Governance

Tremco CPG UK Limited

SECTION 172(1) STATEMENT

The Companies (Miscellaneous Reporting) Regulations 2018 require Directors to explain how they considered the interests of key stakeholders and the broader matters set out in section 172(1) (A) to (F) of the Companies Act 2006 ('S172') when performing their duty to promote the success of the Company under S172.

This S172 statement, explains how the Directors: a) have engaged with employees, suppliers, customers and others; and b) have had regard to employee interests, the need to foster the company's business relationships with suppliers, customers and others, and the effect of that, on the principal decisions taken by the company during the financial year.

The S172 statement focuses on matters of strategic importance to the company, and the level of information disclosed is consistent with the size and the complexity of the business.

General confinnation of directors' duties

The board has a framework for determining the matters within its remit and certain financial and strategic thresholds have been determined to identify matters requiring board consideration and approval. When making decisions, each director ensures that he/she acts in the way he/she considers, in good faith and that would most likely promote the company's success for the benefit of its shareholders, and in doing so have regard (among other matters) to:

S172(1) (A) "The likely consequences of any decision in the long term"

The company is part of RPM International Inc. ("RPM") group of companies, which is a global group of companies, the ultimate parent of which is listed on the New York Stock Exchange, and all of the company's shares are held internally within the RPM group. The company has adopted the RPM Code of Conduct, The Values and Expectations of 168, which encourages the RPM core principles of integrity, commitment, responsible entrepreneurship and moral courage are the cornerstone for each decision made in the short or long term. The directors understand the business and the evolving environment in which it operates, including the related risks and challenges. Based on the company's purpose to be the leading intumescent coatings provider for the protection of steel structures and fire stopping solutions to construction movement joints, gaps and service penetrations, the strategy set by the board includes continued strengthening of the company's position as a leading supplier of lntumescent coatings while keeping the core principles, safety and social responsibility fundamental to day-to-day business operations.

S172(1) (B) "The interests of the company's employees"

The directors recognise that employees are fundamental and instrumental to the success of the business which is dependent on attracting, retaining, and motivating a diverse group of talented and qualified employees. With the intent of ensuring that it remains a responsible employer (including with respect to pay, benefits, health and safety and the workplace environment), the directors factor the implications of decisions on employees where relevant and feasible. Employee engagement, organisational culture and attracting and retaining talent is key to the business, as is compliance with applicable employment legislation. Employee satisfaction is measured through employee surveys, the results of which are reviewed in detail and appropriately addressed when required. A one to one/appraisal program is also part of the company's culture. The company also holds regular meetings with specific departments to ensure that key business decisions are communicated effectively, resulting in positive feedback from employees and regularly posts announcements through the company intranet page; for example new starter introductions, department structure changes and company social events.

The company respects human rights and employment law, without exception. The board of directors' respects human rights in strict accordance with the European Convention on Human Rights (ECHR). We reject all forms of forced or compulsory labour. Equally, we are opposed to all forms of child labour. The minimum age for admission to employment shall be as set out in the respective national legislation or collective bargaining agreements - provided these comply with the Minimum Age Convention adopted by the International Labour Organisation (ILO).

The company promotes equal opportunities and equal treatment of employees, rejecting all forms of discrimination or any ground whatsoever, e.g. race, ethnic origin, gender, religion, political or other opinion, disability, age or sexual identity. The company recruits and promotes employees solely on the basis of professional qualifications and performance.

S172(1) (C) "The need to foster the company's business relationships with suppliers, customers and others"

Deploying the company's strategy requires strong and mutually beneficial relationships with suppliers and customers. The company seeks the promotion and application of sound corporate governance principles in such relationships, which are prescribed in standards such as the Company's Code of Conduct, Supplier Code of Conduct, Distributors and Applicators Code of Conduct and Modern Slavery requirements.

The company assesses its customer base to ensure compliance with applicable laws in relation to the sales of its products, including those related to corruption.

Moreover, the directors receive information updates on a variety of topics that indicate and inform how customers and suppliers have been vetted and engaged. These can range from information regarding contract management, business strategies, projects, and investments.

The board puts an emphasis on fostering business relationships with key stakeholders such as customers, suppliers and distributors and takes pride in the building and nurturing of these relationships through regular communication and responsiveness. Through the use of social media platforms and enhancements to the company website, the business has been able to engage with its customers, suppliers and local communities about changes in the industry, business development and new products. For example, the social media platform, Linkedln is used to issue key company updates, introduce new product lines and provide updates regarding the construction industry as a whole.

S172(1) (D) "The impact of the company's operations on the community and the environment"

In conducting our business, the company seeks to minimise waste, reduce our impact on the environment and reduce the use of energy and resources and is accredited to ISO14001 Environmental Management Systems and regularly reports on safety and environmental performance matters to the board and the RPM group. The company aims to meet the demand for its products and services in ways which are economically, environmentally and socially responsible.

The company intends to reduce the negative impact to the environment through its production processes and working practices. For example, health, safety, and environmental preservation are incorporated into the design requirements for company products and company packaging is designed to minimise waste and material handling problems. The business is committed to responsible corporate citizenship through our continuing efforts to ensure that our products and operations reflect the best available designs and practices to prevent adverse impact on the health and safety of our customers and associates and on the environment.

S172(1) (E) "The desirability of the company maintaining a reputation for high standards of business conduct"

The board periodically reviews and approves business conduct frameworks, such as standards of conduct, policies and procedures related thereto, and ensures personnel participate in training covering topics regarding health and safety, bribery and corruption, data protection, cyber security and modern slavery. All personnel have access to the RPM Compliance Hotline, as well as the RPM reporting platform through which any compliance or ethics issues can be discussed or reported. The company also performs due diligence before entering into new supplier or distributor agreements. These measures help to ensure high standards of business conduct are maintained. Alongside the above, business conduct is also maintained through the HR department whereby all employees are required to complete training on the company code of conduct '168' and also regularly complete online tutorials for safeguarding against fraud, IT threats etc.

S172(1) (F) "The need to act fairly as between shareholders of the company"

After weighing up all relevant factors, the directors consider which course of action best enables delivery of the company's strategy through the long-term, taking into consideration the impact on the company's stakeholders.

Principal decisions

Below, we outline some of the principal decisions made by the board over the year, explain how the directors have engaged with, or in relation to, the different key shareholders and how shareholders' interests were considered as part of the decision-making process.

During the fiscal year ended May 2022, the manufacturing of a sister company, Flowcrete UK Limited, was fully transferred from the plant based in Sandbach, Cheshire to the main CPG UK manufacturing site in Hindley Green, Wigan. This decision was made in order to increase efficiencies across the business and gain synergies from one larger manufacturing site. The change was fully communicated to all affected employees in good time, with a significant consultation period where alternatives were considered.

The customers and finished goods inventory of Flowcrete UK Limited was originally transferred during the fiscal year ended May 2020. The employees were also moved to Tremco CPG UK Limited via the TUPE process. The production transfer was the next step in this overall plan to ensure the full business was transferred for legal purposes, in line with our goal of reducing the complexity of a large number of legal entities all operating in the same country.

During the fiscal year ended May 2021, a principal decision was made to acquire the trade and assets of a sister company, Dryvit UK Ltd. This decision was communicated to employees through a business newsletter. The directors assigned a project lead, who involved key business leaders in the project team to ensure that the decisions of the project could take into account the views of each department being, finance, supply chain, customer service and legal. The merger of the new Dryvit brand within Tremco CPG was communicated to all Dryvit customers and suppliers through the use of a letter to ensure that the decisions of the business was communicated to the key stakeholders of the business. During the fiscal year ended May 2022, the legacy Dryvit site in Sheffield was exited and a decision made to fully dissolve the company, which has taken place post period end.

During the fiscal year ended May 2019, RPM issued a directive for their subsidiaries to undertake a task where the entity transfers customers to the geographic location closest to them. As a result, for the previous three financial years, the business has sold third party customers to intercompany partners. This decision was communicated to the affected customers by way of mouth or letter. The decision to transfer the customers was communicated by the business leaders to finance and customer service personnel. The decision did not impact the wider community. The remaining customer transfers were completed during the fiscal year ended May 2022.

The company has continued to support local charities through fundraising and support. These initiatives are led by our employees and are something that we will continue to take part in, in the future.

The company is also working to reduce carbon emissions through more efficient energy usage and transitioning to an electric fleet of vehicles.

This report was approved by the board on and signed on its behalf.

Sarah Rose Brown

Director

Date: 23 February 2023