $6.3 million amortisation of acquired intangibles, restructuring costs of $1.4 million, impairment of non-current assets and goodwill of $24.6 million and transition

costs of $1.5 million. See Adjusted Performance Measures section for full breakdown of adjustments and comparatives.

4 Constant currency measures are provided in the Adjusted Performance Measures section.

FINANCIAL REVIEW

FULL YEAR RESULTS UNDERPINNED BY A SIGNIFICANT

STEP UP IN H2 FINANCIAL PERFORMANCE.

Revenue declined within Respiratory Protection this year following a

record prior year supported by the initial deployment of masks into Europe

under the NSPA framework contract, in addition to support for Ukraine.

This has been partially offset by revenue growth within Head Protection

with the commencement of shipments against the NG IHPS contract,

which resulted in total revenue for the Group declining by 7.5% to $243.8

million (2022: $263.5 million). Margins in both businesses improved year on

year, but a shift in revenue from the higher margin Respiratory Protection

to lower margin Head Protection led to margin erosion at a group

level, resulting in adjusted operating profit margin at 8.7% (2022: 8.9%).

Following the completion of our contractual obligations, the Armour

business has moved into discontinued operations, and we have restated

the 2022 financials to compare on a like-for-like basis.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Order intake for the Group of $258.7 million (2022: $267.9 million) was

down 3.4% (2.9% constant currency). Head Protection orders grew strongly

with $38 million of orders for NG IHPS, and $14 million of orders against the

ACH GEN II contract received in the year. Respiratory orders were down in

the year, with weak demand from the U.S. DOD as expected.

The closing order book of $135.8 million reflects an increase of 12.3%

(10.9% constant currency) over the prior year, with an increase of 64.5%

(64.5% constant currency) in the Head Protection order book more

than offsetting a decrease of 40.4% (42.0% constant currency) within

Respiratory Protection. Notably the Head Protection order book consists of

$59 million of orders for NG IHPS and over $20 million for ACH GEN II, both

fully covering expected sales for these products in the next financial year.

Revenue for the Group totalled $243.8 million, a decline of 7.5% (7.5%

constant currency) compared to a prior year of $263.5 million.

Respiratory Protection revenue totalled $156.9 million, a decline of 18.7%

(18.7% constant currency) compared to $193.0 million in 2022, with the

largest decrease within the U.K. & International market as a result of the

large sales into Europe last year under the NSPA framework contract.

Respiratory Protection sales into the U.S. DOD grew modestly, albeit with

a significant mix shift away from mask systems to aftermarket products as

sales of M53A1 and M69 masks in the prior year were replaced with sales

of filters and other spares and accessories. Notably, we delivered over

$17million of M61 filters into the U.S. DOD which represented 24 months’

worth of demand, and although we expect to receive similar orders in the

future, there will be a significant decline of U.S. DOD filters revenue in 2024

as a consequence. Commercial Americas revenue dropped significantly;

however, this was driven by one-off deliveries in the prior year in support

of Ukraine.

Head Protection revenue totalled $86.9 million, an increase of 23.3% (23.3%

constant currency) over the prior year of $70.5 million. U.S. DOD revenue

grew by 19.7% with strong sales of EXFIL ballistic helmets and a successful

ramp-up of the NG IHPS programme. Commercial Americas revenue grew

modestly at 7.1% with encouraging initial sales of the new EPIC commercial

helmet range following a successful launch in the second half of the year.

Lastly, we had a strong year for Head Protection in the U.K. & International

market with revenue growth of 77.6%, driven by deliveries of EXFIL helmets

into the Australian Defence Force.

Group adjusted EBITDA of $35.7 million (2022: $38.8 million) is down

8.0% (13.6% constancy currency) compared to the prior period. Lower

revenue in high margin Respiratory Protection, high levels of scrap from

production ramp-up of NG IHPS, and increased levels of expensed R&D

were headwinds in the year, partially offset by favourable product mix

within Respiratory Protection, reduced freight costs, and savings in central

overheads. Adjusted EBITDA margin of 14.6% was down 10bps (down

110bps constant currency) on the prior year.

Adjusted operating profit of $21.2 million (2022: $23.4 million) is after

adjusted depreciation, amortisation and impairment of $14.5 million

(2022: $15.4 million), resulting in an adjusted operating profit margin of

8.7% (2022: 8.9%) down 20bps (down 120bps constant currency) on the

prior year.

Statutory operating loss from continuing operations of $12.6 million (2022:

profit of $11.0 million) reflected exceptional items in the period which are

summarised below.

Impairments include a $23.4 million charge to goodwill (2022: $nil), arising

as the new Head Protection cash-generating unit (CGU) was subject to

impairment testing for the first time. Based on the Group’s Board approved

five-year financial plan, adjusted to exclude cash flows considered

expansionary, the value in use of the Head Protection CGU was less than

the carrying amount.

The Head Protection CGU includes all goodwill associated with the 2020

Ceradyne acquisition of $28.0 million and 2021 Team Wendy acquisition

of $58.3 million. In 2021, goodwill related to the Ceradyne acquisition was

allocated in full to the sole Respiratory and Head protection operating

segment, and as such was unaffected by the 2021 armour-related

impairments. In 2022, the decision to present Armour as a separate

operating segment was taken, with nil goodwill value allocated to the

Armour segment. This was based on a relative value approach, which

attributed no value to Armour given trading losses forecast to closure.

Further details of the impairment are included in note 3.1.

The Adjusted Performance Measures section contains a full breakdown

and explanation of adjustments.

2023

2022

Statutory operating (loss)/profit (12.6) 11.0

Amortisation of acquired intangibles 6.3 6.8

Impairment of goodwill and other

non-currentassets

24.6 4.0

Restructuring costs 1.4 1.6

Transaction costs 1.5 —

Adjusted operating profit 21.2 23.4

Adjusted net finance costs increased to $7.2 million (2022: $3.7 million) due

to higher net debt and variable interest charges.

After an adjusted tax charge of $1.9 million (2022: $3.1 million), the Group

recorded an adjusted profit for the period after tax of $12.1 million (2022:

$16.6 million).

Adjusted basic earnings per share fell to 40.3 cents (2022: 54.7 cents).

Return on invested capital, calculated on a rolling 12-month basis, fell to

8.7% (2022: 9.0%), reflecting lower adjusted operating profit.

Statutory net finance costs of $7.6 million (2022: $5.0 million) include

$0.4million (2022: $1.3 million) net interest expense on the U.K. defined

benefit pension scheme liability.

U.S. DOD

Commercial Americas U.K. & International

Head Protection

Revenue by market

$86.9m

(FY2022: $70.5m)

Respiratory Protection

Revenue by market

$156.9m

(FY2022: $193.0m)

RESPIRATORY PROTECTION

EXPENDITURE HAS PRIMARILY FOCUSED

ON COMPLETING THE DEVELOPMENT

OF THE EXOSKIN LINE OF BOOTS AND

GLOVES, WHILST HEAD PROTECTION

EXPENDITURE CONTINUED TO CENTRE

AROUND NG IHPS AND ACH GEN II

HELMET DEVELOPMENT.

FINANCIAL REVIEW CONTINUED

Avon Protection plc Annual Report and Accounts 2023

Statutory loss before tax from continuing operations was $20.2 million (2022: profit of $6.0 million) and, after a tax credit of $3.8 million (2022: charge of

$0.3 million), the loss for the period from continuing operations was $16.4 million (2022: profit of $5.7 million).

Segmental Performance

2023 2022

Respiratory

Protection

Head

Protection

Total

Respiratory

Protection

Head

Protection

Total

Revenue 156.9 86.9 243.8 193.0 70.5 263.5

Adjusted EBITDA 36.6 (0.9) 35.7 42.4 (3.6) 38.8

Adjusted EBITDA margin 23.3% (1.0)% 14.6% 22.0% (5.1)% 14.7%

Adjusted operating profit 29.3 (8.1) 21.2 33.5 (10.1) 23.4

Adjusted operating profit margin 18.7% (9.3)% 8.7% 17.4% (14.3)% 8.9%

Adjusted operating profit margin within the Respiratory Protection business improved despite the fall in revenue, growing from 17.4% in FY22 to 18.7%

in FY23. This was due to a product mix shift away from lower margin sales on the NSPA framework in the prior period, and repricing on a couple of key

products. Beyond these mix effects, rapid action to right-size the cost base was taken in light of the weaker demand environment.

The Head Protection business has continued to make a loss as we work through the production ramp-up for the NG IHPS and ACH GEN II programmes,

although we have seen reduced losses with the operational gearing tailwinds from the increased revenue, resulting in an adjusted operating profit

margin of (9.3%), up from (14.3%) in FY22. We continue to believe that the transformational initiatives within the STAR strategy will bring this business to

acceptable levels of profitability.

Research and development expenditure

Total investment in research and development (capitalised and expensed) was $10.2 million (2022: $10.9 million), in line with the prior period as a

percentage of revenue. Excluding amortisation and impairment, we have seen an increase in costs expensed to the P&L following lower levels of

capitalisation.

Continuing operations

2023

2022

Total expenditure 10.2 10.9

Less customer funded (1.2) (1.4)

Group expenditure 9.0 9.5

Capitalised (3.1) (5.8)

Income statement impact 5.9 3.7

Amortisation and impairment of development expenditure 4.3 6.5

Total income statement impact 10.2 10.2

Revenue 243.8 263.5

R&D spend as a % of revenue 4.2% 4.1%

Respiratory Protection expenditure has primarily focused on completing the development of the EXOSKIN line of boots and gloves, whilst Head Protection

expenditure continued to centre around NG IHPS and ACH GEN II helmet development.

In FY23 research and development costs have been reclassified as a separate line item below gross profit in the Consolidated Statement of Comprehensive

Income, with comparatives restated accordingly.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

FINANCIAL REVIEW CONTINUED

Net debt and cash flow

2023

2022

Adjusted continuing EBITDA 35.7 38.8

Share-based payments and defined benefit pension scheme costs 1.7 1.8

Working capital (34.9) 18.1

Cash flows from continuing operations before exceptional items 2.5 58.7

Restructuring and transaction costs paid (2.3) (1.0)

Cash flows from continuing operations 0.2 57.7

Cash flows from discontinued operations 3.2 (24.2)

Cash flows from operations 3.4 33.5

Payments to pension plan — (8.5)

Net finance costs (6.6) (3.4)

Net repayment of leases (3.0) (3.2)

Tax received 3.7 3.7

Capital expenditure (11. 0) (8.9)

Discontinued operation disposals, investing and financing cash flows 6.6 (4.4)

Purchase of own shares – share buyback — (12.4)

Dividends to shareholders (13.4) (13.4)

Foreign exchange on cash — (0.4)

Change in net debt, excluding lease liabilities (20.3) (17.4)

Opening net debt, excluding lease liabilities (44.2) (26.8)

Closing net debt, excluding lease liabilities (64.5) (44.2)

Cash flows from continuing operations before exceptional items were

$2.5million (2022: $58.7 million) with the movement principally due to

working capital outflows of $34.9 million, compared to inflows of $18.1

million in the prior year. Working capital outflows were driven by a $26.2

million increase in receivables due to sales phasing (2022: $13.2 million

reduction in receivables).

Dividends and purchase of own shares were $13.4 million (2022: $25.8 million),

with the change reflecting the buyback programme in the prior year,

which has now been formally cancelled.

Tax was an inflow of $3.7 million (2022: inflow of $3.7 million), due to

historical amounts owed being settled in the period.

Net debt was $85.4 million (2022: net debt $68.0 million), which includes

lease liabilities of $20.9 million (2022: $23.8 million). Excluding lease

liabilities, net debt was $64.5 million (2022: net debt $44.2 million).

Defined benefit pension scheme

The Group operated a contributory defined benefits plan to provide

pension and death benefits for the employees of Avon Protection plc and

its Group undertakings in the U.K. employed prior to 31 January 2003. The

plan was closed to future accrual of benefit on 1 October 2009 and has

a weighted average maturity of approximately 11 years. The net pension

liability for the scheme amounted to $40.2 million as at 30 September

2023 (2022: $6.3 million). The increase is mainly due to adverse actuarial

experience adjustments.

There were no contributions in respect of scheme expenses and deficit

recovery plan payments in the period as these were fully prepaid for

FY23 in the previous year. In accordance with the deficit recovery plan

agreed following the 31 March 2022 actuarial valuation, the Group will

make payments in FY24 of £6.95 million, FY25 of £4.30 million and FY26 of

£4.70million in respect of deficit recovery and scheme expenses.

Foreign exchange and interest rate risk management

The Group is exposed to translational foreign exchange risk arising when

the results of sterling denominated companies are consolidated into the

Group presentational currency, U.S. dollars. Group policy is not to hedge

translational foreign exchange risk. Due to the translational effect, a

1cent increase in the value of the U.S. dollar against sterling would have

decreased revenue by approximately $0.2 million and increased operating

profit by approximately $0.2 million for FY23.

RCF borrowings are floating rate priced using the U.S. Secured Overnight

Financing Rate (SOFR). In 2022 the Group implemented a hedging policy

using interest rate swaps to fix a portion of SOFR floating rate interest.

The notional value of active interest rate swaps at 30 September 2023

was $30.0 million (2022: $30.0 million), expiring on 8 September 2025.

The Group also has additional interest rate swaps in place with a notional

value of $20.0 million starting on 8 September 2025 and expiring on 8

September 2026 (2022: $nil). The financial value of interest rate swaps at 30

September 2023 was $0.9 million (2022: $0.5 million), an asset position as

hedged fixed rates are lower than current market forecasts for SOFR.

Dividends

In line with the revised capital allocation policy, the Board has proposed a

final dividend of 15.3 cents per share (2022:30.6 cents). The final dividend

will be paid in pounds sterling on 8 March 2024 to shareholders on the

pounds sterling for payment at the prevailing exchange rate which will be

announced prior to payment.

We expect the H1 2024 dividend to be similarly rebased, resulting in the

customary one-third to two-thirds distribution for the full year next year.

Rich Cashin

Chief Financial Officer

21 November 2023

Avon Protection plc Annual Report and Accounts 2023

STRATEGY IN ACTION

REVOLUTIONISING TOGETHER

PARTNERING FOR INNOVATION

Revolutionise focuses on a longer-term horizon and we have

continued to work hand in hand with our customers on research and

development programmes, ensuring our products align perfectly with

their unique requirements.

In Respiratory Protection, we began funded initiatives on pioneering

the next generation of filters and diving masks, expanding our

underwater portfolio. In Head Protection, we stand at the forefront of

traumatic brain injury mitigation, harnessing funding to continue our

vital research in this critical area.

BY ACTIVELY ENGAGING WITH

OUR CUSTOMERS, WE NOT ONLY

DESIGN PRODUCTS THAT MEET THEIR

IMMEDIATE NEEDS BUT ALSO PIONEER

TECHNOLOGIES THAT SHAPE THE

FUTURE, DRIVING THE INDUSTRY

FORWARD THROUGH INNOVATIVE,

CUSTOMERFOCUSED SOLUTIONS.

Ron Szalkowski, VP Engineering, Head Protection

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Annual Report and Accounts 2023 Avon Protection plc

Assessing risk is an essential element of the management

of our organisation, and risk management is embedded

within the business units and functional teams.

The Risk Committee reports the outcome of the six-monthly risk reviews

at a Group level to the Audit Committee twice a year. Updates on risk

mitigation actions are provided quarterly and all risks contained in the risk

registers are reviewed annually to ensure they remain current.

Assurance

We apply the ‘three lines of defence’ model to managing risk where the

first line is management control and is represented by business unit and

functional leadership, which owns and manages risk on a day-to-day basis

within the Group’s internal control framework.

The Risk Committee, alongside the Executive Committee, monitors and

oversees these activities as a governance and compliance function. This

internal assurance is our second line of defence.

The third line is independent assurance, which has been supported by

Deloitte during the period. We have recruited an Internal Audit Manager

tofulfil this role in FY24.

Annual review of internal controls and riskmanagement

We have made the following enhancements to our risk

management process:

• Risk registers have been aligned to reflect the new organisation

structure of two Strategic Business Units.

• The Group’s principal risks were specifically considered as part of the

strategy process which established our STAR strategy and each of the

strategic priorities contains a risk assessment which is updated quarterly.

• An Internal Audit Manager was recruited to provide assurance to the

Executive Committee and Audit Committee, replacing Deloitte.

• Risk appetite was reviewed and agreed at Board level for the Group.

• The Audit Committee reviewed the climate risk register and the Board

reviewed the TCFD disclosures.

• Outputs from the business unit risk registers and STAR strategy process

were used to identify material climate-related risks andopportunities.

Commentary on the review of the Group’s system of internal control is

contained in the Audit Committee Report on page 84.

Our Group risk management framework

The Board has overall responsibility for the Group’s risk management

framework and ensuring the risk management process is robust and

continuously improved. The Board’s role includes promoting a culture

that emphasises integrity at all levels of business operations and setting

the overall policies for risk management and control. This year the

Board also set its overall risk appetite considering the balance between

risk and reward. The Board has delegated the responsibility for certain

risk management activities to the Audit Committee.

The Audit Committee supports the Board by monitoring the

effectiveness of the Group’s risk management and internal control

systems four times each year.

The Risk Committee, which is not a Committee of the Board, is the

owner of the Group’s risk management process, acting as an interface

between the Audit Committee, business units and functional teams.

The Risk Committee facilitates the risk reviews conducted by the

business units and other teams and reviews and challenges the results

where necessary. Through this process the Audit Committee identifies

the principal and emerging risks at a Group level.

Our approach

Business unit leadership is responsible for implementing the Group’s

risk management process at an operational level. It oversees the

identification, assessment and reporting of risks in a risk register and is

responsible for identifying and implementing activities to mitigate risk

and the integration of these into strategy where appropriate.

Each risk in the risk register is assessed using likelihood and impact.

Scoring takes account of the mitigations in place and represents a net

risk position. Supporting narrative includes any emerging risks. The risk

registers are updated and then reviewed by the Risk Committee every

six months.

The measurement of likelihood and impact uses bespoke impact

assessment measures based on both financial and non-financial

impacts which are set relative to the size of the business unit.

Likelihood High (>60%) Impact (revenue,

EBITDA, cost,

employee impact,

reputational

impact)

High

Medium (40–60%) Medium

Low to

medium (20–40%)

Low to medium

Low (<20%) Low

HOW WE IDENTIFY

AND MANAGE RISK

RISK MANAGEMENT

Avon Protection plc Annual Report and Accounts 2023

Risk appetite

Low – we are cautious and often accept as little risk as possible; risk

response actions are taken even though prevention costs are greater than

expected incident costs.

Medium – we take a balanced approach to risk taking; risk response

actions are made based on cost effectiveness, management priorities and

potential outcome.

High – we are willing to take greater than normal risks; response actions

are taken only when a strong case can be made for the cost effectiveness

of potential outcomes.

Principal risks

Principal risks are those that would threaten the Group’s business

model or future performance and have been identified based on

likelihood of occurrence and the potential impact on the Group.

The principal risk chart below summarises the Group’s principal risks

for 2023 going into 2024 by likelihood and impact. The chart has been

populated by reference to the year end risk assessment. The following

pages show each risk and the mitigations in place and contain a

commentary on how the risk has played out during the period. Overall

risk appetite is also shown.

Emerging risks

Emerging risks, which are classed as risks which could impact beyond

the next review point, are noted during each risk review and presented

to the Audit Committee.

The Risk Committee has identified the emerging risks expected to

increase across the Group in the coming year. The most prominent are

summarised below:

• Bid and contract risk resulting from the growing focus on

international markets, which inherently have lower visibility and

higher competition and demands greater resources from our

bidding and compliance teams.

• Resourcing of international sales efforts and the likelihood of success

for Head Protection in international territories as a new market

entrant in many regions.

• Competition on new mask and helmet programmes.

• Compliance and reputational risk around the current net zero plan

which does not currently extend to the stated net zero deadline.

1. Bid and contract risk

2. Strategy execution risk

3. Manufacturing risk

4. Recruiting and retaining talent

5. Financial controls and reporting

6. Delivery of new product programmes

7. Geopolitical risk

8. Security and cyber risk

9. Compliance and internal control

10. Sustainability

11. Defence sector concentration/cycle risk

2023 PRINCIPAL RISKS

LIKELIHOOD

IMPACT

7 4

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Strategy

No change

Increasing

Decreasing

Trend Sustainability

Our planet

Our supply chain

Our customers

Our colleagues and communities

Links

Bid and contract risk

Risk appetite: Medium

Trend

Strategy Sustainability

Strategy execution risk

Risk appetite: Medium

Trend

Strategy Sustainability

Business risk

• Sales targets not delivered

• Loss of major bids/tenders

• Competitors increase

market share at Avon

Protection’s expense

Impact on

• Sales and profitability

• Strategy delivery

Mitigation

• Product portfolio and certifications meet

customer requirements

• Market and channel strategies agreed

and in place

• Capable and professional sales team, correctly

remunerated and engaged

• Competitive pricing

• Robust bid approval process and well resourced

bid programme teams

• Intimate customer relationships with regular

contact and programmes of record/multi-year

commitments agreed where possible

• Competitor monitoring and

counter-competitorstrategies

Comment and outlook

Sales are reliant on delivering the order pipeline

which contains competitor and timing risk.

Management of internal and supply chain costs

is required to keep pricing competitive and

support strong margins. A switch of focus to the

international market to mitigate reduced U.S. DOD

volumes, and in support of rebreather tenders, has

increased the volume of bids and put pressure on

the bid teams, creating risk of pricing error or lost

bids. Competitor activity can slow the progress of

government procurements. We expect both the

U.K. GSR programme and future IHPS opportunities

to be competitively bid, which could lead to lower

revenue and/or margins.

Business risk

• Strategy execution risk

• Execution of transformation

programmes

Impact on

• Strategy delivery

• Sales, costs and profitability

• Employee recruitment, retention

and morale

Mitigation

• Strategy model and approach defined, agreed

and communicated

• Strategic projects clearly identified, agreed and

resourced for delivery

• Effective programme management team, tools

and reporting to ensure projects are delivered on

time and benefits are realised

Comment and outlook

This risk relates to our ability to deliver the

transformation programmes defined under the STAR

strategy in 2023 across both business units and the

central functions. Significant progress was made in

2023 in defining and planning these programmes

and some benefits have already been delivered.

Both business units are targeting improved

manufacturing and footprint efficiency alongside

the introduction of new products into manufacture

(ACH GEN II, boots and gloves and rebreathers).

Within the central functions the focus is setting cost

at an appropriate level and improving reporting

based on the revised organisational structure.

RISK MANAGEMENT CONTINUED

Strengthen

Transform

Advance

Revolutionise

Avon Protection plc Annual Report and Accounts 2023

Manufacturing risk

Risk appetite: Low

Trend

Strategy Sustainability

Recruiting and retaining talent

Risk appetite: Medium

Trend

Strategy Sustainability

Business risk

• Inability to recruit and

retain employees

Impact on

• Strategy delivery

• Sales, costs and profitability

• Employee morale and culture

Mitigation

• Robust succession planning and effective

performance management processes

• Effective training and development strategy

andactivities

• Appropriate organisational structure with clear

lines of authority and communication

• Maintaining a positive and supportive Avon

Protection culture, supported by values,

employee engagement activity and initiatives

• Retention through competitive remuneration

andbenefits structure and outcomes

Comment and outlook

Across both business units continuing inflation

and economic uncertainty have maintained

focus on remuneration and benefits to ensure we

remain competitive. During the period we have

approved enhanced pay increases designed to

ensure employee pay remains broadly in line with

inflation, and have completed a pay and bonus

benchmarking project. Employee engagement

has been high on the agenda as usual, whether

through our annual employee opinion survey and

follow up actions, the consultation on our new

employee values or direct engagement from the

new leadership team. We also undertook a series

of engagement activities in connection with the

creation and launch of the new STAR strategy. Two

new HR Directors have been recruited to support

the business units and STAR contains an HR ‘Winning

Team’ strategy which addresses this risk area with

additional mitigation.

Business risk

• Supply chain shocks impact our

ability to source key materials

and the cost of manufacturing

(due to sole source dependency,

pricing, availability, quality or

efficiency)

• Poor quality and late delivery

• Environmental or health

and safety incident results in

employee injury, plant closure

and prosecution/fines

• Inventory locks up

working capital

Impact on

• Sales, costs and profitability

Mitigation

• Supply chain strategy targets improvements

• Robust supplier audit and relationship

management, with alternative sources identified

• Robust manufacturing/quality processes

and effective Enterprise resource planning

(ERP) systems

• Strong site leadership and engaged and

motivated production workforce

• Insurance and effective business continuity

planning in place

• Prioritisation of workforce health and safety

Comment and outlook

During the period we introduced NG IHPS into

full production at Irvine but have yet to deliver

targeted cost saving opportunities on this product,

particularly scrap reduction and productivity

improvement. The other major helmet programme,

ACH GEN II, is yet to move into full rate production.

At Cleveland we successfully insourced ballistic shell

production.

Supply chain improvement targets are starting

to be set, with particular focus on the rebreather

supply chain, which contains some long lead time

risk (which drives purchasing commitments before

customer orders are received).

We have hired a President of Operational Excellence

and Continuous Improvement to lead the

implementation of a continuous improvement

culture across our factories, which is ultimately

expected to improve risk mitigation in many areas.

Improvement activities have already occurred as a

result of multiple kaizens.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Financial controls and reporting

Risk appetite: Low

Trend

Strategy Sustainability

Business risk

• Poor quality financial reporting

and business information

• Insufficient overhead controls

• Tax exposure not mitigated

• DB pension funding

requirement restrictions

• Currency fluctuations reduce

the value of receipts or

increase costs

• Insufficient debt capacity

Impact on

• Costs and profitability

• Reputational damage

Mitigation

• Robust internal financial control and reporting

procedures (monthly reporting, business reviews,

strategy/budgeting process) supported by robust

internal audit function

• Appropriate overhead structure

• Bank facilities committed and of sufficient

duration with alternative providers scoped and

ready to step in.

• Bank covenant compliance and reporting

• Tax strategy in place with advisor support

• Long-term pension strategy in place with deficit

recovery plan agreed and reviewed every

three years through triennial valuations, with

professional advice

• Effective currency hedging strategy

Comment and outlook

Manufacturing systems data (e.g. bills of materials,

scrap, labour efficiency) can be delayed or

incomplete which has affected the quality of

financial reporting in 2023 and increases the risk

of bid pricing error. During the period we have

launched a number of projects to improve our

internal financial controls. We introduced a new

delegated authorities matrix to reflect the new

organisation structure and empower the business

units and have projects running to introduce a new

internal control manual and new bid and capex

approval processes. We have also recruited an

Internal Audit Manager who is expected to improve

the accountability and effectiveness of our internal

control framework.

RISK MANAGEMENT CONTINUED

No change

Increasing

Decreasing

Trend

Links

Strategy Sustainability

Our planet

Our supply chain

Our customers

Our colleagues and communities

Strengthen

Transform

Advance

Revolutionise

Delivery of new product programmes

Risk appetite: Medium

Trend

Strategy Sustainability

Business risk

• Failure to identify and

implement new products

Impact on

• Strategy delivery

• Sales and profitability

• Reputation

Mitigation

• Future product/technology road mapping and

funding strategy in place

• Effective new product introduction process which

delivers new products into production at factories

• Sustaining engineering resource at factories

sufficient to support new product introductions

• Intellectual property protection considered and

implemented where necessary

• Sufficient level of interaction with major

customers and regulatory bodies to anticipate

future product requirements

Comment and outlook

Limited investment in respiratory product

development in recent years has resulted in a

restricted pipeline of new products and currently

no new respirator to generate renewed customer

interest or demand. This is corrected under STAR

with the rapid progress on the assault respirator

and a number of new funded product/technology

development programmes. Respiratory focus in

2024 is on CBRN boots and gloves and the newly

NFPA-certified ST54. In Head Protection improved

programme leadership has strengthened our ability

to get the new products into full production and

U.S. DOD funding for traumatic brain injury research

has been extended.

Avon Protection plc Annual Report and Accounts 2023

Security and cyber

Risk appetite: Low to medium

Trend

Strategy Sustainability

Geopolitical risk

Risk appetite: Medium

Trend

Strategy Sustainability

Business risk

• Geopolitical factors result in an

unfavourable business climate

for defence spending or restrict

access to national markets

• U.S. DOD budgets/

funding withdrawn

• Conflict triggers surge in

demand that cannot be met by

production capacity

Impact on

• Sales and profitability

• Ability to ship products

• Financial loss

• Reputational damage

Mitigation

• Close monitoring of the political environment and

federal funding and budget position

• Lobbyist/government advisors and key

influencers aligned to Avon Protection’s interests

• Diversified global customer base

• Multi-year military contracts in place

(programmes of record)

• Manufacturing surge capacity plan in place

Comment and outlook

We maintain a close watch on the political

landscape in our key markets, particularly the U.S.

The U.S. government shutdowns do carry timing risk

around order processing, lot testing and our ability

to ship, but having programmes of record provide a

significant degree of business protection generally.

For example the order pipeline for U.S. DOD helmets

is confirmed for next year. With the currently soft

U.S. DOD respiratory demand, the strategy to

diversify the customer base internationally is already

mitigating the risk of a U.S. Government shutdown.

Conflict and the changing threat environment can

also create the risk of a surge in demand which

cannot be met by the current production capacity,

resulting in lost sales.

Business risk

• Business interruption/cash cost

of cybercrime and fraud

• Compliance with U.S. DOD and

U.K. MOD security requirements

• IT system continuity event

Impact on

• Ability to ship products

• Financial loss

• Reputational damage

Mitigation

• IT strategy anticipates forthcoming requirements

• IT sufficiently resourced with specialists to

ensurecompliance

• Robust network/IT controls and security

protocols/policy

• Cyberinsurance and IT disaster recovery plan

and backup

Comment and outlook

Strong and effective management of our security

and IT systems is necessary to prevent the

compromise of secure information, intellectual

property and data relating to our personnel

andcustomers.

During the period we conducted an independent

assessment on our information security control

architecture and cybersecurity business

continuity plan as part of considering whether

topurchasecyberinsurance.

We launched mandatory cybersecurity training

campaigns in support of CMMC 2.0 compliance and

we remain on track to be compliant with CMMC 2.0

requirements when they become mandatory.

We have completed the transfer of the Cleveland

site onto the Avon Protection IT systems.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

Compliance and internal control

Risk appetite: Low

Trend

Strategy Sustainability

Business risk

• Failure to comply with

export controls

• Bribery and corruption risk

• Breach of contract/law leads

to investigation, prosecution,

litigation or fines

• Defence contract compliance

• Failure to comply with the

requirements of the Special

Security Agreement

Impact on

• Ability to ship products

• Financial loss

• Reputational damage

Mitigation

• Effective export control policy supported

by training

• Effective anti-bribery and corruption policy

supported by training

• Embedded and effective Code of Conduct

• Effective internal legal and internal control/

audit function

• Effective government contract

specialist knowledge

• Clear policies defining and understanding of

working practices between Avon and the security

cleared entity Avon Protection Ceradyne

Comment and outlook

Working within the defence sector requires us to

maintain strong compliance controls.

We have launched mandatory annual Code of

Conduct training to all employees. A project is

underway to reduce the risk that a partner pays a

bribe to secure business for Avon. This will include

enhancements to the current diligence process, a

review of our partner remuneration policy and a

thorough review of our partner network, with the

introduction of additional checks and assurance.

Deloitte continued its FY23 internal audit work

programme. We have strengthened our day-to-

day oversight of internal controls through the

recruitment of an Internal Audit Manager to fulfil this

role in FY24.

RISK MANAGEMENT CONTINUED

No change

Increasing

Decreasing

Trend

Links

Strategy Sustainability

Our planet

Our supply chain

Our customers

Our colleagues and communities

Strengthen

Transform

Advance

Revolutionise

Sustainability

Risk appetite: Medium

Trend

Strategy Sustainability

Business risk

• Cost and delay in implementing

net zero plan and progressing

the sustainability agenda

• Customer requirements shift to

more sustainable products that

we do not offer

Impact on

• Reputational damage

• Sales, cost and profitability

Mitigation

• Maintain strong relationships with customers,

supply chain and technology partners

• Sufficient focus on sustainability at all levels of the

business and within key processes

• Sustainability plan and targets agreed

• Sufficiently resourced operations to complete

necessary projects

Comment and outlook

We have set a sustainability strategy which is

designed to complement and be delivered through

our STAR strategy by being aligned to certain

key priorities, e.g. operational excellence and site

optimisation. So as we fund the delivery STAR,

we can be confident we are also delivering our

sustainability agenda.

As explained in the sustainability report, during the

period we established cross-functional net zero

teams at each of the sites to identify opportunities

to reduce energy usage and emissions. These teams

will be critical in supporting the business to review

and deliver our net zero plan at each site.

Purchase of renewable and low emission electricity

has been reviewed and implemented at our

factories where practicable.

Avon Protection plc Annual Report and Accounts 2023

Defence sector concentration/cycle risk

Risk appetite: Medium

Trend

Strategy Sustainability

Business risk

• U.S. DOD customer

concentration risk

• Government defence spending

cyclical fluctuation

Impact on

• Sales and profitability

Mitigation

• Strong U.S. DOD/customer relationships

and insight

• Understand future capability requirements and

investment in technology to deliver the products

the customer requires

• Maintain diversification via other markets e.g. the

U.S. first responder market and geographies

• Strategy targets diversification of global military

customer base

Comment and outlook

Our primary market is the defence sector which

is subject to defence spending cycle risk. Military

budgets remain strong in the current heightened

threat environment and the military order book

for helmets is confirmed for 2024, with some risk

mitigation achieved from the diversification of the

customer base within the U.S. DOD. The Respiratory

Protection business is already mitigating its risk

in this area through expanding its product and

market focus away from the U.S. DOD due to the

current slow demand. That business has also further

mitigated its concentration risk by launching a new

e-commerce business selling 50 series respirators to

a new customer base, the US civilian market.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTSGOVERNANCE

GOVERNANC E

Avon Protection plc Annual Report and Accounts 2023

WE HAVE MAINTAINED HIGH LEVELS

OF ENERGY THROUGH THE CONTINUED

EXECUTION OF OUR STAR STRATEGY AND

WE HAVE MADE SIGNIFICANT PROGRESS

IN EACH OF THE KEY AREAS, WHICH IS

A TESTAMENT TO THE DEDICATION AND

INNOVATION OF OUR TEAM.

72 Chair’s Introduction to Governance

74 Board of Directors

76 Corporate Governance

80 Nomination Committee Report

82 Audit Committee Report

86 Remuneration Committee Report

108 Directors’ Report

CONTENTS

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

The Board is committed to achieving high

standards of governance designed to protect

the long-term interests of all other stakeholders,

while promoting the highest standards of

integrity, transparency and accountability.

Dear Shareholder

I am pleased to present our Corporate Governance Report. This report

describes our governance structures and procedures, and summarises

the work of the Board and its Committees and how the Board evaluated

its effectiveness in 2023. As a Board we recognise the fundamental

importance of ensuring robust governance practices are implemented

and followed in order to promote the long-term sustainable success of the

Company, generate value for shareholders and contribute to wider society.

Stakeholder engagement

The Board recognises its obligation to ensure effective engagement with its

stakeholders, to understand their different perspectives and to ensure their

interests are considered in Board discussions and decision making. While

we understand the importance of balancing all stakeholder views, this year

we have sought to increase the mechanisms under which we engage with

and receive feedback from our employees, including additional in-person

townhall meetings and site visits. Details of stakeholder engagement

activities during the period are outlined on pages 36 to 39.

Purpose and culture

We are an organisation made up of over 900 people, in five main locations

around the U.K. and North America. Our people come from a wide variety of

backgrounds and work on a diverse range of products in a number of different

markets. The thing we all have in common – the golden thread that binds us

together – is our shared purpose: Protecting Lives.This underpins everything

we do, including our culture and values. The Board understands the

importance of its role in setting the right tone from the top and embedding

it throughout the Group. In addition to the Board, the Executive Committee

has responsibility to ensure the policies and behaviours set at Board level are

effectively communicated and implemented throughout the Group.

Our refreshed Code of Conduct, which was approved by the Board during

the period, reflects our purpose and our values, and sets out the standards

of behaviour and business conduct expected from anyone working for or

on behalf of the Group.

Board and Committee evaluation

During the period we completed an evaluation of the Board and

its Committees. The 2023 evaluation was internally facilitated using

questionnaires, led by the Company Secretary and me. It concluded

that the Board, its Committees, the individual Directors and the Chair

performed effectively during 2023, both individually and as a collective

unit. The significant improvement in this year’s strategy process was

commented on by several Board members and although it was noted that

the risk management process had improved, it was felt there was further

work to do. There was agreement that the Board had improved following

the appointment of the new CEO, that the Board had a strong sense of

collective responsibility and the individual roles were working effectively

together. In addition the introduction of the new simplified organisation

A STRONG

TEAM

CHAIR’S INTRODUCTION TO GOVERNANCE

structure was a clear improvement which had provided increased clarity

on performance drivers. Further details can be found on page 78.

Sustainability

Given its significance, the Board has retained responsibility for the

development and oversight of our sustainability agenda directly, rather

than establishing a specific Board-level committee. During the period the

Board has approved our sustainability targets for the next five-years. At

the management level, Rich Cashin, our CFO, is the Executive Director with

responsibility for overseeing our sustainability agenda across the business

and chairs our Sustainability Steering Committee. This Committee reports

to the Board on progress. Further details on the remit of the Sustainability

Steering Committee can be found on page 51.

Avon Protection plc Annual Report and Accounts 2023

Annual General Meeting

The 2024 AGM of Avon Protection plc will be held at Hampton Park West,

Semington Road, Melksham, Wiltshire SN12 6NB, at 10.30 am on Friday

26January 2024. Further details, including the resolutions to be proposed

to our shareholders, can be found in the Notice of Meeting on pages 174

to 178. The result of the votes on the resolutions put forward at the AGM

will be publicly announced to the stock exchange and published on our

website as soon as possible following the conclusion of the meeting. I will

be in attendance at the AGM and will be very happy to take any questions

you may have regarding the operation of the Board during the period.

Welook forward to seeing you there.

Bruce Thompson

Chair

21 November 2023

AS A BOARD WE RECOGNISE THE FUNDAMENTAL IMPORTANCE OF

ENSURING ROBUST GOVERNANCE PRACTICES ARE IMPLEMENTED

AND FOLLOWED IN ORDER TO PROMOTE THE LONGTERM

SUSTAINABLE SUCCESS OF THE COMPANY, GENERATE VALUE

FORSHAREHOLDERS AND CONTRIBUTE TO WIDER SOCIETY.

Compliance with the U.K. Corporate Governance Code

The Company reports against the Financial Reporting Council’s (FRC’s)

U.K. Corporate Governance Code 2018 (‘the Code’), which is available at

www.frc.org.uk. The Board has applied all principles and complied with

all provisions in the Code for the year ended 30 September 2023, with

the exception of Provision 9, that the role of Chair and CEO should not be

exercised by the same person. For a limited period Bruce Thompson was

appointed as Executive Chair. As explained on page 76, we were in full

compliance with this provision following the appointment of Jos Sclater

asCEO on 16 January 2023. Further details on how the Company applied

the principles of the Code during the period can be found as follows:

See page

Board leadership and Company purpose

Long-term value and sustainability 2, 41

Culture 76

Shareholder engagement 38

Employee engagement 36

Other stakeholder engagement 36

Conflicts of interest 109

Division of responsibilities

Role of the Chair 76

Division of responsibilities 76

Non-Executive Directors 76

Composition, succession and evaluation

Appointments and succession planning 81

Skills, experience and knowledge 74, 75

Length of service 74, 75

Evaluation 78

Diversity 80

Audit, risk and internal control

Audit Committee 82

Integrity of financial statements 83

Fair, balanced and understandable 82

Internal controls and risk management 84

External auditor 84

Principal and emerging risks 62

Remuneration

Policies and practices 90

Alignment with purpose, values and long-term strategy 90

Independent judgement and discretion 97

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

BOARD OF DIRECTORS

A BOARD

WITH

EXPERIENCE

Our business is led by our experienced Board of Directors, which focuses on developing

the Group’s strategy and supporting management to execute against it.

Bruce Thompson

Chair

First appointed:

March 2020

AppointedChair:

December 2020

Skills and experience:

Bruce joined the Board in March

2020. During his executive career,

Bruce was CEO of Diploma

PLC, the FTSE 250 specialised

technical products and services

business, for over 20 years. Prior

to joining Diploma, Bruce was

a Director with the technology

and management consulting

firm Arthur D. Little Inc., both in

the U.K. and the U.S. He is also an

Independent Non-Executive Chair

of discoverIEGroup plc.

Committee membership:

Chloe Ponsonby

Non-Executive Director

Senior Independent Director

First appointed:

March 2016

Skills and experience:

Chloe has spent her career in

financial services, first in equity

fund management at Jupiter,

and then in investment banking

at Altium and Oriel Securities

(now owned by Stifel). Chloe

also held the role of Managing

Director in investment banking at

Panmure Gordon and is currently

a Managing Director within the

corporate broking unit at HSBC.

She is a Chartered Financial Analyst

and has a first class Economics

degree from the University

ofManchester.

Committee membership:

Rich Cashin

Chief Financial Officer

First appointed:

April 2022

Skills and experience:

Before joining Avon Protection,

Rich was President, Strategy

and Corporate Development

for Ultra Electronics plc from

June2019. Prior to this, he was

GroupHead of Investor Relations

and, subsequently, a divisional

Finance Director for Meggitt PLC

and held a number of investment

and finance roles at Rolls-Royce plc

and UBS AG.

Jos Sclater

Chief Executive Officer

First appointed:

January 2023

Skills and experience:

Prior to joining Avon Protection,

Jos spent three years as Group CFO

at Ultra Electronics plc, utilising his

skills and experience from his time

as Group CFO at Castrol Lubricants.

Jos has also spent seven years at

GKN plc in various roles including

Group CFO and Director of

Corporate Finance & Strategy.

Josstarted his career as a qualified

solicitor and held in-house

legal and M&A roles at ICIplc,

AkzoNobel N.V. and GKN plc.

Avon Protection plc Annual Report and Accounts 2023

Bindi Foyle

Non-Executive Director

First appointed:

May 2020

Skills and experience:

Bindi has been Group Finance

Director of Senior plc, a

manufacturer for the aerospace,

defence, land vehicle and power

and energy markets, since

July 2017, having served as an

Executive Director since May

2017. Bindi joined Senior in 2006

as Group Financial Controller

before becoming Director of

Investor Relations and Corporate

Communications in 2014. Prior

to joining Senior, she held senior

finance roles at Amersham plc and

General Electric, having previously

worked with BDO Stoy Hayward.

Committee membership:

Victor Chavez CBE

Non-Executive Director

First appointed:

December 2020

Skills and experience:

Victor has over 30 years of

experience in the defence and

security sectors. His early career

focused on telecommunications

and software before joining Thales

U.K. in 1999. He was appointed

Chief Executive in 2011, retiring

in 2020 having successfully

integrated and grown the business

during this period. In recognition

of his services to defence and

security for the U.K. and France,

Victor was appointed a CBE

in 2015 and a Chevalier of the

Légiond’Honneur in 2020.

Committee membership:

Miles Ingrey-Counter

General Counsel and

Company Secretary

First appointed:

October 2007

Skills and experience: Miles is

a qualified solicitor; he joined the

Group in January 2004 and has

been a member of the Executive

Committee since 2008. Miles

also has responsibility for all

Group HR matters and is Chair

of the Retirement and Death

Benefits Plan. Prior to joining Avon

Protection, Miles was a solicitor

with Osborne Clarke LLP.

Board membership key

Audit Committee

Nomination Committee

Remuneration Committee

Chair

Independent Director

Board gender diversity (%) Independence (%)

Female

Male

Executive (including CFO)

Non-Executive (excluding Chair)

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

CORPORATE GOVERNANCE

Introduction

This Corporate Governance Report, along with information in the Strategic

and Remuneration Reports, explains how the principles and provisions of

the U.K. Corporate Governance Code 2018 (‘the Code’) have been applied.

A copy of the Code can be found on www.frc.org.uk.

Statement of compliance with the Code

We are pleased to confirm that the Board has complied with all provisions

of the Code throughout 2023, with the exception of the following:

• Provision 9, which states that the roles of Chair and CEO should not be

exercised by the same individual. Paul McDonald stepped down from

the Board as CEO on 30September 2022. Foran interim period from 1

October 2022 until Jos Sclater joined the Board as CEO on 16 January

2023, the Chair was appointed as Executive Chair.

Board leadership

The Board comprises two Executive Directors and four Non-Executive

Directors (including the Chair, Bruce Thompson). Chloe Ponsonby has

announced her intention to step down from the Board next year following

an increase in her executive responsibilities. Details about the recruitment

process for her replacement are disclosed on page 81. The Board regularly

reviews its composition to ensure it has the necessary breadth and depth

of skills to support the development of the Group. We believe the Board

continues to have a strong mix of experienced individuals who provide

a unique perspective on Company matters and bring specific skills to

the Board.

Biographical details for each member of the Board can be found on pages

74 and 75 of this Annual Report. All Directors will stand for re-appointment

by shareholders at the 2024 AGM.

Company purpose

The Company purpose is stated on page 2. The Board recognises its role in

establishing the purpose, values and strategy of the Group and ensuring

these are embedded throughout the business.

Our culture

The Board clearly recognises the importance of culture and its link to

delivering our purpose and strategy. Assessing and monitoring our culture

is important to ensure we retain a successful culture as we grow. Through

our employee engagement initiatives, explained in more detail on page

46, the Board has sought to maintain a good level of engagement with

the workforce. The Board considers the most effective way of achieving

this engagement is via a Global Employee Advisory Forum, which was

established in 2021.

Division of responsibilities

For an interim period from 1 October 2022 until Jos Sclater joined the

Board as CEO on 16 January 2023, the Chair took on the role of Executive

Chair. For the remainder of the financial year there was a clear division

of responsibility between the running of the Board by the Chair and the

running of the Group’s business by the CEO.

The Chair is responsible for the leadership of the Board and ensuring its

effectiveness in all aspects of its role. The CEO manages the Group and

has the primary role, with the assistance of the Board, of developing and

implementing business strategy. The Chair ensures that meetings of Non-

Executive Directors take place without the Executive Directors present.

Whilst the Chair is performing the role of Executive Chair, the Senior

Independent Director assists with these responsibilities.

Rules concerning the appointment and replacement of Directors of the

Company are contained in the Articles of Association. Amendments to the

Articles must be approved by a special resolution of shareholders. One of

the roles of the Non-Executive Directors, under the leadership of the Chair,

is to undertake detailed examination and discussion of strategies proposed

by the Executive Directors, so as to ensure that decisions are made in the

best long-term interests of shareholders and take proper account of the

interests of the Group’s other stakeholders.

The Non-Executive Directors are appointed by the Board on terms

which allow for termination on three months’ notice. Copies of Executive

Directors’ service contracts and terms and conditions of appointment

for Non-Executive Directors are available for inspection at the

registered office.

How the Board operates

The Chair ensures, through the Company Secretary, that the Board agenda

and all relevant information are provided sufficiently in advance of

meetings and that adequate time is available for discussion of all agenda

items, in particular strategic issues. The CEO and the Company Secretary

discuss the agenda ahead of every meeting. At meetings, the Chair

ensures that all Directors are able to make an effective contribution and

every Director is encouraged to participate and provide opinions on each

agenda item. The Chair always seeks to achieve unanimous decisions of

the Board following due discussion of agenda items.

The Non-Executive Directors fully review the Group’s operational

performance and the Board as a whole has, with a view to reinforcing its

oversight and control, reserved a list of powers solely to itself which are

not to be delegated to management.

CORPORATE GOVERNANCE

REPORT

Avon Protection plc Annual Report and Accounts 2023

This list includes appropriate strategic, financial, organisational and

compliance issues, including the approval of high level announcements,

circulars, the Annual Report and Accounts and certain strategic and

management issues, which include:

• approval of the annual operating budget and the three-year

strategic plan;

• the extension of the Group’s activities into new areas of business and/or

geographical areas (or their cessation);

• changes to the corporate or capital structure;

• financial issues, including changes in accounting policy, the approval

ofdividends, bank facilities and guarantees;

• changes to the constitution of the Board;

• the approval of budgeted project spend of over $5 million or any capex

or R&D expenditure which exceeds budget by more than 10%;

• The approval of bid/sales proposals where the estimated total contract

value exceeds $10 million or a duration of five years for high risk

proposals (or $20 million for low risk proposals);

• The approval of any agency commission which exceeds 10% on a

customer contract; and

• consideration and approval of all proposed acquisitions and mergers.

Each Director has full and timely access to all relevant information and

the Board meets regularly with appropriate contact between meetings.

All Directors receive a tailored induction to the Group from the Company

Secretary on joining the Board. When appointed, Non-Executive

Directors are made aware of and acknowledge their ability to meet

the time commitments necessary to fulfil their Board and Committee

duties. Procedures are in place, which have been agreed by the Board,

for Directors, where necessary in the furtherance of their duties, to take

independent professional advice at the Company’s expense and all

Directors have access to the Company Secretary.

The Company Secretary is responsible to the Board for ensuring that all

Board procedures and governance requirements are complied with. The

removal of the Company Secretary is a decision for the Board as a whole.

Committees of the Board

Of particular importance in a governance context are the three

Committees of the Board, namely the Remuneration Committee, the

Nomination Committee and the Audit Committee. Each Committee

operates under clear terms of reference, copies of which are available on

our website. Details of the operation of each Committee are provided

within the relevant Committee report.

Bindi Foyle is Chair of the Audit Committee. The Board is satisfied that

Bindi has recent relevant financial experience and her profile appears

on page 75.

Bruce Thompson is Chair of the Nomination Committee but, in accordance

with the Committee’s terms of reference, is not permitted to chair

meetings when the Committee is dealing with matters relating to the

Board Chair’s position.

Chloe Ponsonby is Chair of the Remuneration Committee. The

Remuneration Committee’s principal responsibilities are to decide

on remuneration policy on behalf of the Board and to determine

remuneration packages and other terms and conditions of employment,

including appropriate performance-related benefits for the Executive

Directors and other senior executives. The Remuneration Committee also

has regard to the remuneration of the wider workforce. More details of the

activities of the Remuneration Committee are set out in the Remuneration

Report on pages 86 to 107.

Composition, succession and evaluation

The Nomination Committee is responsible for leading the process

for Board appointments and making recommendations to the Board,

putting in place plans for succession and regularly reviewing the Board’s

structure, size and composition. The Committee takes into account the

challenges and opportunities facing the Group and the skills, knowledge

and experience needed by the Board and makes recommendations to the

Board with regard to any changes. Further information and the activities

of the Nomination Committee during the period are detailed on page

80 and 81.

Attendance at meetings

All Committee and Board meetings held in the year were quorate. Directors’ attendance during the period ended 30 September 2023 was as follows:

Board

(6 scheduled, 1 ad hoc)

Audit Committee

(3scheduled)

Remuneration Committee

(4 scheduled, 1 ad hoc)

Nomination Committee

(2 scheduled)

Bruce Thompson

7(7) – 4(4) 2(2)

Bindi Foyle 7(7) 3(3) 5(5) 2(2)

Chloe Ponsonby 7(7) 3(3) 5(5) 2(2)

Victor Chavez 7(7) 3(3) 5(5) 2(2)

Jos Sclater

6(6) – – –

Rich Cashin 7(7) – – –

The maximum number of meetings which each Director could have attended is shown in brackets.

1 Bruce Thompson temporarily stepped down from the Remuneration Committee while appointed as Executive Chair from 1 October 2022 to 16 January 2023

2 Jos Sclater was appointed to the Board on 16 January 2023.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

CORPORATE GOVERNANCE CONTINUED

Performance evaluation

The Board continually strives to improve its effectiveness and conducts

an annual review of its performance and that of its Committees and the

individual Directors to enhance overall Board effectiveness. Given the

recent changes to the Board, including the appointment of JosSclater

as CEO on 16 January 2023 and prior to this the appointment of

RichCashin as CFO on 31 March 2022, it was agreed that the 2023 Board

evaluation process would be conducted internally using questionnaires

andinterviews led by the Company Secretary. Consideration will be

givento the 2024 evaluation being externally facilitated.

The Board evaluation questionnaire, completed by all Board members

and the Company Secretary, was structured to provide Directors with

the opportunity to express views on a variety of topics including Board

remit and responsibilities, skills and dynamics of the Board, meetings and

content, Group strategy, internal control and risk management, decision

making and communication.

A detailed discussion of the findings from the performance evaluation

took place at the October 2023 Board meeting. Overall, the evaluation

concluded that the Board, its Committees, the individual Directors and

the Chair performed effectively during 2023, both individually and as a

collective unit. The significant improvement in this year’s strategy process

was commented on by several Board members and although it was

noted that the risk management process had improved, it was felt there

was further work to do. It was felt that the Board had improved following

the appointment of the new CEO and there was a strong sense of

collective responsibility within the Board, with the individual roles working

effectively together. In addition, the introduction of the new simplified

organisation structure was a clear improvement which had provided

increased clarity on performance drivers.

The following areas were identified by the Board as areas of focus for 2024

and beyond:

• Ensuring continued visibility of and engagement with the US sites and

workforce through a US Board trip, to be arranged to include Chloe

Ponsonby’s successor when identified

• A deeper understanding of the relationship with the US DOD,

particularly on the Respiratory protection side of the business

• A deeper dive into important elements of the strategy including the

transformation programmes and key opportunities and technology

developments

Audit, risk and internal control

The Board has an established framework of internal controls covering

both financial and non-financial controls. In addition, there is a process for

identifying, evaluating and managing significant business risks, including

emerging risks, faced by the Group. This process was in place throughout

the 2023 financial year.

The Code requires that Directors establish procedures to manage risk,

oversee the internal control framework and determine the nature and

extent of the principal risks the Company is willing to take in order to

achieve its long-term strategic objectives.

The Board, through the Audit Committee, reviews the effectiveness of

the Group’s system of internal controls on a continuing basis. The scope

of this review covers all controls including financial, operational and

compliance controls, as well as risk management. The Audit Committee

has responsibility to review, monitor and make policy recommendations to

the Board upon all such matters.

The Audit Committee keeps this system under continuous review and

formally considers its content and its effectiveness on an annual basis.

Such a system can provide only reasonable, and not absolute, assurance

against material misstatements or losses. The section on internal

control in the Audit Committee Report on page 84 and the following

paragraphs describe relevant key procedures within the Group’s systems

of internal control and the process by which the Directors have reviewed

theireffectiveness.

Systems exist throughout the Group which provide for the creation of

three-year plans and annual budgets; monthly reports enable the Board

to compare performance against budget and to take action where

appropriate. Procedures are in place to identify all major and emerging

business risks and to evaluate their potential impact on the Group. These

risks are described within the Strategic Report on pages 62 to 69.

Risk management

Risk is managed by the business unit and functional leadership teams,

supported and overseen by the Risk Committee, which is led by the

Company Secretary and includes other members of the finance team.

The risk management process has remained the same during the

period but the number and structure of the risk registers was changed

to reflect the new organisational structure. The outputs from the risk

management process are set out in more detail in the Principal Risks and

Risk Management section on pages 62 to 69.

The Audit Committee carried out quarterly reviews of the key risks facing

the Group and risk management activities undertaken during the period,

following the risk reviews conducted by the Risk Committee with the

business leadership. The Audit Committee also carried out a robust annual

assessment of the major business risks and emerging risks affecting the

Group, including macro risks.

Internal control

There is a clearly defined delegation of authority from the Board to the

business units, with appropriate reporting lines to individual Executive

Directors. There are procedures for the authorisation of capital expenditure

and investment, together with procedures for post-completion appraisal.

Internal controls are in existence which provide reasonable assurance

of the maintenance of proper accounting records and the reliability of

financial information used within the business or for publication. The

Group finance department manages the financial reporting process to

ensure there is appropriate control and review of the financial information

including the production of the consolidated annual accounts. Group

finance is supported by the operational financial managers throughout the

Group, who have responsibility for providing information in keeping with

the policies, procedures and internal best practices as documented in the

internal control manual and are accountable under these.

The Board has issued a Code of Conduct, reviewed annually, which

reinforces the importance of a robust internal control framework

throughout the Group. The Board recognises that an open and honest

culture is key to understanding concerns within the business and to

uncovering and investigating any potential wrongdoing. The Code of

Conduct sets out the procedure whereby individuals may raise concerns

in matters of financial reporting or any other matter of concern with

management or directly with the Chair of the Audit Committee, or

anonymously through our ‘Speak Up’ process, to ensure independent

investigation and appropriate follow-up action. All employees complete

training on the Code of Conduct to ensure they have read and

understood it.

Although the Board itself retains the ultimate power and authority in

relation to decision making, the Audit Committee meets at least four

times a year with management and the external auditor to review specific

accounting, reporting and financial control matters.

This Committee also reviews the interim, preliminary and annual

statements and has primary responsibility for making a recommendation

on the appointment, re-appointment and removal of the external auditor.

Avon Protection plc Annual Report and Accounts 2023

Relations with shareholders

The Directors regard regular communications with shareholders as

extremely important. All members of the Board receive copies of

analysts’ reports, of which the Company is made aware, and receive

an investor relations report from the CFO at every Board meeting. The

Board reports formally to its shareholders in a number of ways, including

via regulatory news announcements, press releases, routine reporting

obligations, a detailed Annual Report and Accounts and, at the half year,

aninterim report.

Regular dialogue takes place with institutional shareholders, including

presentations after the Company’s preliminary announcements of the half

and full year results. The Board receives comments from analyst meetings

and shareholder meetings after both interim and final results and at other

times during the period. The AGM includes a presentation by the CEO on

aspects of the Group’s business and shareholders have the opportunity

to both ask questions and to leave written questions with the Company

Secretary for the response of the Directors. Directors also make themselves

available after the AGM to talk informally to shareholders, should they

wish to do so, and respond throughout the year to any correspondence

from individual shareholders. This year we have consulted with our major

shareholders on a revised Remuneration Policy.

Special Security Agreement

On 8 December 2020, our U.S. subsidiary Avon Protection Ceradyne, LLC

(APC) and the Company entered into a Special Security Agreement with

the U.S. Department of Defense. The SSA was entered into in support

of the U.S. DOD contracting and product development elements of the

then ballistic protection business and permits APC to perform classified

U.S. defence contracts. There are a number of specific protocols that the

Company and APC are required to comply with under the SSA, including

the appointment to the APC Board of two independent outside U.S.

Directors approved by the U.S. Government. The SSA imposes certain

restrictions on the degree of influence the Company can exert over

APC and it is therefore important that the Company maintains a strong

relationship with the APC Board, in order to ensure that we are fulfilling our

own governance obligations. A member of our Executive Committee is an

inside Director on the APC Board. We anticipate continued engagement

with APC and the outside Directors in the coming year under the

governance of the SSA to support synergy opportunities across APC’s

product portfolio for the benefit of our Head Protection business.

Disclosure and Transparency Rules (DTR)

Disclosures in respect of the DTR requirements under DTR 7.2.6 are given

in the Directors’ Report on pages 108 to 110 and have been included

byreference.

Going concern

The financial statements have been prepared on a going concern basis,

which the Directors believe to be appropriate for the following reasons:

The Directors have prepared a going concern assessment covering the

12-month period from the date of approval of these financial statements.

The assessment indicates that the Group will have sufficient funds to meet

its liabilities as they fall due for that period.

As part of their assessment, the Directors considered a base case and a

severe downside scenario involving a 21% decline in bank-determined

adjusted EBITDA against the base case. The base case is the Group’s 2024

budget. The severe downside scenario incorporates the cumulative risk-

adjusted impact of individual risks identified to the Group’s 2024 budget,

whilst excluding all individual opportunities. The severe downside scenario

also excludes mitigating actions the Directors could take to reduce future

cash outflows or expenses. The risks align with the Group’s principal risks

and uncertainties and relate primarily to possible loss of bids and contracts

or lower anticipated volumes of secured work.

Even in the severe downside scenario, the assessment indicates that the

Group will have sufficient funds to meet its liabilities as they fall due, and

will continue to comply with loan covenants, throughout the forecast

period. The Group has committed RCF facilities of $142 million covering

the 12-month going concern period, maturing on 8 September 2025.

Additional committed RCF facilities of $58 million are also available until

8September 2024. At 30 September 2023 $77.7 million of the RCF facility

was drawn (2022: $53.7 million).

RCF loan covenants measured on a bi-annual basis include a maximum

limit of 3.0 times for the ratio of net debt, excluding lease liabilities, to

bank-determined adjusted EBITDA (leverage), and a minimum limit of 4.0

times for the ratio of bank-determined adjusted EBITDA to interest payable

on bank loans and overdrafts. At 30 September 2023 leverage was 1.94

times (2022: 1.99 times). Bank-determined adjusted EBITDA is calculated

ona pre-IFRS 16 leases basis, and excludes certain non-cash items.

On this basis, the Directors are confident that the Group and Company

will have sufficient funds to continue to meet their liabilities as they fall

due for at least 12 months from the approval of these financial statements.

Accordingly the Group and Company continue to adopt the going

concern basis in preparing their financial statements.

Viability statement

The Directors have assessed the viability of the Group over a five-year

period to September 2028, taking account of the Group’s current position,

and potential impact of the principal risks documented in the Strategic

Report. Based on this assessment, the Directors have a reasonable

expectation that the Group will be able to continue in operation and meet

its liabilities as they fall due over the period to September 2028.

In making this statement, the Directors have considered the resilience

of the Group, taking account of its current position, the principal risks

facing the business in severe but plausible downside scenarios, and the

effectiveness of any mitigating actions. This assessment has considered

the potential impacts of these risks on the business model, future

performance, solvency and liquidity over the period. As set out in the

TCFD section the potential financial impact of climate change for the

next five years has been assessed as low, with no material impact on

viability expected.

In making their assessment, the Directors have taken account of the

Group’s RCF facility which provides financing until September 2025.

TheDirectors have a reasonable expectation that broadly similar financing

could be obtained at the end of the current RCF facility, supporting

continuing operations. During the period the Group has complied with

allcovenant requirements attached to its financing facilities.

The Directors consider the five-year lookout period to be the most

appropriate as this aligns with the Group’s own strategic planning period.

The Group has an annual business planning process, which comprises

a strategic plan, a financial forecast for the current year and a financial

projection for the forthcoming five years. This plan is reviewed at least

annually by the Board as part of its strategy setting process. Once

approved by the Board, the plan provides a basis for setting all detailed

financial budgets and strategic actions that are subsequently used by the

Board to monitor performance. The forecast performance outlook is also

used by the Remuneration Committee to establish the targets for both the

annual and long-term incentive schemes.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

NOMINATION COMMITTEE REPORT

LETTER FROM

THE CHAIR

Attendance at Nomination Committee meetings

During the period, the Nomination Committee held two scheduled

meetings. Attendance of the members of the Committee is recorded in

the table below:

Scheduled meetings Attended

Eligible

to attend

Bruce Thompson 2 2

Chloe Ponsonby 2 2

Bindi Foyle 2 2

Victor Chavez 2 2

The Nomination Committee comprises all the Non-Executive Directors.

Main responsibilities

The main responsibilities of the Committee are as follows:

• to regularly review the Board’s structure, size and composition, taking

into account the challenges and opportunities facing the Group and

the skills, knowledge and experience needed by the Board and to make

recommendations to the Board with regard to any change;

• to put in place and periodically review succession plans for Directors

and, more generally, senior executives; and

• to lead the process for Board appointments and make

recommendations to the Board.

The Committee’s terms of reference are available within the Corporate

Governance section of the Company’s website and are reviewed annually.

All Directors are appointed by the Board following a rigorous selection

process and subsequent recommendation by the Committee.

Bruce Thompson

Chair of the Nomination

Committee

Diversity

The Board recognises the benefits of diversity and believes the Board’s

perspective and approach are greatly enhanced by gender, age and

cultural diversity. The Nomination Committee is responsible for the Board’s

policy in this area. Diversity of skills, background, knowledge, international

and industry experience, and gender, amongst many other factors, will

be taken into consideration when seeking to appoint new Directors to

the Board. Notwithstanding the foregoing, all Board appointments will

always be made on merit. The Board’s Diversity Policy can be found in the

Corporate Governance section of the Company’s website.

The Balance@Avon initiative, supported by the Committee, aims to help

develop and promote our female leadership, create a forum where we can

identify, nurture and develop the female leaders of the future and ensure

that all women at Avon Protection thrive in their careers. The initiative

is driven by a steering group which collaborates on long-term ideas to

help shape the future face of Avon Protection and create an agenda and

platform to help build our future female talent pipeline.

During 2023 we have supported a number of Balance@Avon initiatives,

including International Women’s Day and a Group-wide mentoring

programme. We have achieved our minimum target of 33% female

representation on the Board and continue to work to achieve the same

minimum target representation for the Executive Committee and its

direct reports.

Further information, including the number of women in senior

management and within the organisation, is shown in the Sustainability

Report on page 47.

Activities during 2023

During the period, the Committee:

• considered and confirmed the appointment of Jos Sclater as CEO,

following the departure of Paul McDonald on 30 September 2022;

• commenced the search for a new Non-Executive Director to replace

Chloe Ponsonby who announced her intention to step down from the

Board next year following an increase in her executive responsibilities;

• reviewed the composition of the Board and its succession plan;

• carried out an annual review of the Committee’s terms of reference;

• recommended re-election of the Board at the forthcoming Annual

General Meeting; and

• discussed the Board performance evaluation results with the Board

as a whole.

Avon Protection plc Annual Report and Accounts 2023

Board changes

As announced to shareholders on 24 May 2022, after five years as CEO

and19 years with the Company, Paul McDonald stepped down from the

Board as Chief Executive Officer on 30 September 2022.

JosSclater joined the Group as CEO on 16 January 2023. The process

followed for Jos’ appointment was disclosed in last year’s report. Jos’

biography, together with those of all Board Directors, isincluded on pages

74 and 75.

Chloe Ponsonby has confirmed her intention to step down from the

Board next year following an increase in her executive responsibilities.

The recruitment process to find Chloe’s replacement is being led by me as

Chair of the Committee. Independent executive search consultants Korn

Ferry have been retained and provided with a detailed description of the

role and associated skills and experience required. Korn Ferry will compile

a longlist of potential candidates based on initial interviews, from which a

shortlist of candidates will be selected by the Committee for interview.

The Committee has previously decided that all Directors should be put

forward for re-appointment by shareholders each year at the AGM. Taking

into account the performance and value that each Director has brought

to the Board, the Committee confirms the appointment of each Non-

Executive and Executive Director should be renewed for a further year.

Accordingly, resolutions to re-appoint each Director for another year are

being put to shareholders at the forthcoming AGM.

Succession planning

The Committee reviews succession planning for the Board formally at

least once a year in order to ensure the Board is adequately prepared for

potential changes to key Board positions. In addition, the Committee

reviewed the executive leadership needs of the Group during the period.

Renewing the longer-term succession planning of the Executive

Committee and business unit leadership teams will be a priority for

the coming year now the organisational structure changes have

beencompleted.

Alongside this, the Committee also retains oversight of the programmes

in place to assess and facilitate talent development amongst the

management teams to ensure there is a structured approach to

growing, developing and retaining the Company’s future leaders.

Thisyear the Committee received updates on the Group’s Professional

DevelopmentProgramme.

Committee evaluation

The evaluation of the effectiveness of the Committee was conducted

as part of this year’s Board performance evaluation. The outcome of the

2023 Committee review was positive and highlighted the need for the

Committee to ensure it reviews broaded succession plans for the Executive

Committee and senior leadership roles in 2024. Further detail on the result

of the Board evaluation exercise is included on page 78 of the Corporate

Governance Report.

Bruce Thompson

Chair of the Nomination Committee

21 November 2023

THE COMMITTEE RETAINS OVERSIGHT OF THE PROGRAMMES

IN PLACE TO ASSESS AND FACILITATE TALENT DEVELOPMENT

AMONGST THE MANAGEMENT TEAMS TO ENSURE THERE IS

A STRUCTURED APPROACH TO GROWING, DEVELOPING AND

RETAINING THE COMPANY’S FUTURE LEADERS.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

AUDIT COMMITTEE REPORT

LETTER FROM

THE CHAIR

During 2023 the Audit Committee undertook a full evaluation exercise

of KPMG’s audit approach, to ensure the effectiveness of the external

audit function. Reviewing the results of the evaluation of the external

audit process, we are satisfied with both the auditor’s independence and

audit approach.

The Audit Committee acts on behalf of the full Board, and the matters

reviewed and managed by the Committee remain the responsibility of the

Directors as a whole.

Main responsibilities of the Audit Committee

The Audit Committee has delegated authority from the Board set out in its

written terms of reference. The terms of reference for the Audit Committee are

available for inspection at the Company’s registered office and on our website.

The key objectives of the Audit Committee are:

• to provide effective governance and control over the integrity of the Group’s

financial reporting and review the significant financial reportingjudgements;

• to support the Board with its ongoing monitoring of the effectiveness

of the Group’s system of internal controls and risk management systems;

• to monitor the effectiveness of the Group’s internal audit function and

review its material findings;

• to oversee the relationship with the external auditor and make

recommendations to the Board in relation to the re-appointment of

the external auditor and monitor the external auditor’s objectivity

andindependence;

• to review the adequacy of the Company’s whistleblowing arrangements

and the provision of appropriate investigation of any matters raised; and

• to advise the Board on whether the Committee believes the

Annual Report and Accounts, taken as a whole, is fair, balanced,

and understandable and provides the information necessary for

shareholders to assess the Company’s position and performance,

business model and strategy.

Composition of the Audit Committee

The members of the Committee are set out on page 77 of the Corporate

Governance Report. The Committee members are all independent

Non-Executive Directors and have the appropriate range of financial

and commercial expertise necessary to fulfil the Committee’s terms of

reference. The Board considers that as a serving Group Finance Director

of a U.K. listed company, I have both the current and relevant financial

experience required to chair this Committee.

The Committee typically invites the Board Chair to attend all Committee

meetings together with the Executive Directors and the Group

FinancialController.

Bindi Foyle

Chair of the Audit

Committee

Attendance at Audit Committeemeetings

During the period, the Audit Committee held three scheduled meetings.

Attendance of the members of the Committee is recorded in the

tablebelow:

Scheduled meetings Attended

Eligible

to attend

Bindi Foyle 3 3

Chloe Ponsonby 3 3

Victor Chavez 3 3

The Committee monitors the integrity of the Group’s financial statements

and supports the Board with its ongoing monitoring of the effectiveness

of the Group’s risk management and internal control systems.

During 2023, the Audit Committee continued its key oversight role for

the Board of the Group’s financial management and reporting to reassure

shareholders that their interests are properly protected.

The Audit Committee has established a set programme of activities, with

agenda items scheduled to coincide with the annual financial reporting

calendar. The Committee reports regularly to the Board on its work.

During the 2023 financial year, the Committee has continued to monitor

the integrity of the Group’s financial statements and supported the

Board with its ongoing monitoring of the Group’s risk management

and internal control systems. The Committee also determined the

focus of the Group’s internal audit activity, reviewed its findings, and

continues to verify that recommendations and agreed actions are being

appropriatelyimplemented.

In accordance with the Code, the Committee continued to have oversight

of the Group’s whistleblowing function, known as ‘Speak Up’, together

with the associated policies and procedures. The Committee received

regular updates on the number and types of Speak Up reports and agreed

follow-up actions throughout the year from the General Counsel.

Avon Protection plc Annual Report and Accounts 2023

2023 Annual Report

The main areas of focus considered by the Committee during 2023 were

as follows:

• The presentation of the financial statements and the quality and

acceptability of accounting policies and practices including the

presentation of adjusted performance measures and the adjusting

items. The Committee reviewed papers prepared by management,

challenged management’s judgements and estimates, and reviewed

the disclosure of adjusted items within the Group’s half year and full

year results, agreeing that the position taken in the financial statements

isappropriate.

• The clarity of the disclosures and compliance with financial

reporting standards and relevant financial and governance reporting

requirements. Material areas in which significant judgements have been

applied are discussed separately in more detail below.

• At the request of the Board, the Committee considered whether the

2023 Annual Report was fair, balanced and understandable and whether

it provided the necessary information for shareholders to assess the

Company’s position and performance, business model and strategy.

Having taken account of the other information provided to the Board

throughout the year, the Committee was satisfied that, taken as a whole,

the Annual Report and Accounts was fair, balanced and understandable.

The Committee was content, after due challenge and debate, with the

assumptions made and the judgements applied in the accounts and

agreed with management’s recommendations. In addition, the Committee

reviewed and recommended the approval of the statements on corporate

governance, internal control and risk management in the Annual Report

and Accounts and the half year results announcement.

Significant judgements and estimates considered

bytheAudit Committee

After discussions with management and the external auditor, the

Committee determined that the key risks of material misstatement of the

Group’s 2023 financial statements arose in the following areas:

• valuation of goodwill allocated to Head Protection;

• development costs capitalisation and valuation;

• estimation of the defined benefit pension obligation; and

• the cessation of the Armour business satisfying the requirements

forreporting as a discontinued operation.

Goodwill impairment

The Group has a significant goodwill balance as a result of legacy

acquisitions, predominantly in relation to Ceradyne and Team Wendy.

Following the change in operating segments, the Committee confirmed

management’s assessment that specific impairment reviews for Head

Protection and Respiratory Protection CGUs were required, covering

goodwill and other attributable net assets. In the prior year, goodwill

was allocated to the single operating segment, Respiratory and

HeadProtection.

Impairment review of the Head Protection CGU indicated the carrying

value of goodwill and other attributable net assets exceeded future value

in use. The value in use calculation was based on the Board approved

five-year plan and utilised discounted cash flow projections, adjusted to

exclude expansionary capital expenditure and linked cash flows.

The Committee considered and challenged the assumptions applied

by management, including consideration of scenario analysis and

sensitivities, concluding that the proposed impairment was reasonable

and appropriate.

Further analysis and detail on goodwill is set out in note 3.1 of the

financialstatements.

Development costs capitalisation and impairment

The Group capitalises development costs and other capital spend relating

to new products.

Expenditure in respect of product development is capitalised where

management judge a positive outcome is reasonably certain, taking

account of commercial viability and technical feasibility, including

regulatory approvals required and forecast customer demand.

Capitalised development costs are tested for impairment annually or

whenever there is an indication that the asset may be impaired. Any

impairment is recognised immediately in the Consolidated Statement

ofComprehensive Income

The key issues reviewed in the financial year included the valuation

of assets in relation to the categories of escape hoods and boots and

gloves. The Committee concurred with management that a proposed

impairment relating to escape hoods and remaining carrying values on

other product groupings as included in the 30 September 2023 balance

sheet wereappropriate.

Further analysis and detail on the Group’s development costs are set out

innote 3.1 of the financial statements.

THE COMMITTEE MONITORS THE INTEGRITY OF THE GROUP’S

FINANCIAL STATEMENTS AND SUPPORTS THE BOARD WITH ITS

ONGOING MONITORING OF THE EFFECTIVENESS OF THE GROUP’S

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS.

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

AUDIT COMMITTEE REPORT CONTINUED

Estimation of the defined benefit pension assets

andobligations

The Group operated a contributory defined benefit plan to provide

pension and death benefits for the employees of its U.K. Group companies

employed before 31 January 2003. The plan was closed to future accrual of

benefits on 1 October 2009.

The investments held by the pension scheme include both quoted

and unquoted securities, the latter of which by their nature involve

assumptions and estimates to determine their fair value. Where there

is no active market for the unquoted securities, the fair value of these

assets is estimated by the pension trustees based on advice received

from the investment manager whilst also using any available market

evidence of any recent transactions for an identical asset. The assumptions

used in valuing unquoted investments are affected by current market

conditions and trends which could result in changes in fair value after

themeasurement date.

Estimation of the defined benefit pension obligation involves significant

judgements concerning future changes in inflation, mortality rates and the

selection of a suitable discount rate, as well as the future performance and

valuation of the scheme’s assets. Changes to these actuarial judgements

could have a significant impact on the estimated pension obligation.

An independent actuary is engaged to estimate the defined benefit

pension obligation, undertaking a valuation of the scheme’s assets and

assessment of current and future pension liabilities. The Committee

reviewed a report from the independent actuary on the appropriateness

of the assumptions used in assessing the assets and liabilities of the

scheme and agreed that the defined benefit pension obligation was being

estimated appropriately with reasonable judgements being applied.

Further analysis and detail on the Group’s defined benefit pension scheme

are set out in note 6.2 of the financial statements.

External auditor

The Audit Committee considers the appointment of the external auditor

each year. KPMG LLP (KPMG) was appointed as the Group’s external auditor

for the 2019 audit following a tender process in 2018. 2023 is KPMG’s fifth

year as the Group’s external auditor and Andrew Campbell-Orde has acted

as audit partner since KPMG’s appointment. In line with practice, 2023 is

the final year that Andrew Campbell-Orde will act as audit partner. The

Committee interviewed a number of prospective partners to assume

responsibilities for 2024.

The Committee oversees the relationship with the external auditor, and

monitors all services provided by and fees payable to it, to ensure that

potential conflicts of interest are considered and that an objective and

professional relationship is maintained.

In particular, the Committee reviews and monitors the independence

and objectivity of the external auditor and the effectiveness of the audit

process. At the outset of the annual audit process, the Committee receives

a detailed audit plan from the auditor, identifying its assessment of the key

risks and its intended areas of focus. This is agreed with the Committee to

ensure coverage is appropriately focused.

The Committee also holds separate discussions with the external auditor

without Executive management being present. In addition, I held separate

meetings with the external auditor during the course of the year.

Review of the effectiveness of the external auditor

The Committee evaluates the effectiveness of the external auditor

annually. This evaluation includes a review of the effectiveness of the

external audit process, consideration of whether management had been

adequately challenged, interaction with the Committee and quality of the

audit work. The 2022 review included reports from the external auditor

and management incorporating feedback against a formal assessment

framework from key members of the Group’s finance team and those

employees who had interacted with KPMG during the audit. The Group

reviewed and discussed the overall structure of the audit team to ensure

consistency and appropriate resourcing in future audits. This report was

reviewed at the Committee’s meeting in March 2023. Overall feedback

was positive and where opportunities for improvement were identified in

respect of earlier discussion with management regarding developments

and changes during the period, KPMG was asked to take account of that

feedback in the planning for future audit activity. KPMG and management

also worked together to more clearly define the information required

from management during the audit to aid increased audit efficiency.

Thisreview concluded that the audit was conducted to a good standard

with appropriate focus and challenge on the key audit risks.

KPMG has discussed more generally the firm’s process for enhancing audit

quality which includes internal quality reviews.

Audit fees and auditor re-appointment

During 2023, the Committee reviewed and approved the proposed audit

fees and terms of engagement for the 2023 audit and recommended to

the Board that it proposes to shareholders that KPMG be re-appointed

as the Group’s external auditor for 2024 at the AGM to be held on

26January 2024.

Auditor independence

To ensure the independence and objectivity of the external auditor and

avoid a situation where the auditor’s familiarity with the Group’s affairs

results in excessive trust, the Committee maintains a formal Auditor

Independence Policy. The policy follows the ethical guidance on auditor

independence issued by the FRC in December 2019 and was reviewed

during the period to ensure it remained appropriate. Under the policy all

non-audit services permitted by the FRC require the specific approval of

the Audit Committee.

The policy also establishes guidelines for the recruitment of employees or

former employees of the external auditor. To ensure compliance with this

policy, the Audit Committee carried out a review during the period; this

included consideration of the remuneration received by KPMG for audit

services, audit-related services and non-audit work.

The breakdown of the fees paid to the external auditor is included in note

2.5 of the financial statements. KPMG also conducted a half year review on

the interim financial results of the Group. No other non-audit services were

provided by KPMG during the period.

Avon Protection plc Annual Report and Accounts 2023

Internal control

The Committee regularly reviews the effectiveness of the Group’s

systemof internal controls and risk management. The Committee regularly

reviews the effectiveness of the Group’s system of internal controls and risk

management. This involves monitoring and reviewing the effectiveness

of internal audit activities, which includes a review of the audits carried

out and the recommendations arising. It also reviews management’s

responses, actions to address recommendations, approving the internal

audit programme and resourcing for 2024.

The internal audit programme for 2023 comprised of risk-based

audits undertaken by Deloitte. Deloitte reports directly to the Audit

Committee, which considered and approved the scope of the 2023

internal audit programme to be undertaken. During the period, Deloitte

focused its internal audit work on a review of the planning for new ERP

implementation (following prior year ERP reviews), an advisory audit on

Group HR policies around personnel management and a review of the

investment process for intangible and tangible spend.

The 2024 internal audit programme will incorporate changes to resourcing,

with the appointment of an Internal Audit Manager, which is expected to

improve accountability and effectiveness.

Several improvements were identified in respect of developing

and enhancing the Group’s risk management processes, further

documentation around internal controls, increased consistency to support

investment decisions and the design of globally consistent HR processes.

As part of the internal control framework, site controllers and plant

managers are obliged to positively confirm, on a biannual basis, that

controls documented in the internal control manual are in place and

are being adhered to, with specific reference to key controls such as

bank and control account reconciliations. This process has been in place

for the year under review and up to the date of approval of the Annual

Report and Accounts. It has been reviewed by the Board and continues

to be monitored by the Committee, which remains satisfied with

thearrangements.

As part of its work, and in line with its terms of reference, the Committee

also considers the discharge of the Board’s responsibilities in the areas of

corporate governance, financial reporting and internal control, including

the internal management of risk, as identified in the Code and the FRC

Guidance on Risk Management, Internal Control and Related Financial

Business Reporting. In 2023, the Group continued to strengthen its

risk management procedures and these have been reviewed by the

Committee. Risk management activities are dealt with in more detail

inthePrincipal Risks and Risk Management section on pages 62 to 69

andthe Corporate Governance Report on page 78.

Audit Committee effectiveness review

The evaluation of the effectiveness of the Audit Committee was

conducted alongside the Board effectiveness review, information on

which is provided in the Corporate Governance Report on page 78.

The review concluded that the Audit Committee continued to operate

effectively during the period.

Bindi Foyle

Chair of the Audit Committee

21 November 2023

Annual Report and Accounts 2023 Avon Protection plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

8686

Avon Protection plc Annual Report and Accounts 2023

REMUNERATION COMMITTEE REPORT

Policy review

Our current Policy was approved by shareholders at the 2021 AGM. The

Policy is now reaching the end of its three-year life and the Committee

is seeking approval of a revised Policy. This is timely, as it has provided

the Committee with an opportunity to look afresh and in depth at the

remuneration arrangements in light of a number of recent developments

at Avon Protection – not least the recruitment of a new management

team and the recent adoption of the new five-year STAR strategy – and

to respond to the latest remuneration-related governance changes and

investor guidance.

As part of this process, during 2023 we undertook a comprehensive review

of senior executive pay arrangements, including a consultation exercise

with our major shareholders. We were pleased to have spoken to directly

or to have received responses from shareholders covering over 45% of

shares in issue at the time of consulting, as well as from ISS, and I would

like to thank all respondents for their constructive comments which have

helped shape the proposed Policy being put forward for approval.

Business context

On 16 January 2023 Jos Sclater became CEO of Avon Protection. Jos has

brought with him a wealth of experience in leadership roles, an impressive

track record of value creation within global manufacturing businesses and

deep experience in the international defence industry. Jos’ appointment

was preceded by the appointment of Rich Cashin as CFO in March 2022.

Under Jos’ leadership, and closely supported by Rich, the management

team has undertaken a comprehensive review of the business and

developed the STAR strategy which has been designed to improve

financial performance over the next five-year period through growing

revenues, margin expansion and improved return on invested capital

whilst enhancing our ESG priorities, namely protecting more lives, and

reducing scrap waste and carbon emissions. Full details of the STAR

strategy can be found in the Strategic Report on page 22.

After a difficult period under previous management, and as we begin to

put the new strategy into effect, the signs of recovery are already clear.

However, achieving the strategic goals and translating these into the

targeted improvement in financial performance will require superior

execution. This is what we are aiming to stimulate and reward.

Proposed changes to the Policy

The Committee undertook a comprehensive review of the pay

arrangements implemented three years ago and concluded the

current structure – comprising an annual bonus scheme and awards of

performance shares under our LTIP – continues to remain appropriate

for Avon Protection. However, at this critical juncture, to incentivise our

new management team to continue to build on the foundations of

implementing the new strategic direction, it is proposed that a one-off

matching arrangement replaces the LTIP grant in the first year of our

three-year Policy only.

Attendance at Remuneration Committeemeetings

During the period, the Remuneration Committee held five scheduled

meetings. Attendance of the members of the Committee is recorded in

the table below:

Scheduled meetings Attended

Eligible

to attend

Chloe Ponsonby 5 5

Bruce Thompson 4 4

Bindi Foyle 5 5

Victor Chavez 5 5

On behalf of the Board, I am pleased to present the Directors’ Remuneration

Report for the 52 weeks ended 30 September 2023. This includes the

following three sections:

• this Annual Statement which summarises the work of the Remuneration

Committee (‘the Committee’) in 2023 and sets out the context in which

pay decisions were made;

• the revised Directors’ Remuneration Policy (‘the Policy’) which will set

the parameters within which our Directors will be remunerated going

forward and which will take effect from the date of our 2024 AGM,

subject to shareholder approval; and

• the Annual Report on Remuneration which provides: (i) details of the

remuneration earned by Directors and the link between Company

performance and pay in FY23; and (ii) how we intend to implement the

new Policy in FY24.

The Annual Statement and the Annual Report on Remuneration will,

together, be subject to the usual advisory shareholder vote at the AGM

on 26 January 2024. The revised Policy will be subject to a separate

binding shareholder vote at the same meeting. A separate resolution to

amend the Long-Term Incentive Plan to accommodate the ability to make

awards in the first year of the revised three-year Policy will also be put to

shareholders for approval.

LETTER FROM

THE CHAIR

Chloe Ponsonby

Chair of the

Remuneration

Committee

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Annual Report and Accounts 2023 Avon Protection plc

This will require our Executive Directors to purchase ordinary shares with

their own funds up to the value of 100% of their base salary (‘Investment

Shares’) and in return they will receive a matching award to the value of

up to four times the value of shares purchased (‘Matching Shares’). The

purchase of Investment Shares will ensure the interests of the Executive

Directors are immediately aligned with shareholders, with their own

capital at risk. This contrasts with traditional Long-Term Incentive Plan

(LTIP) schemes which do not require personal investment. The Matching

Shares will vest subject to continued employment, the retention of

Investment Shares over the performance period and achievement of

ambitious performance targets measured over the three-year period

ending 30 September 2026. Two-thirds of the awards will be eligible to

vest after three years and the remaining one-third after four years. Holding

periods will also apply to ensure Executives cannot realise any benefit from

their vested awards until the fifth anniversary of grant.

During consultation, some investors requested that a cap on the total

number of matching awards apply in order to prevent too significant a

number of awards being granted if the share price at the intended grant

date (February 2024) is low (noting that the number of awards is a function

of the matched investment value and the share price at the time of grant).

The Committee took this feedback on board and has agreed that the

total number of matching awards in aggregate for the CEO and CFO will

be capped at 450,000 shares. This may result in a maximum match that is

lower than 4:1 but, in any event, the maximum will not be higher than this

level. In effect, if the award price at the date of grant is below c.£8.22, the

450,000 award cap will take effect and the maximum match will reduce.

Separately, the Board is considering how best to hedge vested awards to

reduce the dilutive impact over the next three years.

Vesting of the awards will be dependent on two measures, independently

assessed – 70% on adjusted basic earnings per share (EPS) and 30% on

return on invested capital (ROIC):

FY26 EPS

(70%)

FY26 ROIC

(30%) Match

Threshold

90c 16% 0.5:1 (i.e. 12.5% vesting)

Target

125c 18% 1.75:1 (i.e. 43.75% vesting)

Maximum

150c 20% 4:1 (i.e. 100% vesting)

Achieving the EPS and ROIC targets will require a significant recovery

in earnings, optimisation of our capital base and performance well in

excess of current market expectations (2026 EPS consensus is c. 72c). The

targets are considered to be particularly stretching and are designed to

ensure that participants will only receive the full benefit if they deliver

transformational results. For information, delivering the target of 125c EPS

and 18% ROIC would result in vesting equivalent to the current 175% of

salary LTIP award. Shareholders felt that the target and upper stretch levels

were very demanding in light ofconsensus and broader expectations.

The Board believes successful implementation of our STAR strategy will

deliver significant financial benefits to the Group over the next four years

and in turn will create substantial shareholder value and the Committee

is keen to see the incentive arrangements closely linked to the strategy.

The personal and significant investment by our Executive Directors

inherent in the proposed one-off matching arrangement demonstrates

their commitment to the successful implementation of the strategy; the

ambitious earnings and ROIC targets are designed to deliver substantial

value creation and a swift turnaround; and the interaction of the phased

vesting and holding periods will ensure Executives are locked in over

the longer term. In addition, as well as covering the CEO and CFO, other

arrangements will be implemented for other senior executives at Avon

Protection to ensure they are motivated and retained at a time when their

existing LTIP awards have little or no value. Retaining the senior team both

at the Board level and below the Board is critical to the delivery of our new

strategy. For these reasons, the Committee believes that this arrangement

is appropriate and in the best interests of the Group and its shareholders.

The current LTIP rules will be amended to facilitate the proposed one-off

matching arrangement. Following the grant of the matching award in the

first year of the three-year Policy period, for the second and third years,

annual LTIP awards will be granted up to the normal Policy maximum of

175% of salary.

The Committee has also considered whether any other elements of the

Policy require changing to reflect corporate governance developments

since it was last approved but is comfortable that these have been

previously addressed. A two-year holding period applies to LTIP awards,

pension is aligned with the workforce contribution rate (7.5% of salary), a

post-cessation holding period applies and malus and clawback provisions

are aligned with market practice (and will reflect any changes required –

ifnecessary – when the new U.K. Corporate Governance Code is finalised).

Further details of how we intend to implement the new Policy in FY24 are

set out later in this letter.

Remuneration outcomes for FY23

The annual bonus for FY23 was dependent on a scorecard of measures

which included adjusted operating profit (40%), operating cash flow (20%),

revenue (20%) and the delivery of strategic objectives (20%).

Jos Sclater joined the Company shortly after the financial annual bonus

targets were set. Upon joining and as mentioned earlier, Jos embarked

upon a comprehensive review of the business and developed and

implemented a new strategy and change of direction. The original

financial targets were largely unachievable and this has resulted in no

payout against the revenue, profit and cash objectives. The Committee

could have amended the targets to align better with the new strategy

but decided against this. Therefore, in practice, the maximum bonus

opportunity was limited to the strategic objectives which accounted for

20% of the maximum bonus. Following strong individual performance

and the accomplishment of important short term non-financial drivers, the

Committee has determined that the full 20% out of the 20% on strategic

objectives should be payable. The Committee recognises the sensitivities

around paying a bonus based solely on non-financial performance but on

this occasion believes it is warranted given the new CEO and targets that

were made on an old strategy and set of assumptions.

WE HAVE UNDERTAKEN A COMPREHENSIVE REVIEW OF OUR POLICY WHICH

INCLUDED A WIDEREACHING SHAREHOLDER CONSULTATION EXERCISE.

THIS EXERCISE WAS A CRITICAL INPUT INTO OUR REVIEW PROCESS AND

HELPED SHAPE OUR FINAL PROPOSALS.

8888

Avon Protection plc Annual Report and Accounts 2023

REMUNERATION COMMITTEE REPORT CONTINUED

Remuneration outcomes for FY23 continued

Vesting of the Long-Term Incentive Plan awards made on 2 February 2021

was based on two measures – relative TSR and EPS growth – over the

three-year performance period. The Group did not meet the threshold

targets and therefore the awards lapsed in full. Neither Jos Sclater nor

RichCashin held awards under this cycle of the LTIP.

No discretion was applied in determining the annual bonus and LTIP

vesting outcomes. The Committee agreed the final remuneration

outcomes reflected Group performance over the respective performance

periods and was satisfied the Policy had operated as intended.

Board changes

As set out in the prior year’s report, Jos Sclater joined the Board as CEO

with effect from 16 January 2023. Jos’ base salary on joining was set

at £526,594 p.a. along with bonus opportunity of 125% of base salary

(pro-rated for time served in FY23). He also received an LTIP grant of 175%

of salary on 18 January 2023, shortly after joining. Jos did not forfeit any

remuneration upon joining the Company and therefore there was no need

to make buyout awards.

During the period between the previous CEO, Paul McDonald, stepping

offthe Board on 30 September 2022 and Jos Sclater joining in January 2023,

Bruce Thompson took on the role of Executive Chair. Bruce agreed with

the Remuneration Committee that he would not receive any additional

fees for acting as Executive Chair and continued to receive his Non-Executive

Chair fee only over this period. Bruce reverted to his position as Non-Executive

Chair of the Board following Jos Sclater’s joining. During the period of

Bruce’s appointment as Executive Chair, he temporarily stepped down

asamember of the Remuneration Committee, but continued to be invited

to Committee meetings.

How the Policy will be applied in FY24

The Committee will seek to implement the revised Policy as follows:

Base salaries

Jos Sclater’s salary will increase by 4.5% from £526,594 to £550,291 and

Rich Cashin’s salary will increase by 4.5% from £358,750 to £374,894. These

increases are in line with the average general workforce increase of 4.5%

for FY24. As a reminder, last year the CFO’s salary was increased by 2.5%

which compared to a general workforce increase ranging from 5% o 8%.

Annual bonus

The maximum annual bonus opportunity will be 125% of salary, with

25% of any bonus earned deferred into shares for two years. The bonuses

will be based on absolute Group operating profit (50%), average working

capital turns (30%) and strategic objectives (20%). The targets are

commercially sensitive but will be disclosed in full on a retrospective basis

in next year’s report.

Long-Term Incentive Plan (LTIP)

Subject to the approval of the revised Policy, the Committee intends to

grant awards after the AGM in February 2024 under the one-off share

matching arrangement to both Executive Directors. Details of how this

arrangement will operate in practice, including the performance measures

and targets, are set out earlier in this letter.

Views of our stakeholders

As mentioned, we have sought to undertake a comprehensive review of

our Policy to include a wide-reaching shareholder consultation exercise.

This exercise was a critical input into our review process and helped

shape our final proposals. We understand the reticence of some investors,

in principle, to the use of one-off incentive arrangements but we are

convinced that the proposed share matching arrangement, under which

awards will be made in 2024 only, is the right approach for Avon Protection

for the reasons set out earlier in this letter. However, we were pleased

that the majority of those shareholders we consulted with were broadly

supportive of the new Policy and the one-off share matching arrangement

(subject to the addition of safeguards, such as the overall cap on the

number of shares which may be awarded, which we built in) and we were

comforted by this support. I would like to take this opportunity to reiterate

my thanks to all shareholders and proxy voting agencies that participated

in this process and for the constructive feedback that has contributed to

the design of the new Policy.

The Committee also takes employees’ views on pay into account and

this is achieved through a Global Employee Advisory Forum. This year

discussions have included the organisational restructure and increased

empowerment, together with the outcome from the remuneration review,

which was aimed at ensuring our pay practices are fair and competitive.

The annual bonus scheme was also included in this review.

I would once again like to thank shareholders for their input in shaping

over proposed policy and I hope we will receive your support for the

resolutions relating to remuneration at the forthcoming AGM. I am always

happy to hear from the Company’s shareholders and you can contact me

via the Company Secretary if you have any questions on this report or

more generally in relation to the Company’s remuneration.

Chloe Ponsonby

Chair of the Remuneration Committee

21 November 2023

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Annual Report and Accounts 2023 Avon Protection plc

Remuneration 2023 Remuneration 2024

FIXED PAY

Salary

(annual base)

CEO: £526,594 (upon joining in January 2023)

CFO: £358,750

CEO: £550,291 (4.5% increase effective

1October 2023)

CFO: £374,894 (4.5% increase effective

1October 2023)

Pension A 7.5% of salary employer contribution rate

applies. This is aligned with the U.K. workforce

contribution rate

No change

Benefits Includes car allowance, private health insurance

and life insurance

No change

ANNUAL BONUS

Maximum

opportunity

125% of salary

CEO’s bonus pro-rated for period as a Director

No change

Award level

and operation

• Performance measures: revenue (20%),

operating profit (40%), operating cash flow

(20%) and strategic objectives (20%)

• 25% of the overall amount deferred into

shares which vest after two years

• Malus and clawback provisions apply

• Performance measures: absolute Group

operating profit (50%), average working

capital turns (30%) and strategic

objectives (20%)

• 25% of the overall amount deferred into

shares which vest after two years

• Malus and clawback provisions apply

LONGTERM

INCENTIVES

Award level

Normal LTIP

CEO: 175% of salary grant on appointment

CFO:150% of salary

One-off share matching

arrangement (FY24 only)

• Up to 100% of salary investment

matched at up to 4 times, i.e. up to

400% of salary

• Number of matching awards

determined by matching the investment

value and using the share price at grant

• Total awards to the CEO and CFO

subject to an overall cap of 450,000

shares in aggregate (CEO: 267,656 shares,

and CFO: 182,344 shares)

Operation • Performance measures: relative TSR (50%

ofaward) and EPS with a ROCE underpin

(50%of award)

• Performance measured over three years

• Two-year additional holding period applies

tovested awards

• Malus and clawback provisions apply

• Performance measures: EPS (70% of

award) and ROIC (30% of award)

• Performance measured over three years

• Vests in two tranches after three years

(two-thirds of the award) and four years

(one-third of the award)

• Vesting dependent upon retention of

investment shares over the performance

period

• Additional holding periods apply to

vested awards such that no value can be

realised until after five years from grant

• Malus and clawback provisions apply

SHAREHOLDING

GUIDELINES

In employment 200% of salary No change

Post-employment 200% of salary to be held for two years

post-employment

No change

REMUNERATION AT A GLANCE

The key elements of Executive Directors’ remuneration packages and our approach to implementation in 2024 are summarised below:

9090

Avon Protection plc Annual Report and Accounts 2023

DIRECTORS’ REMUNERATION POLICY

This section of the report sets out our Directors’ Remuneration Policy

which will be put forward for shareholder approval at the 2024 AGM on

26January 2024. The Policy will take formal effect from the date of the

AGM, subject to shareholder approval, replacing the one most recently

approved by shareholders at the AGM on 29 January 2021.

Guiding policy

The Company’s guiding policy on executive remuneration is that:

• executive remuneration packages should be clear and simple, taking

into account the linkage between pay and performance by both

rewarding effective management and making the enhancement of

shareholder value a critical success factor in the setting of incentives,

both in the short and the long term;

• the overall level of salary, incentives, pension and other benefits

should be competitive (but not excessive) when compared with other

companies of a similar size and global spread and should be sufficient

to attract, retain and motivate Executive Directors of superior calibre

inorder to deliver long-term success; and

• performance-related components should form a significant proportion

of the overall remuneration package, with maximum total potential

rewards being earned through the achievement of challenging

performance targets based on measures that are linked to the

Company’s KPIs and to the best interests of shareholders.

Considerations when determining Remuneration Policy

As described in the letter from the Remuneration Committee Chair, the

Committee undertook a comprehensive review of the current Directors’

Remuneration Policy during the course of 2023 to ensure, primarily,

that it continues to: (i) support the strategy and promote the long-term

sustainable success of the Group; (ii) align executive remuneration with

Company culture, purpose and values and clearly provide linkage to the

successful delivery of the Company’s long-term strategy; (iii) attract, retain

and motivate executive management of the quality required to run the

Company successfully (without paying more than is necessary); and (iv)

have regard to the views of our shareholders and other stakeholders and

appropriately reflect the best practice expectations of institutional investors.

In reviewing the Policy during the course of 2023, and in planning for its

implementation, the U.K. Corporate Governance Code has continued to

be a key touchstone and we have been careful to take full account of the

remuneration-related provisions in our design considerations. With regard

to how we have sought to comply with the six factors outlined in Provision

40 of the Code, for example, we believe the following are worth noting

inparticular:

• Clarity – Our remuneration framework is structured to support financial

delivery and the achievement of strategic objectives, aligning the

interests of Executive Directors with those of our shareholders. Our

Policy is transparent and well understood by our senior executive team.

It has been clearly articulated to our shareholders and representative

bodies (both on an ongoing basis and during consultation when

changes have been proposed).

• Simplicity – Our remuneration framework is straightforward to

communicate and operate. We have operated the same simple and

transparent overarching structure for many years and applied it on a

consistent basis across all employees. For the first year of the new Policy

only, one-off awards will be made under a single matching arrangement

to the Executive Directors in lieu of the usual LTIP awards. This is

intended to be a simple long-term incentive arrangement with clear

alignment to the new STAR strategy and to shareholder interests at its

heart. The measures and targets are indelibly linked to our longer-term

strategic goals and to incentivising superior financial performance.

Inthe second and third years of the Policy we will return to our

long-standing approach of making our usual LTIP awards only.

• Risk – Our incentives have been structured to ensure that they

are aligned with the Board’s system of risk management and risk

appetite. Inappropriate risk taking is discouraged and mitigated

through, for example: (i) the operation of arrangements that provide

an appropriate balance of fixed pay to short and long-term incentive

pay and through multiple performance measures based on a blend of

financial and non-financial targets; (ii) the deferral of a proportion of

annual bonus into shares and the operation of a post-vesting holding

period for the LTIP; (iii) the operation of significant in-employment

andpost-employment shareholding guidelines; and (iv) the operation

of robust recovery and withholding provisions.

• Predictability – Our incentive plans are subject to individual caps,

with our share plans also subject to market standard dilution limits.

The Committee has full discretion to alter the pay-out level or vesting

outcome to ensure payments are appropriately aligned with the

underlying performance of the Company.

• Proportionality – Ensuring Executive Directors are not rewarded for

failure underscores our approach to remuneration (e.g. a significant

proportion of our packages is based on long-term performance targets

linked to the KPIs of the Company, our ability to use discretion to

ensure appropriate outcomes and our openness to doing so through

the structure of our Executive Directors’ contracts). There is a clear link

between individual awards, delivery of strategy and our long-term

performance. As mentioned above, formulaic incentive outcomes are

reviewed by the Committee and may be adjusted having consideration

to overall Group performance and wider workforce remuneration

policies and practices.

• Alignment to culture – Our Policy is aligned to Avon Protection’s

culture and values. The Committee strives to instil a sustainable

performance and continuous improvement culture at the management

level that can cascade down throughout the Company. The Board sets

the framework of KPIs against which we monitor the performance of

the Company and the Committee links the performance metrics of

our incentive arrangements to those KPIs. We are also keen to foster

aculture of share ownership throughout the Company and operate

all-employee share arrangements in pursuit of this objective.

REMUNERATION COMMITTEE REPORT CONTINUED

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Annual Report and Accounts 2023 Avon Protection plc

Consideration of shareholder views

The Committee is committed to an ongoing dialogue with shareholders

and welcomes feedback on Directors’ remuneration. The Committee seeks

to engage directly with major shareholders and their representative bodies

on any material changes to the Policy. The Committee also considers

shareholder feedback received in relation to the remuneration-related

resolutions each year following the AGM. This, plus any additional

feedback received from time to time (including any updates to

shareholders’ remuneration guidelines), is then considered as part of

theCommittee’s annual review of the Policy and its implementation.

In its review of current remuneration and the proposed Policy being

put forward, the Committee conducted a comprehensive consultation

exercise which sought feedback from shareholders holding over 45%

of shares in issue, as well as from the main shareholder representative

bodies. The Committee was very grateful for the comments received.

Thefeedback, which was largely positive, was used constructively to shape

our final proposals. Further details regarding the consultation exercise can

be found in the Remuneration Committee Chair’s letter on page 86.

Consideration of employment conditions elsewhere

in the Group

The Committee closely monitors the pay and conditions of the wider

workforce and the design of the Directors’ Remuneration Policy is

informed by the policy for employees across the Group.

While employees are not formally consulted on the design of the Directors’

Remuneration Policy, the Board receives views through a Global Employee

Advisory Forum comprising representatives from our Culture Champion

network. Another way in which the Board engages with employees across

the Group on remuneration is through the Employee Opinion Survey,

which includes a section dedicated to pay and benefits. The results of this

are shared with the Board.

Differences in pay policy for Executive Directors

compared to employees more generally

As for the Executive Directors, general practice across the Group is

to recruit employees at competitive market levels of remuneration,

incentives and benefits to attract and retain employees, accounting for

national and regional talent pools. When considering salary increases

for Directors, the Committee will take into account salary increases

and pay and employment conditions across the wider workforce. The

pension contribution for Executive Directors is consistent with that for the

general workforce. 27% of employees are able to earn annual bonuses

for delivering exceptional performance, with corporate performance

measures aligned to those set for the Executive Directors. All employees,

including the Executive Directors, have the opportunity to participate in

the tax-approved share incentive plans.

There are some differences in the structure of the Policy for the Executive

Directors compared to that for other employees within the organisation,

which the Committee believes are necessary to reflect the differing levels

of seniority and responsibility. At senior levels, remuneration is increasingly

long term and ‘at risk’, with an increased emphasis on performance-related

pay and share-based remuneration. This ensures the remuneration of

the Executives is aligned with both the long-term performance of the

Company and the interests of shareholders.

Further details of the role of the Committee and its decision-making

processes can be found in the Annual Report on Remuneration

on page 99.

Changes to the Directors’ Remuneration Policy

In summary, the only material change to the Policy relates to the

introduction of a one-off long-term share matching arrangement

for operation only in the first year of the three-year Policy. Under this

arrangement the Executive Directors will be required to purchase

shares with a value of up to 100% of salary and to hold them over the

set performance period. Subject to maintaining this holding over the

performance period these Investment Shares may be matched at up to

a ratio of 4:1 (albeit subject to an overall cap under the arrangement of

450,000 shares in aggregate) dependent on the achievement of stretching

performance targets and continued employment. The awards under this

share matching arrangement will be made in the first year of the new

Policy only (in lieu of the usual LTIP awards) after which it is intended

that normal awards under the LTIP at up to 175% of salary per annum

are made in years two and three. No further awards will be made under

the share matching arrangement after the 2024 grant. Further details

of this proposed change, along with the rationale, are set out in the

Remuneration Committee Chair’s letter on page 86.

9292

Avon Protection plc Annual Report and Accounts 2023

DIRECTORS’ REMUNERATION POLICY CONTINUED

Policy table

The table below sets out the main components of the proposed Directors’ Remuneration Policy, together with further information on how these aspects

of remuneration will operate, subject to approval by shareholders at the 2024 AGM. The existing Policy – approved by shareholders at the 2021 AGM on

29January 2021 and set out in the 2020 Annual Report – will remain in effect until shareholders approve the new Policy. The Remuneration Committee

has discretion to amend remuneration and benefits to the extent described in the table and the written sections that follow it.

Element of

remuneration

Purpose and link

to strategy Operation Maximum potential value Performance targets

Basic salary

To provide competitive

fixedremuneration.

To attract and retain

Executive Directors of

superior calibre in order

to deliver long-term

business success.

Reflects individual

experience and role.

The Committee’s aim is to

position salaries around

the mid-market level of

companies of a similar

size, scale and complexity.

Normally reviewed annually by

the Remuneration Committee

with increases typically effective

1 October.

Individual salary adjustments

take into account each Executive

Director’s role, competence

and performance. Significant

adjustments are infrequent and

normally reserved for material

changes in role, a significant

increase in the size/complexity of

the Group, or where an individual

has been appointed on a low

salary with an intention to bring

them to market levels over time

and subject to performance.

Other factors which will be taken

into account will include pay

and conditions elsewhere in the

Group, progression within the

role, and competitive salary levels

in companies of a broadly similar

size and complexity.

No prescribed maximum or

maximum increase.

The normal approach will be to

limit increases to the average

level across the wider workforce,

though increases above this

level may be awarded subject

to Committee discretion to take

account of certain circumstances,

such as those stated under the

‘Operation’ column ofthis table.

On recruitment or promotion,

the Committee will consider

previous remuneration and pay

levels for comparable companies

(for example, companies of a

similar size and complexity,

industry sector or location),

when setting salary levels. This

may lead to salary being set at a

lower or higher level than for the

previousincumbent.

Although there are no

formal performance

conditions, any increase

in base salary is only

implemented after

careful consideration of

individual contribution

and performance and

having due regard to

the factors set out in the

‘Operation’ column of

this table.

Benefits

To provide competitive

fixedremuneration.

To attract and retain

Executive Directors of

superior calibre in order

to deliver long-term

business success.

Executive Directors are entitled

to benefits such as travel-related

benefits including a car or car

allowance, medical assessments,

private health insurance and life

assurance. Executive Directors

will be eligible for any other

benefits which are introduced for

the wider workforce on broadly

similar terms.

Any reasonable business-related

expenses (and any tax thereon)

can be reimbursed if determined

to be a taxable benefit.

Executive Directors will be eligible

to participate in any all-employee

share plan operated by the

Company, on the same terms

asother eligible employees.

For external and internal

appointments or relocations,

the Company may pay

certain relocation and/or

related incidental expenses

asappropriate.

As it is not possible to calculate in

advance the cost of all benefits, a

maximum is not pre-determined.

The maximum level of

participation in all-employee

share plans is subject to the limits

imposed by the relevant tax

authority from time to time.

Not applicable.

REMUNERATION COMMITTEE REPORT CONTINUED

9393

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

Element of

remuneration

Purpose and link

to strategy Operation Maximum potential value Performance targets

Pension

To reward sustained

contributions by providing

retirement benefits.

The Company funds

contributions to a Director’s

pension as appropriate through

contribution to the Company’s

money purchase scheme

or through theprovision

of salary supplements or a

combination of these.

Company contribution up to

the prevailing rate offered to

the workforce in the country

where they are based at the

time (currently 7.5% of salary

inthe U.K.).

Not applicable.

Annual bonus

Rewards the achievement

of annual financial and

business targets aligned

with the Group’s KPIs.

Maximum bonus only

payable for achieving

demanding targets.

Deferred element

encourages long-term

shareholdings and

discourages excessive

risk taking.

Bonus is based on performance in

the relevant financial period. Any

payment is discretionary and will

be subject to the achievement of

stretching performance targets.

Bonus is normally paid in cash,

except 25% of any bonus which is

deferred into shares for two years.

Bonuses are not contractual

and are not eligible for inclusion

in the calculation of pension

arrangements.

Recovery and withholding

provisions apply in cases of

misconduct, corporate failure,

reputational damage, error

in calculation of a bonus and

material misstatement of

financial results.

Dividends or dividend equivalents

may accrue on deferred shares.

Capped at 125% of salary. The Committee sets

performance measures

and targets that are

appropriately stretching

each year, taking into

account key strategic

and financial priorities

and ensuring there is

an appropriate balance

between incentivising

Executive Directors

to meet targets, while

ensuring they do not

drive unacceptable

levelsof risk or

inappropriate behaviours.

The majority of the

bonus will normally

be based on financial

measures and the

balance could be

based on non-financial,

strategic, personal and/or

ESG related objectives.

A graduated scale of

targets is normally set for

each measure, with no

pay-out for performance

below a threshold level

of performance.

The Committee has

discretion to amend

the pay-out should any

formulaic outcome not

reflect the Committee’s

assessment of overall

business performance.

9494

Avon Protection plc Annual Report and Accounts 2023

REMUNERATION COMMITTEE REPORT CONTINUED

Element of

remuneration

Purpose and link

to strategy Operation Maximum potential value Performance targets

Long-Term

Incentive

Plan

Designed to align

Executive Directors’

interests with those of

shareholders and to

incentivise the delivery

of sustainable earnings

growth and superior

shareholder returns.

Awards of conditional shares or

nil cost option awards which

normally vest after three years

subject to the achievement

of performance targets and

continued service.

An additional two-year holding

period applies after the end of

thethree-year vesting period.

Recovery and withholding

provisions apply in cases of

misconduct, corporate failure,

reputational damage, error in

calculation of award and material

misstatement of financial results.

Dividend equivalents may be paid

for awards to the extent they vest.

The Committee retains discretion

to adjust vesting levels in

exceptional circumstances,

including but not limited to

regard of the overall performance

of the Company or the grantee’s

personal performance.

Executive Directors may receive

an award of up to 175% of basic

salary per annum.

The Committee will consider

the prevailing share price when

deciding on the number of shares

to be awarded as part of any

LTIP grant.

A 10% in ten years dilution limit

governing the issue of new

shares to satisfy all share schemes

operated by the Company

will apply.

Performance measures

may include, and

are not limited to,

relative TSR, ROIC, EPS,

strategic measures and

ESG-related objectives.

The Committee retains

discretion to set

alternative weightings or

performance measures

for awards over the life

ofthe Policy.

100% of awards vest

forstretch performance,

up to 20% of an award

would normally vest for

threshold performance

and no awards vest

below this. Underpins

may apply.

One-off share

matching

arrangement

under the

Long-Term

Incentive

Plan in FY24

Designed to be retentive

over the longer term,

to incentivise the new

management team to

deliver a turnaround and

a significant improvement

in financial performance,

and to closely align

Executive Directors’

interests with those of

shareholders.

To participate in the arrangement,

the Executive Directors will be

required to purchase ordinary

shares with their own funds

(‘Investment Shares’) and in return

they will receive a matching award

(‘Matching Shares’).

Awards of Matching Shares will be

made as conditional shares or nil

cost options which will normally

vest in two tranches after three

years (2/3 of the award) and four

years (1/3 of the award) subject to

retention of the Investment Shares

over the performance period,

achievement of performance

targets and continued service.

Additional two-year and one-year

holding periods apply after the

end of the three-year and four-

year vesting periods respectively.

Failure to retain the Investment

Shares over the full performance

period will normally result in a

pro-rata reduction in Matching

Shares under award.

Recovery and withholding

provisions apply in cases of

misconduct, corporate failure,

reputational damage, error in

calculation of award and material

misstatement of financial results.

Investment Shares

Executive Directors may invest up

to an overall maximum of 100% of

annual salary.

Matching Shares

Executive Directors may receive

an award equal to up to four times

the value of Investment Shares

purchased i.e. up to 400% of

salary. The number of awards will

be based on the share price at the

time of grant.

Awards to Executive Directors

are subject to an overall cap

of 450,000 shares in aggregate

(CEO: 267,656 shares, and CFO:

182,344 shares).

No further awards under the

Long-Term Incentive Plan may be

made in addition to the Matching

Shares in the same financial year.

A 10% in ten years dilution limit

governing the issue of new

shares to satisfy all share schemes

operated by the Company

will apply.

Not applicable.

DIRECTORS’ REMUNERATION POLICY CONTINUED

Policy table continued

9595

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

Element of

remuneration

Purpose and link

to strategy Operation Maximum potential value Performance targets

One-off share

matching

arrangement

under the

Long-Term

Incentive

Plan in FY24

continued

Dividend equivalents may be paid

for awards to the extent they vest.

The Committee retains discretion

to adjust vesting levels in

exceptional circumstances,

including but not limited to

regard of the overall performance

of the Company or the grantee’s

personal performance.

ownership

guidelines

To increase alignment

between Executives

andshareholders.

Executive Directors are required

to retain at least 50% of their net

of tax vested awards until the

in-employment shareholding

guideline is met.

Nil cost options which have

vested but are yet to be exercised

and deferred bonus awards

subject to a time condition only

may be considered to count

towards the in-employment

shareholding on a notional

post-tax basis.

Executive Directors are required

to build up and maintain an

in-employment shareholding

worth 200% of salary (100% for

other senior management).

Executive Directors are normally

required to hold shares at a

level equal to the lower of their

shareholding at cessation and

200% of salary for two years

post-employment (excluding

shares purchased with own funds

and any shares from share plan

awards made before the adoption

of the previous Policy (approved

on 29January 2021)).

Not applicable.

Chair and

Non-Executive

Directors’ fees

and benefits

To provide compensation

in line with the demands

of the roles at a level

that attracts high-

calibre individuals and

reflects their experience

andknowledge.

Fees are normally reviewed

annually taking into account

factors such as the time

commitment and contribution

of the role and market levels in

companies of comparable size

and complexity.

The Chair is paid an all-inclusive

fee for all Board responsibilities.

Fees for the other Non-Executive

Directors may include a base fee

and additional fees for further

responsibilities (for example, for

chairing Board Committees or

for holding the office of Senior

Independent Director).

The Company repays any

reasonable expenses that a

Non-Executive Director incurs

in carrying out their duties as

a Director, including travel,

hospitality-related and other

modest benefits and any tax

liabilities thereon, if appropriate.

If there is a temporary yet material

increase in the time commitments

for Non-Executive Directors, the

Board may pay extra fees on a

pro rata basis to recognise the

additional workload.

No prescribed maximum fee

ormaximum fee increase.

Increases will be informed by

taking into account internal

benchmarks such as the salary

increase for the general workforce

and will have due regard to the

factors set out in the ‘Operation’

column of this table.

Not applicable.

9696

Avon Protection plc Annual Report and Accounts 2023

REMUNERATION COMMITTEE REPORT CONTINUED

Assumptions for the chart above

• Minimum: comprises fixed pay for the year made up of base salary

(applying from 1 October 2023), the value of pension at 7.5% of annual

bass salary and the estimated value of benefits using FY23 values

(annualised for the CEO).

• On-target: bonus achieved at 50% of the maximum opportunity, i.e.

62.5% of salary and with the on-target level of vesting under the share

matching arrangement taken to be 43.75% of the face value of the

award at grant, i.e. 175% of salary.

• Maximum: full bonus achieved and the share matching arrangement

vesting in full, i.e. 125% of salary bonus pay-out and a share match to the

value of 400% of salary.

• Share price appreciation of 50% has been assumed for the LTIP awards

under the final ‘Max with growth’ scenario.

• Amounts relating to all-employee share schemes have, for simplicity,

been excluded from the charts.

Selection of performance measures and targets

Annual bonus

The Executive Directors’ annual bonus arrangements are focused on

the achievement of the Company’s short and medium-term financial

objectives, with financial measures selected to closely align the

performance of the Executive Directors with the strategy of the business

and with shareholder value creation. Where non-financial objectives are

set, these are chosen to support the delivery of the longer-term strategic

milestones and which link to those KPIs of most relevance to each

Director’s individual responsibilities.

Details of the measures used for the annual bonus are provided in the

Annual Report on Remuneration.

Long-Term Incentive Plan

One of the primary aims of the share matching arrangement is to motivate

participants to achieve very stretching adjusted EPS and ROIC growth

targets aligned to the delivery of the STAR strategy. This is reflected in the

ambitious target ranges set for the FY24 EPS and ROIC measures, details

ofwhich are provided in the Annual Report on Remuneration.

The share matching arrangement will operate for the first year of the

new Policy period only after which, in future years, we will return to

making annual awards under our normal LTIP. The Committee will

review the choice of performance measures and the appropriateness

of the performance targets prior to each LTIP grant. The target ranges

for LTIP awards will be set as sliding scales which will be calibrated at

the time of award taking account of internal and external forecasts, to

encourage continuous improvement and incentivise the delivery of

stretchperformance.

DIRECTORS’ REMUNERATION POLICY CONTINUED

Illustration of the application of the Policy

The balance between fixed and variable ‘at risk’ elements of remuneration changes with performance. Our policy results in a significant proportion of

remuneration received by Executive Directors being dependent on performance. The charts below illustrate how the Policy would function for minimum,

on target and maximum performance in the first year of the new Policy (FY24). Note that the long-term incentive element of remuneration will be lower in

years two and three of the policy as the one-off matching award will be granted in the first year only and then will return to the normal 175% of salary limit.

Min

£609

100%

On-target

£1,915

32%

18%

50%

£’000

Max

£3,498

17%

63%

20%

Max with

growth

£4,598

13%

48%

24%

15%

CEO

Min

£417

100%

On-target

£1,307

32%

18%

50%

Max

£2,385

20%

63%

Max with

growth

£3,135

15%

48%

24%

CFO

Total fixed remuneration Annual bonus LTIP Share price growth

£5,000

£4,000

£3,000

£2,000

£1,000

£0

17% 13%

9797

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

Flexibility, discretion and judgement

The Remuneration Committee operates the annual bonus and LTIP

according to the rules of each respective plan which, consistent with

market practice, include discretion in a number of respects in relation

tothe operation of each plan. Discretions include:

• who participates in the plan, the quantum of an award and/or payment

and the timing of awards and/or payments;

• determining the extent of vesting;

• treatment of awards and/or payments on a change of control or

restructuring of the Group;

• whether an Executive Director or a senior manager is a good/bad leaver

for incentive plan purposes and whether the proportion of awards that

vest do so at the time of leaving or at the normal vesting date(s);

• how and whether an award may be adjusted in certain circumstances

(e.g. for a rights issue, a corporate restructuring or special dividends);

• what the weighting, measures and targets should be for the annual

bonus plan and LTIP awards from year to year;

• the Committee also retains the ability, within the policy, if events occur

that cause it to determine that the conditions set in relation to an

annual bonus plan or a granted LTIP award are no longer appropriate

or unable to fulfil their original intended purpose, to adjust targets and/

or set different measures or weightings for the applicable annual bonus

plan and LTIP awards. Any such changes would be explained in the

subsequent Directors’ Remuneration Report and, if appropriate, be the

subject of consultation with the Company’s major shareholders; and

• the ability to override formulaic outcomes in line with policy.

All assessments of performance are ultimately subject to the Committee’s

judgement and discretion is retained to adjust payments in appropriate

circumstances as outlined in this Policy. Any discretion exercised (and the

rationale) will be disclosed.

Legacy arrangements

For the avoidance of doubt, in approving this Directors’ Remuneration

Policy, authority is given to the Company to honour any previous

commitments entered into with current or former Directors (such as

the payment of a pension or the unwinding of legacy share schemes or

historical share awards granted before the approval of this policy) that

remain outstanding.

Approach to recruitment remuneration

New Executive Directors will be offered a base salary in line with the Policy.

This will take into consideration a number of factors including external

market forces, the expertise, experience and calibre of the individual and

current level of pay. Where the Committee has set the salary of a new

appointment at a discount to the market level initially until proven, an

uplift or a series of planned increases may be applied in order to bring

the salary to the appropriate market position over time. For external and

internal appointments, the Committee may agree that the Company

will meet appropriate relocation and/or related incidental expenses

asappropriate.

Annual bonus awards, LTIP awards and pension contributions would

not be in excess of the levels stated in the Policy and, if appropriate, may

include participation in the matching arrangement in FY24.

Depending on the timing of the appointment, the Committee may deem

it appropriate to set different annual bonus performance conditions

for the first performance year of appointment. An LTIP award can be

made shortly following an appointment (assuming the Company is not

in a close period). In the case of an internal appointment, any variable

pay element awarded in respect of the prior role would be allowed to

pay out according to its terms, adjusted as relevant to take into account

theappointment.

In addition, the Committee may offer additional cash and/or share-based

buyout awards when it considers these to be in the best interests of the

Company (and therefore shareholders) to take account of remuneration

given up at the individual’s former employer. This includes the use

of awards made under 9.4.2 of the Listing Rules. Such awards would

be capped at a reasonable estimate of the value forgone and would

reflect, as far as possible, the delivery mechanism, time horizons and

whether performance requirements are attached to that remuneration.

Shareholders will be informed of any such payments at the time of

appointment and/or in the next published Annual Report.

For the appointment of a new Chair or Non-Executive Director, the

fee arrangement would be set in accordance with the approved

Remuneration Policy.

Service contracts, letters of appointment and policy on

payments for loss of office

Executive Directors

The Company’s policy is that Executive Directors should normally be

employed under a contract which may be terminated by either the

Company or the Executive Director giving no more than 12 months’ notice.

The Company may terminate the contract with immediate effect with or

without cause by making a payment in lieu of notice by monthly instalments

of salary and benefits, with reductions for any amounts received from

providing services to others during this period. There are no obligations

tomake payments beyond those disclosed elsewhere in this report.

The Remuneration Committee strongly endorses the obligation on an

Executive Director to mitigate any loss on early termination and will seek

to reduce the amount payable on termination where it is appropriate to

do so. The Committee will also take care to ensure that, while meeting its

contractual obligations, poor performance is not rewarded. The Executive

Directors’ contracts contain early termination provisions consistent with

the Policy outlined above.

The Group may pay outplacement and professional legal fees incurred by

Executives in finalising their termination arrangements, where considered

appropriate, and may pay any statutory entitlements or settle compromise

claims in connection with a termination of employment, where considered

in the best interests of the Company. Outstanding savings/shares under

all-employee share plans would be transferred in accordance with the

terms of the plans.

A pro-rated bonus may be paid subject to performance, for the period of

active service only. Outstanding share awards may vest in accordance with

the provisions of the various scheme rules.

Under the Deferred Bonus Plan, the default treatment is that any

outstanding awards will continue on the normal timetable, save for

forfeiture for serious misconduct. Clawback and malus provisions will also

apply. On a change of control, awards will generally vest on the date of a

change of control, unless the Committee permits (or requires) awards to

roll over into equivalent shares in the acquirer.

Under the LTIP, any outstanding awards will ordinarily lapse; however, in

‘good leaver’ cases the default treatment is that awards will vest subject to

the original performance condition and time pro-ration and the holding

period will normally continue to apply.

For added flexibility, the rules allow for the Committee to decide not to

pro-rate (or pro-rate to a lesser extent) if it decides it is appropriate to do

so, and to allow vesting to be triggered at the point of leaving by reference

to performance to that date, rather than waiting until the end of the

performance period. On a change of control, any vesting of awards will be

subject to assessment of performance against the performance conditions

and normally be pro-rated. The Committee has the flexibility to decide not

to pro-rate (or to pro-rate to a lesser extent) if it decides it is appropriate

to do so.

Where a buy-out award is made under the Listing Rules then the leaver

provisions would be determined as part of the terms of the award.

9898

Avon Protection plc Annual Report and Accounts 2023

REMUNERATION COMMITTEE REPORT CONTINUED

DIRECTORS’ REMUNERATION POLICY

CONTINUED

Service contracts, letters of appointment and policy

onpayments for loss of office continued

Chair and Non-Executive Directors

All Non-Executive Directors have letters of appointment rather than

service contracts and are appointed on a rolling annual basis, which

may be terminated on giving up to three months’ notice at any time by

either party.

Chair and Non-Executive Director appointments are subject to Board

approval and election by shareholders at each Annual General Meeting.

Key details of the service contracts and letters of appointment of the

current Directors can be found in the Annual Report on Remuneration and

all service contracts and letters of appointment are available for inspection

at the Company’s registered office.

External appointments

The Company recognises that its Executive Directors may be invited to

become Non-Executive Directors of other companies. Such Non-Executive

duties can broaden a Director’s experience and knowledge which can

benefit Avon Protection. Subject to approval by the Board, Executive

Directors are allowed to accept Non-Executive appointments, provided

that these appointments are not likely to lead to conflicts of interest,

and the Committee will consider its approach to the treatment of any

fees received by Executive Directors in respect of Non-Executive roles

asthey arise.

9999

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

ANNUAL REPORT ON REMUNERATION

Role and composition of the Remuneration Committee

The Board is ultimately accountable for executive remuneration and

delegates this responsibility to the Remuneration Committee. The

Remuneration Committee is responsible for developing and implementing

a remuneration policy that supports the Group’s strategy and for

determining the Executive Directors’ individual packages and terms

of service together with those of the other members of the Executive

Committee. When setting the remuneration terms for Executive Directors,

the Committee reviews and has regard to workforce remuneration and

related policies and takes close account of the U.K. Corporate Governance

Code requirements for clarity, simplicity, risk mitigation, predictability,

proportionality and alignment to culture.

The Remuneration Committee’s terms of reference are available on the

Company’s website and include:

• determining and agreeing with the Board the policy for the

remuneration of the Company’s CEO, CFO, Chair and Company

Secretary and such other members of the senior management team

as it chooses to consider or is designated to consider (currently the

Executive Committee), having regard to remuneration trends across

the Group;

• putting in place a remuneration structure that supports strategy and

promotes long-term sustainable success – with executive remuneration

aligned to Company purpose and values and clearly linked to the

successful delivery of the Company’s long-term strategy – and

which attracts, retains and motivates executive management of the

quality required to run the Company successfully without paying

more than is necessary, having regard to views of shareholders and

otherstakeholders;

• reviewing the pay arrangements put in place for the broader workforce;

• within the terms of the agreed policy, determining the total individual

remuneration package of each Executive Director including, where

appropriate, bonuses, incentive payments, share options and

pensionarrangements;

• determining the targets for the performance-related bonus schemes for

the Executive Directors and the Group Executive management team;

• reviewing the design of all share incentive plans for approval by the

Board and shareholders;

• for any such discretionary plans, determining each year whether awards

will be made, the overall amount of such awards, the individual awards

to Executive Directors and the Group Executive management team (and

others) and the performance targets to be used; and

• agreeing termination arrangements for senior executives.

The Committee currently comprises Chloe Ponsonby (Chair), Bruce

Thompson, Bindi Foyle and Victor Chavez.

By invitation of the Committee, meetings are also attended by the CEO,

CFO and Company Secretary (who acts as secretary to the Committee),

who are consulted on matters discussed by the Committee, unless those

matters relate to their own remuneration. Advice or information is also

sought directly from other employees where the Committee feels that

such additional contributions will assist the decision-making process.

The Committee is authorised to take such internal and external advice as it

considers appropriate in connection with carrying out its duties, including

the appointment of its own external remuneration advisors. During the

period, the Committee was assisted in its work by FIT Remuneration

Consultants LLP (‘FIT’). FIT was appointed in December 2019 and has

provided advice in relation to general remuneration matters and the

review of the remuneration policy. Fees paid to FIT in relation to advice

provided to the Committee during the current period were £43,277

(excluding VAT), charged on a time/cost basis. FIT also provided advice to

the Company in relation to Non-Executive Director fees and on technical

share plan implementation matters but other than this did not provide any

other services to the Company.

FIT is a member of the Remuneration Consultants Group and, as such,

voluntarily operates under the Code of Conduct in relation to executive

remuneration consulting in the U.K. The Committee is satisfied that the

advice it received from FIT was objective and independent.

The Committee addressed the following main topics during the

financial period:

• undertook a comprehensive review of the Executive Directors’

remuneration arrangements which culminated in the preparation

of a revised Directors’ Remuneration Policy which will be put to

shareholders for approval at the 2024 AGM;

• seeking the views of our major shareholders and the main voting

agencies as part of a comprehensive consultation exercise to inform the

design process for the revised Policy. Feedback was received from ISS

and shareholders holding c.45% of our issued share capital and this has

helped shape the new Policy;

• assessed whether our remuneration framework is appropriately aligned

with our culture and values and motivates our leaders to achieve the

Group’s strategic objectives;

• reviewed guidance from investor bodies and institutional shareholders;

• reviewed and approved the remuneration packages for our current

Executive Directors;

• determined the terms of the incoming CEO’s package;

• approved the annual bonus outcome for the 2022/23 financial period;

• reviewed and confirmed the vesting of the LTIP awards granted in

March 2020; and

• reviewed and approved the terms of the 2023 LTIP awards and

monitored the performance of the outstanding awards against their

performance targets.

Since the end of the 2022/23 financial period, the Committee has:

• concluded the consultation exercise on the new Directors’

Remuneration Policy and written to our largest shareholders with details

of the Committee’s conclusions;

• made preparations for the one-off share matching awards to be made

shortly after the AGM in February 2024;

• approved annual bonus outcomes to the Executive Directors and

the Executive Board, following completion of the external audit in

November 2023 and undertaken a final assessment of the performance

conditions attached to the February 2021 LTIP awards (based on

performance to 30 September 2023);

• approved restricted stock awards to LTIP participants (excluding

Executive Directors) as a swap for the EPS element of the 2021 and 2022

LTIP awards (which will not vest);

• approved restricted stock awards for a select group of key employees

asa retention tool; and

• agreed the annual bonus structure for the year ending

28September 2024.

The information that follows has been audited (where indicated) by the

Company’s auditor KPMG LLP.

100100

Avon Protection plc Annual Report and Accounts 2023

REMUNERATION COMMITTEE REPORT CONTINUED

ANNUAL REPORT ON REMUNERATION CONTINUED

Single total figure of remuneration for Directors for the 52 weeks ended 30 September 2023 (audited)

Directors’ single total figures of remuneration for the 52 weeks ended 30 September 2023 were as follows:

Basic

salary

and fees

£’000

Pension

£’000

Other

benefits

£’000

Fixed

remuneration

sub-total

£’000

Annual

bonus

£’000

LTIP

£’000

Variable

remuneration

sub-total

£’000

Total

remuneration

£’000

Current Executive Directors

Jos Sclater

2023 376 29 12 417 93 – 93 510

2022 – – – – – – – –

Rich Cashin

2023 359 27 14 400 90 – 90 490

2022 199 15 5 219 106 – 106 325

Former Executive Directors

Paul McDonald

2023 342 26 15 383 – – – –

2022 513 58 17 588 285 – 285 873

Nick Keveth

2023 – – – – – – – –

2022 180 27 10 217 99 – 99 316

Non-Executive Directors

Bruce Thompson

2023 175 – – 175 – – – 175

2022 175 – – 175 – – – 175

Chloe Ponsonby 2023 65 – – 65 – – – 65

2022 65 – – 65 – – – 65

Bindi Foyle 2023 60 – – 60 – – – 60

2022 60 – – 60 – – – 60

Victor Chavez 2023 50 – – 50 – – – 50

2022 50 – – 50 – – – 50

Notes to total figure of remuneration table

1 Jos Sclater joined the Board on 16 January 2023 and Rich Cashin joined the Board on 31 March 2022.

2 Rich Cashin was a member of the Group’s money purchase scheme in FY23. Contributions to the scheme were £5k. Remaining pension contributions for Rich and Jos were paid as a salary supplement.

3 Benefits for FY23 included a car allowance, the cost of private health insurance, critical illness cover and executive medical.

4 Paul McDonald and Nick Keveth stepped off the Board on 30 September 2022 and 31 March 2022 respectively.

5 Bruce Thompson temporarily took on the role of Executive Chair from 1 October 2022 to 15 January 2023 after which he resumed his Non-Executive Chair role. No additional fees or any other

payments were made to Bruce over the period he temporarily took on the Executive Chair role.

Annual bonus for the 52 weeks ended 30 September 2023 (audited)

The annual bonus opportunity for Executive Directors for FY23 was 125% of salary and this was based on financial targets, inclusive of Armour, relating to

revenue (20%), adjusted operating profit (40%), operating cash flow (20%) and the achievement of strategic objectives (20%).

The targets applying to each measure and performance against them are set out in the table below:

Including Armour

Threshold

(0% payable)

Stretch

(100% payable)

Actual/

reported

achievement

Bonus payable

(% of maximum)

Revenue (20%) $290.0m $330.0m $274.3m 0.0% 0.0%

Adjusted operating profit (40%) $21.0m $26.8m Below threshold 0.0% 0.0%

Operating cash flow (20%) $29.6m $35.4m Below threshold 0.0% 0.0%

Strategic objectives (20%) Set out in more detail below

Operating cash flow is defined as cash flows from operations before exceptional items, less net repayments of leases and capital expenditure.

101101

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

The strategic element of the bonus for FY23 was based on the following broad categories with objectives assigned to each. The categories and

achievements are set out in the table below:

Head Protection: Establish leading position

in Head Protection by securing and delivering

contracts and approvals to support short and long

term growth of business.

Well on track to become largest supplier of helmets to the U.S. DOD. Successful production

ramp-up of NG IHPS helmet, well ahead of competition. FAT approval for ACH GEN II in final stages.

Strong demand for newly launched EPIC helmet, targeted at commercial market worldwide.

Medium term operational strategy developed to structurally improve margins.

Respiratory Protection: Maintain leading global

position in Respiratory Protection.

Leading supplier of CBRN respirators to U.S. and U.K. military with high levels of collaboration

onfuture product development. NSPA FM50 programme extended to new NATO countries.

NSPAcontract won for boots and gloves. Strong pipeline for technology leading rebreathers.

Body and flat armour: Manage the orderly wind

down and closure of the Armour business.

Armour business fully exited by end of financial year as planned. Outstanding body and flat armour

contractual obligations fulfilled. Assets sold and the Lexington facility sub-leased. Armour is now a

discontinued business.

Operations: Upgrade operational capability

to increase efficiency and to significantly

improve conversion of orders into revenue on a

consistent basis.

Continuous improvement culture and methodology introduced, with progress now visible through

new operational metrics. Respiratory Business right-sized to reflect lower revenue base. Reduced

levels of scrap and rework in Head Protection as production ramps-up.

Strategy & Organisation: Review Group strategy

in core Respiratory and Head Protection businesses

and implement new organisation structure to

support strategy.

Organisation re-structured into two Strategic Business Units (Respiratory and Head Protection) with

focused leadership teams and designed to improve delivery, focus and accountability. New STAR

strategy developed by the teams and translated into objectives and key results (OKRs).

ESG: Finalise the ESG policy, strategy and

implementation plan, agree with Board and

communicate with shareholders

Newly formed Sustainability Committee determined level of ambition, agreed on priority

objectives aligned with STAR strategy and set stretching targets to be delivered over next five years

with focus on reducing scrap in operations, energy usage and carbon emissions.

Jos Sclater joined the Company shortly after the financial annual bonus targets were set. Upon joining and as mentioned earlier, Jos, with Rich Cashin the

CFO, embarked upon a comprehensive review of the business and developed and implemented a new strategy and change of direction. The original

financial targets were largely unachievable and this has resulted in no payout against the revenue, profit and cash objectives. The Committee could

have amended the targets to align better with the new strategy but decided against this. Therefore, in practice, the maximum bonus opportunity was

limited to the strategic objectives which accounted for 20% of the maximum bonus. Following strong individual performance and the accomplishment

of important short term non-financial drivers, the Committee has determined that 20% out of the 20% on strategic objectives should be payable. The

Committee recognises the sensitivities around paying a bonus based solely on non-financial performance but on this occasion believes it is warranted

given the new CEO and targets that were made on an old strategy and set of assumptions.

Incentive awards vesting (audited)

Awards were granted on 2 February 2021 under the LTIP to the former CEO and former CFO and these were based on three-year performance targets.

Halfof the award was subject to a relative TSR condition (measuring performance against the constituents of the FTSE 250 excluding investment trusts)

and the other half was subject to EPS growth targets.

The TSR measurement period ended on 30 September 2023. The Company’s TSR over this period was confirmed as (78.7)% which ranked the Company

below the median of the peer group and therefore this part of the award will lapse full. The Company delivered an adjusted basic EPS of 40.3c, which was

below the threshold growth target. Therefore, this element of the award will also lapse.

Weighting Threshold Maximum

Actual

performance % Vesting

TSR 50% Median Upper quintile Below median

% TSR

Adjusted basic EPS 50% 155.5c 199c 40.3c 0%

LTIP awards granted in the 52 weeks ended 30 September 2023 (audited)

The table below provides details of share awards made to Jos Sclater on 18 January 2023 and Rich Cashin on 21 December 2022:

Type of award Basis of award

Number of shares

under award

Face value of

award (£’000)

% vesting

at threshold

End of

performance period

Jos Sclater

Nil cost option 175% of salary 84,607 922 20% (TSR)

0% (EPS)

18 January 2026 (TSR)

30 September 2025 (EPS)

Rich Cashin

Nil cost option 150% of salary 49,406 538 20% (TSR)

0% (EPS)

20 December 2025 (TSR)

30 September 2025 (EPS)

1 The number of awards was based on a share price of £10.89 which was the Company’s five-day average share price over 14 December 2022 to 20 December 2022.

102102

Avon Protection plc Annual Report and Accounts 2023

REMUNERATION COMMITTEE REPORT CONTINUED

ANNUAL REPORT ON REMUNERATION CONTINUED

LTIP awards granted in the 52 weeks ended 30 September 2023 (audited) continued

The performance conditions for this award will be measured over a three-year performance period and are as follows:

The first performance condition for 50% of the award compares the Company’s total shareholder return (TSR) performance over the performance period

relative to a comparator group. The comparator group for the TSR element is the constituents of the FTSE 250 Index (excluding investment trusts) as at the

start of the performance period. No portion of the TSR element may vest unless the Company’s TSR performance over the performance period at least

equals the median TSR performance within the comparator group, for which 20% of the TSR element may vest, rising on a straight-line basis to full vesting

of the TSR element for upper quintile or better relative TSR performance.

The second performance condition for the other 50% of the award is based on the Company’s adjusted basic earnings per share (EPS) over the three-year

performance period commencing on 1 October 2022. No portion of the EPS element may vest unless the adjusted EPS for the 2025 financial period is

at least 100 U.S. cents, for which 0% of the EPS element may vest, rising on a straight-line basis to full vesting of the EPS element for EPS of 150 U.S. cents

or better. The EPS element of the awards is subject to a return on capital employed underpin in respect of which the Remuneration Committee retains

discretion to reduce the extent of vesting of the EPS element by regard to the Company’s ROCE performance over the performance period.

The Remuneration Committee also retains a general discretion to reduce the extent of vesting of the awards generally if it considers that the underlying

business performance of the Company does not justify vesting.

Directors’ shareholdings and share interests and position under shareholding guidelines (audited)

Beneficial interests of Directors, their families and trusts in ordinary shares of the Company at 30 September 2023 were:

Number of

shares owned

outright (including

connected persons)

Unvested shares

subject to

performance

conditions

Shareholding as a

% of salary as at

30 September 2023

Shareholding

guidelines

(200% of salary) met?

Jos Sclater 24,130 84,607 14% No

Rich Cashin 11,185

82,092 10% No

Bruce Thompson 31,000 – N/A N/A

Chloe Ponsonby 4,550 – N/A N/A

Bindi Foyle 2,000 – N/A N/A

Victor Chavez 1,015 – N/A N/A

1 Unvested LTIP shares.

2 Includes 1,185 2022 deferred bonus shares

3 Between the year end and the start of the close period on 22 October 2023 Jos Sclater and Rich Cashin purchased 30,356 and 20,000 shares respectively.

Outstanding LTIP awards (audited)

Award date

Award held at

1 October 2022

Granted

in the period

Vested

in the period

Lapsed

in the period

Outstanding

awards at

30 September 2023

Jos Sclater 18.01.23 – 84,607 – – 84,607

Rich Cashin 21.12.22 – 49,406 – – 49,406

08.03.22 32,686 – – – 32,686

The outstanding awards are subject to two performance criteria. Half the awards are subject to a relative TSR measure and the other half are subject to an

EPS growth condition.

Total Directors’ remuneration for the 52 weeks ended 30 September 2023 under Schedule 5 (audited)

2023

£’000

2022

£’000

Aggregate remuneration, excluding gains on exercise of share options 1,350 1,864

Aggregate gains on the exercise of share options

– 386

Aggregate contribution to defined contribution pension scheme

5 8

1 Gains on exercise of share options are shown at the actual value of vested shares using the vesting date share price.

2 During the period pension contributions were paid to defined contribution schemes for one Director (2022: two Directors).

103103

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

Dilution

The Company reviews the awards of shares made under the all-employee and executive share plans in terms of their effect on dilution limits in any rolling

ten-year period. In respect of the 5% and 10% limits recommended by the Investment Association, in the period of 10 years ending on 30 September

2023, we issued 300,000 shares in 2013 to satisfy awards under all our share plans, which represents 0.96% of our issued ordinary share capital at

30September 2023.

It remains the Company’s practice to use an Employee Share Ownership Trust (ESOT) in order to meet its liability for shares awarded under the LTIP.

At 30 September 2023 there were 261,714 shares held in the ESOT which will either be used to satisfy awards granted under the LTIP to date, or in

connection with future awards. A hedging committee ensures that the ESOT holds sufficient shares to satisfy existing and future awards made under the

LTIP by buying shares in the market or recommending the Company issues new shares. Shares held in the ESOT do not receive dividends.

As at 30 September 2023, the market price of Avon Protection plc shares was £6.18 (2022: £11.24). During the 52 weeks ended 30 September 2023 the

highest and lowest daily closing market prices were £12.00 and £6.17 respectively.

Share Incentive Plan

The Company currently operates the Avon Rubber p.l.c. Share Incentive Plan (SIP), approved by shareholders at the AGM in February 2012. All U.K. tax

resident employees of the Company and its subsidiaries are entitled to participate. Under the SIP, participants purchase shares in the Company monthly

using deductions from their pre-tax pay. Jos Sclater and Rich Cashin were not members of the SIP during the period. The maximum contribution each

month under the SIP is currently £150, a sum which is set by the Government.

Payments to past Directors, including payments for loss of office (audited)

Nick Keveth stepped down from the Board and his role as CFO on 31 March 2022 and Paul McDonald stepped down from the Board and his role as CEO

on30 September 2022. Nick received no further remuneration during FY23. Paul continued to receive his salary and contractual benefits (including

pension allowance/contributions) up until the end of his contractual notice period on 31 May 2023. Paul did not receive a bonus for FY23. For the period

1October 2022 to 31 May 2023, Paul was paid £342,000 in base salary, £15,000 in benefits and £26,000 in pension benefits.

As good leavers, both Nick and Paul were allowed to keep their unvested LTIP awards subject to achievement of performance criteria and a time pro rata

reduction. The LTIP awards granted to Nick and Paul on 17 March 2020 failed to meet the threshold performance conditions and thus lapsed in full. As a

result, 18,383 and 31,734 awards lapsed for Nick and Paul respectively during FY23.

Service contracts and letters of appointment

The table below summarises key details in respect of each Executive Director’s contract.

Contract date

Company

notice period

Executive

notice period

Jos Sclater 17 October 2022 12 months 12 months

Rich Cashin 6 January 2022 12 months 12 months

The date of each Non-Executive appointment is set out below, together with the date of their last re-election by shareholders.

Date of initial

appointment

Date of last

re-election

Chloe Ponsonby 1 March 2016 27 January 2023

Bruce Thompson 1 March 2020 27 January 2023

Bindi Foyle 1 May 2020 27 January 2023

Victor Chavez 1 December 2020 27 January 2023

All service contracts and letters of appointment are available for inspection at the Company’s registered office.

Other appointments

Rich Cashin is not currently appointed as a Non-Executive Director of any company outside the Group. Jos Sclater remains a Director of two secure

companies within the Ultra Group which were established to safeguard technology critical to U.K. national security as part of the acquisition by Cobham

in2021. Jos Sclater does not receive any remuneration for these services.

104104

Avon Protection plc Annual Report and Accounts 2023

REMUNERATION COMMITTEE REPORT CONTINUED

ANNUAL REPORT ON REMUNERATION CONTINUED

Total shareholder return performance graph

The following graph illustrates the total return, in terms of share price growth and dividends on a notional investment of £100 in the Company over the

last ten years relative to the FTSE Small Cap Index (excluding investment trusts), the FTSE 250 Index (excluding investment trusts) and the FTSE All-Share

Index (excluding investment trusts). These indices were chosen by the Remuneration Committee as a competitive indicator of general U.K. market

performance for companies of a broadly similar current and past size.

Chief Executive Officer’s remuneration

The total remuneration figures, including annual bonus and vested LTIP awards (shown as a percentage of the maximum that could have been achieved),

for the CEO for each of the last ten financial periods are shown in the table below.

Peter Slabbert retired on 30 September 2015. Rob Rennie stood down from the Board and was replaced by Paul McDonald on 15 February 2017. Paul

McDonald stepped down as CEO on 30 September 2022 and was replaced by Jos Sclater on 16 January 2023.

Financial period CEO

CEO single figure

of total

remuneration

£’000

Annual bonus

pay-out against

maximum

opportunity

Long-term

incentive

vesting

2023 Jos Sclater 510 20% –

2022 Paul McDonald 873 44% 0%

2021 Paul McDonald 819 0% 50%

2020 Paul McDonald 1,686 66% 100%

2019 Paul McDonald 928 55% 80%

2018 Paul McDonald 734 80% 84%

2017 Paul McDonald

663 81% 99%

2017 Rob Rennie 213 57% –

2016 Rob Rennie 484 52% –

2015 Peter Slabbert 1,676 91% 100%

2014 Peter Slabbert 1,529 91% 96%

1 Includes remuneration received in the period prior to his appointment as Director in 2017.

September

2023

September

2013

September

2014

September

2015

September

2016

September

2017

September

2018

September

2019

September

2020

September

2021

September

2022

900

800

700

600

500

400

300

200

100

Avon Protection plc FTSE Small Cap excl investment trusts FTSE All-Share excl investment trusts FTSE 250 Index excl investment trusts

105105

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

Percentage change in remuneration of Directors compared with other employees

The following table shows the percentage change in each Executive and Non-Executive Director’s remuneration compared with the average change for

all employees of the Company for the 52 weeks ended 30 September 2023. Changes for prior periods are also shown which are building up over time to

cover a rolling five-year period.

Salary/fee Pension and other benefits Annual bonus

2023 2022 2021 2020 2023 2022 2021 2020 2023 2022

2021 2020

Current Directors

Jos Sclater

– – – – – – – – – – – –

Rich Cashin

80.4% – – – 105.0% – – – (15.1)% – – –

Bruce Thompson

0.0% 13.6% 541.7% – – – – – – – – –

Chloe Ponsonby 0.0% (3.0)% 19.6% 8.8% – – – – – – – –

Bindi Foyle

0.0% 5.3% 235.3% – – – – – – – – –

Victor Chavez

0.0% 19.0% – – – – – – – – – –

Past Directors

Paul McDonald

(33.3)% 2.8% 22.0% 5.1% (45.3)% (17.6)% 15.2% 54.9% (100.0)% – (100.0)% 25.7%

Nick Keveth

– (48.6)% 22.8% 5.6% – (44.8)% 13.6% 37. 2% – – (100.0)% 26.4%

Pim Vervaat

– – (58.9)% 0.0% – – – – – – – –

David Evans

– – (82.9)% 0.0% – – – (100.0)% – – – –

All employees

5.3% 3.2% 4.7% 6.0% 11. 2% 3.9% 6.8% 6.9% (36.8)% N/A (100.0)% 38.2%

1 Jos Sclater joined the Board on 16 January 2023.

2 Rich Cashin joined the Board on 31 March 2022.

3 Bruce Thompson was appointed as Chair on 2 December 2020.

4 Bindi Foyle was appointed to the Board as Non-Executive Director with effect from 1 May 2020 and took over as Chair of the Audit Committee on 29 January 2021.

5 Victor Chavez was appointed to the Board with effect from 1 December 2020.

6 Paul McDonald stepped off the Board on 30 September 2022.

7 Nick Keveth stepped off the Board on 31 March 2022.

8 Pim Vervaat and David Evans stepped off the Board on 29 January 2021 and 2 December 2020 respectively.

9 As the only Avon Protection plc employees are the CEO and the CFO, comparative figures for all U.K. employees of the Group have been set out on a voluntary basis. To aid comparison, the group of

employees selected are those full time U.K. employees who were employed over the complete period.

10 In 2021 no bonuses were payable to Directors or employees, meaning percentage changes are not applicable for 2022.

Chief Executive Officer to employee pay ratio

The table below sets out the ratio between the total pay of the CEO and the total pay of the employees at the 25th, 50th (median) and 75th percentiles of

the U.K. workforce.

Financial period Method 25th percentile Median 75th percentile

2023 A 26:1 21:1 13:1

2022 A 36:1 28:1 19:1

2021 A 36:1 29:1 20:1

The 25th, 50th and 75th percentile ranked individuals have been identified using Option A in accordance with the reporting regulations, selected on

the basis that this provides the most robust and statistically accurate means of identifying the relevant employees. The day by reference to which the

25th, 50th and 75th percentile employees were determined was 30 September 2023. The CEO pay figure is the total remuneration figure as set out in the

single figure table and then annualised and equivalent figures (on a full-time equivalent basis) have been calculated for the relevant 25th, 50th and 75th

percentile employees.

The total pay and benefits figures used to calculate the ratios for each of the 25th percentile, median and 75th percentile employees are set out below:

Financial period 25th percentile Median 75th percentile

2023 £26,060 £32,535 £50,435

The salary element for each of these figures is set out below:

Financial period 25th percentile Median 75th percentile

2023 £24,819 £30,300 £45,866

The Committee is satisfied that CEO remuneration is reasonable and consistent with the Company’s wider policies on employee pay, reward and

progression; see page 91 for further details.

106106

Avon Protection plc Annual Report and Accounts 2023

REMUNERATION COMMITTEE REPORT CONTINUED

ANNUAL REPORT ON REMUNERATION CONTINUED

Relative importance of spend on pay

The following table shows the change in Group expenditure between the current and previous financial periods on remuneration and associated costs

for all employees globally, set against distributions to shareholders and other uses of profit or cash flow, being profits retained within the business,

investments in research and development and other capital expenditure.

2023

2022

(restated)

$m % change

Overall expenditure on pay (note 6.1) 83.2 87. 2 (4.6%)

Dividends paid 13.4 13.4 0.0%

Loss retained (loss for the period less dividends and share buyback) (27.8) (33.4) (16.8%)

R&D expenditure (including capitalised development costs) 10.2 10.9 (6.4%)

Other capital expenditure (excluding capitalised development costs) 7.9 3.1 154.8%

1 Comparative overall expenditure on pay has been increased by $4.5 million, with the restatement reflecting a correction to expense allocations. This is a disclosure restatement and does not have an

impact on the Group’s primary statements.

Implementation of policy for the 52 weeks ended 28 September 2024

Basic salary

Salaries have been increased by 4.5% to £550,291 and £374,894 for Jos Sclater and Rich Cashin respectively. This is in line with the average increase across

the wider U.K. workforce of 4.5%.

2024

2023

Jos Sclater 550,291 526,594

Rich Cashin 374,894 358,750

Non-Executive Director fees

Fees have been increased by 4.5% for the Non-Executive Directors, in line with the average increase across the wider U.K. workforce of 4.5%.

2024

2023

Chair 182,875 175,000

Non-Executive Director 52,250 50,000

Committee Chair 10,450 10,000

Senior Independent Director 10,450

10,000

* There is a maximum additional fee of £15,675 if the Senior Independent Director also chairs a Committee.

Benefits

Benefits remain unchanged and include a car allowance, the cost of private health insurance, life insurance, critical illness insurance and executive medical.

Pension

The Executive Directors receive a contribution towards pension of 7.5% of basic salary, paid either as a non-pensionable salary supplement or delivered

through the Group’s money purchase scheme. This contribution rate is in line with the U.K. workforce rate.

Annual bonus

For the 2024 financial period, the maximum opportunity under the annual bonus plan will be 125% of base salary for both Executive Directors. 25% of the

total bonus payment will be deferred into shares for two years.

Bonuses will be based on absolute Group operating profit (50%), average working capital turns (30%) and strategic objectives (20%). The actual targets are

commercially sensitive and will be disclosed on a retrospective basis.

2024 LTIP awards

The Committee expects to make awards under the one-off share matching arrangement to Jos Sclater and Rich Cashin in February 2024. Full details of the

performance conditions and targets are set out in the Remuneration Committee Chair’s letter on page 89.

107107

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

Statement of shareholder voting on the RemunerationReport

The shareholder vote on the Remuneration Report for the 52 weeks ended 1 October 2022 at the AGM which took place on 27 January 2023 was

as follows:

Resolution

Votes for

(including

discretionary) % for

Votes against

(excluding withheld) % against

Total (excluding

withheld and third

party discretionary Withheld

Approval of the Directors’

Remuneration Report 17,756,159 83.71% 3,456,535 16.29% 21,212,694 6,134

This Remuneration Report has been approved by the Board of Directors and signed on its behalf by:

Chloe Ponsonby

Chair of the Remuneration Committee

21 November 2023

108108

Avon Protection plc Annual Report and Accounts 2023

DIRECTORS’ REPORT

The Directors submit the Annual Report and audited financial statements

of Avon Protection plc (‘the Company’) and the Avon Protection group

of companies (‘the Group’) for the year ended 30 September 2023.

TheCompany is a public limited company incorporated and domiciled

in England and Wales with company registration number 32965. The

Company’s subsidiary undertakings, including those located outside

theU.K., are listed in note 7.3 of the financial statements.

Strategic Report

The Strategic Report, which contains a review of the Group’s business

(including by reference to key performance indicators), a description of

the principal risks and uncertainties facing the Group, and commentary

onlikely future developments, is set out on pages 62 to 69 and is

incorporated into this Directors’ Report by reference.

Financial results and dividend

The Group statutory loss for the period after taxation amounts to

$14.4million (2022: loss $7.6 million). Full details are set out in the

Consolidated Statement of Comprehensive Income on page 129.

An interim dividend of 14.3 U.S. cents per share (converted to 11.25p) was

paid inrespect of the period ended 30 September 2023 (2022: 14.3c).

The Directors recommend a final dividend of 15.3 U.S. cents per share,

which will be converted into GBP prior to payment to shareholders

(2022:30.6c), resulting in a total dividend distribution per share for the 52

weeks ended 30September 2023 of 29.6 U.S. cents per share (2022: 44.9c).

Share capital

The Company only has one class of share capital, which comprises

ordinary shares of £1 each. On 28 January 2022, the Company announced

a Share Buyback Programme, which concluded on 13 April 2022 following

the purchase of 765,098 shares. The buyback programme was formally

cancelled on 23 May 2023. As at 21 November 2023 the Company has

30,258,194 shares in issue, with 765,098 held in treasury, and no shares

were issued during the period. All shares forming part of the ordinary share

capital have the same rights and carry one vote each. There are no unusual

restrictions on the transfer of a share. Further details of the shares in issue

during the financial year are set out in note 5.5 of the financial statements.

The full rights and obligations attaching to the Company’s shares as

well as the powers of Directors are set out in the Company’s Articles

of Association (‘the Articles’), copies of which can be obtained from

Companies House or by writing to the Company Secretary. Shareholders

are entitled to receive the Company’s reports and accounts, to attend

and speak at general meetings, to exercise voting rights in person or by

appointing a proxy and to receive a dividend where declared or paid

out of profits available for that purpose. There are no restrictions on the

transfer of issued shares or on the exercise of voting rights attached to

them, except where the Company has suspended their voting rights

or prohibited their transfer following a failure to respond to a notice to

shareholders under section 793 of the Companies Act 2006, or where the

holder is precluded from transferring or voting by the Financial Services

Authority’s Listing Rules or the City Code on Takeovers and Mergers.

The 261,714 shares held in the name of the Employee Share Ownership

Trust are held as a hedge against awards previously made or to be made

pursuant to the Long-Term Incentive Plan and are held on terms which

provide voting rights to the trustee.

The Company is not aware of any agreements between its shareholders

which may restrict the transfer of their shares or the exercise of their voting

rights, the only exception to this being that the trustee of the Employee

Share Ownership Trust have waived their rights to dividends.

At the Company’s last AGM held on 27 January 2023, shareholders

authorised the Company to make market purchases of up to 3,025,819 of

the Company’s issued ordinary shares. No shares were purchased under

this authority during the period. A resolution will be put to shareholders

atthe forthcoming AGM to renew this authority.

The Directors require authority to allot unissued share capital of the

Company and to disapply shareholders’ statutory pre-emption rights.

Such authorities were granted at the 2023 AGM and resolutions to renew

these authorities will be proposed at the 2024 AGM; see explanatory notes

on pages 176 to 178. No shares were allotted under this authority during

the period.

Substantial shareholdings

As at 30 September 2023 the following shareholders held 3% or more of

the Company’s issued share capital:

Alantra EQMC Asset Management SGIIC SA 14.93%

Kempen Capital Management Nv 11.0 0 %

Aberforth Partners LLP 8.30%

Ancora Advisors LLC 5.06%

Schroder Investment Management Limited 4.98%

Royal London Asset Management Limited 3.83%

NFU Mutual 3.57%

Hargreaves Lansdown Stockbrokers 3.35%

Invesco Asset Management Limited 3.13%

Significant agreements – change of control

The only significant agreements to which the Company is a party which

take effect, alter or terminate upon a change of control of the Company

following a takeover bid are the Company’s:

• revolving credit facility agreement; and

• Long-Term Incentive Plan (‘the Plan’).

The unsecured revolving credit facility of $200 million provided by Barclays

Bank PLC, Comerica Bank Inc., Fifth Third Bank NA, National Westminster

Bank plc, CIC and Bank of Ireland contains a provision which, in the event

of a change of control of the Company, gives each lending bank the

right to cancel its commitments to the Company and to declare all the

outstanding amounts and accrued interest owed to such lending bank

immediately due and payable. If a lending bank does not exercise this right

within 15 business days of being notified of the change of control, it shall

not be able to cancel its commitments or require repayment of its share

of the amounts outstanding under the facility in respect of such change

of control.

A change of control will be deemed to have occurred if any person

or group of persons acting in concert (as defined in the City Code on

Takeovers and Mergers) gains direct or indirect control of the Company.

Under the rules of the Plan, on a takeover a proportion of each

outstanding grant will vest. The number of shares that vest is to be

determined by the Remuneration Committee, including by reference to

the extent to which the performance conditions have been satisfied and

the amount of time that has passed since the award was made.

It is also possible that the trustee of the pension plan would seek to review

the current funding arrangements and deficit recovery plan as part of or

following a change of control, particularly if that resulted in a weakening

ofthe employer covenant.

The Company does not have agreements with any Director or employee

that would provide compensation for loss of office or employment

resulting from a change of control, except in relation to the Long-Term

Incentive Plan as described above.

109109

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

Directors

The current Directors as at 21 November 2023 and their biographies are

shown on pages 74 and 75. Jos Sclater was appointed to the Board on

16January 2023.

According to the Articles of Association, all Directors are subject to

election by shareholders at the first AGM following their appointment, and

to re-election thereafter at intervals of no more than three years. In line

with best practice reflected in the U.K. Corporate Governance Code, all

current Directors will be standing for re-appointment at the forthcoming

AGM to be held on 26 January 2024.

The remuneration of the Directors including their respective shareholdings

in the Company is set out in the Remuneration Report on pages 99 to 107.

The Company’s rules about the appointment and replacement of

Directors, together with the powers of Directors, are contained in the

Articles. Changes to the Articles must be approved by special resolution

ofthe shareholders.

Directors’ and Officers’ indemnity insurance

In accordance with the Company’s Articles and subject to the provisions of

the Companies Act 2006 (‘the Act’), the Company maintains, at its expense,

Directors’ and Officers’ Liability insurance to provide cover in respect of

legal action against its Directors. This was in force throughout the financial

year and remains in force as at the date of this report.

The Company’s Articles allow the Company to provide the Directors with

funds to cover the costs incurred in defending legal proceedings. The

Company is therefore treated as providing an indemnity for its Directors

and Company Secretary which is a qualifying third-party indemnity

provision for the purposes of the Act.

Conflicts of interest

During the period no Director held any beneficial interest in any

contract significant to the Company’s business, other than a contract of

employment. The Company has procedures set out in the Articles for

managing conflicts of interest. Should a Director become aware that they,

or their connected parties, have an interest in an existing or proposed

transaction with the Group, they are required to notify the Board as soon

as reasonably practicable.

Research and development

The Group continues to utilise its technical and materials expertise to

remain at the forefront of innovative technology and produce specialist

products and services to maximise the performance and capabilities of its

customers. The Group maintains its links to key universities in the U.S. and

U.K. and continues to work with new and existing customers and suppliers

to develop its knowledge and product range. Total Group expenditure

on research and development in the year was $10.2 million (2022: $10.9

million), further details of which are contained in the Strategic Report

on page 59.

Corporate governance

The Company’s statement on corporate governance can be found in

the Corporate Governance Report on pages 76 to 79. The Corporate

Governance Report forms part of this Directors’ Report and is incorporated

into it by cross-reference.

Stakeholder engagement

The Board factors stakeholder opinions and feedback into its decisions to

ensure the impact on key stakeholders’ needs and concerns is considered.

More information on how the Board engages with stakeholders can be

found in the Section 172 Statement on pages 36 to 39.

Employee share schemes and plans

The Group encourages its employees to share in the future success of the

Group and operates three share-based incentive plans. The Avon Rubber

Share Incentive Plan (SIP) is open to all eligible U.K. employees. Under

the SIP participants are able to purchase shares in the Company monthly

using deductions from their pre-tax pay. The Avon Rubber Employee

Stock Purchase Plan (ESPP) is open to all eligible U.S. employees. Under

the ESPP, participants are able to purchase shares in the Company at a

discounted rate from payroll deductions. The Avon Rubber Long-Term

Incentive Plan (LTIP) is designed to align Executive Directors’ and senior

employees’ interests with those of shareholders and to incentivise the

delivery of sustainable earnings growth and superior shareholder returns.

Discretionary awards are granted under the LTIP over a fixed number of

shares by reference to salary, with awards ordinarily vesting, subject to

meeting performance criteria, on the third anniversary of the grant date.

Environmental and corporate social responsibility

Matters relating to environmental and corporate social responsibility

including reference to our policy on diversity are set out in the

Sustainability Report on pages 41 to 49.

Greenhouse gas emissions

The disclosures concerning greenhouse gas emissions required by law are

included in the Sustainability Report on page 45.

Political and charitable contributions

No political contributions were made during the period or the prior

period. Contributions for charitable purposes amounted to $124,706

(2022: $108,403) consisting of numerous small donations to various

community charities in Wiltshire, Maryland, Michigan, New Hampshire,

California and Ohio.

Policy on employee disability

Avon Protection provides support, training and development

opportunities to all our employees irrespective of any disabilities they

mayhave. We give full and fair consideration to disabled applicants, and

where an existing employee becomes disabled during their employment,

we will make every effort to enable them to continue their employment

with Avon Protection in their original or an alternative role.

Financial instruments

An explanation of the Group policies on the use of financial instruments

and financial risk management objectives is contained in note 5.4 of the

financial statements.

Independent auditor

The Directors who held office at the date of approval of this Directors’

Report confirm that, so far as they are each aware, there is no relevant

audit information of which the Company’s auditor is unaware, and each

Director has taken all the steps that they ought to have taken as a Director

to make themselves aware of any relevant audit information and to

establish that the Company’s auditor is aware of that information.

Auditor

KPMG LLP has expressed its willingness to continue in office as

independent auditor and a resolution to re-appoint it and authorising

theBoard to agree its remuneration will be proposed at the AGM.

Annual General Meeting

The Company’s AGM will be held at our Hampton Park West facility,

Semington Road, Melksham, Wiltshire SN12 6NB, on 26 January 2024 at

10.30 am. Registration will be from 10.00 am. The Notice of the AGM and

an explanation of the resolutions to be put to the meeting are set out

inthe Notice of Meeting and can be found on pages 174 to 178.

110110

Avon Protection plc Annual Report and Accounts 2023

DIRECTORS’ REPORT CONTINUED

Statement of Directors’ responsibilities in respect of the

Annual Report and the financial statements

The Directors are responsible for preparing the Annual Report and the

Group and Parent Company financial statements in accordance with

applicable law and regulations.

Company law requires the Directors to prepare Group and Parent

Company financial statements for each financial year. Under that law they

are required to prepare the Group financial statements in accordance with

U.K. adopted International Accounting Standards.

Under company law the Directors must not approve the financial

statements unless they are satisfied that they give a true and fair view of

the state of affairs and profit or loss of the Group and Parent Company.

Inpreparing each of the Group and Parent Company financial statements,

the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable, relevant

and reliable;

• state whether they have been prepared in accordance with U.K.

adopted International Accounting Standards;

• assess the Group and Parent Company’s ability to continue as a going

concern, disclosing, as applicable, matters related to going concern; and

• use the going concern basis of accounting unless they either intend

toliquidate the Group or the Parent Company or to cease operations,

orhave no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records

that are sufficient to show and explain the Parent Company’s transactions

and disclose with reasonable accuracy at any time the financial position

of the Parent Company and enable them to ensure that its financial

statements comply with the Companies Act 2006.

They are 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, and have

general responsibility for taking such steps as are reasonably open to them

to safeguard the assets of the Group and to prevent and detect fraud and

other irregularities.

Under applicable law and regulations, the Directors are also responsible for

preparing a Strategic Report, Directors’ Report, Directors’ Remuneration

Report and Corporate Governance Statement that complies with that law

and those regulations. The Directors are responsible for the maintenance

and integrity of the corporate and financial information included on the

Company’s website. Legislation in the U.K. governing the preparation

and dissemination of financial statements may differ from legislation in

otherjurisdictions.

In accordance with Disclosure Guidance and Transparency Rule (‘DTR’)

4.1.16R, the financial statements will form part of the annual financial report

prepared under Disclosure Guidance and Transparency Rule (‘DTR’) 4.1.17R

and 4.1.18R. The Auditor’s Report on these financial statements provides no

assurance over whether the annual financial report has been prepared in

accordance with those requirements.

Directors’ confirmations

Each of the Directors, whose names and functions are listed on pages 74

and 75, confirms that to the best of their knowledge:

• the financial statements, prepared in accordance with the applicable

set of accounting standards, give a true and fair view of the assets,

liabilities, financial position and profit or loss of the Company and the

undertakings included in the consolidation taken as a whole; and

• the Strategic Report and Directors’ Report include a fair review of the

development and performance of the business and the position of

the issuer and the undertakings included in the consolidation taken

as a whole, together with a description of the principal risks and

uncertainties that they face.

We consider the Annual Report and Accounts, taken as a whole, is fair,

balanced and understandable and provides the information necessary for

shareholders to assess the Group’s position and performance, business

model and strategy.

The Directors’ Report and Responsibilities Statement were approved

by the Board of Directors on 21 November 2023 and are signed on its

behalf by:

Jos Sclater

Chief Executive Officer

21 November 2023

111

Annual Report and Accounts 2023 Avon Protection plc

111

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

ADJUSTED

PERFORMANCE

MEASURES

Avon Protection plc Annual Report and Accounts 2023

112

THE GROUP HAS DILIGENTLY WORKED TO

IMPLEMENT THE NEW OPERATING MODEL,

WITH THE CREATION OF TWO STRATEGIC

BUSINESS UNITS FOR RESPIRATORY

PROTECTION AND HEAD PROTECTION, EACH

WITH FOCUSED LEADERSHIP TEAMS WHO

ARE EMPOWERED AND ACCOUNTABLE FOR

DELIVERING OUR STAR STRATEGY.

114 Adjusted Performance Measures

ADJUSTED

PERFORMANCE

MEASURES

CONTENTS

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

113

PERFORMANCE MEASUREMENT

The Directors assess the operating performance of the Group based on adjusted measures of EBITDA, operating profit, net finance costs, taxation and

earnings per share, as well as other measures not defined under IFRS including orders received, closing order book, EBITDA margin, operating profit

margin, returnon invested capital, cash conversion, net debt excluding lease liabilities, average working capital turns, and constant currency equivalents

for relevant metrics. These measures are collectively described as Adjusted Performance Measures (APMs) in this Annual Report.

The Directors believe that the APMs provide a useful comparison of business trends and performance. The APMs exclude exceptional items considered

unrelated to the underlying trading performance of the Group. The term adjusted is not defined under IFRS and may not be comparable with similarly

titled measures used by other companies.

The Group uses these measures for planning, budgeting and reporting purposes and for its internal assessment of the operational performance.

ADJUSTED PERFORMANCE MEASURES

The following table summarises the statutory and adjusted profit and loss account measures for the period together with the adjustments made to each

line item.

52 weeks ended 30 September 2023 52 weeks ended 1 October 2022 (restated)

Adjusted

Adjustments

Total

Adjusted

Adjustments

Total

Continuing operations

Revenue 243.8 – 243.8 263.5 – 263.5

Cost of sales (157.9) – (157.9) (174.6) – (174.6)

Gross profit 85.9 – 85.9 88.9 – 88.9

Sales and marketing expenses (14.9) – (14.9) (15.0) – (15.0)

Research and development costs (10.0) (0.2) (10.2) (8.8) (1.4) (10.2)

General and administrative expenses (39.8) (33.6) (73.4) (41.7) (11.0) (52.7)

Operating profit/(loss) 21.2 (33.8) (12.6) 23.4 (12.4) 11. 0

EBITDA 35.7 (2.9) 32.8 38.8 (1.6) 37. 2

Depreciation, amortisation andimpairment (14.5) (30.9) (45.4) (15.4) (10.8) (26.2)

Operating profit/(loss) (note 1) 21.2 (33.8) (12.6) 23.4 (12.4) 11.0

Net finance costs (note 5) (7.2) (0.4) (7.6) (3.7) (1.3) (5.0)

Profit/(loss) before taxation 14.0 (34.2) (20.2) 19.7 (13.7) 6.0

Taxation (note 3) (1.9) 5.7 3.8 (3.1) 2.8 (0.3)

Profit/(loss) for the period from

continuingoperations 12.1 (28.5) (16.4) 16.6 (10.9) 5.7

Discontinued operations – profit/(loss)

fromdiscontinued operations (note 4) – 2.0 2.0 – (13.3) (13.3)

Profit/(loss) for the period (note 5) 12.1 (26.5) (14.4) 16.6 (24.2) (7.6)

Basic earnings/(loss) per share 40.3c (88.3)c (48.0)c 54.7c (79.8)c (25.1)c

Diluted earnings/(loss) per share 40.3c (88.3)c (48.0)c 54.4c (79.3)c (24.9)c

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect reclassification of research and development costs, reclassification of selling and distribution costs, andthe

discontinuation of the Armour business. These are disclosed in APMs note 13.

Avon Protection plc Annual Report and Accounts 2023

114

ADJUSTED PERFORMANCE MEASURES

1 Adjustments to operating loss

Adjusted operating profit excludes discontinued operations and exceptional items considered unrelated to the underlying trading performance of the

Group. Transactions are classified as exceptional where they relate to an event that falls outside of the underlying trading activities of the business and

where individually, or in aggregate, they have a material impact on the financial statements.

2023

2022

(restated)

Operating (loss)/profit (12.6) 11.0

Amortisation of acquired intangibles 6.3 6.8

Restructuring costs 1.4 1.6

Restructuring-related impairment of non-current assets 0.7 0.4

Impairment of other non-current assets (excluding restructuring related impairments) 0.5 3.6

Impairment of goodwill 23.4 –

Transition costs 1.5 –

Adjusted operating profit 21.2 23.4

Depreciation 9.2 9.1

Other impairment charges – 0.4

Other amortisation charges 5.3 5.9

Adjusted EBITDA 35.7 38.8

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect the discontinuation of the Armour business.

Amortisation of acquired intangibles

Amortisation charges for acquired intangible assets of $6.3 million (2022: $6.8 million) are considered exceptional as they do not change each period

based on underlying business trading and performance.

Restructuring costs

Restructuring costs related to the right-sizing of operations were $1.4 million (2022: $1.6 million). These costs are considered exceptional as they relate

tospecific programmes which do not form part of the underlying business trading andperformance.

Restructuring-related impairment of non-current assets

Restructuring-related impairment of non-current assets was $0.7 million. This related to the closure of one of our U.S. offices, with a $0.5 million

impairment to right of use assets (2022: $0.4 million impairment), and $0.2 million impairment to plant and machinery (2022: $nil). These costs are

considered exceptional as they relate to a specific office closure which does not form part of the underlying business trading andperformance.

Impairment of other non-current assets

Reviews of the Group’s non-current assets resulted in $0.5 million exceptional impairment losses (2022: $3.6 million) as the carrying value of certain

product group level CGUs exceeded estimated recoverable amounts. Further details are provided in note 3.1. The impairment losses are significant

items resulting from changes in assumptions for future recoverable amounts. As such they are considered unrelated to current or prior year

tradingperformance.

In the prior period the Group also recognised $0.4 million other non-current asset impairments that were not considered exceptional (note 3.1).

Impairment of goodwill

Review of the Head Protection CGU resulted in impairment to goodwill of $23.4 million (2022: $nil) as the carrying value of the CGU exceeded its estimated

recoverable amount. Further details are provided in note 3.1. The impairment is a significant item based on forecast assumptions for future cash flows.

Assuch it is considered unrelated to current year trading performance.

Transition costs

Transition costs of $1.5 million (2022: $nil) related to the transfer of legacy Team Wendy operations in Head Protection onto a Group controlled ERP system.

These costs are considered transition-related and exceptional as they relate to a specific programme for Team Wendy operations that was only required as

a result of acquisition in November 2020.

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

115

2 Adjustments to net finance costs

Adjusted net finance costs exclude exceptional items considered unrelated to the underlying trading performance of the Group.

2023

2022

(restated)

Net finance costs 7.6 5.0

Defined benefit pension unwind discount (0.4) (1.3)

Adjusted net finance costs 7.2 3.7

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect the discontinuation of the Armour business.

$0.4 million (2022: $1.3 million) unwind of discounting on the U.K. defined benefit pension scheme liability is treated as exceptional given the scheme

relates to employees employed prior to 31 January 2003 and was closed to future accrual of benefits on 1 October 2009 (note 6.2).

3 Adjustments to taxation

Adjustments to taxation represent the tax effects of the adjustments to operating profit and net finance costs. Except for the impairment to goodwill,

adjusting items do not have significantly different effective tax rates compared to statutory rates, with an overall effective rate of 17% (2022: 20%).

The $23.4 million impairment of goodwill resulted in a tax credit of $3.4 million (effective tax rate 14.5%), which explains the lower overall rate compared

tostatutory rates on the total level of adjustments.

4 Profit from discontinued operations

The adjusted profit measures exclude the result from discontinued operations relating to the divestment of milkrite | InterPuls and closure of the Armour

business (note 2.2).

During the period, total profit after tax from discontinued operations was $2.0 million (2022: loss after tax of $13.3 million).

5 Adjustments to loss for the period

2023

2022

(restated)

Loss for the period (14.4) (7.6)

Amortisation of acquired intangibles 6.3 6.8

Restructuring costs 1.4 1.6

Restructuring-related impairment of non-current assets 0.7 0.4

Impairment of other non-current assets (excluding restructuring-related impairments) 0.5 3.6

Impairment of goodwill 23.4 –

Transition costs 1.5 –

Defined benefit pension unwind discount 0.4 1.3

Tax on exceptional items (5.7) (2.8)

(Profit)/loss from discontinued operations (2.0) 13.3

Adjusted profit for the period 12.1 16.6

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect the discontinuation of the Armour business.

6 Adjusted earnings per share

Weighted average number of shares 2023 2022

Weighted average number of ordinary shares in issue used in basic calculation (thousands) 29,996 30,308

Potentially dilutive shares (weighted average) (thousands) 263 221

Diluted number of ordinary shares (weighted average) (thousands) 30,259 30,529

Adjusted continuing earnings per share

2023

$ cents

2022

(restated)

$ cents

Basic 40.3c 54.7c

Diluted 40.3c 54.4c

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect the discontinuation of the Armour business.

Avon Protection plc Annual Report and Accounts 2023

116

ADJUSTED PERFORMANCE MEASURES CONTINUED

7 Net debt

2023

2022

Cash and cash equivalents 13.2 9.5

Bank loans (77.7) (53.7)

Net debt excluding lease liabilities (64.5) (44.2)

Lease liabilities (20.9) (23.8)

Net debt including lease liabilities (85.4) (68.0)

8 Adjusted dividend cover ratio

2023

$ cents

2022

(restated)

$ cents

Interim dividend 14.3c 14.3c

Final dividend 15.3c 30.6c

Total dividend 29.6c 44.9c

Adjusted basic earnings per share 40.3c 54.7c

Adjusted dividend cover ratio 1.4 times 1.2 times

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect the discontinuation of the Armour business.

9 Return on invested capital

Return on invested capital (ROIC) is calculated as adjusted operating profit over average invested capital relating to continuing operations.

2023

2022

Net assets 159.4 210.5

Net assets associated with discontinued operations (5.6) (8.4)

Net assets associated with continuing operations 153.8 202.1

Net debt excluding lease liabilities 64.5 44.2

Lease liabilities (excluding liabilities associated with discontinued operations) 20.9 14.5

Pension 40.2 6.3

Derivatives (0.9) (0.5)

Net tax (33.2) (25.1)

Total invested capital 245.3 241.5

Average invested capital 243.4 261.3

Adjusted operating profit 21.2 23.4

ROIC 8.7% 9.0%

Average invested capital

2023

2022

Current period invested capital 245.3 241.5

Prior period invested capital 241.5 281.0

Average invested capital 243.4 261.3

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

117

10 Average working capital turn (AWCT)

AWCT is the ratio of the 12 month average month end working capital (defined as the total of inventory, receivables and payables excluding lease

liabilities) to revenue, based on continuing operations.

Continuing operations

2023

2022

12 month average month end working capital 65.7 48.2

Revenue 243.8 263.5

AWCT 3.7 5.5

11 Cash conversion

Cash conversion excludes the impact of exceptional items from operating cash flows and EBITDA.

2023

2022

(restated)

Cash flows from continuing operations before exceptional items 2.5 58.7

Adjusted EBITDA 35.7 38.8

Cash conversion 7.0% 151.3%

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect the discontinuation of the Armour business.

2023

2022

(restated)

Cash flows from continuing operations 0.2 57.7

Restructuring and transition costs paid 2.3 1.0

Cash flows from continuing operations before exceptional items 2.5 58.7

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect the discontinuation of the Armour business.

12 Constant currency reporting

Constant currency measures are calculated by translating the prior period at current period exchange rates.

Continuing operations

2023

2022

(restated)

Orders received 258.7 266.3

Closing order book 135.8 122.5

Revenue 243.8 263.5

Adjusted EBITDA 35.7 41.3

Adjusted operating profit 21.2 26.0

Adjusted profit before tax 14.0 22.4

Adjusted basic earnings per share 40.3c 62.2c

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect the discontinuation of the Armour business.

Avon Protection plc Annual Report and Accounts 2023

118

ADJUSTED PERFORMANCE MEASURES CONTINUED

13 Restatement of adjusted performance measures

As per statutory equivalents reconciled in note 7.5, prior period comparatives for adjusted performance measures have been restated to present the

Armour business as a discontinued operation, and to reclassify certain expenses in the Consolidated Statement of Comprehensive Income.

Expense reclassifications include disclosure of research and development costs as a separate line item below gross profit, and recategorisation of selling

and distribution costs. The change in accounting policy provides visibility of research and development costs on the face of the Consolidated Statement

ofComprehensive Income when it was previously only reported in the Financial Review. Selling and distribution costs have been disaggregated into sales

and marketing expenses, presented in a separate line below gross profit, and freight and distribution costs which have been reclassified into cost of sales.

This presentation reflects the way the business performance will be monitored in future, with separate disclosure of research and development

appropriate as an integral part of operations. It is also consistent and comparable with common market practice and therefore provides reliable and more

relevant information to the reader. Overall operating loss figures for the previous period remain unchanged as this is only a presentational restatement.

Areconciliation of reported prior period to restated figures is presented below:

Consolidated Statement of Comprehensive Income for the 52 weeks ended 1 October 2022

Adjusted

Continuing operations

Previously

reported

Remove

Armour

Research and

development

Selling and

distribution

Restated

Revenue 271.9 (8.4) – – 263.5

Cost of sales (192.1) 18.5 8.8 (9.8) (174.6)

Gross profit 79.8 10.1 8.8 (9.8) 88.9

Selling and distribution costs / Sales and marketing expenses (26.0) 1.2 – 9.8 (15.0)

Research and development costs – – (8.8) – (8.8)

General and administrative expenses (43.7) 2.0 – – (41.7)

Operating profit 10.1 13.3 – – 23.4

Net finance costs (4.0) 0.3 – – (3.7)

Profit before tax 6.1 13.6 – – 19.7

Adjustments

Continuing operations

Previously

reported

Remove

Armour

adjustments

Research and

development

Restated

Revenue – – – –

Cost of sales (1.6) 1.6 – –

Gross profit (1.6) 1.6 – –

Selling and distribution costs / Sales and marketing expenses – – – –

Research and development costs – – (1.4) (1.4)

General and administrative expenses (10.6) (1.8) 1.4 (11.0)

Operating (loss)/profit (12.2) (0.2) – (12.4)

Net finance costs (2.4) 1.1 – (1.3)

Profit before tax (14.6) 0.9 – (13.7)

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

119

FINANCIAL

STATEMENTS

Avon Protection plc Annual Report and Accounts 2023

120

OUR GROUP WILL BE MORE ALIGNED

THAN EVER BEFORE, UNITED IN

OUR GOAL TO PROTECT LIVES AND

PROVIDE UNPARALLELED SUPPORT

TO THOSE WHO PROTECT US, ALL

OF WHICH IS UNDERPINNED BY OUR

STAR STRATEGY.

122 Independent Auditor’s Report

129 Consolidated Statement of Comprehensive

Income

130 Consolidated Balance Sheet

131 Consolidated Cash Flow Statement

132 Consolidated Statement

of Changes in Equity

133 Accounting Policies and Critical Accounting

Judgements

138 Notes to the Group Financial Statements

166 Parent Company Balance Sheet

167 Parent Company Statement

of Changes in Equity

168 Parent Company Accounting Policies

170 Notes to the Parent Company Financial

Statements

174 Notice of Annual General Meeting

180 Glossary of Abbreviations

181 Shareholder Information

FINANCIAL

STATEMENTS

CONTENTS

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Annual Report and Accounts 2023 Avon Protection plc

121

Avon Protection plc Annual Report and Accounts 2023

122

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF AVON PROTECTION PLC

1 Our opinion is unmodified

We have audited the financial statements of Avon Protection plc (‘the

Company’) for the 52 weeks ended 30 September 2023 which comprise

the Consolidated Statement of Comprehensive Income, the Consolidated

and Parent Company Balance Sheets, the Consolidated Cash Flow

Statement, and the Consolidated and Parent Company Statements of

Changes in Equity, and the related notes, including the accounting policies

sections in both the Group and Parent Company financial statements.

In our opinion:

• the financial statements give a true and fair view of the state of the

Group’s and of the Parent Company’s affairs as at 30 September 2023

and of the Group’s loss for the period then ended;

• the Group financial statements have been properly prepared in

accordance with international accounting standards in conformity with

U.K.-adopted international accounting standards;

• the Parent Company financial statements have been properly prepared

in accordance with U.K. accounting standards including FRS 101

Reduced Disclosure Framework; and

• the financial statements have been prepared in accordance with the

requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on

Auditing (U.K.) (‘ISAs (U.K.)’) and applicable law. Our responsibilities are

described below. We believe that the audit evidence we have obtained

is a sufficient and appropriate basis for our opinion. Our audit opinion is

consistent with our report to the Audit Committee.

We were first appointed as auditor by the shareholders on 1 February 2019.

The period of total uninterrupted engagement is for the 5 financial periods

ended 30 September 2023. We have fulfilled our ethical responsibilities

under, and we remain independent of the Group in accordance with, U.K.

ethical requirements including the FRC Ethical Standard as applied to listed

public interest entities. No non-audit services prohibited by that standard

were provided.

Overview

Materiality: Group financial

statements as a whole

$2.05m (2022: $1.8m)

0.84% (2022: 0.66%) of revenue from continuing operations

Coverage 100% (2022: 100%) of revenue from continuing operations

Key audit matters 2023 vs 2022

New risks Goodwill impairment – Head Protection NEW

Recurring risks Recoverability of capitalised development expenditure

Parent Company Recoverability of Parent Company’s investment in subsidiaries

2. Key audit matters: our assessment of risks of

materialmisstatement

Key audit matters are those matters that, in our professional judgement,

were of most significance in the audit of the financial statements and

include the most significant assessed risks of material misstatement

(whether or not due to fraud) identified by us, 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.

We summarise below the key audit matters, in decreasing order of

audit significance, in arriving at our audit opinion above, together with

our key audit procedures to address those matters and, as required for

public interest entities, our results from those procedures. These matters

were addressed, and our results are based on procedures undertaken,

in the context of, and solely for the purpose of, our audit of the financial

statements as a whole, and in forming our opinion thereon, and

consequently are incidental to that opinion, and we do not provide a

separate opinion on these matters.

Avon Protection plc Annual Report and Accounts 2023

122

Annual Report and Accounts 2023 Avon Protection plc

123

2 Key audit matters: our assessment of risks of material misstatement continued

The risk Our response

Goodwill Impairment –

Head Protection

Head Protection Goodwill

of$62.9 million.

Impairment charges

of$23.4 million.

Refer to page 83 (Audit

Committee Report), pages

135 and 137 (accounting

policy) and pages 145, and 146

(financial disclosures).

Forecast-based assessment:

• Goodwill is significant and at risk of

irrecoverability due to the level of revenue

and margin growth required to support

the carrying amount allocated to Head

Protection segment, which has been tested

at this level for the first time this period

following the Group’s restructure of its

operating segments.

• The estimated recoverable amount is

subjective due to the inherent uncertainty

involved in forecasting and discounting

future cash flows.

• The effect of these matters is that, as part

of our risk assessment, we determined that

the value in use of goodwill in respect of

the Head Protection CGU has a high degree

of estimation uncertainty, with a potential

range of reasonable outcomes greater than

our materiality for the financial statements

as a whole, and possibly many times that

amount. The financial statements (page

146) disclose the sensitivity estimated by

the Group.

Our procedures included:

• Historical comparison: We assessed the accuracy of the Group’s

forecasting by comparing actual cash flows in the period to the prior

period forecasts.

• Our sector experience: We evaluated the assumptions used, in

particular those relating to forecast revenue growth, gross profit margins

and long-term growth rate based on our knowledge of the Group.

• Benchmarking assumptions: We compared the Group’s assumptions

to externally derived data in relation to key inputs such as revenue

growth rates, long-term growth rate and discount rates, using our own

valuationspecialist.

• Comparing valuations: We compared the sum of the discounted

cash flows (including the respiratory and head protection segments)

to the Group’s market capitalisation to assess the reasonableness of the

assumptions used.

• Assessing transparency: We assessed whether the Group’s disclosures

about the sensitivity of the outcome of the impairment assessment to

changes in key assumptions reflect the risks inherent in the estimation

ofthe recoverable amount of goodwill, including an assessment of

whether the degree of aggregation in the disclosure of key assumptions

was materially acceptable.

We performed the tests above rather than seeking to rely on any of

the Group’s controls because the nature of the balance is such that we

would expect to obtain audit evidence primarily through the detailed

proceduresdescribed.

Our results

• We found the Head Protection Goodwill balance and the related

impairment charge to be acceptable.

The risk Our response

Recoverability of

capitalised development

expenditure

Included within capitalised

development expenditure

of $20.2 million (2022:

$21.1 million).

Impairment charges of

$0.2million (2022: $2.0 million).

Risk vs 2022:

Refer to page 83 (Audit

Committee Report), pages 135

and 137 (accounting policy)

and pages 145, 147, and 148

(financial disclosures).

Subjective Estimate:

• Within the capitalised development

expenditure we identified a number of

products with a higher degree of risk around

recoverability, including those which have

no prior track record of revenue and margin

generation, have low headroom, and those

awaiting regulatory approval.

• The estimated recoverable amount of these

intangible assets is supported by forecasting

and discounting future cash flows (based

on assumptions such as discount rates and

revenue growth rates), which are inherently

highly judgemental. These uncertainties,

combined with the quantum of the

development costs balance for the higher

risk products, means that the recoverable

amount of these development costs is

subject to significant estimation uncertainty.

• The critical issue is to establish whether

there is sufficient demand for the products

which generate these cash flows and

whether the product will meet the

requirements of the customer or required

regulatory approval and the timing of this

approval, which is inherently subjective

as this involves an assessment of the

probability of future outcomes.

Our procedures included:

• Historical comparison: We assessed the accuracy of the group’s

forecasting by comparing actual cash flows for products in the period to

the prior period forecasts.

• For a risk-based selection of products our procedures included:

– Our sector experience: We challenged the detailed forecasts

which support the estimated recoverable amount by reference to

discussions with project managers on the likelihood and timing of

when new products are expected to receive customer or regulatory

clearance as compared to what was assumed in the forecasts and

the size of the potential market.

– Benchmarking assumptions: We compared the Group’s

assumptions to externally derived data in relation to key inputs such

as revenue growth rates and discount rates.

– Sensitivity analysis: We performed sensitivity analysis to

determine if reasonably possible changes in discount rates, product

margins, and growth rates would result in additional impairments

being recognised.

• Assessing transparency: We assessed whether the Group’s disclosures

about the sensitivity of the outcome of the impairment assessment to

changes in key assumptions reflect the risks inherent in the estimation of

the recoverable amount of the development costs.

We performed the tests above rather than seeking to rely on any of

the Group’s controls because the nature of the balance is such that we

would expect to obtain audit evidence primarily through the detailed

proceduresdescribed.

Our results

• We found the development costs balance, and the related impairment

charge to be acceptable (2022: We found the development costs balance,

and the related impairment charge to be acceptable).

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123

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Avon Protection plc Annual Report and Accounts 2023

124

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF AVON PROTECTION PLC CONTINUED

2 Key audit matters: our assessment of risks of material misstatement continued

The risk Our response

Recoverability of Parent

Company’s investments

in subsidiaries

(£212.7 million; 2022:

£191.0 million)

Risk vs 2022:

Refer to page 169 (accounting

policy) and page 171 (financial

disclosures).

Low risk, high value

The carrying amount of the Parent company’s

investments in subsidiaries represents 96.7%

(2022: 95%) of the company’s total assets. Their

recoverability is not at a high risk of significant

misstatement or subject to significant

judgement. However, due to their materiality

in the context of the Parent company financial

statements, this is considered to be the area

that had the greatest effect on our overall

Parent company audit.

Our procedures included:

• Tests of detail: We compared the carrying amount of 100% of

investments with the relevant subsidiaries’ draft balance sheet to identify

whether their net assets, being an approximation of their minimum

recoverable amount, were in excess of their carrying amount and assessing

whether those subsidiaries have historically been profit-making.

• Assessing subsidiary audits: We assessed the work performed by the

subsidiary audit team and the group team on all of those subsidiaries and

considering the results of that work, on those subsidiaries’ profits and

net assets.

Where the net assets of a subsidiary were below the investment’s carrying

amount, our procedures also included:

• Our sector experience: Evaluating the current level of the subsidiary’s

trading, including identifying any indications of a downturn in activity,

byexamining the post year end management accounts and considering

our knowledge of the Group and the market.

We performed the tests above rather than seeking to rely on any of the

company’s controls because the nature of the balance is such that we

would expect to obtain audit evidence primarily through the detailed

proceduresdescribed.

Our results

• We found the company’s conclusion that there is no impairment of its

investments in subsidiaries to be acceptable (2022: acceptable).

3 Our application of materiality and an overview of the

scope of our audit

Materiality for the Group financial statements as a whole was set

at $2.05million (2022: $1.8 million), determined with reference to a

benchmark of revenue from continuing operations, of which it represents

0.84% (2022: 0.68% of revenue). We consider revenue from continuing

operations to be the most appropriate benchmark as it better reflects

thesize of the business compared to the loss before tax.

Materiality for the Parent Company financial statements as a whole was set

at £1.1 million (2022: £1.0 million), which is the component materiality for

the Parent Company determined by the Group audit engagement team.

This is lower than the materiality we would otherwise have determined

with reference to a benchmark of Parent Company total assets, of which

itrepresents 0.5% (2022: 0.5%).

In line with our audit methodology, our procedures on individual

account balances and disclosures were performed to a lower threshold,

performance materiality, so as to reduce to an acceptable level the risk that

individually immaterial misstatements in individual account balances add

up to a material amount across the financial statements as a whole.

Performance materiality was set at 75% (2022: 65%) of materiality for the

Group financial statements as a whole, which equates to $1.8 million

(2022: $1.17 million). We applied this percentage in our determination of

performance materiality because we did not identify any factors indicating

an elevated level of risk.

Performance materiality was set at 75% (2022: 75%) of materiality for

the Parent Company financial statements as a whole which equates to

£0.825 million (2022: £0.75 million). We applied this percentage in our

determination of performance materiality because we did not identify

anyfactors indicating an elevated level of risk.

We agreed to report to the Audit Committee any corrected or uncorrected

identified misstatements exceeding $100,000 (2021: $90,000), inaddition

to other identified misstatements that warranted reporting on

qualitativegrounds.

Of the Group’s eight (2022: eight) reporting components, we subjected

five (2022: five) to full scope audits for Group purposes and one (2022: one)

to specified risk-focused audit procedures over cash & cash equivalents

(2022: cash & cash equivalents). The latter was not individually financially

significant enough to require a full scope audit for group purposes, but

did present specific individual risks that needed to be addressed. The

components within the scope of our work accounted for the percentages

illustrated opposite. For the residual two components, we performed

analysis at an aggregated Group level to re-examine our assessment that

there were no significant risks of material misstatement. The remaining 2%

(2022: nil%) of total Group assets is represented by 1 (2022: nil) reporting

component, none of which individually represented more than 2% (2022:

nil%) of total Group assets.

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124

Annual Report and Accounts 2023 Avon Protection plc

125

3 Our application of materiality and an overview of the

scope of our audit continued

The Group team instructed component auditors as to the significant

areas to be covered, including the relevant risks detailed above and

the information to be reported back. The Group team approved the

component materialities, which ranged from $0.15 million to $1.55 million

(2022: $0.15 million to $1.35 million), having regard to the mix of size and

risk profile of the Group across the components. The work on one of

the components (2022: one of the components) included procedures

performed by component auditors and the rest, including the audit of the

Parent Company, was performed solely by the Group team. The Group

team visited five (2022: five) component locations in the U.K. and U.S.,

to assess the audit risk and strategy. Video and telephone conference

meetings were also held with the component auditors during which the

findings reported to the Group team were discussed in more detail, and

any further work required by the Group team was then performed by the

component auditor.

The scope of the audit work performed was predominately substantive

as we placed limited reliance upon the Group’s internal control over

financialreporting.

Revenue from continuing operations

$243.8m (2022: $263.5m Revenue)

Revenue

$243.8m

Total

revenue

Group

materiality

Group Materiality

$2.05m (2022: $1.8m)

$2.05m

Whole financial statements materiality

(2022: $1.8m)

$1.53m

Whole financial statements performance

materiality (2022: $1.17m)

$1.8m

Range of materiality at six components

($0.15m–$1.55m) (2022: $0.15m to $1.35m)

$0.01m

Misstatements reported to the Audit Committee

(2022: $0.09m)

Group revenue from

continuing operations

Group loss (2022: profit)

before tax

Group total assets

100%

(2022: 100%*)

100%

(2022: 100%*)

100%

(2022: 100%*)

100

Full scope for Group audit purposes 2023

Specified risk-focused audit procedures 2023

Full scope for Group audit purposes 2022

Specified risk-focused audit procedures 2022

Residual components

4 The impact of climate change on our audit

In planning our audit we have considered the potential impacts of climate

change on the Group’s business and its financial statements.

With the support of our climate professionals we performed a risk

assessment of the impact of climate change on the financial statements

and our audit approach.

Climate change impacts the Group in a variety of ways including the

impact of climate risk on manufacturing and procurement, potential

reputational risk associated with the Group’s delivery of its climate related

initiatives, and greater emphasis on climate related narrative and disclosure

in the Annual Report.

The Group’s exposure to climate change is primarily through the

acquisition of materials in its supply chain and increased costs in relation to

manufacturing end products. As part of our audit we have made enquiries

of management to understand the extent of the potential impact of

climate change risk on the Group’s financial statements and the Group’s

preparedness for this.

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125

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Avon Protection plc Annual Report and Accounts 2023

126

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF AVON PROTECTION PLC CONTINUED

4 The impact of climate change on our audit continued

We have also read the Group’s and the Parent Company’s disclosure of

climate related information in the front half of the Annual Report as set

out on pages 50 to 56. On the basis of the procedures performed above,

we concluded that the risk of climate change was not significant when we

considered the nature of the assets and relevant contractual terms. As a

result, there was no material impact from this on our key audit matters.

5 Going concern

The Directors have prepared the financial statements on the going

concern basis as they do not intend to liquidate the Group or the Company

or to cease their operations, and as they have concluded that the Group’s

and the Company’s financial position means that this is realistic. They have

also concluded that there are no material uncertainties that could have

cast significant doubt over their ability to continue as a going concern for

at least a year from the date of approval of the financial statements (‘the

going concern period’).

We used our knowledge of the Group, its industry, and the general

economic environment to identify the inherent risks to its business model

and analysed how those risks might affect the Group’s and Company’s

financial resources or ability to continue operations over the going

concern period. The risks that we considered most likely to adversely

affect the Group’s and Company’s available financial resources and metrics

relevant to debt covenants over this period were:

• disruption to the Group’s supply chain;

• inflationary pressures on the Group’s cost base;

• competition in winning new bids; and

• dependence on a large customer or market.

We considered whether these risks could plausibly affect the liquidity or

covenant compliance in the going concern period by assessing the degree

of downside assumption that, individually and collectively, could result in a

liquidity issue, taking into account the Group’s current and projected cash

and facilities (a reverse stress test).

Our procedures also included:

• comparing past budgets to actual results to assess the Directors’ track

record of budgeting accurately;

• inspecting the confirmation from the lender of the level of committed

financing including re-financing of existing facilities, and the associated

covenant requirements; and

• assessing the completeness of the going concern disclosure.

Our conclusions based on this work:

• We consider that the Directors’ use of the going concern basis of

accounting in the preparation of the financial statements is appropriate.

• We have not identified, and concur with the Directors’ assessment that

there is not, a material uncertainty related to events or conditions that,

individually or collectively, may cast significant doubt on the Group’s

or Company’s ability to continue as a going concern for the going

concern period.

• We have nothing material to add or draw attention to in relation to the

Directors’ statement on page 133 to the financial statements on the use

of the going concern basis of accounting with no material uncertainties

that may cast significant doubt over the Group and Company’s use

of that basis for the going concern period, and we foundthe going

concern disclosure on page 133 to be acceptable.

• The related statement under the Listing Rules set out on page

79 is materially consistent with the financial statements and our

auditknowledge.

However, as we cannot predict all future events or conditions and as

subsequent events may result in outcomes that are inconsistent with

judgements that were reasonable at the time they were made, the above

conclusions are not a guarantee that the Group or the Company will

continue in operation.

6 Fraud and breaches of laws and regulations –

ability to detect

Identifying and responding to risks of material misstatement

due to fraud

To identify risks of material misstatement due to fraud (‘fraud risks’) we

assessed events or conditions that could indicate an incentive or pressure

to commit fraud or provide an opportunity to commit fraud. Our risk

assessment procedures included:

• enquiring of Directors, the Audit Committee, internal audit and

inspection of policy documentation as to the Group’s high-level policies

and procedures to prevent and detect fraud, including the internal

audit function, and the Group’s channel for ‘whistleblowing’, as well as

whether they have knowledge of any actual, suspected or alleged fraud;

• reading Board and Audit Committee minutes;

• considering remuneration incentive schemes (annual bonus scheme &

performance share plan) and performance targets for management and

Directors including the total shareholder return target and EPS target for

management remuneration; and

• using analytical procedures to identify any unusual or

unexpectedrelationships.

We communicated identified fraud risks throughout the audit team and

remained alert to any indications of fraud throughout the audit. This

included communication from the Group to the component audit team of

relevant fraud risks identified at the Group level and request to component

audit teams to report to the Group audit team any instances of fraud that

could give rise to a material misstatement at the Group level.

As required by auditing standards, and taking into account possible

pressures to meet profit targets and our overall knowledge of the control

environment, we perform procedures to address the risk of management

override of controls and the risk of fraudulent revenue recognition, in

particular the risk that revenue is recorded in the wrong period and the risk

that Group and component management may be in a position to make

inappropriate accounting entries.

We also identified a fraud risk related to goodwill impairment – Head

Protection. Further detail in respect of goodwill impairment – Head

Protection is set out in the key audit matter in section 2 of this report.

We also performed procedures including:

• Identifying journal entries and other adjustments to test for all full scope

components based on risk criteria and comparing the identified entries

to supporting documentation. These included those posted to unusual

or unexpected accounts.

• For a sample of revenue recognised pre period end date, assessing

whether revenue had been recognised in the appropriate period by

comparing to dispatch notes or terms of specific sale agreements.

• Assessing significant accounting estimates for bias.

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126

Annual Report and Accounts 2023 Avon Protection plc

127

6 Fraud and breaches of laws and regulations –

abilitytodetect continued

Identifying and responding to risks of material misstatement

due to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be

expected to have a material effect on the financial statements from our

general commercial and sector experience and through discussion with

the Directors (as required by auditing standards), and from inspection of

the Group’s regulatory and legal correspondence and discussed with the

Directors the policies and procedures regarding compliance with laws

andregulations.

As the Group is regulated, our assessment of risks involved gaining

an understanding of the control environment including the entity’s

procedures for complying with regulatory requirements. We communicated

identified laws and regulations throughout our team and remained alert

to any indications of non-compliance throughout the audit. The potential

effect of these laws and regulations on the financial statements varies

considerably. This included communication from the Group audit team to

component audit teams of relevant laws and regulations identified at the

Group level, and a request for component auditors to report to the Group

audit team any instances of non-compliance with laws and regulations

that could give rise to a material misstatement at the Group level.

Firstly, the Group is subject to laws and regulations that directly affect the

financial statements including financial reporting legislation (including

related companies legislation), distributable profits legislation, taxation

legislation, and pensions regulation and we assessed the extent of

compliance with these laws and regulations as part of our procedures on

the related financial statement items.

Secondly, the Group is subject to many other laws and regulations where

the consequences of non-compliance could have a material effect on

amounts or disclosures in the financial statements, for instance through

the imposition of fines or litigation. We identified the following areas

as those most likely to have such an effect: export control legislation

recognising the Governmental nature of many of the Group’s customers,

product regulation, health and safety, employment law, environmental

legislation and anti-bribery & corruption legislation recognising the

nature of the Group’s activities. Auditing standards limit the required audit

procedures to identify non-compliance with these laws and regulations

to enquiry of the Directors and inspection of regulatory and legal

correspondence, if any. Therefore if a breach of operational regulations is

not disclosed to us or evident from relevant correspondence, an audit will

not detect that breach.

Context of the ability of the audit to detect fraud or breaches

of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable

risk that we may not have detected some material misstatements in

the financial statements, even though we have properly planned and

performed our audit in accordance with auditing standards. For example,

the further removed non-compliance with laws and regulations is from the

events and transactions reflected in the financial statements, the less likely

the inherently limited procedures required by auditing standards would

identify it.

In addition, as with any audit, there remained a higher risk of non-

detection of fraud, as these may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of internal controls. Our

audit procedures are designed to detect material misstatement. We are

not responsible for preventing non-compliance or fraud and cannot be

expected to detect non-compliance with all laws and regulations.

7 We have nothing to report on the other information

inthe Annual Report

The Directors are responsible for the other information presented in

the Annual Report together with the financial statements. Our opinion

on the financial statements does not cover the other information and,

accordingly, we do not express an audit opinion or, except as explicitly

stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so,

consider whether, based on our financial statements audit work, the

information therein is materially misstated or inconsistent with the

financial statements or our audit knowledge. Based solely on that work we

have not identified material misstatements in the other information.

Strategic Report and Directors’ Report

Based solely on our work on the other information:

• we have not identified material misstatements in the Strategic Report

and the Directors’ Report;

• in our opinion the information given in those reports for the financial

period is consistent with the financial statements; and

• in our opinion those reports have been prepared in accordance with

the Companies Act 2006.

Directors’ Remuneration Report

In our opinion the part of the Directors’ Remuneration Report to be audited

has been properly prepared in accordance with the Companies Act 2006.

Disclosures of emerging and principal risks and

longer-termviability

We are required to perform procedures to identify whether there is a

material inconsistency between the Directors’ disclosures in respect of

emerging and principal risks and the viability statement, and the financial

statements and our audit knowledge.

Based on those procedures, we have nothing material to add or draw

attention to in relation to:

• the Directors’ confirmation within the viability statement on page 79

that they have carried out a robust assessment of the emerging and

principal risks facing the Group, including those that would threaten

itsbusiness model, future performance, solvency and liquidity;

• the Principal risks disclosures describing these risks and how emerging

risks are identified, and explaining how they are being managed and

mitigated; and

• the Directors’ explanation in the viability statement of how they have

assessed the prospects of the Group, over what period they have done

so and why they considered that period to be appropriate, and their

statement as to whether they have a reasonable expectation that the

Group will be able to continue in operation and meet its liabilities

as they fall due over the period of their assessment, including any

related disclosures drawing attention to any necessary qualifications

orassumptions.

We are also required to review the viability statement, set out on page

79 under the Listing Rules. Based on the above procedures, we have

concluded that the above disclosures are materially consistent with the

financial statements and our audit knowledge.

Our work is limited to assessing these matters in the context of only

the knowledge acquired during our financial statements audit. As we

cannot predict all future events or conditions and as subsequent events

may result in outcomes that are inconsistent with judgements that were

reasonable at the time they were made, the absence of anything to report

on these statements is not a guarantee as to the Group’s and Company’s

longer-term viability.

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128

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF AVON PROTECTION PLC CONTINUED

7 We have nothing to report on the other information

inthe Annual Report continued

Corporate governance disclosures

We are required to perform procedures to identify whether there is a

material inconsistency between the Directors’ corporate governance

disclosures and the financial statements and our audit knowledge.

Based on those procedures, we have concluded that each of the

following is materially consistent with the financial statements and our

auditknowledge:

• the Directors’ statement that they consider that the Annual

Report and financial statements taken as a whole is fair, balanced

and understandable, and provides the information necessary for

shareholders to assess the Group’s position and performance, business

model and strategy;

• the section of the Annual Report describing the work of the Audit

Committee, including the significant issues that the Audit Committee

considered in relation to the financial statements, and how these issues

were addressed; and

• the section of the Annual Report that describes the review of

the effectiveness of the Group’s risk management and internal

control systems.

We are required to review the part of the Corporate Governance Statement

relating to the Group’s compliance with the provisions of the U.K.

Corporate Governance Code specified by the Listing Rules for our review.

We have nothing to report in this respect.

8 We have nothing to report on the other matters on

which we are required to report by exception

Under the Companies Act 2006, we are required to report to you if,

inour opinion:

• adequate accounting records have not been kept by the Parent

Company, or returns adequate for our audit have not been received

from branches not visited by us; or

• the Parent Company financial statements and the part of the Directors’

Remuneration Report to be audited are not in agreement with the

accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are

not made; or

• we have not received all the information and explanations we require

for our audit.

We have nothing to report in these respects.

9 Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page 110, the

Directors are responsible for: the preparation of the financial statements

including being satisfied that they give a true and fair view; 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; assessing the Group and Parent Company’s ability to

continue as a going concern, disclosing, as applicable, matters related to

going concern; and using the going concern basis of accounting unless

they either intend to liquidate the Group or the Parent Company or to

cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

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 our opinion in an auditor’s

report. Reasonable assurance is a high level of assurance, but does not

guarantee that an audit conducted in accordance with ISAs (U.K.) will

always detect a material misstatement when it exists. Misstatements can

arise from fraud or error and are considered material if, individually or in

aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website

at www.frc.org.uk/auditorsresponsibilities.

The Company is required to include these financial statements in

an annual financial report prepared under Disclosure Guidance and

Transparency Rule (‘DTR’) 4.1.17R and 4.1.18R. This Auditor’s Report provides

no assurance over whether the annual financial report has been prepared

in accordance with those requirements.

10 The purpose of our audit work and to whom we owe

our responsibilities

This report is made solely to the Company’s members, as a body, in

accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our

audit work has been undertaken so that we might state to the Company’s

members those matters we are required to state to them in an auditor’s

report and for no other purpose. To the fullest extent permitted by law, we

do not accept or assume responsibility to anyone other than the Company

and the Company’s members, as a body, for our audit work, forthis report,

or for the opinions we have formed.

Andrew Campbell-Orde (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

66 Queen Square

Bristol

BS1 4BE

21 November 2023

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129

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2023

Note

52 weeks ended

30 September

2023

52 weeks ended

1 October

2022

(restated)

Continuing operations

Revenue 2.1 243 . 8 263. 5

Cost of sales (1 5 7. 9) (174 . 6)

Gross profit 85.9 88 .9

Sales and marketing expenses (14 . 9) (15 . 0)

Research and development costs (10 . 2) (10 . 2)

General and administrative expenses (73 .4) (52. 7)

Operating (loss)/profit 2.1 (1 2.6) 11 . 0

Net finance costs 5.2 (7. 6) (5.0)

(Loss)/profit before taxation 2.5 (2 0. 2) 6.0

Taxation 2.6 3. 8 (0. 3)

(Loss)/profit for the period from continuing operations (16 . 4) 5.7

Discontinued operations

Profit/(loss) from discontinued operations 2.2 2.0 (13 . 3)

(Loss)/profit for the period (14 . 4) (7. 6)

Other comprehensive (expense)/income

Items that are not subsequently reclassified to the income statement

Remeasurement (loss)/gain recognised on retirement benefit scheme 6.2 (31. 8) 5 0 .1

Deferred tax relating to retirement benefit scheme 2.6 6.9 (9. 6)

Deferred tax relating to change in tax rates 2.6 1 .1 (3 .4)

Deferred tax relating to other temporary differences 2.6 (0 . 2) (0 .1)

Items that may be subsequently reclassified to the income statement

Deferred tax exchange differences offset in reserves 2.6 0. 8 (2.7)

Other exchange differences offset in reserves (0. 5) 3.5

Cash flow hedges 0.4 0.5

Current tax relating to cash flow hedges – (0 . 1)

Other comprehensive (expense)/income for the period (23 . 3) 38.2

Total comprehensive (expense)/income for the period (3 7. 7) 30. 6

Earnings per share 2.3

Basic (48.0c) (25.1c)

Diluted (48.0c) (24 .9c)

Earnings per share from continuing operations 2.3

Basic (5 4 .7c) 1 8.8c

Diluted (5 4 . 7c) 18 .7c

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect reclassification of research and development costs, reclassification of selling and distribution costs, andthe

discontinuation of the Armour business. These are disclosed in note 7.5.

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CONSOLIDATED BALANCE SHEET

AT 30 SEPTEMBER 2023

Note

At 30 September

2023

At 1 October

2022

Assets

Non-current assets

Intangible assets 3.1 13 9 . 2 17 1 . 0

Property, plant and equipment 3.2 35. 8 39.9

Finance leases 3.3 6.2 –

Deferred tax assets 2.6 4 0 .1 26. 7

Derivative financial instruments 5.4 0.6 0.3

2 21.9 2 3 7. 9

Current assets

Inventories 4.1 54.4 65. 6

Trade and other receivables 4.2 58 . 3 30.6

Derivative financial instruments 5.4 0. 3 0.2

Current tax receivables – 4. 2

Cash and cash equivalents 4.4 13 . 2 9.5

12 6 . 2 11 0 . 1

Liabilities

Current liabilities

Borrowings 5.1 4. 3 4.1

Current tax payables 0.7 –

Trade and other payables 4.3 34.6 42 . 3

Provisions for liabilities and charges 7.1 0.4 0.7

40.0 4 7. 1

Net current assets 86.2 63.0

Non-current liabilities

Borrowings 5.1 94.3 73.4

Deferred tax liabilities 2.6 6.2 5. 8

Retirement benefit obligations 6.2 40. 2 6.3

Provisions for liabilities and charges 7.1 8.0 4.9

14 8 . 7 90.4

Net assets 15 9 . 4 210 . 5

Shareholders’ equity

Ordinary shares 5.5 50.3 50.3

Share premium account 5.5 54. 3 54. 3

Other reserves (13 .9) (14 . 2)

Cash flow hedging reserve 0.8 0.4

Retained earnings 6 7. 9 11 9 . 7

Total equity 15 9. 4 210 . 5

These financial statements on pages 129 to 165 were approved by the Board of Directors on 21 November 2023 and signed on its behalf by:

Jos Sclater Rich Cashin

Chief Executive Officer Chief Financial Officer

The accompanying accounting policies and notes form part of these financial statements.

Company number 00032965

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131

CONSOLIDATED CASH FLOW STATEMENT

FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2023

Note

52 weeks ended

30 September

2023

52 weeks ended

1 October

2022

(restated)

Cash flows from operating activities

Cash flows from continuing operations 4.4 0.2 5 7. 7

Cash flows from discontinued operations 4.4 3. 2 (24 . 2)

Cash flows from operations 4.4 3.4 33. 5

Retirement benefit deficit recovery contributions 6.2 – (8. 5)

Tax received 3.7 3.7

Net cash flows from operating activities 7.1 28 .7

Cash flows used in investing activities

Proceeds from disposal of discontinued operations 2.2 7. 9 –

Costs of disposal 2.2 (0. 4) –

Purchase of property, plant and equipment 3.2 (7. 4) (2 .9)

Capitalised development costs and purchased software 3.1 (3 .6) (6 .0)

Other finance income 5.2 0.4 –

Finance lease capital receipts 3.3 0. 5 –

Investing cash flows used in discontinued operations 7.1 – (3 . 2)

Net cash flows used in investing activities (2.6) (12 .1)

Cash flows used in financing activities

Proceeds from loan drawdowns 5.3 48.0 42. 9

Loan repayments 5.3 (24 . 0) (3 0 . 1)

Finance costs paid in respect of bank loans and overdrafts 5.2 (6 . 3) (2.7)

Finance costs paid in respect of leases 5.2 (0.7) (0.7)

Repayment of lease liability (3. 5) (3. 2)

Dividends paid to shareholders 5.6 (13 . 4) (13 . 4)

Purchase of own shares – Share Buyback Programme 5.5 – (12 . 4)

Financing cash flows used in discontinued operations (0.9) (1. 2)

Net cash flows used in financing activities (0. 8) (20. 8)

Net increase/(decrease) in cash and cash equivalents 3.7 (4. 2)

Cash and cash equivalents at the beginning of the period 9. 5 14 .1

Effects of exchange rate changes – (0. 4)

Cash and cash equivalents at the end of the period 4.4 13 . 2 9. 5

1 Comparatives for the 52 weeks ended 1 October 2022 have been restated to reflect the discontinuation of the Armour business.

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132

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2023

Note

capital

premium

Hedging

reserve

Other

reserves

Retained

earnings

Total

equity

At 2 October 2021 50.3 54. 3 – (15 . 0) 11 5 . 8 205. 4

Loss for the period – – – – (7. 6) (7. 6)

Net exchange differences offset in reserves – – – 0.8 – 0. 8

Deferred tax relating to other temporary differences 2.6 – – – – (0 .1) (0 .1)

Remeasurement gain recognised on retirement benefit

scheme 6.2 – – – – 5 0 .1 5 0 .1

Deferred tax relating to change in tax rates 2.6 – – – – (3 .4) (3 .4)

Deferred tax relating to retirement benefit scheme 2.6 – – – – (9. 6) (9 . 6)

Interest rate swaps – cash flow hedge 5.4 – – 0.5 – – 0. 5

Current tax on interest rate swaps – cash flow hedge 2.6 – – (0 .1) – – (0 .1)

Total comprehensive income for the period – – 0.4 0.8 2 9.4 30.6

Dividends paid 5.6 – – – – (13 . 4) (13 . 4)

Own shares acquired 5.5 – – – – (12 . 4) (12 . 4)

Fair value of share-based payments 6.3 – – – – 1. 0 1. 0

Deferred tax relating to employee share schemes

charged directly to equity 2.6 – – – – (0.7) (0 .7)

At 1 October 2022 50. 3 5 4.3 0.4 (14 . 2) 119 . 7 210 . 5

Loss for the period – – – – (14 . 4) (14 . 4)

Net exchange differences offset in reserves – – – 0. 3 – 0. 3

Deferred tax relating to other temporary differences 2.6 – – – – (0. 2) (0 . 2)

Remeasurement loss recognised on retirement benefit

scheme 6.2 – – – – (31 . 8) (31. 8)

Deferred tax relating to retirement benefit scheme 2.6 – – – – 6.9 6.9

Deferred tax relating to change in tax rates 2.6 – – – – 1.1 1.1

Interest rate swaps – cash flow hedge 5.4 – – 0.4 – – 0.4

Total comprehensive income for the period – – 0.4 0. 3 (38 . 4) (3 7. 7)

Dividends paid 5.6 – – – – (13 . 4) (13 . 4)

Fair value of share-based payments 6.3 – – – – 0.7 0.7

Deferred tax relating to employee share schemes

charged directly to equity 2.6 – – – – (0.7) (0.7)

At 30 September 2023 50. 3 5 4.3 0. 8 (13 .9) 6 7. 9 15 9 . 4

Other reserves consist of the capital redemption reserve of $0.6 million (2022: $0.6 million) and the translation reserve of $( 1 4.5) million (2022: $( 1 4.8) million).

All movements in other reserves relate to the translation reserve.

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133

ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS

FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2023

Section 1 – Accounting policies

The principal accounting policies adopted in the preparation of these

financial statements are set out below. These policies have been

consistently applied to all the periods presented, unless otherwise stated.

Basis of preparation

Avon Protection plc is a public limited company incorporated and

domiciled in England and Wales and its ordinary shares are traded on the

London Stock Exchange.

The financial period presents the 52 weeks ended 30 September 2023

(prior financial period 52 weeks ended 1 October 2022).

The financial statements have been prepared in accordance with U.K.

adopted International Accounting Standards. The financial statements

have been prepared under the historical cost convention except for

derivative instruments which are held at fair value through profit or loss.