Dr. Martens plc Annual Report 2022

FY2022 Annual Report · Dr. Martens plc

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TRUE BRAND
CUSTODIANS

DR. MARTENS PLC
ANNUAL REPORT 2022

DR. MARTENS IS AN
ICONIC BRAND SELLING
TO CONSUMERS IN MORE
THAN 60 COUNTRIES

The first boot was born on 1 April 1960
in Wollaston, England, and was so called
the ‘1460’. For over six decades since,
Dr. Martens has transcended youth and
subcultures, demonstrating its unrivalled
appeal and ability to underpin trends.

STRATEGIC REPORT
Strategic overview

Highlights

Products and innovation

Growing our global presence

Chair’s statement

CEO’s statement

Market review

Business model

Stakeholder engagement and
Section 172 Statement

Our strategy

Our strategy in action

Key performance indicators

Finance review

Sustainability

Our TCFD Disclosures

Risk management and our principal risks

Viability assessment and going concern

Non-financial information statement

GOVERNANCE
Chair’s introduction to governance

Board of Directors

Global Leadership Team

Governance report

Nomination Committee report

Audit and Risk Committee report

Remuneration Committee report

Remuneration report

Directors’ report

FINANCIAL STATEMENTS
Independent Auditor’s report

Consolidated Statement of Profit or Loss

Consolidated Statement of
Comprehensive Income

Consolidated Balance Sheet

168

177

178

179

Consolidated Statement of Changes in Equity 180

Consolidated Statement of Cash Flows

Consolidated Non-GAAP
Statement of Cash Flows

Notes to the Consolidated
Financial Statements

Parent Company Balance Sheet

Parent Company Statement
of Changes in Equity

Notes to the Parent Company
Financial Statements

NOTICE OF ANNUAL GENERAL
MEETING 2022
Letter from the General Counsel
and Company Secretary

Notice of Annual General Meeting 2022

Explanatory notes to the resolutions

Important notes

ADDITIONAL INFORMATION
Five-year financial summary (unaudited)

First half/second half analysis

Glossary

Shareholder information

Company information

181

182

183

225

226

227

234

235

237

240

243

245

247

249

250

104

106

108

112

118

120

136

138

147

150

162

drmartensplc.com

Dr. Martens plc

drmartensofficial

RECOGNISING JUST

SOME OF THE MANY

CUSTODIANS OF

OUR BRAND

CUSTODIAN

noun

Definition:

A person who is responsible for protecting

or taking care of something or keeping

it in great condition.

CONTENTS
Strategic overview

Highlights

Products and innovation

Growing our global presence

Chair’s statement

CEO’s statement

Market review

Business model

Stakeholder engagement and
Section 172 Statement

Our strategy

Our strategy in action

Key performance indicators

Finance review

Sustainability

Our TCFD Disclosures

Risk management and our
principal risks

Viability assessment and
going concern

104

Non-financial information statement

106

TRATEGIC
REPORT

DR. MARTENS PLC ANNUAL REPORT 2022

STRATEGIC REPORTRECOGNISING JUST SOME OF THE MANY CUSTODIANS OF OUR BRANDCUSTODIANDefinition: A person who is responsible for protecting or taking care of something or keeping it in great condition.nounWE ARE ALL CUSTODIANS

OUR
PEOPLE

MAKE US

WHO WE ARE

We employ people with a dedicated passion,
expertise and energy. Without it, we couldn’t
do what we do.

As a unique consumer business, we strive
to attract people who possess a proud sense
of self-expression, share a united spirit and
who are true custodians of our brand.

I can give you hundreds of examples of how
our people use a custodian mindset every day
in order to drive the business forward.

The following few pages provide just a few
examples of what it means to be a brand
custodian, and recognise some of the teams
and individuals doing great work by living
our values every day.

KENNY WILSON
CHIEF EXECUTIVE OFFICER

C
U
S
T
O
D
I
A
N
S

INDIVIDUAL STYLE,
UNITED SPIRIT

Amplifying

INDIVIDUALITY

people worldwide (FTE)

2,229
82%

of our employees feel
included at work

EVERYWHERE

Introducing the DOCs family...
Our business would be nothing without our people.
Authentic individuals who share a united spirit.
People who possess a proud sense of self expression.
People who go the extra mile for our incredible brand.

THE DESIGNERS

THE MAGIC
BEHIND A
GREAT QUALITY
PRODUCT

STELLA MAKINWA
SENIOR FOOTWEAR DESIGNER

Our product strategy is
internally referred to as ‘icons
and innovation’ – we need to
continually invest and grow
our phenomenal icon products,
whilst innovating around this
core to bring freshness and
further grow brand heat.

ADAM MEEK
CHIEF PRODUCT OFFICER

KEEPING OUR BRAND ICONIC
Our design team understands
deeply our brand DNA and every
product we create is rooted in
the design handwriting of our
Originals. Our iconic 1460 boot,
1461 shoe and 2976 Chelsea boot
are at the centre of our product
architecture. To add buzz
each season, our design team
collaborates with a hand-picked
range of designers to develop
exceptional collaboration products.

51%

of revenue comes from
our Originals category

MALCOLM MCGHEE
HEAD OF FOOTWEAR DESIGN

DARREN MCKOY
CREATIVE DIRECTOR

THE
DURABILITY
IS IN THE

DETAIL

Our Intellectual Property
(‘IP’) team ensures the
core DNA is protected
and respected globally.
This includes taking
action when our IP and
designs are infringed
and removing copycat
products in the market.

CATRIN TURNER
HEAD OF GLOBAL IP TEAM

THE MAKERS

BRINGING
TOGETHER
THE MASTERS
OF CRAFT

I love to tell people
I’m part of a brand
that makes such
amazing footwear.

HAZEL SEPPINGS
FOOTWEAR PRODUCTION
APPRENTICE

HAND CRAFTED
WITH

PASSION

OUR ‘CENTRE OF EXCELLENCE’
The first Dr. Martens boot was born on
1 April 1960 in our Cobbs Lane factory
in Wollaston, England. To this day, the
site remains home to our own Made In
England (‘MIE’) manufacturing facilities
which we use as our ‘centre of excellence’.
Some of the methods and techniques
used to make our boots and shoes
are unique to our brand, as are the
machines needed to complete them. The
manufacturing process is much the same
as it was over 60 years ago when the
very first Dr. Martens boot was produced.

Company information

SUE GANNON
250
CHIEF HR OFFICER

drmartensplc.com

Dr. Martens plc

drmartensofficial

CONTENTS
Strategic overview

Highlights

Products and innovation

Growing our global presence

Chair’s statement

CEO’s statement

Market review

Business model

Stakeholder engagement and
Section 172 Statement

Our strategy

Our strategy in action

Key performance indicators

Finance review

Sustainability

Our TCFD Disclosures

Risk management and our
principal risks

Viability assessment and
going concern

104

Non-financial information statement

106

TRATEGIC
REPORT

DR. MARTENS PLC ANNUAL REPORT 2022

STRATEGIC REPORTStrategic overview

OUR PURPOSE IS TO...
EMPOWER R EBELLIOUS SELF -EXPR ESSION

OUR VALUES
Amplifying our strategic focus and guide everything we do.

INTEGRITY

PROFESSIONAL

PASSIONATE

TEAM PLAYERS

CREATIVE

FEARLESS

RESILIENT

REBELLIOUS

OUR STRATEGIC PRIORITIES

DIRECT-TO-CONSUMER
FIRST

ORGANISATIONAL AND
OPERATIONAL EXCELLENCE

CONSUMER
CONNECTION

SUPPORT BRAND
EXPANSION WITH B2B

OUR STRATEGY P28

Planet

OUR SUSTAINABILITY STRATEGY
Product

PEOPLE

DR. MARTENS PLC ANNUAL REPORT 2022

SUSTAINABILITY P54

Highlights

THE FIGURES

Revenue £m

EBITDA1,2 £m

£908.3m

18%

£263.0m

18%

Adjusted PBT2 £m

PBT £m

£214.3m

43%

£214.3m

207%

OUR PERFORMANCE

Direct-to-consumer (DTC)
mix 49%, up 6pts

Ecommerce up 11%, and
up 92% compared to
FY20, resulting in revenue
mix of 29%

Strong retail recovery
following Covid-19
restrictions being lifted
through the year, with
retail revenue up 86%
and mix at 20%, up 7pts

Opened 24 new own
stores globally, taking
own store estate to 158

Launched our first resale
trial, an important step in
our sustainability efforts

Strong performance
of our supply chain, in
the face of significant
Covid-19 lockdowns and
global shipping disruption

Successful roll out of
our global ERP system
in Hong Kong

Increased our headcount
by 332 FTEs, with
particular focus on
strengthening our talent
in Technology, People
and the APAC region

Launched our DE&I strategy

Brand stronger than ever,
with awareness up 4pts,
familiarity up 6pts and
last 24 months up 2pts

Strong product
performance with
continued innovation
around our icons

‘Tough As You’ initiative
working with leading
mentors to open up
the music industry to
marginalised groups

Wholesale was up 5% after
a very strong Q4 period

Elevated brand with
increasing number
of shop-in-shop
wholesale experiences

Successful conversion of
Italy, Spain and Portugal
from a distributor model
to a directly operated
market, enabling us to
control the brand and
unlock growth

1. EBITDA – Earnings before exchange gains/losses, finance income/expense, income tax, depreciation and amortisation.

2. Before exceptional items.

DR. MARTENS PLC ANNUAL REPORT 2022

STRATEGIC REPORTProducts and innovation

A global br and

Icon

Our unique DNA

Our original icons, led by the 1460 boot,
1461 shoe and 2976 Chelsea boot, sit
at the core of the product architecture
and inform the aesthetics for all other
footwear categories.

1 4 6 0

COLLABORATIONS AND
MADE IN ENGLAND
Pushing boundaries with
cutting edge collabs and
heritage craftsmanship

revenue1

2976

51%
ORIGINA L S

revenue

1461

SINCLAIR

AUDRICK
QUAD NEOTERIC

36%
Fusion
INCLUDING SAN D A L S

revenue

JADON

revenue2

SANDALS

6%
Casua l

revenue

COMBS

revenue

TARiK

revenue

KIDS
Mini-me versions
of our originals

ACCESSORIES
Consisting of shoe-care
and leather bags

1. Revenue of collaborations and Made In England is included within the other categories.

2. Revenue of sandals included in Fusion revenue.

DR. MARTENS PLC ANNUAL REPORT 2022

ICONS

Our icons are our most coveted,
recognisable products that have stood the
test of time, and are the purest expression
of the Dr. Martens brand. Styles that are
loved by consumers the world over, our
iconic products account for around 80%
of our business. Our most coveted of those
Original styles are the 1460 boot, the 1461
shoe, and the 2976 Chelsea boot. More
recently, our consumers have also come
to love some of our other franchises, such
as the Jadon, known, loved and worn the
world over. Our icons all have the classic
Dr. Martens DNA clearly woven throughout,
including the trademark heel loop, classic
yellow stitching and air cushioned grooved
sole. Our focus is to continually invest in
these most loved styles, ensuring that we
continue to excite our existing community
as well as new consumers every season,
keeping them front of mind at all times.

1 4 6 0 m o n o

85%

of our product range is
continuity, which means
it is always in the line

V I N T A G E 1 4 6 0 O X B L O O D
A N K L E B O O T S

Q U A D - N E O T E R I C
c o l l a b o r a t i o n
w i t h M a r c J a c o b s

INNOVATION

Our founders were innovators, and that mindset burns
brightly within our creative teams still to this day.
Innovating around our icons is our priority each season,
delivering excitement and surprising our consumers
with new takes on our most well-known styles, whether
that is colour, material innovation or embellishments,
or pushing the boundaries on design exploration.
We also innovate around the key attributes of our
products, such as delivering functional propositions like
WarmWair and WinterWair for the colder months, or
new sole constructs such as our Quad neoteric range
which drives modernity and continued relevance for
today’s consumer. Our icons are always our starting
point for innovation, taking the DNA and using that
to move into new spaces and product lines. A great
example of this is our sandal offering which is growing
strongly. Innovation drives brand heat, consumer
delight and continued relevance with our consumer.
It is ingrained in our brand DNA.

DR. MARTENS PLC ANNUAL REPORT 2022

STRATEGIC REPORTGrowing our global presence

LOVED BY CONSUMERS

ON A GLOBAL SCALE

We operate in over 60 countries globally,
through a range of models:
• directly operated ecommerce sites and stores,
• wholesale partners and distributors.

We’ve been in our core markets for decades,
and therefore benefit from high brand awareness,
however we’re only getting started in driving
growth and achieving our potential.

USA
17 PAIRS/K
CAPITA

158own stores worldwide
14.1m

pairs sold in FY22 worldwide

A m e r i c a s

The significant majority of our
Americas revenue is generated
in the USA, where all of our own
stores are located.

41stores
6third-party

stores

2country-specific websites
£382.7M

revenue

DR. MARTENS PLC ANNUAL REPORT 2022

Owned and operated

Recently converted to owned and operated

Distributors

E M E A

Our largest EMEA markets are the
UK, Germany and France, with Italy
also growing strongly since its
conversion to directly operated.

80stores
3third-party

stores

9country-specific websites
£398.5M

revenue

UK
32 PAIRS/K
CAPITA

FRANCE
7 PAIRS/K
CAPITA

GERMANY
15 PAIRS/K
CAPITA

ITALY
8 PAIRS/K
CAPITA

A PA C

Japan is our largest and most important
market in APAC. Our largest distributor
market is Australia. China is a long-term
growth opportunity.

37stores
182third-party

stores

2country-specific websites
£127.1M

revenue

CHINA
<1 PAIRS/K
CAPITA

JAPAN
4 PAIRS/K
CAPITA

Owned and operated

Distributors

Hybrid model

DR. MARTENS PLC ANNUAL REPORT 2022

STRATEGIC REPORTChair’s statement

LOOKING TO THE FUTURE WITH
CONFIDENCE

I am very pleased to
introduce our second Annual
Report as a publicly listed
company. The theme of this
year’s report is ‘custodian’,
a word which has a deep
connection with all who
work at Dr. Martens.

Being a brand custodian means looking
after the brand and leaving it in a better
position than we found it, putting the
brand and business first, and making
decisions for the long term. This custodian
mindset starts with myself and my
colleagues on the Board and flows
throughout the organisation.

The results we’re reporting for the year
are consistent with the commitments
we made when we listed on the London
Stock Exchange last year, with high-teens
revenue growth, up 18%, and EBITDA
slightly ahead of market expectations.
This is a notable achievement in the

context of another year where our
business was impacted by the Covid-19
pandemic. The biggest challenge Covid-19
had on the business this year was
considerable disruption in our supply
chain. For over three months we
experienced a Covid-19 lockdown and
shutdown of production in south Vietnam,
which accounts for a third of our global
manufacturing, constraining the supply of
products we had to sell. Like many global
businesses, we also experienced a
significant increase in global shipping
times, particularly into the USA. Against
this backdrop our results are, in my view,
even more impressive.

I am so proud of how
strongly the spirit of brand
custodianship runs through
our business and our
people. Doing the right
thing for the long-term
growth of the brand drives
every decision we take.

PAUL MASON
CHAIR

DR. MARTENS PLC ANNUAL REPORT 2022

I continue to be struck by the agility,
dedication and passion demonstrated by
all of our people and would like to take
this opportunity to thank each and every
one of our teams across the world. Our
people are our greatest asset; without
them Dr. Martens simply wouldn’t be the
business it is today.

Governance
As custodians of the brand we are
committed to strong corporate governance.
Over the past year we continued to invest
time and energy so that our new Non-
Executive Directors could deepen further
their understanding of the business,
and ensure that the Board, as a whole,
leverages effectively their rich and diverse
skillsets to further improve our business.

We also carried out a comprehensive
Board evaluation, our first as a listed
business, for which we adopted a hybrid
approach of joint facilitation by our
Company Secretary and third-party
consultancy ghSMART. The Board’s
conversations and reflections on our
effectiveness as a PLC Board were
open, honest, and appropriately
challenging, with Board members
making commitments based on the
feedback shared during this exercise.

During the year I was pleased to meet
with some of our largest institutional
shareholders, alongside our Senior
Independent Director and Company
Secretary, to hear their views and discuss
our governance approach and sustainability
efforts. I look forward to continued
engagement in the coming year.

You can read more about our corporate
governance from page 107.

Sustainability
In last year’s report we were pleased to
include a detailed Sustainability report
and announce stretching commitments,
including targeting all our footwear to
be made from sustainable materials by
2040 without compromising quality.
Over the past year the teams have been
working hard to devise roadmaps and
metrics to ensure that we achieve these
commitments. Our sustainability efforts
are two-fold: to reduce the impact of
our current ways of working, whilst also
investing and researching new ways of
operating and creating our products in
the future. I hope you enjoy reading our
Sustainability report, which starts on
page 54.

Looking ahead
In my view, the Dr. Martens business is
only at the early stages of its growth
opportunity. The growth we’ve achieved in
key markets like the USA and conversion
markets such as Germany and Italy give
me significant confidence for the
sustainability of our future performance.
This also reinforces to me the amount of
self-help still available to us as we continue
to invest in the business. In Kenny and
Jon we have two very experienced and
passionate Executive Directors, ably
supported by a world-class leadership
team and rich talent globally.

I would like to thank our shareholders
for their continued support and belief
in the business, and we look forward
to delivering another great year in
Dr. Martens’ history.

GOVERNANCE HIGHLIGHTS

The Board’s activities during FY22

Received regular updates on
views of our investor base,
external communications and
other key external stakeholders.

Strategic deep-dive sessions
with GLT members in the areas
of People strategy, Supply Chain,
Product, Brand and Cyber Security.

Oversaw the conversion of
Italy and Iberia into directly
operated markets.

Reviewed and approved the
FY23 budget and five-year plan.

Approved the sustainability
roadmaps to enable us to
achieve our commitments.

Deepened Board members’
understanding of the business
through market visits and
listening groups.

Corporate governance highlights

Proposed a full-year dividend
of 5.50p per share.

Undertook our first governance
roadshow with major
institutional shareholders.

Carried out our first Board
Effectiveness Review as a plc.

PAUL MASON
NON-EXECUTIVE CHAIR
31 May 2022

+18%FY22 Revenue growth

GOVERNANCE P107

DR. MARTENS PLC ANNUAL REPORT 2022

STRATEGIC REPORTCEO’s statement

DR. MARTENS PLC ANNUAL REPORT 2022

WITH
KENNY WILSON

CHIEF EXECUTIVE OFFICER

The people at Dr. Martens
make us who we are, and our
culture and brand are the
things that truly differentiate
us from other companies.
These are what will underpin
and drive our continued
success in the years ahead.

DR. MARTENS PLC ANNUAL REPORT 2022

STRATEGIC REPORT
CEO’s statement
continued

COULD YOU TELL
US ABOUT YOUR
BRAND CUSTODIAN
PHILOSOPHY?

Q
A

We are all privileged to work at such an
iconic brand as Dr. Martens, and for every
single person at Docs our first priority is
to enhance and protect the brand – which
we refer to as being a brand ‘custodian’.
We believe that if we focus first on
growing brand equity, then revenue and
profits will follow. Being a custodian
means taking a long-term view – doing
the right thing and making decisions as
if it was our own business, not taking
short-cuts or focusing on short-term
results. The Dr. Martens brand will thrive
for decades to come, long after we have
all left the business, and our legacy is to
pass it to the next generation in an even
better position than we inherited it.

HOW HAS
DR. MARTENS
PERFORMED
THIS YEAR?

Q
A

Our continued focus on our DOCS
strategy meant that we delivered in line
with the commitments we made when
we listed. We achieved revenue growth
of 18%, or 22% constant currency, and
EBITDA of £263m. These strong results
were despite unprecedented disruption in
our supply chain due to Covid-19, with our
factories in south Vietnam, which account
for a third of total production, being
closed for over three months and
significant global shipping delays.

We have a DTC-first strategy and during
the year DTC revenue grew by 34% to
49% mix. Ecommerce revenues were up
11%, or 92% on a two-year basis. Retail
recovered strongly as Covid-19 restrictions
were lifted through the year, with revenue
up 86% or 12% on a two-year basis.

Our largest two regions, Americas and EMEA,
accounted for the majority of our growth,
as planned, with revenue growing by 29%
and 19% respectively. APAC continues

At Docs we are all
custodians for the brand,
and this drives long-term
decision-making and the
overarching desire
to do the right thing.

to be impacted by Covid-19
restrictions and this
resulted in 10% revenue
decline. We continue to expect
that the majority of our
growth over the coming few
years will be driven by the
Americas and EMEA, driven
by DTC growth and, in the
latter, conversion markets.

Growing brand equity is
crucial for our long-term
sustainable growth and
I am very pleased with
the results of our latest

comprehensive brand survey, with
global brand awareness of 72%, up 4pts;
familiarity of 47%, up 6pts; and last 24
months purchased of 8%, up 2pts.

For me, one of the other key achievements
this year is the refresh of the Global
Leadership Team. In Adam Meek (Chief
Product Officer), Jen Somers (Americas
President), Sue Gannon (Chief HR Officer)
and Meg Johnson (Chief Marketing Officer)
we have fantastic talent, with global
experience, and they have added significant
value and perspectives to the team already.

DR. MARTENS PLC ANNUAL REPORT 2022

HOW DO YOU
THINK ABOUT
FASHION RISK AT
DR. MARTENS?

Q
A

I don’t see Dr. Martens as a fashion brand.
Our products transcend fashion trends
with 85% of FY22 revenue coming from
continuity brands. Our products are iconic
wardrobe staples and are adopted by
consumers globally who use them as a key
component of their own individual style.
Inevitably, there will be a small number
of consumers who buy into the brand
based on a specific look, but this has been
the case for many years, and the durability,
comfort and range of products means
that these consumers are also very likely
to stay loyal to the brand and go on to
buy other products at a later date.

The long-term growth opportunity is
not only supported by the level of
underpenetration that we have in key
markets such as the USA and continental
Europe, but by the timeless relevance of
our iconic products. Our iconic products
have resonated through over six decades
of changing fashion trends – they are
wardrobe staples. Our confidence in this
growth continuing well into the future is
exemplified by the extraordinary high
demand for collaborations with other
brands, which want to borrow from our
iconicity and timelessness. We also
manage the brand using the mentality of a
luxury brand – for instance price discipline,
never discounting our continuity iconic
products, managing supply to wholesale
and continually investing in the brand and
our relationship with consumers. This
approach I believe will further reinforce
the sustainability and longevity of our
future growth.

WHAT IS
DR. MARTENS DOING
TO BECOME MORE
SUSTAINABLE?

We hope to have
100% of our footwear
made from sustainable
materials by 2040.

Q
A

Sustainability has long been important to
our business – our consumers care about it
as do the people who work at Dr. Martens
– in fact, it’s one of the most common
topics raised at our internal town hall
meetings or when we’re interviewing
people to come and work with us. Our key
principles of product durability and
timeless design are inherently rooted in a
sustainable, long-term approach. The most
sustainable product is something you
already own, so we invest effort into
educating our consumers about how they
can make their Docs last longer – I have
pairs I still wear regularly that are several
decades old.

In last year’s Annual Report we included a
detailed sustainability section and launched
ambitious commitments. This year we’re
giving a detailed update on our progress,
including how we developed the roadmaps
to achieve our longer-term aims. We’re also
reporting against the TCFD framework for
the first time.

Over the past year we’ve continued
to invest in sustainability, particularly
focusing on the management of our
carbon footprint and climate impact. I’d
categorise our sustainability efforts as
being dual-track – on the one hand we’re
working hard to reduce the impact on
the planet of how we currently operate.
This includes measuring and reducing

our carbon footprint, further improving
our leather traceability and reducing
wastage. At the same time, we’re also
working hard to create and develop
new ways to operate and manufacture
our products in the future. The targets
we’ve set are ambitious, for example,
having 100% of our footwear made
from sustainable materials, without
compromising quality, by 2040. Being
uncompromising on quality means any
different materials we use have to be
durable enough to last a long time and
at the moment, there are not many
sustainable materials around that meet
the standards the consumer expects from
our products. As we sit here today, we
don’t know exactly how we’ll achieve
elements of some of our commitments.
What we do know however is how
important it is to set such a stretching
target and start working to achieve it.
We’re engaging with innovative start-ups
and universities and are determined that
we’ll get there – and, crucially, we won’t
compromise on the quality or durability
of the product itself.

I hope you enjoy reading our
Sustainability report which starts
on page 54.

WHAT ARE THE
KEY PRIORITIES
FOR THE NEXT
12 MONTHS?

Q
A

My overarching aim remains to build the
brand – we make footwear that stands for
Rebellious Self Expression. We will focus
and energise the business to execute the
DOCS strategy – in short, to sell more
pairs of boots, shoes and sandals, to more
consumers, through our own channels,
primarily in our seven priority markets.
So, that is about volume-driven growth,
across our footwear offering and selling
more pairs through our own channels. It
is predicated on customer recruitment as
well as retention, and really focusing our
efforts on those markets where we have
the biggest future growth opportunity.
Ensuring that the whole business remains
focused on this strategy and the growth
opportunity ahead is imperative.

As everyone who works for Dr. Martens
is a custodian of the brand, my other
priorities are people focused. So secondly,
I am focused on ensuring that the Global
Leadership Team is a high performing team,
working collaboratively to deliver the
results and execute the strategy. Investing
in talent across the business and
continuing to improve our capability, to
create the future leaders of the business,
is also a focus and motivator for me.

Finally, the priority for me in the next
12 months, as the world emerges from
Covid-19, at varying speeds globally, is
bringing our people together, ensuring
that people who have joined Dr. Martens
in the past two years are fully immersed
in our fantastic culture, and can connect
with their colleagues and understand the
importance of their role as custodians.

We need to do this in a way that is right
for all of our stakeholders, for our brand,
for the planet and for our people.

DR. MARTENS PLC ANNUAL REPORT 2022

STRATEGIC REPORTCEO’s statement
continued

CONVICTION IN FUTURE

GROWTH

Our strong results for the
year were driven by our
proven DTC-first strategy
and continue to build
upon our track record of
volume-led growth. When
we listed, we committed to
deliver high-teens revenue
growth, and we were pleased
to report 22% constant
currency growth. Our results
were achieved against
unprecedented Covid-19
disruption in our supply
chain, which our teams
navigated with flexibility
and dedication.

I have always said that driving brand equity
is our first priority, as it will ensure
sustainable growth in the decades ahead.
Our recent comprehensive brand survey
shows that our brand is stronger than ever,
with significant growth in awareness,
familiarity and recent purchase. Dr. Martens
remains incredibly underpenetrated
globally, giving us conviction in our future
growth ambition.

I am proud to report that our first full year
as a listed company has seen our strategy
continue to deliver strong results, with
revenue up 18%, or 22% constant currency,
and EBITDA ahead of market expectations.
We grew pairs by 10% and DTC revenue mix
increased by 6pts to 49%.

These results were achieved against
significant supply chain disruption due
to Covid-19. Our third-party factories in
south Vietnam, which account for a third of
our production, were closed for over three
months and we also experienced a near-
doubling of global shipping times to the
USA. This brought additional operational
complexity and required us to prioritise
allocation of inventory at peak periods into
our own higher margin DTC channels. In
addition, we have faced continued demand
impacts from Covid-19 restrictions, most
notably in our smallest region, APAC.

We have a unique, iconic
brand and thousands of
passionate people globally,
who act as brand custodians
every day. I would like to
thank each and every one
of them for their hard work.

KENNY WILSON
CHIEF EXECUTIVE OFFICER

DR. MARTENS PLC ANNUAL REPORT 2022

THE DOCS STRATEGY

Across the entire organisation we act as brand custodians, focused on protecting
and enhancing the brand and the business for future generations. This long-term
view guides everything we do and ensures that we make the right decisions and
investments for the future, as part of our long-term sustainability commitments.

Whilst the overall strategic framework is unchanged, we periodically assess and
refine the strategy and focus areas to ensure that they best reflect the opportunities
ahead and our key priorities. We have therefore fine-tuned the strategy:

Our strategy has four pillars, ‘DOCS’, which are:

DIRECT-TO-CONSUMER FIRST
We aim to build brand equity and drive margin expansion. This pillar includes
increasing the number of own stores and expanding our own digital platforms,
developing our omnichannel capabilities and building a profitable resale, repair
and end of life business model.

ORGANISATIONAL AND OPERATIONAL EXCELLENCE
We are investing in and improving our organisation, operations and IT to enable
growth and unlock value. This includes driving our culture with a focus on
engagement and people development, building a best in class, scalable supply
chain, and continuing to transform technology into a key business enabler.

CONSUMER CONNECTION
Here we are focused on acquiring new consumers and driving loyalty. We aim
to inspire Rebellious Self Expression, ground product innovation in icons and
year-round consumer relevance, lead in sustainability through our product durability
and innovation, and harness insights to drive cut-through marketing initiatives.

SUPPORT BRAND EXPANSION WITH B2B
We have refocused this pillar on our B2B business, which is made up of wholesale and
distributors, with the aim of managing these activities holistically and purposefully. We
will continue to partner with fewer and better B2B partners to reach more consumers
and grow the brand further. This includes improving our B2B brand presentation and
increasing controlled in-store branded spaces to enhance the consumer experience.
Our conversion market strategy is also included within this pillar.

OUR STRATEGY P28

The Group delivered revenue of £908.3m, up
18% year-on-year, in line with the high-teens
growth guidance given at the time of the IPO,
and up 22% on a constant currency basis.
DTC continues to grow ahead of wholesale, in
line with our DOCS strategy. Our ecommerce
and retail channels are mutually beneficial,
with ecommerce benefitting locally when
we open new own retail stores, as brand
and product awareness and consumer
engagement grows. Our medium-term
milestones are unchanged: 60% of revenue
from DTC, 40% of revenue from ecommerce
and 20% from retail.

Ecommerce revenue was up 11% to represent
29% of Group revenue. Compared to FY20,
ecommerce revenues were up 92% and mix
up 9pts. We continue to invest in our online
trading capabilities and in increased digital
marketing, and benefit from the long-term
shift in consumer spending to ecommerce.

Retail continues to be an important and
profitable channel, allowing us to fully
showcase the brand and our product
range. FY22 retail revenue was £185.6m,
up 86% and up 12% compared to FY20.
When Covid-19 restrictions were lifted
across EMEA and Americas we generally
saw a very good retail recovery, ahead of
our expectations. Our retail performance
across all markets in APAC continued to be
heavily impacted by Covid-19 restrictions,
particularly in Japan and China.

We opened 24 new own stores globally, taking
our total own store estate to 158. These
included two new stores in Italy and one in
Spain, following the successful conversion
of these markets to directly operated; seven
new stores in the USA, particularly focused
on the Mid-West, and two stores in Shanghai,
China, as a first trial in operating directly
operated stores in the country.

Wholesale allows us to reach more
consumers in more places globally and
we aim to have collaborative relationships
with quality wholesale partners who
understand and appreciate our brand.
We run a tiered and focused strategy
in wholesale, ensuring that a targeted
product range is sold to each tier of
wholesale customer, reflecting their
consumer base and strategic purpose
to our brand. Over the medium term we
continue to expect wholesale revenues
to grow in absolute terms but become
a smaller part of our Group revenue in
percentage terms. In FY22 wholesale
revenues were £460.3m, up 5%, driven
mainly by USA.

At a regional level, revenues continue
to be driven by our two largest regions,
with Americas revenue up 29% (33%
constant currency) and EMEA up 19%
(23% constant currency). In EMEA we
saw a particularly strong performance in
Italy, following the successful conversion
to a directly operated business at the start
of FY22, with constant currency revenue
up 62% and up 122% in the second half.
We also saw a good performance in our
most established market of the UK, driven
by strong demand for product categories
such as shoes and sandals, with UK
revenue up in line with EMEA overall.
The UK accounted for 17% of Group
revenue in FY22. In the Americas we
saw strong growth across all channels
and are especially pleased by our
performance in states such as Texas
where we have been opening stores
and investing in brand marketing.

As anticipated, our APAC performance
was impacted heavily by Covid-19, with
revenue down 10% (down 5% constant
currency), to account for 14% of total
Group revenue. Our largest market in
the region is Japan, which experienced
a varying degree of Covid-19 restrictions
through the year. Given the relatively
high proportion of revenues generated
through retail in the country this had a
disproportionate impact, although when
restrictions were lifted, for example in
October and November, we saw a strong
retail recovery, in line with the experience
in other markets. Overall the performance
of Japan was encouraging, with revenue
up high single digit constant currency.
China is a small part of our overall
business, accounting for a fifth of APAC
and only 3% of Group revenues. We are
focused on establishing our brand and
laying the foundations for the long term
in this market.

DR. MARTENS PLC ANNUAL REPORT 2022

STRATEGIC REPORTCEO’s statement
continued

We have agreed to transfer control of
approximately half of our 31 Dr. Martens
branded franchise stores in Japan
into our own retail at the end of FY23
when the contract expires. This has a
compelling business case, as it will
increase our control of the brand in
this important market and enable us to
drive growth harder in the years ahead.
Following the transfer our DTC share
in Japan will be around 75%.

FY22 EBITDA1,2 was £263.0m, up 18%,
with an EBITDA1,2 margin of 29.0%, up
0.2pts. This strong performance was
driven by a combination of volume and
improved DTC mix, with margin partially
offset by increased marketing investment,
cost annualisation and a return to
business as usual spending.

Group PBT before exceptional items2 was
£214.3m, up 43%, with net finance costs,
including unamortised loan costs and
interest on lease liabilities of £15.0m.
Profit after tax was £181.2m, compared to
£34.7m in FY21 when we incurred £80.5m
of exceptional costs related to the IPO.
Underlying earnings per share were 17.4p,
up 21%.

Operating cash flow2 after capex was
strong at £208.1m, with conversion of
79%. As at 31 March 2022 we had cash
of £228.0m (31 March 2021: £113.6m)
and undrawn facilities of £189.5m.

Through FY22 we changed several
members of the Global Leadership Team
(GLT). Sue Gannon, our Chief HR Officer,
joined in June 2021 having held senior HR
roles previously at Netflix and Suntory. In
late 2021 we welcomed Adam Meek as our
new Chief Product Officer, and Jennifer
Somer as our new President, Americas;
both have exceptionally strong
backgrounds in the footwear industry.

11%

Ecommerce: change yoy

86%

Retail: change yoy

Wholesale: change yoy

SUPPLY CHAIN

This year saw the most challenging
global supply chain backdrop we have
experienced, with Covid-19 resulting in
factory closures in the south of Vietnam
(which accounts for around a third of
our global production) for over three
months, and a near-doubling of shipping
times from APAC to the USA. In this
context our supply chain teams worked
incredibly hard to keep products moving
and deliver the results we’re announcing
today. At the time of writing, all our
factories are open and operating at an
average of 90% capacity, in line with
our planning assumptions.

We also worked flexibly, sourcing
increased product from other factories
wherever possible.

We also benefitted from the significant
work done in recent years to diversify
the supply chain, moving to product
dual sourcing wherever possible and
expanding our geographical footprint.
For AW22, our Tier 1 production by
geography will be approximately 30%
from the south of Vietnam, 22% from
the north of Vietnam, 22% from Laos,
10% from China, 8% from Bangladesh,
7% from Thailand and 1% from the UK.

We had decided to enter FY22 with higher
levels of continuity product than normal,
given the uncertain environment, and this
decision proved incredibly valuable as it
enabled us to fulfil some of the product
shortfall due to the factory closures. We
prioritised inventory towards our own DTC
channels, particularly during the peak Q3
trading period, delaying some wholesale
orders into Q4.

The unprecedented level of disruption
in the global shipping industry and a
near-doubling of global sea freight
shipping times, particularly to the USA,
also brought with it further operational
challenges and complexities. The large
proportion of our product which is
continuity in nature, and therefore
non-seasonal, was however a significant
relative advantage.

READ MORE P24

DR. MARTENS PLC ANNUAL REPORT 2022

125

GOVERNANCEGovernance report
Board Leadership and Company Purpose continued

With Robyn Per r iss

EMPLOYEE REPRESENTATIVE
NON-EXECUTIVE DIRECTOR

What are the key aspects of your role?

LISTENING TO
THE EMPLOYEE
VOICE

The role comes with numerous
responsibilities, but amongst the most
important would be to actually spend
time with a broad cross section of our
employees, without management present,
to have access to an unfiltered and
impartial view from our employees. I am
then able to act as the ‘employee voice’
to the Board by raising and facilitating
discussions during Board meetings on
the things that employees tell us are
important to them, both in terms of
common themes and regional nuances.

Why is it important for employees to
have a voice in the boardroom?

Our employees are the heartbeat of
Dr. Martens and are at the coalface of
putting our DOCS strategy into action.
They are also a rich resource for new
ideas and innovative thinking. It’s
imperative that the Board is in tune with
the ‘mood music’ of the organisation in
each region so that we can ensure we are
communicating with employees about the
right things, in the right way, and taking
action where it is needed most. Culture
has always been a differentiator at
Dr. Martens and a key part of maintaining
a healthy culture is ensuring the Board
listens and employees are heard.

It is also critical for their voice to be
heard in the boardroom to ensure the
Board has access to their fresh ideas and
that it is up to speed not only on what is
going well in the business, but also on any
‘pain points’ there may be in particular
areas that it needs to address.

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DR. MARTENS PLC ANNUAL REPORT 2022

How do you think your role can help
drive better engagement between
the Board and business?

As the ‘voice’ of employees within the
boardroom I ensure that the themes
of the feedback I receive through my
engagement with the business are aired
during Board meetings, on a strictly
‘no-names’ basis of course, and ensure
they are properly considered and
factored into the Board’s discussions.

The wider Board and I are conscious that
this is a new role and there is work to be
done to properly flesh out and embed it
in the business. Our refreshed employee
engagement strategy is currently under
development and, as a part of this, we will
be looking to put in place a programme of
activities that not only allow me to reach
more of the business but also cement our
approach to employee engagement as a
continuing dialogue and feedback loop
between the Board and business.

During the year Robyn Perriss undertook a number of
engagement activities as our Employee Representative
Non-Executive Director. We asked Robyn about the types
of activities that her role involves, how she sees it developing
in future and also for her insights into the ways in which the
Board engages with the global workforce.

What are some of your main reflections
since taking on the role?

Thinking back to the employee listening
forums we held towards the end of
the financial year, I am struck by the
refreshing candidness with which my
conversations with different areas of
the business have been conducted so
far. The sessions were employee-led
and participants spoke with exceptional
honesty, courage and openness.

Another reflection would be that the
insights gained through the Covid-19
restricted engagement I have had with
employees since formally taking on the
representative role have proven its
importance, and I’m looking forward to
spending more time with our employees
in person over the next financial year.

What were some of the challenges
raised during your conversations with
different teams and regions?

Many of the issues of concern for our
employees were reflective of current
social and economic pressures impacting
their lives. Concerns raised around pay in
the context of rapidly increasing inflation
in each of our core regions are significant
given the economic backdrop. Health
and wellbeing has been thrown into sharp
focus due to the pandemic and was of
course a key conversation topic. In an
international business, employees are
at different stages of the pandemic and
subject to a range of restrictions and
we need to be mindful of that as a Board.
Some employees also spoke about
their experiences during the pandemic
and their concerns around a loss of
connectivity and its potentially erosive
impact on Company culture at a time
when our workforce was growing.

How do you see your role
developing in future?

In short, by doing more, and doing
it in person. These are a new set of
responsibilities at Dr. Martens and we’re
working on refining our engagement
strategy to ensure we’re making the most
of opportunities presented by this role
over the coming year.

The relaxation and, in some countries,
removal of Covid-19 related travel
restrictions has meant that we are once
again able to visit employees in our
stores, factories and distribution centres
in many of our core markets and I am
hoping to be able to do more of that over
the coming year. However, the pandemic
is, unfortunately, very much still with
us and continues to impact our regional
businesses with differing degrees of
severity. We will need to ensure that
we continue to reach out to employees
globally via virtual means to ensure
all our employees are heard.

Another positive challenge that
employees put forward was for the Board
to lead the business to build on its
successes in terms of diversity, equity
and inclusion, which are important issues
for all of us and is something I also care
deeply about. It is encouraging to feel
the passion about DE&I and I am hopeful
we can harness this to help us gain
momentum on this topic, but what was
also clear was the sense of determination
amongst employees to drive change
where it is needed.

…and the highlights?

Regardless of where they are in the
world, employees share an affinity
and passion for the Dr. Martens brand,
inclusive working culture, willingness
to take positions on social causes and
strong connections to popular culture.
Additionally, the sense of energy amongst
employees to embed even greater
diversity, equity and inclusion into
Dr. Martens’ culture to an even greater
extent came through very strongly during
our listening groups. Part of my role will
be to work closely with Sue Gannon,
our CHRO, to ensure that we are holding
ourselves to account for driving change
in their respective areas.

DR. MARTENS PLC ANNUAL REPORT 2022

127

GOVERNANCEGovernance report
Division of Responsibilities

GETTING THINGS DONE:
HOW WE DELEGATE

RESPONSIBILITIES

The following pages illustrate
our governance framework
and, in particular, how the
Board delegates authority
to its Committees and the
wider business.

Board Committees
To maximise its effectiveness and ensure
sufficient time and attention can be
devoted to the key matters requiring
its attention, the Board has delegated
authority in certain areas to its principal
Board Committees. Clear terms of
reference are in place for each Board
Committee, which are reviewed annually
and refreshed as and when necessary.

Delegated authorities and
governance policies
The Board has implemented a number
of policies, guidelines and procedures to
govern its conduct, the manner in which it
operates and how it delegates authority to
different layers of management across the
business to promote the efficient running
of the business. These are reviewed by
the Board annually and include:

More information on each of the Board
Committees can be found on the page
opposite and in each of their respective
reports, covering pages 136 to 161.

Delegation of Authority Policy.

Schedule of Matters Reserved for
the Board.

Global Leadership Team (GLT)
Responsibility for the execution of the
Group’s strategy and day-to-day
management of the business has been
delegated by the Board to the Executive
Directors with the support of the GLT. The
Board regularly invites senior leaders and
the relevant members of their teams to
attend and present at Board meetings on
topics of strategic importance to inform
and guide its thinking and ultimately
result in more effective decision-making.

The Board’s relationship with the
Executive Directors and the GLT is
secured through clear and open lines of
communication, supported by a culture of
open, honest discussion and constructive
feedback. The Board recognises the value
of seeking many perspectives and
encourages each Board member to speak
out and ask challenging questions. This
approach has served the Board well
during its first full year of activities
and will continue to enhance its overall
effectiveness in the years ahead.

Articles of Association.

Board Committee terms of reference.

Non-Executive Director Policy.

Non-Audit Services Policy.

Business-wide and PDMR Securities
Dealing Codes.

Disclosure Policy.

Division of Duties document (covering
the Chair, CEO, Senior Independent
Director and Employee Representative
Non-Executive Director).

These documents are available to view on
drmartensplc.com.

The Board’s oversight of how the
authorities it has delegated to its Board
Committees and the GLT are exercised is
maintained through clear reporting
channels. It is kept updated on proceedings
of Audit and Risk, Remuneration and
Nomination Committee meetings by the
Chair of each respective Committee, whilst
detailed executive updates are provided by
the CEO and CFO at each Board meeting.
These updates are supported by written
summaries of matters considered and
approved by the Operating and Real Estate
Committees, in addition to the regular
suite of written reports circulated to the
Board prior to each meeting.

The effectiveness
of the relationship
between the Board as
a whole, the Executive
Directors and the
GLT is secured
through strong lines
of communication
and a culture of
open discussion.

EMILY REICHWALD
GENERAL COUNSEL
& COMPANY SECRETARY

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DR. MARTENS PLC ANNUAL REPORT 2022

Dr . Martens plc Boar d

AUDIT AND RISK
COMMITTEE
• Assists the Board in

discharging its
responsibilities in relation
to financial reporting.
• Monitors and reviews the
Group’s financial controls
and systems.
• Advises on the

appointment of, manages
the relationship with and
monitors the effectiveness
of the external auditor.
• Reviews the effectiveness

of wider compliance,
including the whistleblowing
and fraud systems in place
within the Group.

REMUNERATION
COMMITTEE
• Develops and monitors the
ongoing appropriateness
of the Group’s policy on
Executive remuneration.

• Determines the levels

of remuneration for the
Board and leadership.
• Monitors remuneration

structures and
recommends changes.
• Reviews overall workforce
remuneration and related
policies and the alignment
of incentives and rewards
with culture and takes
these into account
when determining the
remuneration of the
Board and leadership.

NOMINATION
COMMITTEE
• Reviews the structure,
size and composition
of the Board.

• Recommends potential

Board and senior
management appointments
and reappointments to
the Board.

MARKET DISCLOSURE
COMMITTEE
• Membership comprises

the Executive and
Non-Executive Directors,
Company Secretary,
Director of Investor
Relations, Communications
Director and Director of
Finance Control.

• Oversees succession

• Oversight of all market

planning for the
Company’s Directors and
Global Leadership Team.
• Monitors effectiveness
of policies and strategy
for diversity, equity
and inclusion.

SEE PAGES 138 to 146

SEE PAGES 147 to 161

SEE PAGES 136 to 137

T
H
G
I
S
R
E
V
O

OPERATING
COMMITTEE
Chaired by the Company
Secretary. Provides
oversight to ensure
appropriate governance and
implementation of the
delegation of authorities and
discusses relevant proposals
to ensure proper governance
processes are followed.

OPERATIONAL RISK
COMMITTEE
Chaired by the Head of
Internal Audit and Risk.
Oversees development and
implementation of an
effective risk management
approach. Facilitates review
and challenge of the
identification, prioritisation
and management of key risks.

EXECUTIVE DIRECTORS

GLOBAL LEADERSHIP TEAM
Reporting into the CEO, this constitutes the Group’s
core leadership team with accountability over each of
our regional and central business functions: EMEA,
Americas, APAC, IT and Digital, Strategy, Product,
Marketing, Finance, Legal & Compliance and HR.
This group is responsible for the day-to-day
management of the business and ensuring Board
oversight requirements are met.

DELEGATED AUTHORITIES AND GROUP POLICIES:
The Group’s Delegation of Authority Policy formally sets
out the nature and extent of the authority that allows
designated employees to act on behalf of the Company.
Internal requirements in respect of the conduct of the
business and its employees are set out in the numerous
Group-wide policies, standards and guidelines that
comprise our internal compliance framework.

D
E
L
E
G
A
T
I
O
N
O
F
A
U
T
H
O
R
I
T
Y

disclosure requirements,
including approving for
publication statements
relating to the Group’s
performance or containing
potentially price-sensitive
information.

• Oversees compliance
with the Market Abuse
Regulation, in particular the
Group’s processes for the
identification, management
and public disclosure of
inside information.

REAL ESTATE
COMMITTEE
Chaired by the CFO.
Facilitates full review and
discussion of all property-
related proposals and
growth strategies in each
of our key regions.

SUSTAINABILITY
COMMITTEE
Chaired by the CEO. Reviews
and makes recommendations
to the Board on the Group’s
sustainability and
ESG-related initiatives, as
well as its policies and
performance in relation to
social, environmental and
community matters. Keeps
the Board updated on
relevant ESG-related
developments and their
impact on the business.

DR. MARTENS PLC ANNUAL REPORT 2022

129

GOVERNANCE

Governance report
Division of Responsibilities continued

DIVISION OF BOARD

ROLES

The roles and responsibilities of the Chair, Chief Executive Officer and Senior
Independent Director have been clearly defined and divided by the Board and
all Board Directors stand for (re-)election annually at the Company’s AGM.

The roles of Chair and Chief Executive are separately held,
with distinct responsibilities defined in writing, reviewed by
the Board and published on drmartensplc.com. A summary
of how the responsibilities of these key Board roles are
divided is set out in this section.

Over half of our Board (excluding the Chairman) comprises
Independent Non-Executive Directors and the composition
of all Board Committees is compliant with the requirements
of the UK Corporate Governance Code 2018.

The Chairman, Paul Mason, was considered independent
on his appointment but was not considered independent
on the Company’s admission to listing. Tara Alhadeff is
a Non-Independent Non-Executive Director, appointed
to the Board pursuant to the terms of the Company’s
relationship agreement with its principal shareholder,
IngreLux S.àr.l. More information about Board composition
and independence is available on pages 110 to 117 and 133.

CHAIR

PAUL MASON

The Chair leads the Board and ensures it discharges
its responsibilities to the Company and its
stakeholders effectively, whilst promoting high
standards of corporate governance across the
Group. Key responsibilities include:

• facilitating constructive Board relations and the
effective contribution of all Non-Executive
Directors, fostering relationships based on trust,
mutual respect and open communication;

• setting a Board agenda primarily focused on

strategy, performance, value creation, culture,
stakeholders and accountability, ensuring that
issues relevant to these areas are reserved for
Board decision;

• demonstrating objective judgement throughout
tenure and promoting a culture of openness
and debate;

• ensuring the clear and effective communication

of information to shareholders and seeking
regular engagement with them.

SENIOR
INDEPENDENT
DIRECTOR

LYNNE WEEDALL

The Senior Independent Director acts as a sounding
board for the Chairman, providing support in the
delivery of the Chairman’s objectives and serving
as an intermediary for the other Directors and
shareholders. Key responsibilities include:

• being available to shareholders if they have
concerns that contact through the normal
channels of Chair, CEO or other Executive
Directors has failed to resolve, or for which
such contact would be inappropriate;

• leading the process for evaluating the performance

of the Chair and, if requested by the Board,
leading the evaluation process for the Board,
its Committees and individual Directors;

• when called on, seeking to meet a sufficient

range of major shareholders in order to develop
a balanced understanding of their views;

• ensuring an orderly succession process
for the Chair, working closely with the
Nomination Committee.

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DR. MARTENS PLC ANNUAL REPORT 2022

CHIEF
E XECUTIVE
OFFICER

KENNY WILSON

CHIEF
FINANCIAL
OFFICER

JON MORTIMORE

The CEO reports to the Chairman and to the Board
and is responsible for the executive management of
the Group. All members of executive management
report to the Chief Executive Officer. Key
responsibilities include:

• leading the leadership team in managing the

Group’s activities on a day-to-day basis;

The CFO leads the Group Finance function and
ensures that effective financial processes, controls
and reporting are implemented and maintained.
Key responsibilities include:

• all aspects of finance including tax, treasury,

procurement and investor relations;

• working with the CEO to develop and implement

• developing Group strategy, plans and commercial

the Group’s strategic objectives;

and other objectives with the Board;

• leading communications with shareholders and
other key stakeholders and ensuring that timely
and accurate information is disclosed to the market;

• setting an example to the Group’s workforce and

other key stakeholders and communicating to them
expectations in respect of the Company’s culture.

• ensuring effective financial compliance and control;

• management of the budget and long range

financial planning processes;

• ensuring resource allocation decisions meet the

Group financial hurdle ratio;

• ensuring there is adequate liquidity and financing
arrangements through the financial year and in
the long term.

NON-E XECUTIVE
DIRECTORS

TARA ALHADEFF

IJE NWOKORIE

IAN ROGERS

ROBYN PERRISS

LYNNE WEEDALL

Non-Executive Directors use their outside expertise to
support the Executive Directors and the leadership team.
Key responsibilities include:

• assisting with the development of Group strategy;

• providing objective and constructive challenge to both

the Executive Directors and the leadership team;

• monitoring and scrutinising the Group’s financial and

operational performance.

P.T.O.

DR. MARTENS PLC ANNUAL REPORT 2022

131

GOVERNANCECOMPAN Y
SECRETARY

EMILY REICHWALD

The Company Secretary advises and provides
support to the Chair and the Board, on all
matters relating to corporate governance.
Key responsibilities include:

• being available to all Directors to provide advice

and assistance as needed;

• ensuring compliance with Board procedures,
Group governance policies and all applicable
rules and regulations;

• ensuring appropriate, detailed information flows

from the business to the Board and its
Committees to facilitate high quality discussion
and debate;

• facilitating a comprehensive induction for newly

appointed Directors;

• coordinating the Board evaluation in conjunction

with the Chair;

• setting the appropriate ‘tone from the top’

relating to corporate governance of the Company;

• updating the Board on new or amended corporate
governance-related legislation and/or regulatory
requirements applicable to the Company.

Governance report
Division of Responsibilities continued

DIVISION OF BOARD ROLES
CONTINUED

EMPLOYEE
REPRESENTATIVE
NON-E XECUTIVE
DIRECTOR

ROBYN PERRISS

The Designated Employee Representative Non-
Executive Director acts as Board Ambassador for
Employee Engagement and will seek to maintain
strong links between the Board and the workforce.
Key responsibilities include:

• acting as the ‘employee voice’ to the Board
by raising and facilitating discussion on any
relevant matters or issues of concern
highlighted by the workforce;

• gaining an insight into the workforce culture within
Dr. Martens through a programme of activities,
for example site visits and listening groups;

• ensuring that all major strategic initiatives,

business and budget proposals appropriately
consider the potential impact on the workforce;

• maintaining open lines of communication with the
workforce through ensuring the Board has effective
methods of receiving feedback and, where possible,
to seek to provide the workforce with a clear
understanding of Board decision-making;

• ensuring that all Non-Executive Directors of

the Company continue to gather feedback and
perspectives from the workforce.

132

DR. MARTENS PLC ANNUAL REPORT 2022

Non-Executive Director
independence
Our Non-Executive Directors offer a range
of skills, knowledge and experience from
successful careers outside of Dr. Martens
and provide a degree of independent
oversight to the Executive Directors,
constructively challenging where needed
and providing valuable insights that will
help shape our strategy in the years ahead.

The independence of our Non-Executive
Directors is reviewed as part of the Board
evaluation process. In FY22, the Board was
satisfied that the Company complies with
the requirements of the Code in relation
to Director independence since over half
the Board, excluding the Chair, comprises
Non-Executive Directors that the Board has
determined to be independent in character
and judgement and free from relationships
or circumstances which may affect, or could
appear to affect, their judgement. However,
as at the date of this report there are
two specific areas relating to Director
independence and the criteria of the
Code that require further explanation:

Chairman independence

Paul Mason has held various roles within
the Group (including acting as Executive
Chairman for a period) and, as a result, the
Board does not consider him to meet the
specific independence criteria set out in
the Code. Nevertheless, the Board is
confident in Paul’s continued chairmanship
on the basis that his leadership, extensive
knowledge of the Group’s business and
significant retail and consumer brand
experience are in the best interests of the
Company and shareholders as a whole.

Non-Independent
Non-Executive Director

Tara Alhadeff, a Board member since 2015,
was appointed as a Non-Executive Director
of the Company by its largest shareholder,
IngreLux S.àr.l. (IngreLux S.àr.l. is wholly
owned by funds advised by Permira
Advisers LLP), pursuant to its relationship
agreement with the Company, and is
therefore not considered by the Board to
be independent for the purposes of the
Code. Under the terms of the relationship
agreement, IngreLux S.àr.l. can appoint
one Non-Executive Director to the Board
for so long as it retains control of 10% or
more of the votes able to be cast on all (or
substantially all) matters at any general
meeting held by the Company.

The Board remains confident that its
overall composition remains appropriate
and that Tara’s extensive experience
with the Company together with her
background in investing in consumer
brands remain significant assets from
which it continues to benefit.

All of our Non-Executive Directors are in
the second year of the recommended
maximum nine-year term of service set
out in the Code. Our longest-serving
Non-Executive Director is Tara Alhadeff,
who has served less than eight full years
on the Board.

For more information on:

Arrangements with the Company’s
largest shareholder, see pages 165;

The skills and experience of each
Director, see pages 114 to 117.

Directors’ external interests
The Non-Executive Directors are expected
to commit sufficient time to Company
business to enable them to meet their
obligations to the Company. However, the
nature of their role means that it is not
possible to specify the precise time
commitment required. This was made clear
to each Non-Executive Director at the time
of their appointment and the Board will
ensure it continues to do so for future
non-executive Board appointments.
Each of the Non-Executive Directors has
confirmed that they continue to be able to
meet the Company’s expectations of them
and to allocate sufficient time to discharge
their duties as Directors effectively.

The Board considered the positions held
by the current Directors in external
organisations as part of their process of
appointment to the Board and will continue
to do so for all future prospective Board
appointments. Directors’ external
commitments are monitored by the Board
on an ongoing basis, with the assistance of
the Company Secretariat function, to ensure
that they remain able to allocate sufficient
time to their duties to the Company.

The Board has processes in place for the
monitoring and assessment of Directors’
external interests and potential conflicts
of interest. It requires that all Directors
disclose to it any new external interests
before their appointment takes effect
and any potential conflict(s) of interest
of which they are aware that may arise
in future. Additionally, the Non-Executive

Directors are required to seek consent
from the Board prior to accepting any
other (or further) directorships of publicly
quoted companies or any major external
appointments.

Furthermore, there is an expectation that
the Non-Executive Directors will avoid
holding an excessive number of external
appointments, however the Board
understands that these roles vary in
complexity and has therefore agreed
to consider their potential impact on a
Director’s ability to meet their obligations
to the Company on an individual basis.
When doing so, the Board considers the
number of directorships of other public
companies held by the individual Director
in conjunction with the ‘size’ of the role,
i.e. the likely amount of time and work
required. The Board also takes into account
externally published guidance and proxy
voting guidelines to ensure the principles of
major investors in respect of ‘overboarding’
are considered. More information about
how the Board considers the needs of
investors and other stakeholders can be
found on pages 22 to 27.

A number of new external interests were
disclosed to the Board during or shortly
after the year under review, in accordance
with the procedure outlined above. Lynne
Weedall notified the Board that she would
be joining the boards of Softcat plc and
Greggs plc as a Non-Executive Director.
Similarly, Robyn Perriss notified the Board
of her appointment as a Non-Executive
Director to the Board of Huel Ltd.
Additionally, the Nomination Committee
reviewed the positions of both Lynne
Weedall and Robyn Perriss as Non-
Executive Directors of Softcat plc. The
Board has confirmed that it is comfortable
that none of these positions are likely to
impact the commitment of Robyn and
Lynne to the Dr. Martens Board, be it in
terms of time or dedication, that the
quantity of external interests held by each
of the Non-Executive Directors remains at
an appropriate level and that they do not
give rise to any conflicts of interest.

For more information on:

The attendance of each Non-Executive
Director at Board and Committee
meetings during the year, see page 110
and the report of each respective
Committee.

The external interests of our
Directors, see pages 114 to 117.

DR. MARTENS PLC ANNUAL REPORT 2022

133

GOVERNANCEGovernance report
Composition, Succession and Evaluation

FROM GOOD TO GREAT:
DEVELOPING BOARD

EFFECTIVENESS

The following pages provide
insight into the Board
Effectiveness Review that
took place during the latter
part of the financial year, the
first undertaken by the Board
since Dr. Martens became
a public company in 2021.

FY22 Approach
Having successfully managed its
transition to a PLC, the Board shifted
focus to delivering a strong start to FY23.
It was therefore keen to ensure that its
first Effectiveness Review was a genuinely
value-adding exercise; one through which
it could openly and honestly discuss,
challenge and assess its strengths, the
quality of its discussions and decision-
making and its opportunities for
improvement, as well as those of its
Committees and individual Directors,
to help it excel over the longer term.

The FY22 Board Effectiveness Review
comprised a hybrid approach led jointly
by the Chairman, Company Secretary
and specialist leadership and board
consultancy ghSMART. It represented the
commencement of the Board’s annual
review cycle, which will incorporate both
internal processes facilitated by the
Company Secretary and, at least every
three years in line with the requirements
of the UK Corporate Governance Code,
externally facilitated reviews.

Timing
When considering the appropriate point
in the financial year to undertake this
exercise, the Board decided that
scheduling it for the fourth quarter of
FY22, by which time it would have a full
year of activities as a PLC Board on which
to reflect, would lead to a richer, more
insightful review process than would
have been possible were it to have been
undertaken in FY21, so soon after the IPO.

Rationale
The Board agreed that its first review
should follow a hybrid model to bring
both internal and external rigour and to
set the tone for an approach of continual
improvement at the start of the journey
of being a PLC Board. The Company had
previous experience of working with
ghSMART and the Board felt that its
PxWxR model was ideal to apply in a
board context and could be effective
in driving a common and consistent
nomenclature and approach through the
business. Likewise, key members of the
ghSMART team were familiar with the
business as a result of their prior work
with the Company. The Board was
therefore confident that its involvement
in collecting data and generating findings
would result in a higher quality process
overall than would otherwise have been
achievable. Equally, the Board was
satisfied that the themes, insights and
recommendations identified would
represent their independent views.

Process and timeline:

NOV
2021

JAN
2022

FEB
2022

MAR
2022

MAR/APR
2022

DESIGN

QUESTIONNAIRE

INTERVIEW

ANALYSIS

FEEDBACK

ACTION

Each Board member
completed an online
questionnaire covering
both self-evaluation and
Board and Committee
effectiveness through
the lenses of the three
pillars of the PxWxR
model (‘Priorities’, ‘Who’
and ‘Relationships’)
and the UK Corporate
Governance Code.

The Board discussed
the intended
approach to its first
review and agreed to
the proposal from the
Chairman, Senior
Independent Director,
CEO and Company
Secretary to pursue
a hybrid model.

ghSMART was selected
as the appropriate
independent external
partner to assist
the Chairman and
Company Secretary in
undertaking the review.

ghSMART managed
the process of
analysing the feedback
from the interviews
and integrating this
with the findings of the
earlier questionnaires.

A full report covering
the Board as a whole,
the Committees and
each individual
Director was prepared
for discussion at the
March Board meeting.

The feedback received
from the questionnaires
was used as the basis
for discussions between:

1. each Board member
and the Chairman
focusing on
self-evaluation;

2. each Board member
and the SID focusing
on the effectiveness
of the Chairman; and

3. each Board member,

the Company
Secretary and
ghSMART focusing
on the overall
effectiveness of the
Board and each of its
Board Committees.

The recommendations
and learnings from the
review resulted in a
number of action points,
next steps and a revised
‘Board skills matrix’,
which was reviewed
by the Nomination
Committee.

The insights and
recommendations
from the review were
also used to help the
Directors shape
individual personal
commitments to be
finalised during the
first half of FY23.

A full, detailed debrief
facilitated by the
Company Secretary
and ghSMART took
place during the
Board meeting.

Individual Director
feedback was shared
and the Board discussed
its strengths and
opportunities for future
improvement, both for
the Board as a whole
and for each Director,
as highlighted in the
findings of the review.

The Board Committees
held separate
discussions on their own
effectiveness at their
subsequent meetings.

134

DR. MARTENS PLC ANNUAL REPORT 2022

PxWxR MODEL: SETTING THE CONTEXT OF THE FY22 BOARD EFFECTIVENESS REVIEW
The Board’s effectiveness was evaluated against the three pillars of the PxWxR model to ensure that the Board is focused on what
matters most (Priorities), has the right people in the right positions (Who) and cultivates a culture of trust, open debate and
constructive challenge (Relationships). The key questions that the Board considered under each of these pillars are outlined below.

PRIORITIES

WHO

RELATIONSHIPS

• Are the Board and senior leadership

• Do Board members bring requisite

aligned on what success looks like and
key priority areas to deliver value?

• Is the Board properly focused on value

drivers, the core business and key risks?

• Is the Board allocating its focus in
a balanced way between strategic
leadership and regulatory requirements?

attributes to the Board, including skills,
experience, market understanding,
diversity of perspectives and other
key factors?

• Is the right leadership in place to

deliver the strategy?

• Is there trust and transparency
between the Board and senior
management?

• Are ways of working clear and

consistent and supported by the
right cadence, reporting and flow
of information?

• Are decision-making authorities and
Board roles well-defined, with clear
succession plans in place?

• Are Board debates and decisions

conducted with appropriate confidence,
openness, candour, challenge and respect?

FINDINGS OF THE BOARD EFFECTIVENESS REVIEW

It was felt that the Board was focused
on the right priorities and that it had
correctly pivoted away from the
‘governance heavy’ issues on which it had
rightly spent a large amount of its time
during the Company’s PLC transition
phase and had refocused on the strategic
conversations that were more relevant
for the business looking forwards.

The contributions of the Non-Executive
Directors were valued and would continue to
develop further with greater exposure to the
business in person (rather than remotely).

Overall, the Board was regarded as having
committed, high-calibre individuals with
a shared passion for the brand and led
by a trusted, supportive Chairman. The
Executive Directors were perceived as
impactful and high performing in their
respective roles, whilst the Non-Executive
Directors were viewed as a strong and
talented team with a diverse range of
skills and experience. Looking ahead,
it was felt that the Board should ensure
it takes a targeted, strength-based
approach to further leverage the skills
of its Non-Executive Directors to ensure
their skills are used to maximum effect.

There was acknowledgment that the
Covid-19 pandemic had resulted in an
exceptionally challenging start to the
Company’s journey as a PLC; however,
despite this Board members had
successfully built strong relationships
with each other, underpinned by a high
degree of trust in the intentions,
credibility and performance of the Group.
Having successfully navigated their first
year as a PLC Board, there was an
opportunity for individual Board members
to broaden their contributions even
further as their peers welcomed
contributions from all Board members
beyond their own areas of expertise
and knowledge.

RECOMMENDATIONS AND ACTIONS
The review resulted in a number of actions and recommendations focused
on further improving the Board’s effectiveness, summarised below.

• Continue to ensure the Board is aligned
on a clear set of priorities on which to
focus over the coming twelve months.

• Use the Board strategy offsite event

to dive deeper into priorities.

• Schedule time at Board meetings during

FY23 for more exposure to bench
strength through the organisation,
focusing on the Company’s people
strategy and talent.

• The Nomination Committee should
focus on the development of the
Company’s approach to key talent
succession.

• The composition of the Board should be
kept under review over the coming year.

• Continue to refine and strengthen the
relationships between Board members
through in-person meetings in and out
of the boardroom.

• Introduce general non-executive

sessions without the executive team
to allow for confidential discussions.

• Create opportunities for shared

experiences such as visits together
to key markets.

DR. MARTENS PLC ANNUAL REPORT 2022

135

GOVERNANCENomination Committee report

I am proud to be serving on a
diverse and inclusive Board.

LYNNE WEEDALL
CHAIR OF THE NOMINATION COMMITTEE

COMMITTEE MEMBERSHIP

The members of the Committee are the Company’s Non-Executive Directors (the
majority of whom are independent) and the Chairman of the Board. The Committee
will continue to monitor its composition to ensure it remains appropriate and
reinforces our ability to provide independent oversight.

The members of the Committee and their attendance at meetings during the
year are disclosed below. Full biographies of each member can be found on
pages 114 to 117.

Committee members

Committee composition

Number of meetings
attended/max number
could have attended:

2/2

50%

Male
Female

3 of 6
3 of 6

• Review the gender diversity of the
Board in light of recently updated
requirements.

• Review Chairman and Non-Executive

Director independence.

Lynne Weedall (Committee Chair)1

Tara Alhadeff

Paul Mason

Ije Nwokorie1

Robyn Perriss1

Ian Rogers1

1. Independent.

Focus areas for FY23
• Continue to review Board and senior

management appointment and
succession, including induction and
education process for future Non-
Executive Board appointments.

• Review of diversity and inclusion
initiatives for improving female
representation at senior levels.

136

DR. MARTENS PLC ANNUAL REPORT 2022

Key responsibilities

Recommend potential Board and
senior management appointments
and reappointments to the Board.

Oversee the inductions of new Board
members and the ongoing training,
as appropriate, for the Board.

Review and make recommendations
to the Board in relation to Board and
senior management succession
planning, including ensuring plans
are in place for an orderly succession.

Oversee the development of a
diverse succession pipeline and the
Company’s policy on Board, senior
management and workforce diversity
and inclusion.

Review and monitor the effectiveness
of the Company’s policies, objectives
and strategies relating to diversity
and inclusion.

Oversee (with the Chairman) the
annual Board evaluation process.

Further detail on the role and remit of the
Committee can be found within its terms
of reference, which are available on our
website, drmartensplc.com.

Dear shareholder ,

I am pleased to present the report of
Dr. Martens’ Nomination Committee for FY22.
In our report last year, I outlined several key
areas on which the Committee intended to
focus during FY22, our first full year as a
Committee. We have made progress in each
of these and have identified our key areas of
focus for the year ahead. This report provides
an update on the Committee’s discussions
during the year and the matters on which
we intend to focus in the year ahead.

Activities during FY22
The Committee met twice during the year, in
June 2021 and March 2022. Our meeting in
June was our first full meeting as a Committee
and it was therefore important for us to take
time to discuss the scope of our remit and the
manner in which we believed we could function
best in support of the Board and business. In
particular, we discussed the operations of an
effective PLC Nomination Committee, with
reference to examples of good practice based
on our experiences on other boards. Through
these discussions, we were clear that our
effectiveness as a Committee would be
augmented through the close involvement
and support of the CEO and Chief HR Officer,
particularly in respect of matters relating to
(non-Board) senior leadership recruitment and
succession and the development of initiatives
relating to diversity, equity and inclusion.

Later in the year, we discussed the
recommendations from our first Board
Effectiveness Review process. We agreed
that the Board possessed a breadth of
skills, diversity and experience and
reviewed the Board’s skills matrix to delve
into the areas where we believed these
could be further developed in future.

Succession planning
An important discussion point for the
Committee during the year was Board
succession. It is never too early to
consider succession arrangements for
Board and senior leadership roles and
how any future changes at these levels
should be managed in the best interests
of the business. Indeed, with the
Dr. Martens Board still very much in
the early stages of its journey together
and every executive and non-executive
Board member focused on delivering the
Company’s strategy over the longer term,
it was the Committee’s view that this
provided a solid base to ensure that we
have appropriate processes in place in
preparation for every eventuality. The
Committee’s conversations focused on
the key Board roles of Chair, CEO and CFO
and, in particular, emergency succession
in the event of unforeseen urgent
circumstances, as have been seen by
other companies during the pandemic.

Diversity, equity and inclusion
I am proud to be serving on a diverse and
inclusive Board and the Committee will
ensure that diversity, equity and inclusivity
remain amongst its core tenets,
underpinning all future appointments to the
Board and Senior Leadership Team, be it
diversity of gender, background, heritage,
sexuality or any of the many aspects of
identity that make individuals unique. All
recommendations for future Board and
senior appointments will be made on merit
to ensure the appropriate balance of skills
and experience across our senior leadership
are maintained or improved.

The Board comfortably met the
recommendations of the FTSE Women
Leaders Review and Parker Review
Committee relating to, respectively, female
membership and ethnic diversity that
applied during FY22. At present, 38% of our
Board members are women and we continue
to benefit from the significant experience
of Ije Nwokorie, whose successful career
was built on his experiences growing up in
Nigeria and who has been named as one of
the 100 most influential people of African
or African Caribbean heritage in the UK.
Furthermore, when reviewing the feedback
from our Board evaluation it was pleasing
to see that all of our Board members felt
included, which is another important
aspect of diversity.

Whilst not applicable to the year under review,
the Committee has noted the publication in
April 2022 of the FCA’s Policy Statement in
respect of diversity and inclusion on company
boards and executive management, which
sets out updated requirements to drive
further improvements in board diversity,
including a revised 40% minimum target
for women on listed company boards and
a requirement that at least one woman
should occupy the position of Chair, Senior
Independent Director, Chief Executive Officer
or Chief Financial Officer. With myself
occupying the role of Senior Independent
Director, our Board is already compliant with
the latter requirement and, whilst not within
the scope of the new requirements, we would
highlight that each of our principal Board
Committees is chaired by one of our female
Board members: myself for this and the
Remuneration Committee, and Robyn Perriss
for the Audit and Risk Committee. Whilst we
do not yet meet the new 40% requirement,
we are confident that we will do so within
the specified timeframe.

In terms of our wider leadership, as at the
date of publication of this Annual Report
60% of our Global Leadership Team (GLT)
were male vs 40% female (excluding the
Executive Directors), whilst the equivalent
figures for their direct reports were 52%
and 48% respectively. Additionally, the
Board and Committees continue to benefit

directly from the participation of our
General Counsel and Company Secretary,
Emily Reichwald, in meetings and the advice
and perspectives she provides as part of her
role. Details of gender diversity across the
business can be found in the Sustainability
report on page 83. Additionally, our Gender
Pay Gap report for FY22 can be found on
our website, drmartensplc.com.

Strengthening the GLT
A key area within the Committee’s remit
is to review the succession arrangements
for the GLT, which comprises the senior
leaders of each of our business functions
accountable for delivering our strategy.

There were a number of changes to the
GLT during the year and recruitment was
focused on establishing a GLT for the
next wave of growth, with exceptionally
thorough searches closely supported by the
CHRO, CEO and Company Secretary. GLT
recruitment and succession was discussed
by the Committee at its meeting in June,
with further updates on developments in
the search for suitable candidates provided
through the CEO’s regular Board update
papers and the Remuneration Committee.

The end result of this process was the
addition of highly talented individuals to take
us into the next phase of the journey. Sue
Gannon joined the business in June 2021 as
our new Chief HR Officer. Jennifer Somer
and Adam Meek followed in November and
December 2021 as President, Americas and
Chief Product Officer respectively. Finally,
Meg Johnson joined as Chief Marketing
Officer in April 2022. With these new
additions, the Board is confident that the
Company has in place a GLT that is both of
high quality and well positioned to drive the
business forwards. More information about
the GLT can be found on pages 118 and 119.

AGM and Director reappointment
All Directors will be offering themselves for
re-election at the forthcoming AGM in July,
in accordance with the provisions of the
Code. All the Directors being proposed for
reappointment attended an acceptable
number of Board and Committee meetings
during FY22 and, as mentioned on page 133,
the Board is satisfied that they continue to
devote sufficient time to the Company to
enable them to discharge their duties in full
and continue to demonstrate a high degree
of dedication to their role. More information
on the length of tenure of each of our
Directors can be found within the statistics
detailed on page 110 and 111.

LYNNE WEEDALL
CHAIR OF THE NOMINATION COMMITTEE
31 May 2022

DR. MARTENS PLC ANNUAL REPORT 2022

137

GOVERNANCEAudit and Risk Committee report

The Committee has
continued to build and refine
on the solid foundations
established pre-IPO.

ROBYN PERRISS
CHAIR OF THE AUDIT AND RISK COMMITTEE

COMMITTEE MEMBERSHIP

The Committee comprises three Independent Non-Executive Directors: Lynne Weedall,
Ije Nwokorie and Robyn Perriss as Committee Chair. The Committee reviewed its
composition during the year under review and believes it continues to be appropriate.

The members of the Committee and their attendance at meetings during the
year are disclosed below. Full biographies of each member can be found on
pages 114 to 117.

Committee members

Committee composition

Number of meetings
attended/max number
could have attended:

Robyn Perriss (Committee Chair)

Ije Nwokorie

Lynne Weedall

5/5

67%

33%

Male
Female

1 of 3
2 of 3

Focus areas for FY23
• Programme and project assurance on the
implementation of key Group systems.

• Continued focus on cyber and IT
security, with a particular focus
on our ecommerce platform.

• Assurance on the methodology

and calculation of key ESG metrics.

• Supply chain assurance review.

• Preparation and implementation

following the final outcomes of the
BEIS corporate governance proposals.

• Development of an Audit and

Assurance Policy.

• Monitoring the transition of the

external auditor relationship to PwC.

Key responsibilities

Monitoring the integrity of the
Group’s Annual Reports and financial
statements and any other formal
announcements relating to its
financial performance, and reviewing
the significant financial reporting
judgements made in connection with
their preparation.

Monitoring and reviewing the
adequacy and effectiveness of
the Company’s internal financial
controls and internal control
and risk management systems.

Overseeing and maintaining an
appropriate relationship with the
Company’s external auditor and
reviewing the independence,
objectivity and effectiveness
of the audit process.

Ensuring that internal audit
arrangements are appropriate
and effective.

Ensuring that fraud prevention
and whistleblowing arrangements
are established which minimise
the potential for fraud and financial
impropriety.

138

DR. MARTENS PLC ANNUAL REPORT 2022

Dear shareholder ,

As Chair of the Audit and Risk Committee
(the Committee), I am pleased to present
the Committee’s report for the first full
year as a listed company. The Committee
has continued to build and refine on the
solid foundations established pre-IPO,
establishing a regular cadence of meetings
around the Group’s financial reporting
cycle, and met five times during the year. It
also formally reviewed its effectiveness as
a Board Committee as set out on page 141.

The Committee fulfils a vital role in the
Group’s governance framework, providing
independent challenge and oversight
of the accounting, financial reporting
and internal control processes, risk
management, the Internal Audit function
and the relationship with Ernst & Young
LLP (EY), the external auditor. This report
outlines how the Committee has
discharged its responsibilities during the
year, the key issues it has considered
during the year ended 31 March 2022
and also key areas of focus over the
next financial year.

EY have been the external auditor since
2005 and during FY21 a decision was
made to tender the external audit for the
year ending 31 March 2023. Consequently
a significant proportion of the Committee’s
time during the year was devoted to
the audit tender process, and following
a very comprehensive, high quality and
competitive tender process, the Committee
recommended the appointment of PwC as
auditor to the Board at the 2022 AGM.
Further details of the external audit tender
process are set out on pages 144 and 145.

Given the geographic scale and complexity
of the Dr. Martens business, combined with
our growth ambitions and our desire to
maintain a strong framework of internal
controls and risk management across the
business, a decision was made by the
Committee to appoint an internal audit
co-source partner alongside the Group’s
‘in-house’ Internal Audit function. Following
a competitive tender process led by the
Head of Internal Audit and the Committee
Chair, Grant Thornton LLP (GT) were
appointed in June 2021. This further
strengthens our internal audit capability by
providing valuable subject matter expertise
and geographic reach, particularly in areas
where travel has not been possible due
to ongoing Covid restrictions.

The Committee has reviewed the
requirements of the Task Force on
Climate-related Financial Disclosures
(TCFD) and considered the impact and
risk of climate change under various
scenarios and our reporting with the
TCFD pillars of disclosure as set out
on pages 90 to 96.

As part of the ‘business as usual’ items set
out on pages 140 to 143, the Committee
has also carried out a review of the
effectiveness and independence of EY as
auditor for the year ended 31 March 2022
and performed an internal questionnaire-
based review of the effectiveness of the
Internal Audit function.

With the assistance of management, the
Committee has reviewed the content in
the Annual Report and believes that this
explains our strategic objectives and is
fair, balanced and understandable. We
have considered the impact of Covid-19
on our business and our risk management
framework and you will find important
detail on this in other sections of the
Annual Report.

Whilst this Audit and Risk Committee
report contains some of the matters
addressed during the year, it should be
read in conjunction with the Dr. Martens
plc financial statements from page 167.
This includes the significant accounting
matters and issues in relation to the
Group’s financial statements that the
Committee has assessed during the year,
which can be found on page 142. This
report explains why the issues were
considered significant, which provides
context for understanding the Group’s
financial statements for the year.
Further information can be found in the
Independent Auditor’s report from page
168, which covers their key audit matters.

I will be happy to answer any questions
about the work of the Committee at the
forthcoming AGM.

ROBYN PERRISS
CHAIR OF THE AUDIT
AND RISK COMMITTEE
31 May 2022

DR. MARTENS PLC ANNUAL REPORT 2022

139

GOVERNANCEAudit and Risk Committee report
continued

Competence of the Committee
The members of the Committee provide
a breadth of financial, commercial and
sector expertise, thereby enabling the
Committee to meet its responsibilities and
the requirements of the UK Corporate
Governance Code (the ‘Code’). The Board
is satisfied that the Committee as a whole
has competence relevant to the sector in
which the Company operates. The Board
is also satisfied that Robyn Perriss, a
Chartered Accountant, recent Finance
Director of a FTSE 100 company and an
experienced Audit Committee Chair, has
recent and relevant financial experience
and she has been designated as the
financial expert on the Committee for the
purposes of the Code. Emily Reichwald, our
General Counsel and Company Secretary,
acts as Secretary to the Committee.

More information about the
experience and qualifications of
each member of the Committee
can be found on pages 114 to 117.

Role of the Committee
The key responsibilities of the Committee
are described on page 138. Further details
on the role of the Committee and the
range of matters that fall within its remit
can be found within its terms of reference,
available at drmartensplc.com.

How the Committee operates
The Committee held five meetings during
FY22, all of which were attended by a
full complement of Committee members.
Committee meetings are scheduled
to align with key dates in the Group’s
financial calendar and in accordance
with a structured forward planner,
developed with the Company Secretary.
This provides Committee members with
clarity in respect of the range of matters
on which their attention will focus over
the course of a given year and ensures
that the Committee remains able to focus
its priorities effectively, devote sufficient
time to discussing and debating key
topics within its remit and discharge
its responsibilities in full.

Audit Committee activities during FY22

The Committee received updates on,
discussed and debated a range of topics
during the five meetings it held during
the year, summarised below:

Internal audit and risk management
• received a detailed update on the work

of the Internal Audit function
at each meeting;

Finance
• received updates from the Group’s

Treasury and Tax functions, including
overviews of their roles within the
business, current and planned team
structures and areas of focus for
FY22 and future years;

• reviewed and discussed a number of
items relating to the FY22 half and
full-year results, including disclosures
relating to key areas of accounting
judgement and the proposed
approach to the going concern
assessment and Viability Statement,
and whether the FY22 Annual Report
(taken as a whole) was fair, balanced
and understandable;

• discussed the Group’s tax strategy
and approved the statement for
publication on our corporate website;

• considered upcoming legislative

developments relating to tax and their
potential impact on the Group;

• reviewed and discussed the findings
of internal audit reviews undertaken
during the year and monitored progress
of agreed remediation actions;

• reviewed and approved the internal

audit plan for FY22;

• discussed the Group’s risk appetite,
principal risks and risk management
and reviewed the Group’s Risk Register;

External audit
• received an update from the external
auditor on the planned approach and
scope for the half-year audit review
and the full-year audit;

• reviewed the Group’s policy relating
to the provision of non-audit services
by the external auditor;

• reviewed and approved EY’s audit

report and fee for FY22;

• reviewed and discussed the

effectiveness of the external auditor;

• discussed the external audit tender
process and approved a proposal to
recommend the appointment of
PricewaterhouseCoopers LLP as the
Group’s statutory auditor from FY23;

140

DR. MARTENS PLC ANNUAL REPORT 2022

The external auditor is invited to attend
each meeting together with the Chairman
of the Board, the CEO, the CFO, Tara
Alhadeff, the Company Secretary and the
Head of Internal Audit and Risk. This means
that substantially all Board members are
present at Committee meetings. The
Committee also sets time aside periodically
to seek the views of the external auditor
and the Head of Internal Audit and Risk.
In between meetings the Committee Chair
also regularly keeps in touch with the
CFO, Company Secretary and other
members of the management team. The
members of the Committee also hold
private, ‘in camera’ sessions with the
external auditor after each meeting to
give the opportunity for the external
auditor to provide feedback without the
executives present.

Business updates
• received updates at each meeting on the
regional rollout of ‘Project Reboot’, the
strategic initiative to implement a single,
global ERP solution (MS Dynamics);

• reviewed the Company’s crisis

management plan and procedures;

• received an update on the ongoing
work to enhance the Group’s IT
and cyber security infrastructure
and capabilities;

Governance
• received an update from the Group’s
Compliance function, including the
approach to Group-wide policy
management, training and third-party
due diligence, and approved the
proposed policy governance process;

• received updates on whistleblowing
and fraud procedures, including
reports on specific incidents;

• received an update on data protection,
including the Group’s approach to
privacy management and key business
priorities in respect of privacy maturity;

• reviewed and approved the

Committee’s terms of reference;

• subsequent to the year end, reviewed

its effectiveness as a Committee
during its first full year.

Significant financial reporting issues,
judgements and estimation uncertainty
The Committee received reports from
the leadership team in relation to the
identification of significant accounting
issues, judgements and key sources
of estimation uncertainty, significant
accounting policies and proposed
disclosures in the FY22 Annual Report.
The Committee is satisfied that the
judgements made are reasonable, that
suitable accounting policies have been
adopted and appropriate disclosures
have been made in the accounts.

The Committee’s review of the full-year
financial statements focused on several
areas of significance, either due to the
materiality of the areas or the nature
of them to the extent that they require
significant judgement or estimation, all
of which were discussed and addressed
with our external auditor throughout the
external audit process. The key matters
of focus are set out on page 142, overleaf.

Additionally, the review highlighted
the importance of building a strong,
constructive relationship with the
incoming external auditor, a process
which commenced later in the year
as part of their onboarding process.

More information about the Board
evaluation process can be found on
pages 134 and 135.

Corporate reporting
A key element of the Committee’s role is to
assist the Board in its oversight of the quality
and integrity of Dr. Martens’ reporting
and its accounting policies and practices.

In line with its terms of reference,
the Committee monitored the Group’s
year-end reporting process to ensure
that Dr. Martens provided accurate, timely
financial results and that appropriate
accounting standards and judgements
were implemented effectively. In doing so,
the Committee received and discussed
reports from relevant members of the
leadership team, including reports on
the Group’s management of risk and
internal controls, long-term viability,
going concern and the work undertaken
to ensure the Annual Report was fair,
balanced and understandable. It also
received and discussed reports from the
external auditor.

Key areas of focus for the
Committee
Committee Effectiveness Review
The Committee’s effectiveness was
reviewed as part of the wider Board
evaluation process. The Committee
considered and reflected on the outputs
of its assessment subsequent to the year
end, at its meeting in April 2022. These
reflections covered where the Committee
perceives its strengths and opportunities
for improvement to lie as well as specific
feedback provided by individual
Committee members and advisers.

Overall, the review found that the
Committee is effective in executing its
responsibilities and made significant
progress during its first full year of
operations. It was considered to be
focusing on the right priority areas and
guided by a strong and knowledgeable
Committee Chair, who was encouraging
of substantive discussions and debate.

Committee papers were considered to
be of good quality and to provide clear
visibility of relevant issues, albeit there
were opportunities to tighten the
presentation of information to further
focus the Committee’s discussions on
key areas.

There was a sense that the Committee
was still calibrating the appropriate
level of detail for its discussions and
deliberations and that it would be
beneficial to consider certain matters
within its remit in a wider context and
with future horizon-scanning in mind.

Risk
The role of the Committee relating to internal control and risk management is set out in the table below:

PLC BOARD

AUDIT AND RISK COMMITTEE

LEADERSHIP

• Provides oversight of and is ultimately

• Reviews the effectiveness of the

accountable for risk.

Group’s internal financial controls.

Supported by Internal Audit, is
responsible for:

• Assesses the principal and emerging

risks facing the Group.

• Monitors the Group’s overall risk

management and internal control
systems.

• Annually reviews the effectiveness
of the systems of risk management
and internal control.

• Receives reports from management
on the effectiveness of the Group’s
systems and the conclusions of any
testing undertaken.

• Reviews and approves statements
in the Annual Report in relation to
internal control and management
of risk.

• the identification, assessment,

management and monitoring of
risk on a day-to-day basis;

• developing, operating and monitoring

systems of internal control; and

• providing assurance to the Board,

through the Audit and Risk
Committee, that it has done so.

More information about our approach to risk management is available on pages 97 to 103.

DR. MARTENS PLC ANNUAL REPORT 2022

141

GOVERNANCEAudit and Risk Committee report
continued

Key areas of focus

Significant area

How this was addressed

Revenue recognition Revenue accounting policies and recognition criteria are assessed in relation to the three key streams:

ecommerce, retail and wholesale. An element of estimation and judgement is involved in relation to:

• cut-off and what proportion of relevant ecommerce and wholesale sales have not yet been received by the

customer at year-end date and should not be recognised as revenue;

• the returns provisions and the accounting requirements in relation to variable consideration under IFRS 15;

• the statutory day adjustment made to align the Group’s retail calendar which ended on 27 March with the

year end date of 31 March.

Based on detailed reports and discussions with management and the external auditor, including the review of
the outputs of the data analytics procedures used by EY, the Committee reviewed and assessed the timing of
revenue recognition under IFRS 15 and is satisfied that the judgements made were reasonable and appropriate.

Inventory provisioning requires significant judgement on which inventory lines should be classed as
obsolete. Inventory age, historical sales patterns and trading forecasts are used when classifying inventory
lines to be provided against. This is reassessed quarterly in relation to the changing external and internal
environment. The Committee has reviewed the significant assumptions and is satisfied that they have been
applied in line with the Group framework and that the overall inventory provision as a proportion of gross
inventory is appropriate.

Inventory valuation
and provisions

Intangible assets:
Cloud computing
arrangements
accounting

Software as a Service arrangements are ones in which a customer does not have possession of the
underlying software, but accesses and uses the software on an as-needed basis. The most recent guidance
published by the IFRS Interpretations Committee (IFRIC) focuses on accounting for customisation and
configuration costs relating to cloud computing arrangements not covered previously under IFRS.

The implementation of the new guidance has been treated as a change in accounting policy under IAS 8
as per the IFRIC instruction which must be applied retrospectively; this resulted in a restatement of prior
capitalised costs to operating expenses and reductions to intangible assets. More information on this can
be found on page 47 of the Strategic report and pages 187 to 190 of the financial statements.

Based on detailed reports and discussions with management and the external auditor, the Committee
reviewed the assessment of SaaS arrangements and is satisfied that the judgements made were appropriate
and that the prior year adjustment is clearly presented.

There is judgement involved in determining the Group’s corporation tax provision. The Group recognises
liabilities for anticipated tax issues based on estimates of whether taxes will be due. Where
the final tax outcome of these matters is different from the amounts that were initially recorded, such
differences will impact the current and deferred tax assets and liabilities in the period in which the
determination is made. Management judgement is required to determine the amount of deferred tax assets
that can be recognised, based upon the likely timing and level of future taxable profits together with an
assessment of the effect of future tax planning strategies. The Committee has reviewed the judgement
exercised by management in this area, including the prior year adjustment relating to a deduction in
respect of 2021 bonus costs, and has determined that the taxation charge is appropriate.

Based on papers prepared by management, the Committee performed a detailed review of the Group’s
projected cash flows, borrowing capacity and the covenants within its borrowing facilities over a three-year
period (our viability assessment period). The approach was discussed and agreed by the Committee in May
2022 by reviewing the Group’s financial position and performance, budgets for FY23 and three-year cash
projections, which were stress tested under different scenarios having regard to the principal risks faced
by the business. The Committee reported to the Board that, in its view, the going concern assumption
remained appropriate.

Corporation tax

Going concern
and viability

142

DR. MARTENS PLC ANNUAL REPORT 2022

Fair, balanced and understandable
A key governance requirement is for the
Board to ensure 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, performance, business model
and strategy. To assist it in making this
determination, the Board has requested
the advice of the Committee.

To assist the Committee in making its
assessment, it received drafts of the
report at key points in the production
process in order to provide its feedback
and papers from leadership highlighting
the supporting evidence for the report’s
key messages. Any disclosures that the
Committee believed required additional
information or clarification were
highlighted and the necessary edits made
during the subsequent drafting phase.
The Committee also reviewed narrative
reporting in the front half of the Annual
Report to ensure its consistency with the
financial reporting in the back half,
and that the overall layout and linkage
between each section of the report
was clear and understandable.

Having completed its assessment, the
Committee concluded that the disclosures
throughout the Annual Report and
financial statements, as well as the
processes and controls underlying its
production, were appropriate and that
the 2022 Annual Report and financial
statements was fair, balanced and
understandable, allowing the Committee
to provide positive assurance to the
Board to assist it in making the statement
required by the Code.

Audit effectiveness
The Committee’s oversight responsibilities
in respect of the relationship between
the Group and the external auditor
incorporate an additional duty to review
the external auditor’s independence,
objectivity and overall effectiveness.

The Committee received a comprehensive
audit plan from Ernst & Young, setting
out the proposed scope and areas of
focus for the FY22 audit and the auditor’s
assessment of the key areas of risk it
had identified. The audit plan and the
areas of risk identified by the auditor
were reviewed and, where appropriate,
challenged by the Committee to ensure
management’s assumptions and
estimates underlying each were robust.

Subsequent to year end, the Committee
conducted a review of the effectiveness
of Ernst & Young and its work during the
year-end audit. A session was held to
discuss the effectiveness of Ernst &
Young and the audit process, led by the
Committee Chair and attended by
members of the Company’s global finance
leadership teams. To frame these
discussions and ensure the key topics were
covered in full, a tailored list of questions
focusing on, amongst other things, the
audit plan, working relationship with
the auditor, management of issues, audit
process and any particular areas of
excellence and/or challenge, was circulated
to attendees in advance. Feedback from
the session was subsequently discussed by
the Committee. The review acknowledged
that there was a general sense that the
audit was more efficient compared to FY21,
particularly in the area of quality and
frequency of communication with finance
teams and management, aided by the
external audit teams being on site in most
regions. The greater use of data analytic
tools in areas like impairment reviews was
also seen as valuable.

The Committee concluded that, overall,
the external auditor was effective in
planning and executing the FY22 audit.

Going concern and long-term viability
The Committee reviewed the Group’s going
concern and long-term viability disclosures
in this Annual Report, together with the
reports prepared by the leadership team
in support of each statement, and advised
the Board on their appropriateness.
As part of its review, the Committee
considered the Group’s future prospects
with reference to forward-looking views
on risk, viability and planning, considering
amongst other things a number of
scenarios modelled by the business
(including a ‘severe but plausible’ downside
scenario) and a reverse stress test carried
out to assess the strength of the Group’s
financing arrangements.

More detail can be found on pages
97 to 99 of the Strategic report.

The going concern and long-term viability
statements were also reviewed by the
external auditor. Their findings were
highlighted to the Committee, with whom
the conclusions that had been drawn by
leadership in producing each statement
were also discussed. More detailed
information about our approach to
making our going concern and long-term
viability assessments can be found on
pages 104 and 105 of the Strategic report.

External auditor
A key responsibility of the Committee is
to oversee and maintain the relationship
with the external auditor on behalf of the
Board. Ernst & Young was appointed as
the auditor of Doc Topco Limited, which
was the parent company in the Dr. Martens
Group prior to the IPO, in 2014 and became
the auditor of the Company and the
Dr. Martens Group on its admission to
listing on the London Stock Exchange in
January 2021. The lead partner for the
FY22 audit was Julie Carlyle, who was
appointed in 2015.

During the year, the Committee oversaw
the Group’s tendering of the external
audit, which resulted in the Committee
making a recommendation to the Board
that PricewaterhouseCoopers LLP be
appointed as the new external auditor
for FY23. Consequently, Ernst & Young
will step down following the conclusion
of their work on the FY22 audit and the
Company will be seeking shareholder
approval for the appointment of
PricewaterhouseCoopers LLP at its
AGM to be held in July.

DR. MARTENS PLC ANNUAL REPORT 2022

143

GOVERNANCEAudit and Risk Committee report
continued

Audit tender
Following the disclosure last financial year
of our intention to tender the audit, the
Group undertook a formal tender process
to select a new external auditor, with effect
from the financial year ended 31 March
2023, in order to ensure the Group’s
compliance with the Competition and
Markets Authority’s Statutory Audit
Services for Large Companies Market
Investigation (Mandatory Use of
Competitive Processes and Audit
Committee Responsibilities) Order 2014.
FY22 was considered by the Committee to
be the appropriate time to conduct a tender
given that it would align with the planned
mandatory rotation of the lead audit
partner at EY and the overall length of EY’s
tenure as the Group’s external auditor.

The Committee was supported in the
selection process by an internal Tender
Panel, of which Robyn Perriss, Lynne
Weedall, the Executive Directors and
key members of the Dr. Martens Senior
Leadership Team were members. Clear
assessment criteria were established and
communicated to each participant firm in
advance of the deadline for submission of
their proposals. A dedicated internal audit
tender project manager was appointed
with oversight from the Committee, with
the tender process formally commencing
in September 2021 and concluded in early
December 2021.

Overall, the Committee was impressed
by the high quality of the proposals
put forward by each participant firm,
all of which demonstrate significant
commitment to the tender process, good
understanding of key areas of risk and
of the unique culture at Dr. Martens.
In assessing the proposals, particular
consideration was given to the long-term
nature of the future relationship with the
new external auditor, the length of the
past relationship with the incumbent and
the advantages and disadvantages of
appointing a new external auditor over
the short, medium and longer term.

EXTERNAL AUDIT TRANSITION TIMELINE:

FAMILIARISATION

ACCELERATION

PLAN AND DELIVER

DEC 2021

JAN – MAR 2022

APR – JUN 2022

JUL – SEP 2022

OCT – DEC 2022

JAN – MAR 2023

APR – JUN 2023

JUL 2023

• New auditor selected following

completion of a thorough tender.

• Handover protocols discussed
and agreed by PwC and EY
ahead of year end.

• Handover interviews with key
team members on the Ernst &
Young team.

• Transition planning meeting
held between PwC and the
Dr. Martens team.

• PwC shadowed EY’s

year-end audit.

• Formal appointment of PwC

to be proposed for shareholder
approval at the AGM.

• PwC’s planning procedures to be
completed for the FY23 audit.

Audit planning finalisation

Pre-year-end audit procedures:

Year-end audit procedures:

Statutory accounts and debrief:

• Systems and controls audit

• Year end work focusing on the

• Finalisation of the statutory

testing concluded.

balance sheet, Annual Report

accounts.

• Initial review of Group Annual

disclosures and top-up testing

• Audit debrief on the engagement.

Report.

from interim procedures.

• Finalise view on key judgements

• Annual Report reviews, including

and estimates.

going concern audit procedures.

and half-year review:

• PwC’s planning procedures

anticipated to be completed.

• PwC to perform their first

half-year review.

• Dr. Martens Audit and Risk

Committee to receive an update on

the transition and first impressions.

• Final year-end audit plan ready

to be issued.

External auditor independence
The Committee oversees the process for
approving all non-audit work undertaken by
the external auditor to ensure the Company
does not impair or compromise its
objectivity, effectiveness or independence
and that engagement satisfies all relevant
ethical standards.

The Company’s policy governing the
provision of non-audit services by
an external audit firm reflects the
regulations that prohibit external auditors
from undertaking certain non-audit
services. As Dr. Martens is a public
interest entity (PIE) by virtue of its
transferable securities being admitted
for trading on a regulated market, the
external auditor must only provide
services on the FRC ‘whitelist’ of
permissible services and cap the level
of non-audit fees at 70% of the average

Group audit fee paid by the Company
over the previous three financial years.
The Company’s non-audit services policy
complies with the FRC’s Revised Ethical
Standard (2019).

In making any determination as to
whether to appoint the external auditor
to provide certain non-audit services
that are not prohibited, such as reviewing
quarterly and half-yearly financial
information, the Committee must
consider: whether its skills and experience
make it a suitable supplier; whether
appropriate safeguards are in place to
ensure there is no threat to its objectivity
and independence; the nature of the
service to be provided, including fees
both individually and in aggregate relative
to the audit fee; and the criteria
governing the compensation of members
of the audit team.

Permitted non-audit services are subject
to certain safeguards to preserve the
independence of the external auditor. The
assignment of any individual permitted
service up to £50,000 must be approved by
the CFO, with any work that is incremental
to that limit being subject to approval by
the Committee. The Committee also
receives reports analysing any fees paid
for non-audit work undertaken by the
external auditor every six months.
Additionally, any non-audit services
provided and fees paid are factored into
the Committee’s annual review of the
independence of the external auditor.

In FY22, Ernst & Young received total fees
of £1.5m (FY21: £3.6m) comprising £1.4m
of audit fees (FY21: £1.1m), and £0.1m for
non-audit services (FY21: £2.5m).

The fees for non-audit services during the
year related to work undertaken by Ernst
& Young on the interim financial review

144

DR. MARTENS PLC ANNUAL REPORT 2022

After a thorough and detailed review, the
Committee agreed with the view of the
Tender Panel that PricewaterhouseCoopers
LLP (PwC) represented a high quality
firm with and the best overall audit
strategy for Dr. Martens going forwards.
Consequently, the Committee formally
recommended that PwC be appointed as
the Group’s new external auditor from FY23
onwards. The recommendation of the
Committee was subsequently approved by
the Board at its meeting in December 2021,
subject to the approval of shareholders at
the AGM in July 2022. A summary of the
intended transition process is set out in
the timeline below:

The external audit tender was a comprehensive
process which resulted in some interesting stats:

meetings with Company
management and 33+
with the Tender Panel

10+

pairs of Dr. Martens worn
by members of the firms
participating in the tender

Dr. Martens employees
and 43 audit firm
individuals involved

FAMILIARISATION

ACCELERATION

PLAN AND DELIVER

DEC 2021

JAN – MAR 2022

APR – JUN 2022

JUL – SEP 2022

OCT – DEC 2022

JAN – MAR 2023

APR – JUN 2023

JUL 2023

• New auditor selected following

• Handover protocols discussed

• PwC shadowed EY’s

completion of a thorough tender.

and agreed by PwC and EY

year-end audit.

• Formal appointment of PwC

to be proposed for shareholder

approval at the AGM.

• PwC’s planning procedures to be

completed for the FY23 audit.

ahead of year end.

• Handover interviews with key

team members on the Ernst &

Young team.

• Transition planning meeting

held between PwC and the

Dr. Martens team.

Audit planning finalisation
and half-year review:
• PwC’s planning procedures
anticipated to be completed.

• PwC to perform their first

half-year review.

• Dr. Martens Audit and Risk

Committee to receive an update on
the transition and first impressions.
• Final year-end audit plan ready

to be issued.

Pre-year-end audit procedures:
• Systems and controls audit

testing concluded.

• Initial review of Group Annual

Report.

• Finalise view on key judgements

and estimates.

Year-end audit procedures:
• Year end work focusing on the
balance sheet, Annual Report
disclosures and top-up testing
from interim procedures.

• Annual Report reviews, including
going concern audit procedures.

Statutory accounts and debrief:
• Finalisation of the statutory

accounts.

• Audit debrief on the engagement.

and one audit of furlough reporting in
the Netherlands. Additionally, no non-
audit services were provided during
FY22 by incoming external auditor
PricewaterhouseCoopers LLP.

• the adequacy and effectiveness of the

Group’s systems of operational controls,
including outsourced services, financial
controls, and management controls and
their operation;

Further details of fees paid to Ernst
& Young are set out in note 5 to the
financial statements on page 197.

Internal Audit, risk and
internal control
The remit of the Group’s Internal Audit
function encompasses the review of all
aspects of risk management and control
across the Group’s activities. It serves as
an independent review function for the
Board and all levels of management. Its
role is to understand the Group’s key risks
and to examine and evaluate the adequacy
and effectiveness of its systems of risk
management and internal control.
Its responsibilities include reviewing,
appraising and reporting on:

• the integrity of processes and systems,
including those under development,
to help ensure that controls offer
adequate protection against error,
fraud and loss;

• the Group’s policies, standards and
procedures including their use and
appropriateness;

• the operation of the Group’s corporate

governance and risk management
arrangements; and

• significant aspects of the Group’s activity
including major projects and as directed
by the Audit and Risk Committee.

Additionally, during the year Grant
Thornton were appointed as our internal
audit co-source partner and provided close
support to the Internal Audit function
through delivering certain reviews in the
FY22 internal audit plan.

Whilst the Board and Committee have
overall responsibility for ensuring that
risks are identified and managed, day-
to-day responsibility for these matters
is delegated to the leadership team.
Oversight of the Group Risk Register and
the development and implementation of
the Group’s approach to risk management
is delegated to the Operational Risk
Committee, chaired by the Head of Internal
Audit and Risk. More information about
how the Board delegates authority can be
found on page 129.

DR. MARTENS PLC ANNUAL REPORT 2022

145

GOVERNANCE
Audit and Risk Committee report
continued

During the period under review, the
Committee reviewed and fed back on the
progress made in delivering the internal
audit plan for FY22. The plan included
reviews of the following areas: remote /
hybrid working risks and controls,
cyber security risks, factory payments,
South Korea commercial controls and
programme assurance for ERP and
HR system implementations.

Assessment of the Group’s
system of internal control and
risk management framework
The Group’s risk assessment process and
the way in which significant business risks
are managed is a key area of focus for the
Committee. Activity is driven primarily by
the Company’s assessment of its principal
risks and uncertainties, as set out on
pages 100 to 103.

Additionally, during the year Internal
Audit worked closely with management
and the Committee Chair on an internal
audit plan for FY23. The risk-based plan
was formulated considering Dr. Martens’
strategic plans and objectives, together
with consideration of ‘hot topics’, the
principal risks facing Dr. Martens and the
wider economic and regulatory climate.
The internal audit plan also took into
account the potential impact of the BEIS
consultation and proposed reforms on
improving trust in audit and corporate
governance and the emerging themes
on enhanced governance and controls.

During FY23 reviews are planned in
the following areas: ecommerce sales
returns, new store opening, supply chain
assurance, ESG assurance, particularly
around TCFD disclosures and externally
reported metrics, ‘UK SOX’ readiness,
and programme assurance for major
system and business change projects.

The Committee also reviewed the
effectiveness of the Internal Audit
function in its first year of operations.
It was felt that it had made strong initial
progress in embedding the function into
the wider business, possessing a good
level of experience and knowledge and
building strong working relationships with
senior management. With the relaxation
of Covid-19 restrictions in some markets,
it agreed that there was an opportunity to
visit teams globally to further refine their
understanding of the business and further
develop relationships across the Group.

The Head of Internal Audit and Risk meets
regularly with the Chair of the Committee
outside of its scheduled meetings without
the presence of management. The Head
of Internal Audit and Risk may also meet
with any of the other members of the
Committee and with the external audit
partner outside of Committee meetings.
Additionally, all members of the Committee
are entitled to request a meeting with the
Head of Internal Audit and Risk to discuss
risk, control and audit matters.

The Company has in place an internal
control environment to protect the
business from the material risks which
have been identified. Management is
responsible for establishing and
maintaining adequate internal controls
over financial reporting and we have
responsibility for ensuring the
effectiveness of these controls.

In accordance with the requirements
of the UK Corporate Governance Code
2018, the Committee confirms it has
reviewed the Group’s risk management
and internal control systems and
identified no significant failings or
weaknesses that may significantly
impact the financial statements.

Anti-bribery and corruption
The Board holds ultimate accountability
for the Company’s anti-bribery and
corruption policies and procedures and is
committed to ensuring that Dr. Martens
conducts business in an honest and
ethical manner. To assist it in this regard,
the Board has delegated to the
Committee responsibility for reviewing
the Group’s systems and controls for
preventing bribery and corruption, with
support to the Committee provided by
the Internal Audit function. Dr. Martens
operates a zero-tolerance approach to
bribery and corruption at all levels within
the organisation globally and expects the
highest standards of integrity from our
people, agents, consultants, interns and
subcontractors and any other person
associated with it through business
dealings and relationships worldwide.

Dr. Martens has in place a clear Anti-
Bribery and Corruption Policy which
forms part of its Global Code of Conduct,
the ‘DOCtrine’. This is available for
employees globally to access on our
internal online policy hub. Every Board
Director, member of the leadership
team, employee and third party which
performs services on behalf of
Dr. Martens (including the suppliers
and manufacturers we partner with,

146

DR. MARTENS PLC ANNUAL REPORT 2022

distributors and franchisees which sell
our products and any contractors and
agents which work with us) has an
individual responsibility to comply with
the policy. All employees are required
to attest to their understanding and
acceptance of this policy at the time they
join the business and on an annual basis
thereafter. The Group’s external partners
must also acknowledge their agreement
and understanding. Mandatory online
training is provided to ensure our people
understand their responsibilities in
preventing bribery and corruption.

Whistleblowing
The Board has delegated oversight of
the Group’s whistleblowing policies and
procedures to the Committee. Employees
are expected to act professionally,
honestly and ethically in their dealings
with people, be they others within the
organisation, consumers shopping with
us through any channel, suppliers or
any other external partner they may
have contact with. The behaviours and
standards expected of our people are set
out in the DOCtrine, our code of conduct,
to which all employees must attest on
joining the organisation.

Additionally, the Company’s Speak Up
Policy governs how our people can safely
raise any concerns they may have about
suspected illegal or unethical business
practices impacting the business. A
confidential incident reporting facility is
available, provided by an independent
specialist firm, for circumstances where
an individual wishes to report an issue
anonymously.

Monitoring the effectiveness and
appropriateness of the Speak Up Policy
falls within the remit of the Committee,
supported by Internal Audit. Any potential
incidents that are reported, via the
anonymous reporting facility or directly
to individual line managers or leadership,
are followed up and investigations
launched where appropriate. Ongoing
investigations and their outcomes are
subsequently reported to the Committee.
The Committee received updates on
particular whistleblowing cases during
the year, which included details of the
investigations that took place and the
follow up actions identified.

Remuneration Committee report

Our executive pay approach offers market
competitive remuneration for the achievement
of stretching long-term performance objectives.
The Remuneration Committee will ensure that
pay is closely linked to the business strategy and
generates a strong alignment of interest with all
of our stakeholders including shareholders.

LYNNE WEEDALL
CHAIR OF THE REMUNERATION COMMITTEE

COMMITTEE MEMBERSHIP

The Committee comprises Lynne Weedall (Chair), Robyn Perriss and Ian Rogers,
all of whom are Independent Non-Executive Directors and provide a balance of skills
and experience. The full terms of reference of the Committee are available on the
Company’s corporate website at www.drmartensplc.com.

The attendance of Committee members at meetings during the year is disclosed below.
Full biographies of each member can be found on pages 116 to 117.

Key responsibilities

Establish and agree with the Board
the Remuneration Policy for the
Chair of the Board, the Executive
Directors, the Company Secretary,
the leadership team and any other
senior employees as the Board
may determine.

Determine the individual remuneration
packages of the Directors and relevant
senior employees within the terms of
the agreed Remuneration Policy.

Monitor the remuneration structures
and overall levels of remuneration of
the Group’s senior management and
make recommendations to the Board
where appropriate.

Oversee the remuneration of the
wider Dr. Martens team and ensure
that our policy for the senior team
is consistently structured.

Oversee the operation of the Group’s
employee share schemes.

Committee members

Committee composition

Number of meetings
attended/max number
could have attended:

Lynne Weedall (Committee Chair)

Robyn Perriss

Ian Rogers

5/5

4/51

1. Ian Rogers was unable to attend the Remuneration Committee

meeting on 9/6/21 due to a pre-existing business commitment,

and prior notification was given to the Chair of the Committee.

67%

33%

Male
Female

1 of 3
2 of 3

• Engaging further with the Board

employee listening groups
on Executive remuneration.

• Reviewing performance and

effectiveness during our first year
as a Committee, as part of the
annual Board evaluation process.

Focus areas for FY23
The Committee is planning to undertake
a number of key activities and have
discussions in the course of the coming
year on a range of matters including:

• Implementing the Remuneration Policy
appropriately for the second year of
the policy period.

• Rolling out our global all-employee SIP
– Dr. Martens Your Share – following
the successful Free Shares award in
October 2021.

DR. MARTENS PLC ANNUAL REPORT 2022

147

GOVERNANCE
Remuneration Committee report
continued

ANNUAL STATEMENT FROM THE CHAIR
OF THE REMUNERATION COMMITTEE

Dear shareholder ,

On behalf of the Remuneration
Committee, I am pleased to introduce
the Directors’ Remuneration report
for the year ending 31 March 2022.

This report is divided into three sections:

• This Annual Statement, which summarises

the work of the Committee and our
approach to Directors’ remuneration.

• The Remuneration Policy section,

which provides a summary of the policy
approved at the 2021 AGM. The full
Remuneration Policy can be found
on pages 113 to 118 of the 2021 Annual
Report (and is also available on the
Company website).

• The Annual Report on Remuneration,

which sets out the remuneration
outcomes for the financial year ended
31 March 2022 and the proposed
implementation of the Remuneration
Policy for the upcoming year.

Role of the Remuneration
Committee
In summary, the Committee’s scope is
as follows:

• To develop the Group’s policy on

executive remuneration and monitor
its ongoing appropriateness;

• To determine the levels of remuneration

for the Executive Directors and the
Global Leadership Team (together, the
‘Executive Group’), plus the Chair of
the Board;

• To oversee the remuneration of our
wider workforce and ensure that
our policy for the senior team is
consistently structured; and

• To oversee the operation of the Group’s

share plans.

LOOKING BACK

Company performance
The Group delivered revenue of £908.3m,
up 18% year-on-year, in line with the
high-teens growth guidance given at the
time of listing, and up 22% on a constant
currency basis. DTC continues to grow
ahead of wholesale, in line with our DOCS
strategy. Within DTC, ecommerce revenue
was up 11%, or up 92% compared to
FY20, and retail revenue was up 86%,
or up 12% compared to FY20. FY22
wholesale revenues were £460.3m,
up 5%, driven mainly by USA.

FY22 EBITDA was £263.0m, up 18%, with
an EBITDA margin of 29.0%, up 0.2pts.
This strong performance was driven by
a combination of volume and improved
DTC mix, with margin partially offset by
increased marketing investment, cost
annualisation and a return to business
as usual spending.

Group PBT before exceptional items was
£214.3m, up 43%, and profit after tax was
£181.2m, compared to £34.7m in FY21 when
we incurred £80.5m of exceptional costs
related to the IPO. Underlying earnings
per share1 were 17.4p, up 21%. Operating
cash flow after capex was strong at
£208.1m, with conversion of 79%.

Remuneration payable in respect
of FY22
Base salaries and fees
Base salaries for the Executive Directors
and fees for the Non-Executive Chair and
other Non-Executive Directors remained
unchanged from the levels set at
admission of the Company to the London
Stock Exchange in February 2021.

During the year, Robyn Perriss was
appointed the Non-Executive Director
responsible for employee engagement
to represent the employees’ voices at
the Board level. To reflect the increased
time that Robyn is spending on her
commitment and responsibilities, in line
with our policy on fees for additional Board
duties, the Board introduced an additional
fee of £10,000 per annum for this role.
The fee has been applied from 1 January
2022 to reflect her time in the role.

FY22 annual global bonus
scheme outcome
Employees throughout the Company,
whether in our stores, distribution centres,
factory or offices, participate in a bonus
scheme. To foster alignment across the
business, in FY22, the Executive annual
bonus (Global Bonus Scheme, or GBS)
continued to broadly mirror that of the
wider workforce and the same range of

global PBT targets was used across the
Group. Alongside the GBS, our employee
bonus plans have the ability to reward
exceptional performance, ensuring that our
employees across the world are all aligned
towards our single global growth ambitions.

For the Executive Directors, the GBS
comprised profit before tax (75%) and
strategic targets (25%). Three equally
weighted measures are included under
the strategic element of the GBS:
employee engagement, accelerating our
sustainability journey, and growing our
brand equity. These reflect our passion
and focus on culture, sustainability and
being brand custodians.

Our financial performance was strong
and, reflecting the stretching targets
that were set, this has delivered a 69%
pay-out level under the PBT element
(52% out of 75%). The Committee
carefully considered the performance
against the strategic objectives and
determined that there should be a payout
of 13% out of 25% based on their
achievement. A full breakdown of the
objectives and our performance against
them is contained in the report. Overall,
based on the achievement of these
performance measures, the CEO and CFO
will receive a bonus of 65% of maximum.
When reviewing the outcome of the bonus
against the targets, the Committee took
into account:

• Wider business performance, both
financial and non-financial, in the
context of market expectations and
our IPO guidance.

• The wider workforce experience – the
bonus out-turn of 65% of maximum for
the Executive Directors is marginally
below the payout as a percentage of
maximum for the majority of our
employees of 69%, due to the relatively
higher payout under the PBT element.

• Covid-19 response – no UK government
support has been taken and employees
who were unable to work due to, for
example, enforced store closures, were
paid in full throughout the pandemic.

Based on the considerations set out
above, the Committee is comfortable
that the formulaic outcome of the bonus
is appropriate and so no discretion has
been applied.

In line with the Remuneration Policy,
one-third of the net cash bonus earned
will be used to purchase shares which the
Executive Directors are required to hold
for two years; the remaining two-thirds
will be paid in cash.

148

DR. MARTENS PLC ANNUAL REPORT 2022

TEAM PLAYER

Workforce engagement
This year I, alongside Robyn Perriss
(our Non-Executive Director Designated
Employee Representative), undertook a
number of Listening Forums in EMEA,
USA and APAC. Amongst a wide range of
topics, I shared our approach to Executive
remuneration, how it aligns with Company
strategy and invited comments, questions
and input. There was a wide ranging and
constructive conversation that we intend
to act on and continue our listening.

We see all forms of employee engagement
and listening as an important and
fundamental part of how we do business,
and we expect this to continue to evolve,
widen and deepen over time. In addition to
the direct engagement of the Committee
during the employee forums, we will
implement a multi-layered listening
approach. The strategy will build on the
current programmes and processes and
will include ad hoc surveys, wellbeing,
organisational health, the monitoring
of programmes and initiatives, local
consumer feedback, NED listening groups
and town hall meetings. By joining up the
various tools under a single framework,
we hope to understand our employees’
experiences in a meaningful way.

Pay and benefits for the wider
Dr. Martens team
Dr. Martens’ culture and remuneration
philosophy is aligned across the business:
we offer a comprehensive package of
base pay and benefits for all employees.

For employees who participate in the
Global Bonus Scheme, the level of
performance was 69%, resulting in a
payout to all eligible employees in line
with the rules applying to their job level.

On 8 October 2021, Free Shares were
awarded under the Dr. Martens Your Share
SIP across our global business. This gave
those employed with the Company on
1 September 2021 a number of Free Shares
enabling them to hold a stake in the
business and share in its future success.
Over FY23, the Committee plans to launch
a purchase and match share scheme to
continue to encourage strong employee
engagement and share ownership.

Diversity, equity and inclusion
Dr. Martens has a strong female presence
across all areas of the business, which we
clearly see reflected in all pay quartiles.
The Company’s latest Gender Pay Gap
Statement (for the snapshot period up
to 5 April 2021) can be found on the
Dr. Martens corporate website. We’re
disappointed that our mean and median
pay gap widened in the year to 5 April
2021, but we are focused on improving
this through the actions of our DE&I
strategy. For example, we’re aiming for
a 40:60 male:female split in our retail
stores by 2024. Similarly, we’re aiming
to increase female representation on
our Global Leadership and Management
teams to a 50:50 split. In FY22 we made
significant progress in this regard, with
four out of ten of our Global Leadership
Team being female as at the time of
writing (2021: two).

Further information about our diversity,
equity and inclusion initiatives across the
workforce is set out in the Sustainability
report on pages 81 to 83.

Shareholder engagement
The Committee consults with its larger
shareholders on executive pay matters,
where considered appropriate. I spoke with
some of our largest shareholders at the
beginning of the year in relation to the
approval and operation of our new policy.
As there are no significant changes in the
implementation of the Remuneration
Policy, we have not carried out a further
formal consultation with shareholders in
relation to the policy or its operation in
FY22. However, I am always happy to make
myself available to shareholders to discuss
any concerns or feedback they may have.

On behalf of the Committee, thank you
for reading this report and we look
forward to receiving your support at the
AGM on 14 July 2022 in relation to the
advisory vote under resolution 2 to
approve this report.

LYNNE WEEDALL
CHAIR OF THE REMUNERATION COMMITTEE
31 May 2022

Long Term Incentive Plan (LTIP) awards
The first award under the LTIP was granted
soon after Admission. The first award is
eligible to vest on the announcement of
2024 annual results. No awards vested to
Executive Directors in FY22, and none are
due to vest in FY23.

The Committee is comfortable that actions
taken on pay during the year across the
Company were appropriate and balanced the
interests of all stakeholders and that the
Remuneration Policy operated as intended.

LOOKING AHEAD

Implementation of the Directors’
Remuneration Policy in FY23
Salary and fees
The Executive Directors received a 3%
increase in salary with effect from 1 April
2022. This is in line with the average
increase in our UK workforce, which was
also set at 3%.

Non-Executive Directors’ fee levels for
the year ending 31 March 2023 were
increased by 3%.

Global Bonus Scheme (GBS)
The maximum annual bonus payable under
the GBS will remain at 200% of salary for
the CEO and 150% of salary for the CFO.
The performance conditions will continue
to be based on PBT (excluding exceptional
items) for 75% of the bonus opportunity,
and strategic measures for the remaining
25%, continuing with the core focus areas
of employee engagement, brand equity
and ESG (sustainability). Stretching targets
will be set for all elements, the detail of
which and performance against will be set
out in full in the Directors’ Remuneration
report for FY23.

LTIP
The Committee has been closely
monitoring our recent share price, is
mindful of corporate governance best
practice and the consequential impact
on the number of shares that may be
awarded under the FY23 LTIP grant. As
a result, after careful consideration, the
Committee currently intends that the
award level will be scaled back to 250%
from 300% of salary. We have determined
this to be a meaningful scale-back.

Similar to the first grant under the LTIP,
awards will remain subject to stretching
Underlying EPS1 (67%) and relative TSR
targets (33%). The EPS range will remain
unchanged for the FY23 awards at 12%
p.a. (threshold vesting) to 21% p.a. (stretch
vesting) compound annual growth.

1. Underlying earnings per share is calculated as earnings before exceptional items, preference share interest and prior year tax adjustments.

DR. MARTENS PLC ANNUAL REPORT 2022

149

GOVERNANCERemuneration report

AT A GLANCE

PERFORMANCE SNAPSHOT

Global Bonus Scheme performance

Measure

Weighting of
the bonus

Result
achieved

Achievement
(out of a
maximum 100%)

Payout as a %
of total bonus

Financial
performance PBT

Employee
engagement

75.0%

£214.3m

8.3%

4.03

Strategic
objectives

Brand equity

8.4%

ESG

8.3%

100%

4.3 out of
6 areas
improved

Roadmaps
completed

69%

58%

100%

52%

65%

)
s
’
0
0
0
£
(

n
o
i
t
a
r
e
n
u
m
e
R

l
a
t
o
T

£1,800

£1,600

£1,400

£1,200

£1,000

£800

£600

£400

£200

£0

£1,656

£1,551

£925

£748

2022

2021 (pro-rated)

Kenny Wilson

2022

2021 (pro-rated)

Jon Mortimore

Salary

Benefits

Pension

Global Bonus Scheme

LTIP

TIME HORIZONS FOR REMUNERATION ELEMENTS

Year 1

Year 2

Year 3

Year 4

Year 5

Fixed pay

Salary, pension
and benefits

Global Bonus Scheme
(recovery provisions apply)

66.7% cash

33.3% shares

LTIP
(recovery provisions apply)

Performance period

Holding period

SCENARIO CHARTS – FY23 IMPLEMENTATION

IMPLEMENTATION FOR FY23

Maximum

19%

36%

45%

£4,017 £4,918

Base salary

n
o
s
l
i

W
y
n
n
e
K

e
r
o
m

i
t
r
o
M
n
o
J

Target

32%

30%

38% £2,394

Minimum

100% £772

Maximum

21%

30%

49% £2,355 £2,934

Target

35% 24% 41% £1,428

Minimum

100% £501

£0

£1,000

£2,000

£3,000

£4,000

£5,000

£6,000

Fixed pay

Global Bonus Scheme

LTIP

50% share price growth on LTIP

• Minimum: Fixed pay (FY23 salaries, pension at 5% of

salary and FY22 benefits).

• On-target: Fixed pay plus 50% of maximum FY23 GBS

and LTIP payout.

• Maximum: Fixed pay plus 100% of maximum FY23 GBS
and LTIP payout. The maximum scenario includes an
additional element to represent 50% share price growth
on the LTIP award from the date of grant to vesting.

150

DR. MARTENS PLC ANNUAL REPORT 2022

3% increase for all Executive Directors
• CEO – £721,000.
• CFO – £463,500.

No change.

5% of salary (in line with the wider
workforce).

Benefits

Pension

Global Bonus
Scheme (GBS)

• Maximum opportunity:

— CEO – 200% of salary.
— CFO – 150% of salary.

• Subject to PBT (75%) and strategic

objectives (25%).

• 33% deferred into shares for two years.

LTIP

• Grants for Executive Directors in June

2022: 250% of salary.

• Subject to Underlying EPS1 (67%) and

relative TSR (33%).

• Two-year holding period applies.

Shareholding
guidelines

300% of salary (to be held for two years
post employment).

Directors’ Remuneration Policy
This part of the Directors’ Remuneration report sets out a summary of the Remuneration Policy approved by shareholders at our
2021 AGM and effective from 29 July 2021. The full Remuneration Policy is available in the 2021 Annual Report on our website.

The Remuneration Policy has been designed to encourage long-term, sustainable growth and provide market-competitive overall
remuneration for the achievement of stretching performance targets aligned to the business strategy.

The policy has been tested against the six factors listed in Provision 40 of the UK Corporate Governance Code:

• Clarity – the policy is as clear as possible and is described in straightforward, concise terms to shareholders and the workforce

in this report.

• Simplicity – remuneration structures are as simple as possible and market typical, whilst at the same time incorporating the

necessary structural features to ensure a strong alignment to performance, strategy and minimising the risk of rewarding failure.

• Risk – the Remuneration Policy has been shaped to discourage inappropriate risk taking through a weighting of incentive pay
towards long-term incentives, the balance between financial and non-financial measures in the annual bonus known as the
Global Bonus Scheme (formerly known as the Global Management Incentive Plan), a portion of the GBS being paid in shares,
recovery provisions (i.e. malus and clawback), and in-employment & post-employment shareholding requirements. To avoid
conflicts of interest, Committee members are required to disclose any conflicts or potential conflicts ahead of Committee
meetings. No Executive Director or other member of management is present when their own remuneration is under discussion.

• Predictability – elements of the policy are subject to caps and dilution limits. Examples of how remuneration varies depending
on performance is set out in the scenario charts (included in the at a glance section). The Committee may exercise its discretion
to adjust Directors’ remuneration if a formula-driven incentive pay-out is inappropriate in the circumstances.

• Proportionality – there is a sensible balance between fixed pay and variable pay, and incentive pay is weighted to sustainable
long-term performance. Incentive plans are subject to performance conditions that consider both financial and non-financial
performance linked to strategy. Outcomes will not reward poor performance.

• Alignment to culture – The Remuneration Committee will consider Company culture and wider workforce policies when shaping
and developing Executive remuneration policies to ensure that there is coherence across the business. There will be a strong
emphasis on the fairness of remuneration outcomes across the workforce.

Pay element and purpose

Operation

Opportunity

Base salary

Provide a base level
of remuneration to
help us acquire,
retain and engage
top talent

Salaries are reviewed annually
and any changes are normally
effective from the beginning
of the financial year.

The review will take into account
several factors including (but not
limited to):

• The Director’s role experience

and skills;

Having been set based on
relevant factors, base salaries
will normally increase in line
with increases made to the
wider workforce.

Higher increases may be
permitted where appropriate, for
example where there is a change
to role or there is additional
responsibility or complexity.

Performance metrics,
weighting and assessment

None

• The remuneration policies,

practices and philosophy of
the Company;

• Pay conditions in the Group;

• Business performance;

• Market data for similar roles
and comparable companies;
and

• The economic environment.

1. Underlying earnings per share is calculated as earnings before exceptional items, preference share interest and prior year tax adjustments.

DR. MARTENS PLC ANNUAL REPORT 2022

151

GOVERNANCERemuneration report
continued

Directors’ Remuneration Policy continued

Pay element and purpose

Operation

Opportunity

Performance metrics,
weighting and assessment

The maximum will be set
at the cost of providing
the benefits described.

None

Benefits

To provide a market-
competitive level of
benefits based on the
market in which the
Executive is employed

The Executive Directors receive
benefits which include, but are
not limited to, family private
health cover, life assurance cover
and car allowance, although can
include any such benefits that the
Committee deems appropriate.

The Remuneration Committee
retains the discretion to be able
to adopt other benefits including
(but not limited to) relocation
expenses, tax equalisation and
support in meeting specific costs
incurred by Directors.

Any reasonable business-related
expenses can be reimbursed,
including the tax thereon if
determined to be a taxable benefit.

The Remuneration Committee
reviews benefit eligibility and
cost periodically.

Pensions

To provide market-
competitive
retirement benefits

Contribution to the Group
Pension Plan or a cash
allowance in lieu of pension.

Pension contribution in line
with the rate applicable for the
majority of the UK workforce
(currently 5% of salary).

None

Global Bonus Scheme (GBS) – formerly known as the Global Management Incentive Plan (GMI)

The maximum GBS opportunity
for the Executive Directors is as
follows:

• CEO – 200% of base salary.

• CFO – 150% of base salary.

To reward annual
performance against
financial and
non-financial KPIs
and to encourage
long-term
sustainable growth
and alignment with
shareholders’
interests through
payment in shares

The Remuneration Committee
will determine the GBS payable
after the year end, based on
performance against targets.

No more than two thirds of the
annual GBS will be paid out in
cash after the end of the
financial year. The remaining
amount will be used to purchase
shares which the Executive is
required to hold for two years.

Malus and clawback provisions
will apply up to the date of the
GBS determination and for three
years thereafter.

GBS payouts are determined
based on the satisfaction of
a range of key financial and
strategic objectives set by
the Remuneration Committee.

The majority of the performance
measures will be based on
financial performance.

Performance measures will
be set each year in line with
Company strategy.

No more than 10% of the
relevant portion of the GBS is
payable for delivering a threshold
level of performance, and no
more than 50% is payable for
delivering a target level of
performance (where the nature
of the performance metric allows
such an approach).

The Remuneration Committee
has the discretion to adjust the
formulaic LTIP outcome if it
believes that such outcome is
not a fair and accurate reflection
of business performance.

152

DR. MARTENS PLC ANNUAL REPORT 2022

Pay element and purpose

Operation

Opportunity

Long Term Incentive Plan (LTIP)

Performance metrics,
weighting and assessment

The normal maximum award
level will be 300% of salary per
annum, based on the face value
of shares at grant.

Awards vest subject to the
achievement of at least two
independently measured
performance metrics.

If exceptional circumstances
arise, including (but not limited
to) the recruitment of an
individual, awards may be
granted up to a maximum
of 400% of salary.

Threshold performance under
each metric will result in no more
than 25% of that portion of the
award vesting.

The Remuneration Committee
has the discretion to adjust the
formulaic outcome of the LTIP if
the Committee believes that it is
not a fair and accurate reflection
of business performance.

Participation will be capped by
the HMRC limits applying to the
respective plan.

None

300% of salary.

None

To encourage
long-term sustainable
growth and to provide
alignment with
shareholders’ interests

Awards can be granted in the
form of conditional shares or
nil cost options.

Awards will vest at the end of a
performance period of at least
three years, subject to the
satisfaction of performance
conditions and provided that the
Executive remains employed by
the Group.

The net of tax number of shares
that vest will be subject to an
additional two-year holding
period, during which the shares
cannot be sold.

An additional payment, normally in
shares, may be made equal to the
value of dividends which would
have accrued on vested shares.

Malus and clawback provisions
will apply for three years
post vesting.

All-employee share plans

To provide alignment
with Group employees
and to promote share
ownership

The Executive Directors may
participate in any all-employee
share plan operated by the
Company.

Shareholding requirement

To provide alignment
with shareholders’
interests

During employment
Executives are required to build
up and retain a shareholding
equivalent to 300% of their
base salary.

Until the shareholding
requirement is met, Executive
Directors will be required to
retain 50% of the net of tax
shares they receive under any
incentive plan.

Post-employment
Any Executive Director leaving the
Company will be expected to retain
the lower of the shares held at
cessation of employment and
shares to the value of 300% of
salary for a period of two years.

DR. MARTENS PLC ANNUAL REPORT 2022

153

GOVERNANCERemuneration report
continued

Directors’ Remuneration Policy continued

Performance metrics,
weighting and assessment

None

Pay element and purpose

Operation

Opportunity

Non-Executive Directors

To provide an
appropriate fee level
to attract and retain
Non-Executive
Directors and to
appropriately
recognise the
responsibilities and
time commitment

Non-Executive Directors are paid
a base fee and additional fees for
acting as Senior Independent
Director and as Chair of Board
Committees (or to reflect other
additional responsibilities and/or
additional/unforeseen time
commitments).

The Chair of the Board receives
an all-inclusive fee.

Neither the Chair of the Board
nor the Non-Executive Directors
participate in any incentive plans.

The fee for the Chair of the
Board is set by the Remuneration
Committee, the Non-Executive
Directors’ fees are set by the
Board (excluding the Non-
Executive Directors).

In general, fee level increases will
be in line with rise in salaries for
the rest of the workforce.

The Company will reimburse any
reasonable expenses incurred
(and related tax if applicable).

Service agreements and letters of appointment
The Executive Directors have a service contract requiring nine months’ notice of termination from either party as shown below:

Executive
Director

Date of
appointment

Date of
current contract

Notice from
the Company

Kenny Wilson

5 January 2021

21 January 2021

9 months

Jon Mortimore

5 January 2021

21 January 2021

9 months

Notice from
the individual

9 months

Unexpired period of
service contract

Rolling

The table below details the letters of appointment for each Non-Executive Director.

Non-Executive
Directors1

Date of
appointment

Paul Mason

5 January 2021

Lynne Weedall

11 January 2021

Date of current letter
of appointment

9 January 2021

8 January 2021

Ian Rogers

11 January 2021

25 November 2020

Robyn Perriss

11 January 2021

Ije Nwokorie

11 January 2021

Tara Alhadeff

5 January 2021

8 January 2021

9 January 2021

1. All Non-Executive Directors are in their initial term.

Notice from
the Company

6 months

3 months

N/A

Notice from
the individual

6 months

3 months

154

DR. MARTENS PLC ANNUAL REPORT 2022

ANNUAL REPORT ON REMUNERATION

The Remuneration Committee (the ‘Committee’) presents the Directors’ Remuneration report (excluding the Remuneration Policy),
to be put to shareholders for an advisory (non-binding) vote at the Annual General Meeting to be held on 14 July 2022.

Remuneration Committee
Role and responsibilities
The role of the Remuneration Committee is to determine and establish a Remuneration Policy for the Executive Group and to
oversee the remuneration packages for those individuals. When determining remuneration arrangements, the Committee must
review workforce remuneration and related policies and the alignment of incentives and rewards with culture and take these into
account when determining remuneration of the Executive Group. Further details on the roles and responsibilities of the Committee
are disclosed in the terms of reference which can be found on the Company’s corporate website.

Remuneration Committee membership and meetings
The Remuneration Committee comprises Lynne Weedall (Chair), Robyn Perriss and Ian Rogers, all of whom are Independent
Non-Executive Directors.

Committee met a total of five times during the year ended 31 March 2022.

The table below shows the number of meetings attended out of the possible maximum for each of the members of the Committee.

2021 AGM

Lynne Weedall (Committee Chair)

Robyn Perriss

Ian Rogers

Number of meetings attended/max number could have attended:

5/5

4/51

1. Ian Rogers was unable to attend the Remuneration Committee meeting on 9/6/21 due to a pre-existing business commitment, and prior notification was given to the

Chair of the Committee prior.

Key activities during the year
Key actions and areas of review by the Committee during the year included:

• Oversight of Remuneration Policy and its implementation;

• Ensuring the right remuneration governance policies and processes are in place through the first full year post-IPO;

• The roll-out of the first phase of our all-employee share plan across the global business, in the form of a Free Shares award under

our Dr. Martens Your Share SIP;

• Roll-out of our first phase of engagement with the wider workforce on Executive remuneration via Board employee listening programmes;

• Development of the Global Bonus Scheme objectives to evolve with our business strategy;

• Considering issues relating to wider workforce pay positioning across our regions; and

• Approving remuneration packages for new senior hires below the main Board.

External advisers
The Remuneration Committee receives independent advice from Korn Ferry, who were appointed in June 2020 by the pre-IPO
Remuneration Committee, following a tender process. Korn Ferry provided advice on market practice updates and benchmarking,
and supported management with undertakings such as producing the Directors’ Remuneration report to the extent this did not
impact the independence of its advice. The total fees paid to Korn Ferry in FY22 were £88,490 and were charged on a time and
materials basis. The Committee is satisfied that the advice provided by Korn Ferry is objective and independent.

Korn Ferry is a member of the Remuneration Consultants Group and abides by the voluntary code of conduct of that body.

Statement of voting at the Annual General Meeting
At the 2021 AGM, Dr. Martens’ shareholders were asked to approve resolutions on the Directors’ Remuneration Policy and the 2021
Annual Report on Remuneration. The votes received are set out below:

2021 AGM

Nature of vote

Votes for

Votes against

Votes total

Votes withheld

Approve the Directors’
Remuneration report

Approve the Directors’
Remuneration Policy

Binding

814,391,695

99.62

3,102,787

0.38

817,494,482

1,193

Advisory

810,983,185

99.20

6,512,215

0.80

817,495,400

275

DR. MARTENS PLC ANNUAL REPORT 2022

155

GOVERNANCERemuneration report
continued

Single total figure of remuneration for the financial year ending 31 March 2022 (audited)
The following table sets out the total remuneration for Executive and Non-Executive Directors for the financial year ended
31 March 2022. The comparative FY21 figures relate only to the period from Admission on 29 January 2021 to 31 March 2021.

All figures
shown in £000

Salary and fees

Benefits1

Pension2

Total Fixed
Remuneration

GBS
(Annual bonus)

LTIP

Total Variable
Remuneration

Total

FY22

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

FY21

Kenny Wilson

700

Jon Mortimore 450

Paul Mason

326

Lynne Weedall

Ian Rogers

Robyn Perriss

Ije Nwokorie

Tara Alhadeff3

Notes to the table

–

118

–

750

127 906

4 488

82 437

132

–

– 326

–

– 906

132 1,656

259

– 437

43 925

–

– 326

–

125

–

1. Benefits total represents the taxable value of benefits paid. Benefits provided to Executive Directors include: family private health cover, and car allowance.

2. Executive Directors receive a cash in lieu of pension contribution of 5% of salary.

3. Tara Alhadeff, a representative of Permira, receives no fees for her role as Non-Executive Director.

Global Bonus Scheme (audited)
The maximum Global Bonus Scheme opportunity for FY22 was 200% of salary for the CEO and 150% for the CFO. The performance
against measures for FY22 is set out below. The bonus was subject to PBT (75% of maximum) and strategic objectives (25% of
maximum). The strategic element was based on three equally weighted measures: employee engagement, brand equity and ESG
(sustainability) targets.

Threshold

Target

Stretch

Measure

PBT

Weighting

10% of maximum

50% of maximum

100% of maximum

75%

£186m

£206m

£227m

Employee engagement –
Grow global employee
engagement to reflect a
thriving culture.

8.3% Maintain Global
Factor Grand
Mean
Engagement
Score at 4.07

Grow Global
Factor Grand
Mean
Engagement
Score to 4.17

Stretch Global
Factor Grand
Mean
Engagement
Score to 4.2
reflect a thriving

culture

Achievement
% of maximum
available under
that element

Payout as a
percentage of
total bonus

69%

52%

Actual

£214.3m

Global Factor
Grand Mean
Engagement
Score of 4.03

Brand equity –
Growing the brand equity
across 6 key areas
(Awareness, Familiarity,
Ever Purchased, L24M
Purchased, Loyalty &
Advocacy) in our 7 key
markets.

Sustainability (ESG) –
Create roadmaps for the
11 sustainability targets
to accelerate our
sustainability journey.

Notes

8.3% Improvement in
2 of the 6 brand
equity measures

Improvement in
4 of the 6 brand
equity measures

Improvement in
all 6 brand

equity measures

4.3 out of 6
improvements1

58%

8.3%

4 of target
roadmaps
completed

8 of target
roadmaps
completed

All 11 target
roadmaps
completed

11 roadmaps
completed2

100%

1. Improvements were made in six of our seven key markets, in all of the indicators of Awareness, Familiarity, Ever Purchased and L24M Purchased. The only market

in which we reduced our scores under these four indicators was China – so on average a positive global score was achieved in these four indicators. In the areas of

Loyalty and Advocacy the improvement in net average scores across our seven key markets was slightly above zero. This resulted in a weighted average score

across the six brand equity indicators of 4.3 out of 6.

2. Prior to the start of FY22 our external consultant identified 11 priority sustainability issues. During FY22 our target was to create and sign off detailed roadmaps for

all 11 priority areas, against which we can measure our sustainability journey. During FY22 all 11 road maps have been completed, the detail of which is set out in the

Sustainability report on page 61.

156

DR. MARTENS PLC ANNUAL REPORT 2022

Based on performance during FY22 the GBS outcome for Executive Directors is shown below. The Committee is satisfied that no
adjustments to the payouts is required, and that the outcome is reflective of underlying performance.

Executive

Kenny Wilson

Jon Mortimore

Overall GBS outcome

% of maximum

65%

% of salary

129%

97%

Bonus outcome for FY22
(£’000)

£906

£437

One-third of the net GBS will be used to purchase shares on behalf of the Executive Directors, which they will be required to hold for
two years.

Long Term Incentive Plan (LTIP) vesting during the year (audited)
There are no awards under the LTIP due to vest based on performance to 31 March 2022.

LTIP granted during the year (audited)
On Admission, the Board adopted the Dr. Martens Long Term Incentive Plan. The first LTIP award was granted soon after Admission
on 9 February 2021, to cover the performance period through to 31 March 2024 and was therefore disclosed in last year’s report.
As a result, no further LTIP awards were made to Executive Directors in FY22.

All-employee share plans (audited)
To foster a shareholder mindset in all our employees, the Company wanted to give as many employees as possible a stake in the
business. All employees (at the time the Dr. Martens Your Share SIP was launched) received a small Free Shares award under the
SIP in October 2021. The Executive Directors opted out and so did not receive the award of Free Shares.

Payments to former Directors and for loss of office (audited)
No payments were made to former Directors of the Company in relation to loss of office during the year.

Director interests and Executive Directors’ shareholding requirements (audited)
During employment, Executive Directors are required to build and maintain a shareholding equivalent to 300% of their base salary.
The shareholdings of the CEO and CFO exceed this requirement significantly.

The table below summarises each Director’s current shareholding, including shares subject to a deferral or holding period and
performance conditions, and whether the shareholding requirement has been met. Post-cessation of employment, Executive
Directors must retain shares to the value of 300% of salary for a period of two years in accordance with the Remuneration Policy.

Beneficially

owned shares on
31 March 20221

Vested shares
subject to deferral/
holding period2

11,165,275

6,350,043

7,875,000

11,054

20,270

89,054

5,405

–

Unvested shares
subject to
performance
conditions3

567,567

364,864

Shareholding
requirement
(% of salary)

300%

Current
shareholding
(% of salary)4

3809%

3370%

–

N/A

Requirement

met

Yes

N/A

Director

Kenny Wilson

Jon Mortimore

Paul Mason

Lynne Weedall

Ian Rogers

Robyn Perriss

Ije Nwokorie

Tara Alhadeff

Notes

1. The total number of interests in shares in the Company of the Director including interests of connected persons.

2. Not subject to performance conditions.

3. No share interests are vested but unexercised and no share interests were exercised in FY22.

4. Based on the salary for the year ended 31 March 2022, and a share price on 31 March 2022 of 238.8 pence.

In the tables below, we have summarised the outstanding awards for the Executive Directors included in the Directors’ share
interest table.

DR. MARTENS PLC ANNUAL REPORT 2022

157

GOVERNANCERemuneration report
continued

LTIP awards (awards subject to performance conditions)

Share
price at
grant

Grant date

09/02/2021

513p1

Type of award

Conditional
shares

09/02/2021

513p1

Conditional
shares

No of shares
under the
award
01/04/2021

567,567

364,864

Kenny
Wilson

Total

2021
LTIP

Jon
Mortimore

2021
LTIP

Total

Granted
during
the year

Vested
during
the year

Exercised
during
the year

Lapsed
during
the year

No of shares
under the award
31/03/2022

End of
performance
period

–

567,567 31/03/2024

567,567

364,864 31/03/2024

364,864

1. As explained in the Prospectus and also in last year’s report, the number of shares awarded was calculated using the offer share price of 370p. The closing share

price on the date of grant was 513p.

Performance graph and table
Dr. Martens’ shares began unconditional trading on the London Stock Exchange’s main market on 3 February 2021. The chart
below shows the TSR performance of £100 invested in Dr. Martens from 3 February 2021 (using the offer price of 370p per share)
to 31 March 2022 against the FTSE 350 index. The FTSE 350 index is considered an appropriate comparison as Dr. Martens is a
constituent of the index.

)
d
e
s
a
b
e
R
(
£
e
u
a
V

£150

£140

£130

£120

£110

£100

£90

£80

£70

£60

£50

31/01/2021

28/02/2021

31/03/2021

30/04/2021

31/05/2021

30/06/2021

31/07/2021

31/08/2021

31/09/2021

31/10/2021

30/11/2021

31/12/2021

31/01/2022

28/02/2022

31/03/2022

Dr. Martens

FTSE 350

CEO single figure total remuneration (£000s)

GBS (as % of maximum opportunity)

Long-term incentive vesting (as % of maximum opportunity)

FY22

1,656

65%

–

FY21

259

75%

–

Change in Directors’ and employee remuneration
The table below sets out the percentage change in base salary, value of taxable benefits and bonus for all the Directors compared
with the average percentage change for employees. In FY21, the single figure table was based on the period from Admission on
29 January 2021 to 31 March 2021, whereas in FY22 the table is based on the full financial year ending 31 March 2022. As a result,
we have shown the annual percentage based on the change in the actual single figure of remuneration for 2022 compared to the
annualised single figure of remuneration for FY21 for both Directors and employees.

Kenny Wilson

Jon Mortimore

Paul Mason

Lynne Weedall

Ian Rogers

Robyn Perriss

Ije Nwokorie

Tara Alhadeff

Employees

Percentage change in FY21 – FY22

Taxable
benefits

Global Bonus
Scheme

–

15.7%

71.6%

–

34.8%

37.5%

Salary

2.9%1

–

7.0%

1. Fee increase for Robyn Perriss relates to the inclusion of additional Employee Engagement Director supplementary fee, paid from January 2022.

158

DR. MARTENS PLC ANNUAL REPORT 2022

CEO pay ratio
UK regulations require companies with more than 250 UK employees to publish a ratio to show CEO pay versus that of its UK
employees. In line with these regulations, we have provided the ratio calculated using Method A determined by the regulations,
under which a single total figure of remuneration is derived for each employee and the quartiles analysed. This method is, in the
Committee’s view, the most comprehensive and accurate reflection of the remuneration picture across our employee population.
The pay ratio for FY21 was based on CEO and wider employee pay from Admission to 31 March 2021. The CEO pay ratio for FY22
is based on remuneration for the financial year to 31 March 2022.

Period ended

31 March 2022

31 March 2021

The pay for the CEO and the employees at the percentiles is set out below:

£’000s

Basic salary

Total pay

Method

Lower Quartile

Median

Upper Quartile

77:1

76:1

60:1

62:1

31:1

35:1

CEO

Lower Quartile

Median

Upper Quartile

700

1,656

18.7

21.4

24.0

27.7

43.9

52.8

The employee pay figures were calculated by reference to the year ended 31 March 2022. For our retail employees who are paid
by reference to hours worked, full-time annualised equivalent remuneration was derived using their hourly rates grossed up to a
full-time working week and applying this to relevant elements of pay (such as bonuses which are based on contracted hours). For
salaried employees, their full-time annualised equivalent remuneration is calculated based on contracted working hours and joining
date, applied to the other elements of pay for which they are eligible. Leavers in the period and employees who are on statutory
maternity/paternity leave are excluded from the calculations.

The median CEO to employee pay ratio has slightly decreased this year. This is primarily due to the fact that employees received
salary increases as at 31 March 2021, whilst the CEO did not. Additionally, the GBS for more junior employees has had a stretch
element added in FY22, so this significantly increased the bonus payouts at more junior grades.

The Committee is comfortable that the pay ratio shown above is consistent with our pay, reward and progression policies for the
Company’s UK employees as a whole. When the LTIP begins to pay out in 2024, variable pay will increase for our Executive Directors.
Therefore, it is anticipated that over time the CEO pay ratios will become more volatile due to the variable nature of the CEO
remuneration structure.

Relative importance of the spend on pay
The table below shows the Company’s expenditure on employee pay compared to distributions to shareholders for the year ended
31 March 2022, compared to the annualised figure for FY21 (the annualised figure has been used as this enables better comparison
to FY22):

Distribution to shareholders

Total employees’ pay

FY22
£m

106.8

FY21
£m

94.1

% Change

100

13.5

DR. MARTENS PLC ANNUAL REPORT 2022

159

GOVERNANCERemuneration report
continued

Implementation of policy in FY23 (unaudited)
The section below sets out the planned implementation of the Remuneration Policy in FY23. The only significant change in the
implementation of the policy is that the Committee currently intends that the LTIP award level will be scaled back to 250% from
300% of salary as detailed below.

Executive Director remuneration
Base salary
In line with the wider UK workforce, Executive Directors received a 3% salary increase effective 1 April 2022:

Executive Director

Kenny Wilson

Jon Mortimore

Base salaries

FY23

FY22

% Change

£721,000

£700,000

£463,500

£450,000

Pension and benefits
Executive Directors will receive a cash in lieu of pension contribution of 5% of salary in line with the rate applying to the majority
of the UK workforce. Other benefits include family private health cover, life assurance cover and car allowance.

Global Bonus Scheme
The maximum GBS opportunity will be in line with policy, 200% of salary for the CEO and 150% of salary for the CFO.

Performance will be based on profit before tax (PBT) weighted 75%, and strategic objectives relating to engagement, brand health
and ESG (weighted 25% in total or 8.33% per objective). The Committee considers the disclosure of the precise targets to be
commercially sensitive, but there will be full retrospective disclosure in next year’s Annual Report. The Remuneration Committee
has the discretion to adjust the formulaic GBS outcome if it believes that such outcome is not a fair and accurate reflection of
business performance.

One third of the GBS awarded will be invested in shares and deferred for two years. Malus and clawback provisions apply.

Long Term Incentive Plan
The Committee has been closely monitoring our recent share price, is mindful of corporate governance best practice and the
consequential impact on the number of shares that may be awarded under the FY23 LTIP grant. As a result, after careful consideration,
the Committee currently intends that the award level will be scaled back to 250% from 300% of salary. We have determined this to be
a meaningful scale-back.

Similar to the first grant under the LTIP, awards will remain subject to stretching Underlying EPS1 and relative TSR targets. The EPS
range will remain unchanged for the FY23 awards at 12% p.a. (threshold vesting) to 21% p.a. (stretch vesting) compound annual growth.

Performance measure

Underlying EPS1
(compound annual growth)

Relative TSR vs. FTSE 350
(excluding investment trusts)

Weighting

Threshold
(25% of maximum)

Maximum
(100% of maximum)

Performance period

Targets

67%

33%

12% p.a.

21% p.a.

Median

Upper Quartile
or above

1 April 2022 – 31 March 2025

The Committee is comfortable that these targets provide an appropriate level of stretch and represent a strong link between pay
and performance.

When assessing the performance outcome, the Remuneration Committee will have the discretion to alter the formulaic vesting
if it believes that it is not a fair and accurate reflection of business performance.

Awards are subject to a two-year post-vesting holding period. Malus and clawback provisions apply.

1. Underlying earnings per share is calculated as earnings before exceptional items, preference share interest and prior year tax adjustments.

160

DR. MARTENS PLC ANNUAL REPORT 2022

Non-Executive Director remuneration
In line with the increases across the workforce, the Chair and Non-Executive Directors’ fees have been increased by 3% for the year
ending 31 March 2023. The fees are set out in full in the table below.

Non-Executive Director

Chair of the Board

Non-Executive Director base fee

Senior Independent Director

Audit and Risk Committee Chair’s fee

Remuneration Committee Chair’s fee

Employee Engagement Director

Fees

FY23

FY22

% Change

£335,265

£325,500

£66,744

£64,800

£15,450

£17,407

£16,686

£15,000

£16,900

£16,200

£10,300

£10,000

All-employee share incentives (unaudited)
The Executive Directors will be eligible to participate in any all-employee share plan operated by the Company on a consistent basis
to other UK-based employees.

Approval
This Remuneration report was approved by the Board of Directors on 31 May 2022 and signed on its behalf by the Remuneration
Committee Chair:

LYNNE WEEDALL
CHAIR OF THE REMUNERATION COMMITTEE
31 May 2022

1. Underlying earnings per share is calculated as earnings before exceptional items, preference share interest and prior year tax adjustments.

DR. MARTENS PLC ANNUAL REPORT 2022

161

GOVERNANCEDirectors’ report

The Directors’ report for the year ended 31 March 2022 comprises
pages 107 to 166 and 249 and 250 of this Annual Report,
including any sections incorporated by reference. The Strategic
report can be found on pages 1 to 106. In accordance with
section 414C(11) of the Act, the Board has included certain
disclosures in the Strategic report set out below:

• Information on how the Directors have had regard for the

Company’s stakeholders, and the effect of that regard, can
be found on pages 22 to 27 of the Strategic report.

• Disclosures based on the principles of Task Force on Climate-

related Financial Disclosures (TCFD) are detailed on
pages 90 to 96 of the Sustainability report.

• Information relating to future business developments can

be found throughout the Strategic report.

• Information relating to the Group’s principal risks and risk

management can be found on pages 97 to 103.

• The going concern and long-term viability statements can

be found on pages 104 and 105.

• Details of branches operated by the Company are set out on

pages 6 and 7 and 40.

• The Company’s global greenhouse gas emissions during FY22
can be found on page 68 of the Sustainability report, which is
located within the Strategic report.

• Information relating to research and development can be

found on pages 20 and 21 and 30 to 37 of the Strategic report
and 65 to 79 of the Sustainability report.

Relating to the Board
The Board of Directors
The Directors who have held office during the year ended
31 March 2022, together with biographical details of each
Director, are provided on pages 114 to 117. There were no
changes to the Directors during the year.

The appointment and replacement of Directors are governed by
the Company’s Articles of Association (the ‘Articles’), the UK
Corporate Governance Code 2018 (the ‘Code’), the Companies
Act 2006 (the ‘Act’) and related legislation.

The Company may, by ordinary resolution, declare dividends not
exceeding the amount recommended by the Board. Subject to
the Act, the Board may pay interim dividends and also any fixed
rate dividend, whenever the financial position of the Company,
in the opinion of the Board, justifies its payment.

The Directors may from time to time appoint one or more
Directors. The Board may appoint any person to be a Director
(so long as the total number of Directors does not exceed the
limit prescribed in the Articles). Under the Articles, any such
Director shall hold office only until the next Annual General
Meeting (AGM) where they will stand for annual election.

Articles of Association and powers of Directors
The Articles set out the rules relating to the powers of the
Company’s Directors and their appointment and replacement.
The Articles may only be amended by special resolution at a
general meeting of the shareholders. Subject to the Articles,
the Companies Act and any directions given by special
resolution, the business of the Company will be managed by
the Board which may exercise all the powers of the Company.

Directors’ indemnities and insurance
The Company maintained Directors’ and Officers’ liability
insurance cover throughout the reporting period, providing
appropriate cover for legal action brought against the Directors.
The Directors may also obtain independent legal advice at the

162

DR. MARTENS PLC ANNUAL REPORT 2022

For information on our approach to social, environmental and
ethical matters, please refer to the Sustainability report, which
can be found within the Strategic report on pages 54 to 96.

Other information which legislation requires to be disclosed in
the Directors’ report is set out on the following pages.

The Strategic report and the Directors’ report together form the
Management report for the purposes of the Disclosure Guidance
and Transparency Rules (DTR) 4.1.8R.

Information relating to financial instruments can be found on
pages 210 to 212 and is incorporated by reference.

Both the Strategic report and the Directors’ report have been
drawn up and presented in accordance with and in reliance
upon applicable English company law, and the liabilities of the
Directors in connection with those reports shall be subject to
the limitations and restrictions provided by such law.

Company’s expense, as necessary, in their capacity as Directors.
The Company has entered into deeds of indemnity with each
Director, which provide that the Company shall indemnify the
Directors to the fullest extent permitted by law and the Articles,
in respect of all losses arising out of, or in connection with, the
execution of their powers, duties and responsibilities as
Directors of the Company or any of its subsidiaries.

Compensation for loss of office
There are no agreements between the Company and its
Directors or employees providing for compensation for loss of
office or employment that occurs as a result of a takeover bid.

Directors’ share interests
Details regarding the share interests of the Directors in the
share capital of the Company are set out in the Remuneration
report on page 157.

Directors’ conflicts of interest
The Company has put in place procedures for managing conflicts
of interest. On becoming aware of the existence of an actual or
potential conflict of interest impacting themselves or any person
closely associated with them, the Directors are required to provide
details to the Board for consideration and, if appropriate, its
authorisation. If a conflict is deemed to exist, the relevant Director
will excuse themselves from consideration for discussions relating
to that conflict. Directors have a continuing duty to update any
changes to these conflicts.

Related party transactions
Internal controls are in place to ensure that any related party
transactions involving Directors, or their closely associated
persons, are conducted on an arm’s length basis and are
properly recorded and disclosed where appropriate.

Directors’ service agreements and letters of appointment
Details of the Executive Directors’ service agreements and
Non-Executive Directors’ letters of appointment are available
in the Remuneration report on page 154.

Relating to the Company’s share capital
Share capital
Details of the Company’s issued share capital are set out in note
23 to the financial statements on page 214. As at 31 March 2022,
this comprised a single class of ordinary share carrying the right
to one vote at general meetings of the Company. Holders of
ordinary shares are entitled to attend and speak at general
meetings of the Company, to appoint one or more proxies and,
if they are corporations, corporate representatives to attend
general meetings and to exercise voting rights. The Articles
provide a deadline for submission of proxy forms of not earlier
than 48 hours before the time appointed for the holding of the
meeting or adjourned meeting. However, when calculating the
48-hour period, the Directors can decide not to take account of
any part of a day that is not a working day.

Holders of ordinary shares may receive a dividend, if declared,
and may share in the assets of the Company on its liquidation.
Holders of ordinary shares are entitled to receive the Company’s
Annual Report and Accounts.

Subject to meeting certain thresholds, holders of ordinary
shares may requisition a general meeting of the Company
or the proposal of resolutions at AGMs.

Restrictions on transfer of securities
During FY22, the Company, IngreLux S.àr.l. and the Directors,
together with other pre-IPO shareholders (the ‘Minority
Shareholders’), were subject to restrictions on the issue, sale
and/or transfer, as applicable, of their respective holdings in
the Company’s issued share capital. Each had agreed that
they would not, without the prior written consent of the Joint
Global Co-ordinators (Morgan Stanley and Goldman Sachs
International) appointed during the IPO, issue, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce an offer of any shares or enter into any transaction
with the same economic effect as any of the foregoing.

Pursuant to the Underwriting Agreement entered into during
the IPO, the above mentioned restrictions (subject to certain
exceptions) applied to the Company and IngreLux S.àr.l. for a
period of 180 days, and to the Directors for a period of 365 days,
from 3 February 2021 (being the date on which the Company’s
shares were admitted to the premium listing segment of the
Official List of the FCA and to the London Stock Exchange).
Additionally, pursuant to Deeds of Election entered into prior
to the IPO, these restrictions also applied to the Minority
Shareholders for a period of 365 days in respect of relevant
senior employees of the Group and two former senior
executives, and 180 days in respect of all other Minority
Shareholders. These restrictions lapsed on 3 February 2022
and 2 August 2021, respectively.

In connection with the IPO IngreLux S.àr.l. and certain pre-IPO
shareholders who are members of the Griggs family entered
into an Orderly Marketing Agreement (to which the Company
is not a party) regulating the disposal of shares by any of them,
such that any disposals of any of them following the IPO may
be coordinated and conducted in an orderly manner. This
agreement stipulates that, after the expiration of the restrictions
referred to above, following a disposal of shares by IngreLux
S.àr.l., the parties agree that they will be bound by a further
lock-up on identical terms to the equivalent lock-up terms in the
Underwriting Agreement (in the case of IngreLux S.àr.l.) and in
the SSE Deed (in the case of the relevant pre-IPO shareholders)
for a period of 90 calendar days from the date on which the
disposal completes.

In addition to the specific restrictions set out above which
expired during FY22, there are the following ongoing general
restrictions on the transfer of shares in the Company:

• certain restrictions apply which may from time to time
be imposed by legislation and regulations (for example,
legislation relating to insider dealing);

• pursuant to the Company’s securities dealing code, the
Directors and members of the leadership team require
permission to deal in the Company’s shares;

• restrictions apply where a member, or any other person

appearing to be interested in shares held by such member,
with an interest representing at least 0.25% in nominal value
of the issued shares of their class, has been served with a
disclosure notice under Section 793 of the Companies Act
2006 and has failed to provide the Company with information
concerning interests in those shares;

• the subscriber ordinary shares may not be transferred without

the prior written consent of the Directors;

• the Board may, in its absolute discretion, refuse to register
the transfer of any shares which are not fully paid, provided
that the refusal does not prevent dealings in shares in the
Company from taking place on an open and proper basis;

• the Board may also refuse to register a transfer in favour

of more than four transferees; and

• the Board may also refuse to register the transfer of an
uncertificated share in the circumstances set out in the
uncertificated securities rules (as defined in the Articles).

Major shareholders
Information provided to the Company by major shareholders
pursuant to the FCA’s Disclosure Guidance and Transparency
Rules (DTR) is published via a Regulatory Information Service
and is available on the Company’s website. As at 31 March 2022
the Company had received notification of the following interests
in voting rights pursuant to Chapter 5 of the DTR:

IngreLux S.àr.l.

10 January 2022

Date notified

% of voting
rights1

36.41%

GIC Private Limited

5 February 2021

4.2148%

BlackRock, Inc

25 June 2021

< 5%

1. Percentages are shown as a percentage of the Company’s total voting rights

as at the date the Company was notified of the change in holding.

No changes to the positions set out above and no new positions
were disclosed to the Company between 31 March 2022 and the
publication of this Annual Report.

Relating to the Company
Profit and dividends
The profit for the financial year, after taxation, amounts to
£181.2m. An interim dividend of 1.22p per ordinary share was
announced on 9 December 2021 and paid in February 2022 in
relation to the period under review and the Directors intend to
propose the Company pay a final dividend for the year ending
31 March 2022 of 4.28p per ordinary share.

DR. MARTENS PLC ANNUAL REPORT 2022

163

GOVERNANCE
Directors’ report
continued

Disclosures required under the UK Listing Rules

Listing Rule

Detail

Page reference(s)

9.8.4R (1-2)
(5-13)

9.8.4R (4)

Not applicable

N/A

Long-term
incentive
schemes

150 to 161

9.8.4R (14)
(A-D)

Agreements
with controlling
shareholder

Set out in the Directors’ report
in the sections entitled
‘Relationship agreement with
controlling shareholder’, page
165, and ‘Additional statement
of compliance with UK Listing
Rule 9.8.4 (14)’, below.

Additional statement of compliance with UK Listing Rule
9.8.4 (14)
Since the Company’s admission to listing, it has complied with
the independence provisions contained in UK Listing Rule
9.2.2ADR(1). So far as the Company is aware, IngreLux S.àr.l.
and its associates have also complied with these provisions.

Subsidiaries and principal activities
The Company is the holding company of the Dr. Martens Group
of companies (the ‘Group’), the principal activities of which are
described in this Annual Report. The Group’s subsidiaries and
their locations are set out in note 12 on page 232 of the
financial statements.

Employment policies
The Company has in place a number of policies covering
important issues including diversity, equity and inclusion, equal
opportunities and wellbeing. We are committed to creating an
environment where our people can all be proud to work and,
to do this, we are an equal opportunity employer. All qualified
applicants will receive consideration for employment without
regard to race, colour, religion, gender, gender identity or
expression, sexual orientation, national origin, genetics, disability
or age and we take all reasonable steps to ensure equality of
opportunity in recruitment, training, development and conditions
of work. Persons with disabilities and/or health conditions are
given full and fair consideration for available roles, having
regard for their particular aptitudes and abilities, and we are
committed to providing reasonable accommodations for qualified
individuals with disabilities throughout our job application
process. Employees who become disabled during their career at
Dr. Martens will be retained in employment wherever possible
and the Company will support them in their rehabilitation in the
workplace and provide any training or retraining where needed.

Employee involvement
Clear and open communication with our people is fundamentally
important to our culture and to securing our long-term success.
We ensure our people across all the regions in which we operate
globally are kept well informed of our performance and strategy
and any significant events or developments impacting the
business. Detailed information about how we involve our people
at Dr. Martens can be found in the Sustainability report, the
Employee Engagement section of the Governance report
(which details the work of Robyn Perriss as our Employee
Representative Non-Executive Director) and the wider Strategic
report, specifically on pages 80 to 86, 124 to 127 and 22 to 27.

164

DR. MARTENS PLC ANNUAL REPORT 2022

Political donations
The Company did not make any political donations or incur any
political expenditure during the year ended 31 March 2022.

External auditor
Resolutions proposing to appoint Pricewaterhouse Coopers LLP
as auditor of the Company and to authorise the Audit and Risk
Committee to determine its remuneration will be proposed for
shareholder approval at the upcoming AGM in July.

Events after the balance sheet date
There have been no balance sheet events since the year ended
31 March 2022.

Agreements with controlling shareholder
Set out in the Directors’ report in the sections entitled
‘Relationship agreement with controlling shareholder’ on page
165, and ‘Additional statement of compliance with UK Listing
Rule 9.8.4 (14)’, left.

Change of control
The Company does not have any agreements with Directors
or employees that would provide for compensation for loss
of office or employment resulting from a takeover.

Details of the significant agreements to which the Company is
party that take effect, alter or terminate upon a change of control
of the Company following a takeover bid are set out below:

Share plans: The Company’s share plans contain specific
provisions relating to change of control. Outstanding awards and
options will normally automatically vest and become exercisable
or payable on or following a change of control arising as a result
of a general offer to acquire the whole of the Company’s issued
share capital or a court sanctioned compromise or arrangement
under Section 899 of the Companies Act 2006, subject to the
relevant performance conditions being met at that time.

Bank loan facilities: The Senior Facilities Agreement dated 27
January 2021 between the Group and various banks, pursuant to
which the Group has access to: (i) a €337.5m term loan facility;
and (ii) a £200m multi-currency revolving credit facility, contains
provisions that, in the event of the occurrence of a change of
control event, the banks shall have 15 business days to exercise
an individual right: (i) to cancel all undrawn commitments on five
business days’ notice; and (ii) on 60 days’ notice to require that
all outstanding participations in utilisations are repaid with
accrued interest and any other relevant amounts accrued.

Relationship agreement: Details of the relationship agreement
with IngreLux S.àr.l. are set out in the relevant section of this
Directors’ report on the next page. The relationship agreement
ceases to apply if the Company’s shares cease to be listed on the
premium listing segment of the Official List and traded on the
London Stock Exchange’s main market for listed securities, or if
the holding of IngreLux S.àr.l. (together with any of its associates)
ceases to control or to be entitled to control the exercise of, in
aggregate, 10% or more of the votes able to be cast on all or
substantially all matters at general meetings of the Company.

Modern Slavery Statement
The Company’s Modern Slavery Statement is reviewed and
approved by the Board annually and published on our corporate
website, in line with Section 54(1) of the Modern Slavery Act
2015. The statement covers the activities of the Company and
its subsidiaries and details policies, processes and actions we
have taken to ensure that slavery and human trafficking are not
taking place in our supply chains or any part of our business.
More information on our statement can be found on our website.

Relationship agreement with controlling shareholder
The Company’s largest and, for the purposes of the Listing Rules,
controlling shareholder is IngreLux S.àr.l., which owns 36.99%
of the issued share capital of Dr. Martens plc. IngreLux S.àr.l. is
wholly owned by funds advised by Permira Advisers LLP, a global
investment firm. In accordance with the UK Listing Rules, the
Company and IngreLux S.àr.l. have entered into a relationship
agreement (the ‘Relationship Agreement’) to ensure that:

1. the Group can carry on an independent business as its

main activity;

2. any transactions and arrangements between the Group and
IngreLux S.àr.l. (and/or any of its associates) are at arm’s
length and conducted on normal commercial terms;

3. neither IngreLux S.àr.l. nor any of its associates will take any
action that would have the effect of preventing the Company
from complying with its obligations under the Listing Rules;

4. neither IngreLux S.àr.l. nor any of its associates will propose
or procure the proposal of a shareholder resolution which is
intended or appears to be intended to circumvent the proper
application of the Listing Rules; and

The Relationship Agreement also provides for the Company to
provide, subject to certain limitations and exceptions, reasonable
cooperation and assistance to IngreLux S.àr.l. in the event of a
sale of shares by IngreLux S.àr.l., and that IngreLux S.àr.l. will
ensure that any such secondary sales of shares in the Company
are conducted in an orderly manner.

The Directors believe that the terms of the Relationship
Agreement enable the Group to carry on its business
independently of IngreLux S.àr.l. The Relationship Agreement
will continue for so long as:

1. the Company’s shares are listed on the premium listing

segment of the Official List and traded on the London Stock
Exchange’s Main Market for listed securities; and

2. IngreLux S.àr.l. (together with any of its associates) controls
or is entitled to control the exercise of in aggregate 10% or
more of the votes able to be cast on all or substantially all
matters at general meetings of the Company.

While IngreLux S.àr.l., on its own or together with any person
with whom it is acting in concert, holds 30% or more of the
votes able to be cast on all or substantially all matters at general
meetings of the Company, it is considered a ‘controlling
shareholder’ for the purposes of the Listing Rules. Whilst
IngreLux S.àr.l. remains a controlling shareholder, certain
resolutions, such as resolutions relating to the election of
Independent Directors or the cancellation of the Company’s
listing, will, in order to be passed, need to be approved by both:

1. a majority of shareholders voting on the resolution; and

2. a majority of shareholders voting on the resolution excluding

5. at all times a majority of the Directors of the Company shall

IngreLux S.àr.l.

be independent of IngreLux S.àr.l.

Pursuant to the Relationship Agreement, IngreLux S.àr.l. is also
entitled to appoint one Non-Executive Director to the Board
and nominate that individual to be a member of the Company’s
Nomination Committee for so long as it (together with any of
its associates) controls or is entitled to control the exercise of
in aggregate 10% or more of the votes able to be cast on all or
substantially all matters at general meetings of the Company.
IngreLux S.àr.l.’s first appointed representative is Tara Alhadeff,
whose biography can be found on page 117), and it will consult in
advance with the Chair of the Nomination Committee regarding
the identity of any person proposed to be nominated as a
Non-Executive Director in the future.

Pursuant to the Relationship Agreement, IngreLux S.àr.l. has
certain information rights for the purposes of its accounting,
tax or other regulatory requirements. In addition, the Company
may request that Permira Advisers LLP provides it with advisory
services. IngreLux S.àr.l. has undertaken to keep information
it receives on the Group confidential and in accordance with
applicable law.

Directors’ statement of disclosure of information
to the auditor
Each of the persons who is a Director at the date of approval
of this Annual Report confirms that:

• so far as the Director is aware, there is no relevant audit

information of which the Company’s auditor is unaware; and

• the Director has taken all the steps that he/she ought to
have taken as a Director in order to make himself/herself
aware of any relevant audit information and to establish
that the Company’s auditor is aware of that information.

This confirmation is given and should be interpreted in accordance
with the provisions of Section 418 of the Companies Act 2006.

Annual General Meeting
The Company’s AGM will be held at 28 Jamestown Road,
Camden NW1 7BY, on Thursday 14 July 2022 at 9.30am.

The Notice of Meeting, together with explanatory notes and
guidance on voting and arrangements for the day, is contained
within this Annual Report and can be found on pages 233 to 241.

DR. MARTENS PLC ANNUAL REPORT 2022

165

GOVERNANCEResponsibility statement of the Directors in respect
of the Annual Report
We confirm that, to the best of our knowledge:

• the Group 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;

• the Directors’ report includes a fair review of the development

and performance of the business and the position of the
Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face; and

• the Annual Report, taken as a whole, is fair, balanced and

understandable, and provides the necessary information for
shareholders to assess the Group’s position, performance,
business model and strategy.

This responsibility statement was approved by the Board of
Directors on 31 May 2022 and is signed on its behalf by:

EMILY REICHWALD
GENERAL COUNSEL AND COMPANY SECRETARY
31 May 2022
Dr. Martens plc
Company number: 12960219

Directors’ report
continued

Statement of Directors’ responsibilities
Statement of Directors’ responsibilities in respect of the
Annual Report, the Strategic report, the Directors’ report
and the financial statements
The Directors are responsible for preparing the Annual Report,
the Remuneration report and policy and the financial statements
in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial
statements for each financial year. The consolidated financial
statements of the Group have been prepared in accordance
with UK adopted International Accounting Standards in
conformity with the requirements of the Companies Act 2006.
The Company financial statements have been prepared on a
going concern basis under the historical cost convention and in
accordance with United Kingdom Accounting Standards,
including FRS 102 ‘The Financial Reporting Standard applicable
in the UK and Republic of Ireland’ (United Kingdom Generally
Accepted Accounting Practice) and in conformity with the
requirements of the Companies Act 2006.

Under company law the Directors must not approve the
accounts unless they are satisfied that they give a true and
fair view of the state of affairs of the Company and of the
profit or loss of the Company for that period.

In preparing these financial statements, the Directors are
required to:

• select suitable accounting policies and then apply them

consistently;

• make judgements and accounting estimates that are

reasonable and prudent;

• state whether applicable UK adopted IFRS and applicable UK

Accounting Standards (including FRS 102) have been followed,
subject to any material departures disclosed and explained in
the Group and Parent Company financial statements
respectively;

• prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Company will
continue in business.

The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose, at any time and with reasonable
accuracy, the financial position of the Company and the Group
and to enable them to ensure that the financial statements and
the Remuneration report comply with the Companies Act 2006
and, as regards the Group financial statements, Article 4 of the
IAS Regulation. They are also responsible for safeguarding the
assets of the Group and the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.

The Directors are responsible for the maintenance and integrity
of the corporate and financial information on the Company’s
website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.

166

DR. MARTENS PLC ANNUAL REPORT 2022

CONTENTS

Independent Auditor’s report

Consolidated Statement
of Profit or Loss

Consolidated Statement
of Comprehensive Income

Consolidated Balance Sheet

Consolidated Statement
of Changes in Equity

Consolidated Statement
of Cash Flows

Consolidated Non-GAAP
Statement of Cash Flows

Notes to the Consolidated
Financial Statements

168

177

178

179

180

181

182

183

INANCIAL
STATEMENTS

DR. MARTENS PLC ANNUAL REPORT 2022

167

FINANCIAL STATEMENTSIndependent Auditor’s report
to the members of Dr. Martens plc

Opinion
In our opinion:

• Dr. Martens plc’s Group financial statements and Parent Company financial statements (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 31 March 2022 and of the Group’s profit for the year
then ended;

• the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;

• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Dr. Martens plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year
ended 31 March 2022 which comprise:

Group

Consolidated Statement of Profit or Loss
for the year then ended

Parent Company

Balance Sheet as at 31 March 2022

Consolidated Balance Sheet as at 31 March 2022

Statement of Changes in Equity for the year then ended

Consolidated Statement of Comprehensive Income
for the year then ended

Related notes 1 to 12 to the financial statements including
a summary of significant accounting policies

Consolidated Statement of Changes in Equity
for the year then ended

Consolidated Statement of Cash Flows for the year then ended

Consolidated Non-GAAP Statement of Cash Flows and Related
notes 1 to 30 to the financial statements, including a summary
of significant accounting policies

The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and
UK adopted International Accounting Standards. The financial reporting framework that has been applied in the preparation of the
Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial
Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our
report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence
We are independent of the Group and Parent in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and we
remain independent of the Group and the Parent Company in conducting the audit.

168

DR. MARTENS PLC ANNUAL REPORT 2022

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and Parent
Company’s ability to continue to adopt the going concern basis of accounting included:

• We assessed the risk around going concern at the planning and year end phases of the audit;

• In conjunction with our walkthrough of the Group’s financial statement close process, we confirmed our understanding of
management’s going concern assessment process and engaged with management early to understand and assess the key
assumptions made in their assessment;

• Obtaining management’s going concern models which included a base case, and severe but plausible downside cash flow scenario
covering the going concern assessment period. These forecasts include an assessment of available debt facilities, the adequacy of
liquidity headroom and EBITDA headroom related to compliance with debt covenants as well as understanding how the impact of
Covid-19, supply chain constraints and macro-economic changes had been reflected in the forecasts. In addition to the severe but
plausible scenario, management prepared a reverse stress test scenario;

• Considering the downside scenarios identified by management, independently assessing whether there are any other scenarios

which should be considered, and assessing the quantum of the impact on the available cashflows of the downside scenario in the
going concern period;

• We agreed the 31 March 2022 cash balances included in the going concern assessment to the Group’s year end cash balances;

• We assessed the reasonableness of the cashflow forecasts included in the going concern assessment by analysing management’s
historical forecasting accuracy and understanding how the potential impact of principal risks such as COVID-19 and the current
geopolitical matters have been reflected in the forecasts;

• We evaluated the key assumptions by searching for contrary evidence to challenge these assumptions, including third party sector
forecasts and analyst expectations. Further, we ensured these assumptions were consistent with the five-year plan approved by Dr.
Marten’s Board;

• We also challenged management’s assumptions within the cash flow forecasts in relation to the growth assumptions in wholesale

and ecommerce as well as the extent to which retail trading would continue to recover to pre-Covid-19 levels. Due to uncertainty in
the wider retail and economic markets post Covid-19 and the current macro-economic conditions in the core markets the Group
operate we have anchored our work to focus on further sensitivities to the severe but plausible scenario and whether the reverse
stress test is considered remote;

• Assessing the adequacy of the going concern assessment period until 30 September 2023, considering whether any events of

conditions foreseeable after the period indicated a longer review period would be appropriate;

• Checking the arithmetical accuracy of the cash flow forecast models and assessing the Group’s historical forecasting accuracy;

• Comparing management’s forecasts to actual results through the subsequent events period and performing inquiries to the date

of this report;

• Confirm our understanding of the facility agreements, understood the terms and conditions including those related to covenant
test ratio requirements and checked the calculation of headroom in respect of the financial covenant test ratios; Assessing the
Group’s forecast banking covenant compliance;

• Assessing if the going concern disclosures in the financial statements are appropriate and in accordance with the revised ISA UK

570 going concern standard.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group and Parent Company’s ability to continue as a going concern
for a period up to 30 September 2023.

In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the
Group’s ability to continue as a going concern.

DR. MARTENS PLC ANNUAL REPORT 2022

169

FINANCIAL STATEMENTSIndependent Auditor’s report
to the members of Dr. Martens plc continued

Overview of our audit approach
Audit scope

• We performed an audit of the complete financial information of seven components and audit procedures on

specific balances for a further seven components.

• The components where we performed full or specific audit procedures accounted for 98.7% of Profit before

tax, 99.5% of Revenue and 98.1% of Total assets.

Key audit matters

• Revenue recognition including the risk of management override.

• Valuation of inventory provisioning.

Materiality

• Overall Group materiality of £10.7m which represents 5% of profit before tax.

An overview of the scope of the Parent Company and Group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope
for each company within the Group. Taken together, this enables us to form an opinion on the Consolidated Financial Statements. We
take into account size, risk profile, the organisation of the Group and effectiveness of Group-wide controls, changes in the business
environment and other factors such as recent internal audit results when assessing the level of work to be performed at each company.

In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative
coverage of significant accounts in the financial statements, of the 26 reporting components of the Group, we selected 14
components covering entities within UK, the USA, China, Japan, South Korea, Hong Kong, France, Netherlands, Belgium and
Germany, which represent the principal business units within the Group.

Of the 14 components selected, we performed an audit of the complete financial information of seven components (“full scope
components”) which were selected based on their size or risk characteristics. For the remaining seven components (“specific scope
components”), we performed audit procedures on specific accounts within that component that we considered had the potential for the
greatest impact on the significant accounts in the financial statements either because of the size of these accounts or their risk profile.

The reporting components where we performed audit procedures accounted for 98.7% (2021: 93.7%) of the Group’s profit before
tax, 99.5% (2021: 99.6%) of the Group’s revenue and 98.1% (2021: 98.4%) of the Group’s total assets. For the current year, the full
scope components contributed 95.9% (2021: 86.0%) of the Group’s profit before tax, 92.6% (2021: 89.1%) of the Group’s revenue
and 89.4% (2021: 83.6%) of the Group’s total assets. The specific scope component contributed 2.8% (2021: 7.7%) of the Group’s
profit before tax, 6.9% (2021: 11.9%) of the Group’s revenue and 8.7% (2021: 14.8%) of the Group’s total assets. The audit scope of
these components may not have included testing of all significant accounts of the component but will have contributed to the
coverage of significant accounts tested for the Group.

Of the remaining 12 components that together represent 1.3% of the Group’s profit before tax, none are individually greater than
0.6% of the Group’s profit before tax. For these components, we performed other procedures, including analytical review testing
of consolidation journals and intercompany eliminations and foreign currency translation recalculation to respond to any potential
risks of material misstatement to the Group financial statements.

The charts below illustrate the coverage obtained from the work performed by our audit teams.

Profit before tax

Revenue

Total assets

98.7% Full and specific scope audits
1.3% Other procedures

99.5% Full and specific scope audits
0.5% Other procedures

98.1% Full and specific scope audits
1.9% Other procedures

170

DR. MARTENS PLC ANNUAL REPORT 2022

Changes from the prior year
Scoping arrangements have changed since the prior year. Two new full scope locations for FY22 were added due to one new entity
being established in People’s Republic of China as well as the Group debt company which was elevated to full scope.

Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type of work that needed to be undertaken at each of the
components by us, as the primary audit engagement team, or by component auditors from other EY global network firms operating
under our instruction. Of the seven full scope components, audit procedures were performed on three of these directly by the
primary audit team; the rest were performed by component audit teams except for certain central balances and risk areas which
were covered directly by the primary audit team. For the seven specific scope components, where the work was performed by
component auditors, we determined the appropriate level of involvement to enable us to determine that sufficient audit evidence
had been obtained as a basis for our opinion on the Group as a whole.

The primary team carried out a site visit to the US component in May 2022 and the Americas regional close meeting was attended in
person by a member of the primary team. Given the continued travel restrictions we have been unable to perform physical site visits
to APAC sites. The EMEA component audits are completed by the primary team as majority of the finance function is based in the UK.

For all locations, the primary team interacted on a weekly or bi-weekly basis with all components, via pre-scheduled conference calls,
during the audit fieldwork. This was supported through the use of EY software collaboration platforms for the secure and timely
delivery of requested audit evidence. In addition, we reviewed key working papers, either by arranging virtual conference calls with
the respective component teams or by obtaining direct access to their audit files. Furthermore, we were responsible for the scope
and direction of the audit process. Lastly, we attended all closing meetings of the component teams with management. This,
together with the additional procedures performed at Group level, gave us appropriate evidence for our opinion on the Group
financial statements. Despite restrictions, we were still able to physically attend and observe inventory counts performed by the
entity across the majority of scoped locations. For locations in Hong Kong and China where we were not able to attend counts, we
performed alternative procedures for inventory existence including virtual counts.

Climate change
There has been increasing interest from stakeholders as to how climate change will impact the Group. The Group has determined that
the most significant future impact from climate change on their operations is expected to be from transitional policy and market risks.
These are explained on pages 90 to 96 in the required Task Force for Climate-related Financial Disclosures and on page 90 in the
principal risks and uncertainties, which form part of the “Other information,” rather than the audited financial statements. Our
procedures on these disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated.

As explained in Basis of preparation note, the key areas of the financial statements that may be impacted by climate change have
been described and the Group concluded there is no material financial statement impact from climate change. Governmental and
societal responses to climate change risks are still developing, and are interdependent upon each other, and consequently financial
statements cannot capture all possible future outcomes as these are not yet known. The degree of certainty of these changes may
also mean that they cannot be taken into account when determining asset and liability valuations and the timing of future cash flows
under the requirements of UK-adopted International Accounting Standards.

Our audit effort in considering climate change was focused on considering that the effects of material climate risks disclosed in the
TCFD report on pages 90 to 96 have been appropriately reflected in asset values and associated disclosures where values are
determined through modelling future cash flows, this primarily being impairment assessments. We also challenged the Directors’
considerations of climate change in their assessment of going concern and viability and associated disclosures.

Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.

DR. MARTENS PLC ANNUAL REPORT 2022

171

FINANCIAL STATEMENTSKey observations
communicated to
the Audit and Risk Committee

Based on our audit
procedures we concluded
that revenue, and
adjustments to revenue,
are appropriately
recognised and recorded.

Independent Auditor’s report
to the members of Dr. Martens plc continued

Key audit matters continued

Risk

Our response to the risk

Revenue recognition including
the risk of management
override (2022 £908.3m,
2021 £773.0m).

Refer to the Audit and Risk
Committee Report (page 142);
Accounting policies (page 186);
and Note 3 of the Consolidated
Financial Statements (page 195).

Our assessment is that the
revenue transactions, for retail
and ecommerce revenue, are
high volume low value, non
complex, with no judgement
applied over the amount recorded
for the transactions. We consider
there is a risk for overstatement
of revenue through either the
understatement of the returns
provision or other manual top
side journals processed by
management throughout the
year. Around year end there
is a further risk in relation to
revenue cut off.

For wholesale we consider there
is a risk for overstatement of
revenue through understatement
of judgemental provisions which
are netted off this revenue
stream namely for promotional
agreements with distributors,
returns and rebates. At year end
there is a further risk in relation
to revenue cut off. The above risk
regarding manual top side
journals is also applicable.

We performed full and specific scope audit procedures over this risk
area in 14 locations, which covered 99.5% of Group reported revenue.

Our procedures were designed to corroborate our assessment that
revenue should be correlated closely to cash banked (for all three
revenue streams) and to identify the manual adjustments that are
made to revenue for further testing.

Applicable to all channels; wholesale, ecommerce and retail:

• We updated our understanding of the revenue processes and tested

whether the Group’s revenue recognition policy by channel is in line with
the criteria set out in IFRS 15: Revenue from Contracts with Customers.

For revenue in each full and specific scope audit location:

• We performed walkthroughs of significant classes of revenue
transactions to understand significant processes and identify
and assess the design effectiveness of key controls.

• We used data analytics tools to perform a correlation analysis to

identify those revenue journals for which the corresponding entry
was not to cash. These entries included VAT, rebates, promotional
agreements and returns obtaining corroborating evidence for
such entries.

• We also verified the underlying data driving our correlation analysis

by tracing a sample of cash transactions, selected at random
throughout the year, to bank statements to verify the cash entries
represent real cash receipts.

• We performed detailed substantive testing on the calculation of
the returns provision to determine whether it was appropriate.
We verified the appropriateness of provisions by analysing returns
incurred post year-end to ensure that the returns provision is
complete. We further also considered the uncertainty caused by the
ongoing Covid-19 pandemic and supply chain delays on this provision.

• We obtained a complete list of manual revenue transactions recognised
in the year. We tested any material or unusual manual transactions by
obtaining an explanation from appropriate management and
corroborated these to third party supporting evidence.

• We performed cut-off testing around year-end to ensure revenue

is recognised in the correct period.

Contract review for promotional agreement and rebates:

• We tested whether revenue is recognised in accordance with the

contract terms and conditions.

• We tested the completeness of a sample of contracts by enquiring
with finance and sales teams for any additional arrangements or
amendments to terms, inspecting meeting minutes to identify if any
additional contracts exist, and verifying that the contracts are in date
and cover the financial statement period.

• We performed detailed review and testing of a sample of the

adjustments posted to revenue in relation to promotional agreements
and settlement discount arrangements with customers.

172

DR. MARTENS PLC ANNUAL REPORT 2022

Key observations
communicated to
the Audit and Risk Committee

Based on our audit
procedures we were
satisfied with the
judgements taken by
management and that
the resulting inventory
provision is appropriate.

Risk

Our response to the risk

We performed full and specific scope audit procedures over this risk
area in five locations plus EMEA, which covered 100% of Group
inventory provision.

We updated our understanding of the inventory provisioning process in
each of the above locations assessing the conformity to Group policy.
We also understood local provisions made outside of Group policy for
appropriateness.

Procedures:

• We re-computed the provision calculations and inputs to check for

completeness and accuracy; including testing inventory classification
within the provision workings.

• We challenged and validated the key assumptions applied by

management in estimating the provision with particular focus on
historic sell through data of aged/ provided for items in the prior year
using data analytics.

• We performed sensitivity analysis to assess the significance and risk

of changed assumptions on the provision. This included consideration
of the possible impact of macro-economic matters like impact to
consumer spending and sell through rates. We performed enquiries
across the business and observed the inventory counts with
particular focus on verifying the obsolete inventory and aged
inventory which had indicators that a provision may be required and
we traced back into the provision.

• We challenged and corroborated to supporting documentation any

large releases from the provision to appropriate supporting documents.

• We discussed the adequacy of the provision with management in
each region, understood the ageing profile of inventory at year
end and challenged the completeness of the provision in light the
prevailing economic environment and post year-end utilisation.

• We reviewed disclosures in the financial statements for

appropriateness, including the presentation of any releases in the
financial statements.

Valuation of inventory
Provision (Inventory as at
2022 £123.0m, Inventory
provision of £3.1m Inventory
as at 2021 £101.5m Inventory
provision of £3.9m).

Refer to the Audit and Risk
Committee Report (page 142);
Accounting policies (page 191
and 194); and Note 14 of the
Consolidated Financial
Statements (page 205).

The Group sells an array of
footwear options and is subject to
changing consumer demands and
fashion trends, increasing the
level of judgement involved in
estimating inventory provisions.

Heightened demand following
the recovery from COVID-19 in
key territories increased the
need for higher gross inventory
than at the prior year end.
Early 2022 supply chain issues
increased sell through of
obsolete stock leading to a
reduced provision as a
percentage of gross inventory.

We consider both finished goods
and raw materials as part of our
risk area. Judgement is required
to assess the appropriate level of
provisioning for items that may
be sold below cost or will be
written off in the next 12 months.
The judgement relates to
management’s expectations for
future sales based on current
forecasts, and its intentions with
respect to alternative exit routes
for inventory which attract
different provisioning rates.

In the prior year, our auditor’s report included a key audit matter in relation to the Initial Public Offering and related accounting
within exceptional items which is not applicable to FY22.

DR. MARTENS PLC ANNUAL REPORT 2022

173

FINANCIAL STATEMENTSIndependent Auditor’s report
to the members of Dr. Martens plc continued

Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the
audit and in forming our audit opinion.

Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and
extent of our audit procedures.

We determined materiality for the Group to be £10.7 million (2021: £7.6 million), which is 5% (2021: 5%) of profit before tax. We
believe that profit before tax provides us with a measure which aligns to the users of the financial statements given the focus on
profit and results. In prior year we utilised adjusted profit before tax to as they key measure for users of the financial statements
following the IPO in January 2021.

We determined materiality for the Parent Company to be £7.2 million (2021: £8.8million), which is 0.5% (2021: 0.5%) of total assets.

Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low
level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement was
that performance materiality was 50% (2021: 50%) of our planning materiality, namely £5.3m (2021: £3.8m).

Audit work at component locations for the purpose of obtaining audit coverage over significant financial statement accounts is undertaken
based on a percentage of total performance materiality. The performance materiality set for each component is based on the relative
scale and risk of the component to the Group as a whole and our assessment of the risk of misstatement at that component. In the current
year, the range of performance materiality allocated to components was £3.5m to £1.0m (2021: £3.5m to £0.6m).

Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess of £0.5m
(2021: £0.3m), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted
reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light
of other relevant qualitative considerations in forming our opinion.

Other information
The other information comprises the information included in the Annual Report set out on pages 233 to 250, including Notice of
Annual General Meeting 2022, Five-year financial summary (unaudited), First Half/Second Half Analysis, Glossary, Shareholder
information and Company information, other than the financial statements and our auditor’s report thereon. The Directors are
responsible for the other information contained within the Annual Report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in
this report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that
there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements

are prepared is consistent with the financial statements; and

• the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.

174

DR. MARTENS PLC ANNUAL REPORT 2022

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course
of the audit, we have not identified material misstatements in the Strategic report or the Directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us 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.

Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group and company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review by the Listing Rules.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:

• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material

uncertainties identified set out on page 105;

• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period

is appropriate set out on pages 104 and 105;

• Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets

its liabilities set out on pages 104 and 105;

• Directors’ statement on fair, balanced and understandable set out on page 166;

• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 98;

• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems

set out on page 146; and;

• The section describing the work of the Audit and Risk Committee set out on page 138 – 146.

Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 166, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as
the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group 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 the Directors 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 for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an Auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

DR. MARTENS PLC ANNUAL REPORT 2022

175

FINANCIAL STATEMENTSIndependent Auditor’s report
to the members of Dr. Martens plc continued

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the
company and management.

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the

most significant are those that relate to the reporting framework (IFRS, Companies Act 2006, the UK Corporate Governance Code,
and the Listing Rules of the UK Listing Authority) and the relevant tax compliance regulations in the jurisdictions in which
Dr. Martens plc operates. In addition, we concluded that there are certain significant laws and regulations that may have an effect
on the determination of the amounts and disclosures in the financial statements and those laws and regulations relating to health
and safety, employee matters, environmental, and bribery and corruption practices. Given the onset of the conflict in the Ukraine
prior to year-end, we considered the potential impact of the economic sanctions in relation to Russia had on Dr. Martens plc and
concluded on the compliance with these new regulations.

• We understood how Dr. Martens plc is complying with those frameworks by making enquiries of management, those responsible
for legal and compliance procedures and the Legal Counsel and Company Secretary. We corroborated our enquiries through our
review of Board minutes, and papers provided to the Audit and Risk Committee and noted that there was no contradictory
evidence. We also reviewed correspondence between the Group and various UK and overseas regulatory bodies.

• We considered performance targets and the market capitalisation of Dr. Martens plc and their influence on fraud risks. We

assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur by
considering the controls that the Group has established to address risks identified by the entity, or that might otherwise seek to
prevent, deter or detect fraud. We also considered areas of significant judgement including complex transactions, performance
targets, economic or external pressures and the impact that these have on the control environment. We considered the risk of
fraud through management override of controls and, in response, we incorporated data analytics across manual journal entries
into our audit approach. These procedures also included testing manual journals and were designed to provide reasonable
assurance that the financial statements were free from fraud or error.

• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our

procedures included a review of Board minutes to identify any non-compliance with laws and regulations, a review of the reporting
to the Audit and Risk Committee on compliance with regulations and enquiries of Legal Counsel and management. Where
instances of fraud are identified we involve specialists as appropriate to assist our review of internal investigations completed by
management. We additionally performed detailed testing of legal expenditure incurred in the period and noted that there was no
contradictory evidence. We communicated relevant items from these procedures to the relevant component teams who performed
sufficient and appropriate audit procedures on these areas, supplemented by audit procedures performed at the Group level.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Other matters we are required to address
• Following the recommendation from the Audit and Risk Committee we were reappointed by the Company on 1 June 2021 to audit

the financial statements for the year ending 31 March 2022.

We have been auditors of subsidiaries of the Group since the year ended 31 March 2005.

• The audit opinion is consistent with the additional report to the Audit and Risk Committee.

Use of our report
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.

Julie Carlyle (Senior statutory auditor)
for and on behalf of Ernst & Young LLP,
Statutory Auditor
London
31 May 2022

176

DR. MARTENS PLC ANNUAL REPORT 2022

Consolidated Statement of Profit or Loss
for the year ended 31 March 2022

Revenue
Cost of sales

Gross profit

Selling and administrative expenses
Finance expense2

Profit before tax

EBITDA
Exceptional items

EBITDA (post exceptional items)

Depreciation, amortisation and foreign exchange gains
Finance expense2

Profit before tax

Tax expense

Profit for the year

Earnings per share

Basic

Diluted

Adjusted3 earnings per share

Basic

Diluted

Underlying4 earnings per share

Basic

Diluted

Notes

4
8

3
4

4
8

Total
FY22
£m

908.3
(329.5)

578.8

(349.5)
(15.0)

214.3

263.0
–

263.0

(33.7)
(15.0)

214.3

(33.1)

181.2

Total
FY211
£m

773.0
(302.5)

470.5

(359.2)
(41.6)

69.7

222.9
(80.5)

142.4

(31.1)
(41.6)

69.7

(35.0)

34.7

Notes

FY22

FY211

18.1p

3.5p

11.5p

17.4p

14.4p

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based

software. This resulted in £nil impact on cash. See note 2.14 for further details.

2. Finance expense includes non-cash interest on preference shares of £nil (FY21: £28.5m) and on 28 January 2021 all preference shares were redeemed in full.

3. Adjusted earnings per share is calculated on adjusted profit after tax, being profit after tax before exceptional items.

4. Underlying earnings per share is calculated as earnings before exceptional items, preference share interest and prior year tax adjustments.

The results for the years presented above are derived from continuing operations and are entirely attributable to the owners of the
Parent Company.

DR. MARTENS PLC ANNUAL REPORT 2022

177

FINANCIAL STATEMENTSConsolidated Statement of Comprehensive Income
for the year ended 31 March 2022

Profit for the year

Other comprehensive income/(expense)

Items that may subsequently be reclassified to profit or loss

Currency translation differences
Cash flow hedges

Notes

Total
FY22
£m

181.2

4.3
–

4.3

Total
FY211
£m

34.7

(7.4)
(1.6)

(9.0)

Total comprehensive income for the year

185.5

25.7

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

178

DR. MARTENS PLC ANNUAL REPORT 2022

Consolidated Balance Sheet
for the year ended 31 March 2022

Non-current assets

Intangible assets

Property, plant and equipment
Right-of-use assets

Deferred tax assets
Pension fund surplus

Current assets
Inventories
Trade and other receivables
Income tax assets
Derivatives and other financial assets
Cash and cash equivalents

Total assets

Current liabilities
Trade and other payables
Borrowings – Lease liabilities
Derivatives and other financial liabilities
Income tax payable

Non-current liabilities
Borrowings – Bank2
Borrowings – Lease liabilities
Provisions

Total liabilities

Net assets

Equity attributable to the owners of the Parent
Share capital
Hedging reserve
Capital reserve – own shares
Capital redemption reserve
Merger reserve
Non-UK translation reserve
Retained earnings

Total equity

Notes

13
13

22
29

14
15

20
16

17
18
20

18
18
19

23
24
24
24
24
24
24

Total
FY22
£m

262.1

38.3
105.5

9.6
–

Total
FY211
£m

259.6

32.6
77.4

7.4
–

415.5

377.0

123.0
85.6
6.1
0.9
228.0

443.6

859.1

(134.7)
(19.8)
(0.5)
–

(155.0)

(280.9)
(93.1)
(1.9)

(375.9)

101.5
59.4
–
0.3
113.6

274.8

651.8

(133.0)
(18.2)
–
(1.1)

(152.3)

(281.6)
(66.6)
(1.6)

(349.8)

(530.9)

(502.1)

328.2

149.7

10.0
(0.1)
–
–
(1,400.0)
7.0
1,711.3

10.0
(0.1)
–
–
(1,400.0)
2.7
1,537.1

328.2

149.7

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. Included in bank debt is £4.7m (FY21: £5.9m) of unamortised bank fees.

The notes on pages 183 to 223 are an integral part of these financial statements.
The financial statements were approved and authorised by the Board of Directors and signed on its behalf by:

KENNY WILSON
CHIEF EXECUTIVE OFFICER
31 May 2022

JON MORTIMORE
CHIEF FINANCIAL OFFICER
31 May 2022

DR. MARTENS PLC ANNUAL REPORT 2022

179

FINANCIAL STATEMENTS

Consolidated Statement of Changes in Equity
for the year ended 31 March 2022

At 1 April 2020

Comprehensive income

Profit for the year1
Other comprehensive expense

Total comprehensive income for the year1

Own shares and other equity
transactions

Share issues during the period

Own shares sold in the year

Shares issued

Share for share exchange

Capital reduction

Capital redemption reserve distributions
Share-based payments

At 31 March 20211

Comprehensive income

Profit for the year
Other comprehensive income

Total comprehensive income for the year

Dividends paid

Shares issued
Share-based payments

At 31 March 2022

Share
capital
£m

Hedging
reserve
£m

Notes

–

–
–

–

1,400.0

(1,390.0)

–
–

1.5

–
(1.6)

(1.6)

–

–
–

10.0

(0.1)

–
–

–

–
–

–

–
–

10.0

(0.1)

23
26

Capital
reserve
– own
shares
£m

–

–
–

–

(0.9)

0.3

0.6

–

–
–

–

–
–

–

–
–

–

Capital
redemption
reserve
£m

(165.8)

–
–

–

165.8
–

–

–
–

–

–
–

–

Merger
reserve
£m

Non-UK
translation
reserve
£m

Retained
earnings1,2

£m

Total
equity1
£m

–

–
–

–

(1,400.0)

–

–
–

10.1

224.7

70.5

–
(7.4)

(7.4)

–

–
–

34.7
–

34.7

1.2

3.6

34.7
(9.0)

25.7

0.3

3.9

37.2

37.8

–

1,390.0

(165.8)
11.5

–

–
11.5

(1,400.0)

2.7

1,537.1

149.7

–
–

–

–
–

–
4.3

4.3

–

–
–

181.2
–

181.2
4.3

181.2

185.5

(12.2)

–
5.2

(1,400.0)

7.0

1,711.3

328.2

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. Included within retained earnings Dr. Martens plc (the Company) has distributable reserves of £1,389.8m (FY21: £1,385.0m).

The notes on pages 183 to 223 are an integral part of these financial statements.

180

DR. MARTENS PLC ANNUAL REPORT 2022

Consolidated Statement of Cash Flows
for the year ended 31 March 2022

Profit after taxation

Add back: income tax expense

Add back: finance expense

Add back: depreciation and amortisation

Add back: net foreign exchange rate gains

Add back: share-based payments
Add back: restricted cash

Increase in inventories

(Increase)/decrease in trade and other receivables
(Decrease)/increase in trade and other payables

Change in working capital

Cash flows from operating activities

Cash generated from operations
Taxation paid

Cash generated from operating activities

Cash flows from investing activities

Additions to intangible assets
Additions to property, plant and equipment

Cash used in investing activities

Cash flows from financing activities

Finance expense2

Payment of lease liabilities

Dividends paid

Proceeds from new bank borrowings

Net bank borrowings and facility repayments

Preference share repayments
Sale of shares from EBT

Cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year
Effect of exchange on cash held

Cash and cash equivalents at end of year

Notes

25,26

12
13

Total
FY22
£m

181.2

33.1

15.0

36.9

(3.2)

5.2
–

(18.3)

(23.3)
(1.0)

(42.6)

225.6
(41.2)

184.4

(9.5)
(15.5)

(25.0)

(10.8)

(24.0)

(12.2)

–

–
–

(47.0)

112.4

113.6
2.0

228.0

Total
FY211
£m

34.7

35.0

41.6

34.9

(3.8)

11.5
4.2

(18.1)

0.8
51.2

33.9

192.0
(33.1)

158.9

(6.9)
(10.4)

(17.3)

(12.8)

(23.8)

–

300.0

(92.7)

(341.4)
37.8

(132.9)

8.7

117.2
(12.3)

113.6

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based

software. This resulted in £nil impact on cash. See note 2.14 for further details.

2. Included in finance expense in FY21 are fees paid of £5.4m in relation to the new financing arrangements of £300.0m.

The notes on pages 183 to 223 are an integral part of these financial statements.

DR. MARTENS PLC ANNUAL REPORT 2022

181

FINANCIAL STATEMENTSConsolidated Non-GAAP Statement of Cash Flows
for the year ended 31 March 2022

EBITDA2

Change in net working capital

Share-based payments
Capital expenditure

Operating cash flow2

Net interest paid

Payment of lease liabilities
Taxation

Free cash flow2 before exceptional items

Proceeds from new bank borrowings

Exceptional items3

Preference shares redemption

Net bank borrowings and facility repayments
Dividends paid

Net cash flow

Opening cash
Net cash foreign exchange

Closing cash

Notes

Total
FY22
£m

Total
FY211
£m

263.0

222.9

(35.1)

5.2
(25.0)

208.1

(10.8)

(24.0)
(41.2)

132.1

–

(7.5)

–

–
(12.2)

112.4

113.6
2.0

228.0

27.8

0.7
(17.3)

234.1

(7.4)

(23.8)
(33.1)

169.8

300.0

(27.0)

(341.4)

(92.7)
–

8.7

117.2
(12.3)

113.6

18
11

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. Alternative Performance Measures as defined in the Glossary on pages 247 and 248.

3. All exceptional items paid were in relation to the IPO and refinancing event.

182

DR. MARTENS PLC ANNUAL REPORT 2022

Notes to the Consolidated Financial Statements
for the year ended 31 March 2022

1. General information
Dr. Martens plc (the ‘Company’) is a public company incorporated in England and Wales under the Companies Act 2006. The
Company’s registered office is: 28 Jamestown Road, Camden, London NW1 7BY. The principal activity of the Company and its
subsidiaries (together referred to as the ‘Group’) is the design, development, procurement, marketing, selling and distribution
of footwear, under the Dr. Martens brand.

2. Accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been
consistently applied to the periods presented, unless otherwise stated. Amounts are presented in GBP and to the nearest million
pounds (to one decimal place) unless otherwise noted.

2.1 Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with UK-adopted international accounting
standards. The Group’s consolidated financial statements have been prepared on a going concern basis under the historical cost
convention, except for derivative financial instruments and pension scheme assets that have been measured at fair value.

Certain amounts in the Statement of Profit or Loss and the Balance Sheet have been grouped together for clarity, with their
breakdown being shown in the notes to the financial statements. The distinction presented in the Balance Sheet between current
and non-current entries has been made on the basis of whether the assets and liabilities fall due within one year or more.

The Group reviewed its key metrics during the year and determined that operating profit did not meet the definition of a key metric
and references to this have been removed from the financial statements.

In preparing the Consolidated Financial Statements management has considered the impact of climate change, particularly in the
context of the financial statements as a whole, in addition to disclosures included in the Strategic Report this year. This included an
assessment of the impact on the carrying value of non-current assets and the impact on forecasts used in the impairment review
and the assessments of going concern and longer-term viability. These considerations did not have a material impact on the
financial reporting judgements and estimates, consistent with the assessment that climate change is an emerging risk and not
expected to have a significant impact on the Group’s going concern assessment to 30 September 2023 nor the viability of the Group
over the next three years.

2.2 Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 March 2022
and 31 March 2021. Control is achieved when the Group has rights to variable returns from its involvement with the investee and the
ability to use its power over the investee to affect the amount of the investor’s returns. Specifically, the Group controls an investee if,
and only if, the Group has:

• power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

• exposure, or rights, to variable returns from its involvement with the investee; and

• the ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances
in assessing whether it has power over an investee, including:

• the contractual arrangement(s) with the other vote holders of the investee;

• rights arising from other contractual arrangements; and

• the Group’s voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and
ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed
of during the year are included in the consolidated financial statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.

Profit or Loss and each component of Other Comprehensive Income are attributed to the equity holders of the parent of the Group
and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s
accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.

DR. MARTENS PLC ANNUAL REPORT 2022

183

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

2. Accounting policies continued
2.2 Basis of consolidation continued
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling
interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained
is recognised at fair value.

In the prior year, the Company acquired the entire shareholding of Doc Topco Limited by way of a share for share exchange. The
insertion of the Company on top of the existing Doc Topco Limited group does not constitute a business combination under IFRS 3
‘Business Combinations’ and instead has been accounted for as a common control transaction. Merger accounting has been used
to account for this transaction.

2.3 Adoption of new and revised standards
The Group has applied the following standards, amendments and interpretations for the first time for the annual reporting period
commencing 1 April 2021:

• Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39 and IFRS 7).

• Amendments to IFRS 16 Leasing – Covid-19 related rent concessions.

• An IFRS Interpretations Committee (IFRIC) agenda decision from March 2021 clarifying how configuration or customisation costs

in a cloud computing arrangement (Software-as-a-Service (SaaS)), should be accounted for.

For information on the restatement as a result of the IFRIC agenda decision from March 2021 refer to note 2.14. The other
amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly
affect the current or future periods.

New standards and interpretations not yet applied
At the date of authorisation of these financial statements, there were no standards and interpretations relevant to the Group that
are in issue but not yet effective. Other standards and interpretations or amendments thereto which have been issued, but are not
yet effective, are not expected to have a material impact on the Group’s consolidated financial statements.

2.4 Non-UK currency
The consolidated financial statements are presented in GBP, which is the Group’s functional and presentational currency. The Group
includes non-UK entities whose functional currencies are not Sterling. On consolidation, the assets and liabilities of the Group
entities that have a functional currency different from the presentation currency are translated into GBP at the closing rate at the
date of that Balance Sheet. Income and expenses for each Statement of Profit or Loss are translated at average exchange rates for
the period. Exchange differences are recognised in other comprehensive income.

The functional currency of each company in the Group is that of the primary economic environment in which the entity operates.
Monetary assets and liabilities denominated in non-UK currencies are translated into GBP at the rates of exchange ruling at the
period end. Transactions in non-UK currencies are recorded at the rate ruling at the date of the transaction. All differences are taken
to the Statement of Comprehensive Income.

2.5 Going concern
The financial statements have been prepared on a going concern basis. The Directors’ assessment is based on detailed trading and
cash flow forecasts, including forecast liquidity and covenant compliance. The period of management’s assessment is from the date
of the signing of the financial statements to 30 September 2023 and the going concern basis is dependent on the Group maintaining
adequate levels of resources to operate during the period.

The Directors also considered the Group’s funding arrangements at 31 March 2022 with cash of £228.0m, term loan of £285.6m as
well as available undrawn facilities of £189.5m. A bullet debt repayment of the term loan of £285.6m not due until February 2026.

The year saw a slow recovery from Covid-19 as demand rebounded in our core markets as they emerged from lockdowns and
restrictions and as we begin to learn to live with Covid-19. Despite a wide variety of localised restrictions negatively impacting
trading on a country by country basis, a recovery trajectory has been clear. The principal impact of Covid in the year was on supply
and specifically on manufacturing (as experienced with three factories being closed for circa three months in south Vietnam during
summer 2021) and significantly extended lead times from factory to our DCs, particularly lead times to USA nearly doubling to
90-95 days. More recently we have seen a slow improvement in lead times and, coupled with a high vaccination rate across our
factories, we anticipate it unlikely we will experience a repeat of FY22 country-wide lockdown. Continued recovery is reliant upon
economies normalising, following vaccination success in our core markets and learning to live with Covid-19.

The Directors prepare their detailed forecasts and plans for the assessment period taking into account their experiences of trading
through the financial year to March 2022, including the impact of Covid-19 on profitability, cash flow and covenant compliance.

184

DR. MARTENS PLC ANNUAL REPORT 2022

2. Accounting policies continued
2.5 Going concern continued
The Directors remain vigilant and continue to monitor the effects of Covid-19 and supply chain challenges in all our core markets
(across ecommerce, retail and wholesale channels) and economic and political instability and will react appropriately to further
developments and associated risks. Trading in the year also identified that payments from wholesale customers remained strong
throughout with no material increase in bad debts from pre Covid-19 trading.

As part of the going concern assessment, management have modelled and the Directors have reviewed a base case and a severe but
plausible downside scenario described in the Viability Statement set out on pages 104 and 105 with no planned cost or working
capital mitigation (including the payment of dividends).

The base case assumes the Group continues to trade with no restrictions in core markets and trade continues to build in line with
the DOCS growth strategy.

Given the backdrop of continued global economic uncertainty the current geopolitical landscape and increasing inflation, the risks for
modelling purposes in the severe but plausible downside scenario included a large website down during our peak period, factory
closures for 3 months in one key production geographic and unexpected increases in costs and inflation arising from global events.
These risks will impact on the revenue and cost growth assumptions in the base case and have been sensitised downward to model the
severe but plausible downside scenario with no planned cost or working capital mitigation actions (including the dividend payments).
The impact was represented by revenue growth being 33pts lower than the base case across all channels and geographies.

In the severe but plausible scenario modelled the Group continues to have satisfactory liquidity headroom but required remediation
of the covenant headroom throughout the period under review. However, should this extreme downside scenario occur then
mitigating actions could be taken including, (but not limited to) cancellation of pay awards, reduction in planned marketing spend,
potential extension of payment terms with factories, reducing purchases in line with reduced sales, and delay/cancellation of IT
related capex and reduced future dividend payments. In addition, if inflation expectations are high, we expect to increase prices to
offset higher input costs. A more extreme downside scenario is not considered plausible.

To date we have had minimal experience of bad debts or lower margin. Whilst we have experienced manufacturing constraints
through summer 2021 (with 3 factories in south Vietnam closed for 3 months) and extended lead times for logistics from Asia to
USA, our plans assume the extended lead times are broadly maintained until H2 (when they slowly improve) with factories more
likely to not experience country-wide, long-term lockdowns, but due to high vaccination status, more likely periods of sub optimal
operations/closures for a few days with positive tests isolated but broadly continued operations.

In addition, a reverse stress test has been modelled to determine what could break covenant compliance estimates and liquidity
before any mitigating actions. To model these reverse stress tests the impact on revenue of zero covenant headroom and zero
liquidity was calculated at the end of FY23. Under the covenant breach test it is concluded that the business could weather extreme
growth reductions against the base case without mitigation, -38pts of revenue growth in FY23 before covenants are breached.
Similarly, the business would have to experience -65pts revenue growth reduction in FY23 before zero cash headroom is reached,
which would be below our pre-Covid-19 numbers (FY20). Under both tests modelled, there were no mitigating actions (including
dividend payments) modelled and the resulting revenues calculated and likelihood of occurring have been considered. The Directors
have assessed the likelihood of occurrence to be remote.

The Directors will continue to monitor the effects of Covid-19 and inflation on our Group and the economies of the countries the
Group operates and plan to maintain maximum flexibility to react on a market by market basis, taking into consideration the various
national and local government regulations and policies as events unfold.

In adopting the going concern basis for preparing the financial statements, the Directors have considered the business activities
as well as the principal risks and uncertainties faced by the business. Based on the Group’s trading and cash flow forecasts, the
Directors are satisfied that the Group will maintain an adequate level of resources to be able to continue to operate during the
period under review.

2.6 Share Incentive Plan (SIP) Trusts
The Group operates two SIP Trusts for the benefit of its employees. Under accounting standard IFRS 10 Consolidated Financial
Statements, control for accounting purposes has a different test threshold than under a legal basis and as a result the Group’s
SIP Trusts are deemed to be under the control of Dr. Martens plc.

The Trust deed for the Dr. Martens PLC UK Share Incentive Plan Trust was adopted by the Board on 10 September 2021.
The Trust deed for the Dr. Martens PLC International Share Incentive Plan Trust was adopted by the Board on 10 September 2021.

2.7 Employee Benefit Trust (EBT)
Under accounting standard IFRS 10 Consolidated Financial Statements, control for accounting purposes has a different test
threshold than under a legal basis. The Group operated an EBT for the benefit of its employees in the prior year. The Trust was
dissolved on 1 July 2021.

DR. MARTENS PLC ANNUAL REPORT 2022

185

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

2. Accounting policies continued
2.8 Revenue
The Group’s revenue arises from the sale of products to customers. Contracts with customers generally have one performance
obligation. The Group has concluded that the revenue from the sale of products should be recognised at a point in time when
control of the goods is transferred to the customer, which is dependent on the revenue channel. Revenue is recognised at the
invoiced price less any associated discounts.

Control is passed to the customer on the following basis under each of the revenue channels as follows:

• ecommerce channel: upon receipt of the goods by the customer;

• retail channel: upon completion of the transaction; and

• wholesale channel: upon delivery of the goods or upon dispatch to the customer if the customer takes responsibility for delivery.

The payment terms across each of these revenue channels varies. The payments for retail are received at the transfer of control.
Ecommerce payments are mainly received in advance of transfer of control by less than one week as there is a timing difference
between receipt of cash on order and receipt of goods by the customer. Wholesale customers pay on terms generally between
30 and 60 days.

Provisions for returned goods are calculated based on future expected levels of returns for each channel, assessed across a
variety of factors such as historical trends, economic factors and other measures. The Group performed the five-step model on
each of these elements, identifying the contracts, the performance obligations and the transaction price and then allocating this
to determine the timing of revenue recognition. The revenue channels that have been separately assessed are as follows:

• retail revenue;

• ecommerce revenue, including delivery charge income; and

• wholesale revenue.

Some contracts for the sale of goods provide customers with a right of return and rebates. Under IFRS 15, this gives rise to
variable consideration.

Rights of return
When a contract provides a customer with a right of return, under IFRS 15, the consideration is variable because the contract allows
the customer to return the product. The Group uses the expected value method to estimate the goods that will be returned and
recognise a refund liability and an asset for the goods to be recovered. Prior to FY22 the refund liability was netted against trade
debtors due to its immaterial nature. This is now presented within accruals in line with IFRS 15.

Rebates
Under IFRS 15, rebates give rise to variable consideration. To estimate this the Group applies the ‘most likely amount’ method.

2.9 Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions
will be complied with. When the grant relates to an expense item, it is recognised as an expense on a systematic basis over the
periods of the related costs and for which it is intended to compensate. When the grant relates to an asset, it is recognised as
income in equal amounts over the expected useful life of the related asset.

During the year, the Group received government grants of £nil (2021: £1.9m) of which £nil (2021: £nil) related to the UK. In the prior year,
the Group received and subsequently repaid the UK furlough monies of £1.3m. The repayment is presented net of the grants received.

2.10 Finance expenses
Finance expenses consist of interest payable on various forms of debt and are recognised in the Statement of Profit or Loss under
the effective interest rate method.

2.11 Exceptional items
Exceptional items consist of material non-recurring items and items arising outside of the normal trading of the Group.

186

DR. MARTENS PLC ANNUAL REPORT 2022

2. Accounting policies continued
2.12 Taxation
The tax expense represents the sum of the tax currently payable and deferred tax movement recognised. The tax currently payable
is based on taxable profit. Taxable profit differs from net profit as reported in the Statement of Profit or Loss because it excludes
items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or
deductible. The Group’s liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by
the end of each reporting period.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities
in the historical financial information and the corresponding tax bases used in the computation of taxable profit and is accounted
for using the Balance Sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill
or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects
neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising
in investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at
the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised, or the liability is
settled. Deferred tax is charged or credited in the Statement of Profit or Loss, except when it relates to items credited or charged
directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there
is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied
by the same taxation authority, and the Group intends to settle its current tax assets and liabilities on a net basis.

2.13 Dividends
Final dividends are recorded in the financial statements in the period in which they are approved by the Company’s shareholders.
Interim dividends are recorded in the period in which they are approved and paid.

2.14 Intangible assets
Goodwill
Business combinations are accounted for by applying the acquisition method. Goodwill acquired represents the excess of the fair
value of the consideration over the fair value of the identifiable net assets acquired.

After initial recognition, positive goodwill is measured at cost less any accumulated impairment losses. At the date of acquisition, the
goodwill is allocated to cash generating units, usually at business segment level or statutory company level as the case may be, for the
purpose of impairment testing and is tested at least annually for impairment. If any such indication exists, the assets’ recoverable
amount is estimated. For goodwill, the recoverable amount is estimated at each year-end date and whenever there is an indication of
impairment. On subsequent disposal or termination of a business acquired, the profit or loss on termination is calculated after charging
the carrying value of any related goodwill. Negative goodwill is recognised directly in the Statement of Profit or Loss.

Software
Software is carried at cost less accumulated amortisation and any provision for impairment. Cost includes the original purchase
price of the asset and the development costs incurred attributable to bringing the asset to its working condition for intended use.
Additional costs in relation to the software are capitalised only so far as they fulfil the criteria of being separable intangible assets.
These assets are considered to have finite useful lives and are amortised on a straight-line basis over the expected useful economic
life of each of the assets, which is considered to be three to seven years. The carrying value of intangible assets is reviewed for
impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable.

Change in accounting policy – intangible assets
In March 2021 the IFRS Interpretations Committee (IFRIC) announced an agenda decision on configuration and customisation
costs in a cloud computing arrangement and as a result the Group has changed its accounting policy relating to software intangible
assets. Specifically, this relates to where a cloud computing arrangement represents access to software as a service (SaaS).
Historically, the Group has capitalised all customisation and configuration costs relating to SaaS arrangements. In line with the
new guidance, where a SaaS arrangement is present, configuration and customisation costs will only be capitalised if they meet
recognition criteria for intangible assets separately. If they do not, and they are distinct from the SaaS (typically provided by a third
party), these costs are expensed as incurred. If they are not distinct from the SaaS (typically provided by the software provider),
these are recognised as prepayments and expensed over the SaaS contract.

This change in accounting policy resulted in reductions to intangible assets of £1.5m and £1.2m as at 31 March 2022 and 2021
respectively and an increase in operating expenses of £0.7m and £1.3m in those respective years. The tables on the following page
show the impact of this change. Relevant comparatives in the financial statements and notes to the financial statements have also
been restated. This change in accounting policy had £nil impact on cash.

The change in accounting policy had no impact on the opening balance sheet as at 1 April 2020, and as such no opening balance
sheet has been presented.

DR. MARTENS PLC ANNUAL REPORT 2022

187

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

2. Accounting policies continued
2.14 Intangible assets continued
Impact on Consolidated Statement of Profit or Loss of restatement

Revenue
Cost of sales

Gross profit

Selling and administrative expenses
Finance expense

Profit before tax

EBITDA
Exceptional items

EBITDA (post exceptional items)

Depreciation, amortisation and foreign exchange (losses)/gains
Finance expense

Profit before tax

Tax expense

Profit for the year

Impact on Earnings Per Share

Earnings per share

Basic
Diluted

Adjusted earnings per share

Basic
Diluted

Underlying earnings per share

Basic

Diluted

Change in
accounting
policy
£m

FY21
£m

FY21
(restated)
£m

773.0
(302.5)

470.5

(358.0)
(41.6)

70.9

224.2
(80.5)

143.7

(31.2)
(41.6)

70.9

(35.2)

35.7

FY21

3.6p
3.6p

–
–

–

(1.2)
–

(1.2)

(1.3)
–

(1.3)

0.1
–

(1.2)

0.2

(1.0)

773.0
(302.5)

470.5

(359.2)
(41.6)

69.7

222.9
(80.5)

142.4

(31.1)
(41.6)

69.7

(35.0)

34.7

Change in
accounting
policy

FY21
(restated)

(0.1p)
(0.1p)

3.5p
3.5p

11.6p
11.6p

(0.1p)
(0.1p)

11.5p
11.5p

14.5p

(0.1p)

14.4p

188

DR. MARTENS PLC ANNUAL REPORT 2022

2. Accounting policies continued
2.14 Intangible assets continued
Impact on Consolidated Balance Sheet of restatement

Non-current assets

Intangible assets

Property, plant and equipment

Right-of-use assets

Deferred tax assets
Pension fund surplus

Current assets

Inventories

Trade and other receivables

Income tax assets

Derivatives and other financial assets
Cash and cash equivalents

Total assets

Current liabilities

Trade and other payables

Borrowings – Bank

Borrowings – Lease liabilities

Provisions

Derivatives and other financial liabilities
Income tax payable

Non-current liabilities

Trade and other payables

Borrowings – Bank

Borrowings – Redeemable preference shares

Borrowings – Lease liabilities
Provisions

Total liabilities

Net assets

Equity attributable to the owners of the Parent

Share capital

Hedging reserve

Capital reserve – own shares

Capital redemption reserve

Merger reserve

Non-UK translation reserve
Retained earnings

Total equity

Change in
accounting
policy
£m

FY21
£m

FY21
(restated)
£m

260.8

(1.2)

259.6

32.6

77.4

7.2
–

378.0

101.5

59.4

–

0.3
113.6

274.8

–

0.2
–

(1.0)

–

–
–

–

32.6

77.4

7.4
–

377.0

101.5

59.4

–

0.3
113.6

274.8

652.8

(1.0)

651.8

(133.0)

–

(18.2)

–

–
(1.1)

(152.3)

–

(281.6)

–

(66.6)
(1.6)

(349.8)

(502.1)

–

–
–

–

–
–

–

(133.0)

–

(18.2)

–

–
(1.1)

(152.3)

–

(281.6)

–

(66.6)
(1.6)

(349.8)

(502.1)

150.7

(1.0)

149.7

10.0

(0.1)

–

(1,400.0)

2.7
1,538.1

150.7

–

–
(1.0)

(1.0)

10.0

(0.1)

–

(1,400.0)

2.7
1,537.1

149.7

DR. MARTENS PLC ANNUAL REPORT 2022

189

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

2. Accounting policies continued
2.14 Intangible assets continued
Impact on Consolidated Statement of Cash Flows of restatement

Cash generated from operating activities

Cash used in investing activities

Cash used in financing activities

Change in
accounting
policy
£m

(1.3)

1.3

–

FY21
£m

160.2

(18.6)

(132.9)

FY21
(restated)
£m

158.9

(17.3)

(132.9)

2.15 Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation and provision for impairment. Depreciation is
calculated to write down the cost of the assets less estimated residual value over its expected useful life as follows:

• Freehold properties

2% straight line method.

• Leasehold land and buildings

2% straight line method or over the life of the lease.

• Plant and machinery

15% straight line method.

• Office and computer equipment

20% and 33% straight line method.

Any gain or loss arising on the derecognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the Statement of Profit or Loss in the period that the asset is derecognised.

2.16 Impairment
The carrying amounts of the Group’s assets are reviewed at each year-end date to determine whether there is any indication of
impairment. If any such indication exists, the assets’ recoverable amount is estimated. For goodwill and intangible assets that have
an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each
year-end date and whenever there is an indication of impairment. An impairment loss is recognised whenever the carrying amount
of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the Statement of Profit
or Loss in those expense categories consistent with the function of the impaired asset.

2.17 Lease accounting
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration.

Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of
low-value assets. As part of the measurement approach the discount rate applied varies by both property type and geography. The
Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets
are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

• Leasehold buildings – 3 to 15 years

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase
option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment.
Refer to the accounting policies in the Impairment of non-financial assets section.

190

DR. MARTENS PLC ANNUAL REPORT 2022

2. Accounting policies continued
2.17 Lease accounting continued
ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the
Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate.

Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce
inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the interest charge and reduced for the lease payments made. In addition, the carrying amount of
lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to
future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment
of an option to purchase the underlying asset.

The Group’s lease liabilities are included in interest-bearing loans and borrowings (note 18).

iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e. those leases
that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the
lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments
on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.

iv) Covid-19-related rent concessions
On 28 May 2020, the IASB issued Covid-19-Related Rent Concessions – Amendment to IFRS 16 Leases. The amendments provide an
optional relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct
consequence of the Covid-19 pandemic. The Group has elected to apply the practical expedient which allows for any qualifying
change in lease payments resulting from the Covid-19-related rent concession to be treated the same way it would account for the
change under IFRS 16 if the change were not a lease modification. During the year ended 31 March 2022, the Group received £nil
(2021: £0.7m) of rent concessions from landlords, which have been offset against operating expenses.

2.18 Inventories
Inventories are stated at the lower of cost and net realisable value. Inventories are valued at weighted average cost, including freight
to warehouse and duty. Net realisable value is based on estimated selling price less any costs expected to be incurred to completion
or disposal.

2.19 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument
of another entity.

Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Consolidated Balance Sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the
assets, and to settle the liabilities simultaneously.

2.20 Financial assets
Trade and other receivables
Trade receivables are classified under IFRS 9 and measured at amortised cost using the effective interest rate method. The Group
recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at FVPL. The most significant financial
assets of the Group are its trade receivables, which are referred to as ‘customer and other receivables’. ECLs are based on the
difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects
to receive, discounted at an approximation of the original effective interest rate.

Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and on demand deposits, and other short-term, highly liquid investments that are
readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Cash and cash equivalents
includes debit and credit card payments made by customers which are receivable from banks and cleared the bank.

DR. MARTENS PLC ANNUAL REPORT 2022

191

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

2. Accounting policies continued
2.21 Financial liabilities
The Company classifies all of its non-derivative financial liabilities as liabilities at amortised cost.

Initial recognition
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs. Details of the Group’s equity
are included in note 23.

Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the
recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit or Loss.

Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the course of ordinary business from
suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade payables are recognised initially at fair value and subsequently held at amortised cost using the
effective interest rate method.

2.22 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently carried at amortised cost using
the effective interest rate method so that any difference between the proceeds (net of transaction costs) and the redemption value
is recognised in the Statement of Profit or Loss over the period of the borrowings. Details of the Group’s borrowings are included in
note 18.

Borrowing costs
The Group expenses borrowing costs in the period the costs are incurred. Where borrowing costs are attributable to the acquisition,
construction or production of a qualifying asset, such costs are capitalised as part of the specific asset and amortised over the
estimated useful life of the asset. Details of the Group’s borrowings are included in note 18.

2.23 Pension arrangements
The Group provides pension benefits which include both defined benefit and defined contribution arrangements.

Defined contribution pension schemes
For defined contribution schemes the amount charged to the Statement of Profit or Loss represents the contributions payable to the
plans in the accounting period. Differences between contributions payable in the period and contributions actually paid are shown as
either accruals or prepayments in the Balance Sheet.

Defined benefit pension scheme
The Group operates a defined benefit pension scheme, which requires contributions to be made to separately administered funds for
administration expenses. The Group did not make any contributions to the scheme in the year (FY21: £nil). The UK defined benefit
scheme was closed to new members on 6 April 2002, from which time membership of a defined contribution plan was available. It
was then closed to all future accrual for all existing members on 31 January 2006. No asset is recognised in the Balance Sheet in
respect of defined benefit pension plans due to the uncertainty over future obligations. The defined benefit obligation is calculated
annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are
denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the
related pension obligation. Past-service costs are recognised immediately in income. The net interest cost is calculated by applying
the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. The net interest cost is limited
by the asset ceiling. When occurring, this cost is included in employee benefit expense in the Statement of Profit or Loss. Actuarial
gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in
other comprehensive income in the period in which they arise.

192

DR. MARTENS PLC ANNUAL REPORT 2022

2. Accounting policies continued
2.24 Derivative financial instruments and hedging activities
The Group uses foreign exchange forward contracts to hedge its non-UK currency risks. Such derivative financial instruments are
initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at fair value.
The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument,
and if so, the nature of the item being hedged.

Assets and liabilities held at fair value are categorised into levels that have been defined as follows:

• quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

• inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as

prices) or indirectly (that is, derived from prices) (Level 2). The fair value of hedges are calculated using quoted prices in relevant
exchanges at the end of the reporting period. Where such prices are not available, the Group uses valuation models to determine
the fair values based on relevant factors, including trade price quotations, time value and volatility factors and dealer quotations
for similar currencies traded in different markets and geographical areas, existing at the end of the reporting period; and inputs
for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

Derivative financial instruments consist of foreign exchange forward contracts, which are categorised within Level 2.

Trading derivatives are classified as a current asset or liability. The full fair value of derivatives which are not designated in a hedge
accounting relationship are classified as a non–current asset or liability if the remaining maturity of the hedged item is more than
12 months and as a current asset or liability if the maturity of the derivatives which are not designated in a hedge accounting
relationship are less than 12 months.

2.25 Share-based payments
The Group provides benefits to employees in the form of share-based payment transactions, whereby employees render services
as consideration in exchange for equity instruments (‘equity-settled transactions’).

The cost of equity-settled transactions is measured by reference to the fair value of the equity instruments at the date on which
they are granted and is recognised as an expense over the vesting period, which ends on the date the relevant employee becomes
fully entitled to the award. The fair value is calculated using an appropriate option pricing model and takes into account the impact
of any market performance conditions. The impact of non-market performance conditions is not considered in determining the fair
value at the date of grant. Vesting conditions which relate to non-market conditions are allowed for in the assumptions used for the
number of options expected to vest. The level of vesting is reviewed at each balance sheet date and the charge adjusted to reflect
actual and estimated levels of vesting. The cost of share-based payment transactions is recognised as an expense over the vesting
period of the awards, with a corresponding increase in equity. Further details of share-based awards granted in the year can be
found in notes 25 and 26.

2.26 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.

2.27 Capital reserve – own shares
Dr. Martens plc shares held by the Company’s two SIP Trusts are classified in shareholders’ equity as ‘Capital reserve – own shares’
and are recognised at cost. No gain or loss is recognised in the income statement on the purchase or sale of such shares.

2.28 Alternative Performance Measures (APMs)
Management exercises judgement in determining the adjustments to apply to IFRS measurements in order to derive suitable APMs.
As set out on pages 247 and 248 of the Glossary, APMs are used as management believes these measures provide additional useful
information on the underlying trends, performance and position of the Group. These measures are used for performance analysis.
The APMs are not defined by IFRS and therefore may not be directly comparable with other companies’ APMs. These measures are
not intended to be a substitute for, or superior to, IFRS measurements.

2.29 Significant judgements and estimates
The preparation of the Group’s financial statements in conforming with IFRS requires management to make judgements, estimates
and assumptions that affect the application of policies and reported amounts in the financial statements. These judgements and
estimates are based on management’s best knowledge of the relevant facts and circumstances. However, the nature of estimation
means that actual outcomes could differ from those estimates. Information about such judgements and estimation is contained in
the accounting policies and/or notes to the financial statements and the key areas are summarised below:

DR. MARTENS PLC ANNUAL REPORT 2022

193

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

2. Accounting policies continued
2.29 Significant judgements and estimates continued
Key judgements
The following judgements have had the most significant effect on amounts recognised in the financial statements:

Provisions for expected credit losses of trade receivables
Expected credit losses are calculated based on a combination of factors, including the ageing of the receivable balances, historical
experience of groupings of customer segments that have similar loss patterns, current credit status of the customer and forward-
looking information such as current economic conditions.

Determining the lease term of contracts with renewal and termination options – Group as lessee
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.

The Group has several lease contracts that include extension and termination options. The Group applies judgement in evaluating
whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all
relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement
date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and
affects its ability to exercise or not to exercise the option to renew or to terminate (e.g. construction of significant leasehold
improvements or significant customisation to the leased asset).

The Group included the renewal period as part of the lease term for leases of plant and machinery with shorter non-cancellable
periods (i.e. three to five years). The Group typically exercises its option to renew these leases because there will be a significant
negative effect on production if a replacement asset is not readily available. The renewal periods for leases of leasehold property
with longer non-cancellable periods (i.e. 10 to 15 years) are not included as part of the lease term as these are not reasonably certain
to be exercised. Furthermore, the periods covered by termination options are included as part of the lease term only when they are
reasonably certain not to be exercised.

Inventory provisions
Inventory provisioning requires significant judgement on which inventory lines should be classed as obsolete. Inventory age, historic
sales patterns and trading forecasts are used when classifying inventory lines to be provided against.

Corporation tax
There is judgement involved in determining the Group’s corporation tax provision. The Group recognises liabilities for anticipated tax
issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the current and deferred tax assets and liabilities in the period in
which the determination is made. Management judgement is required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and level of future taxable profits together with an assessment of the effect of future tax
planning strategies (see notes 9 and 22).

Key sources of estimation uncertainty and assumptions
The following estimates are dependent upon assumptions which could change in the next financial year and have a material effect
on the carrying amount of assets and liabilities recognised at the Balance Sheet date:

Carrying value of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or cash generating unit (CGU) fair value less costs of disposal and its value in use. The recoverable
amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less
costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate
valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators.

Determining the carrying value of an asset or CGU requires the use of estimates of future cash flows and discount rates in order to
calculate the present value of the cash flows. For details see notes 12 and 13.

Retirement benefit liabilities
Determining the fair value of the defined benefit pension scheme, which relates to the pension of the Group, requires assumptions
to be made by management and the Group’s independent qualified actuary around the actuarial valuations of the scheme’s assets
and liabilities. For details see note 29.

194

DR. MARTENS PLC ANNUAL REPORT 2022

2. Accounting policies continued
2.29 Significant judgements and estimates continued
Leases – estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease; therefore, it uses its incremental borrowing rate (IBR) to
measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a
similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
The IBR therefore reflects what the Group “would have to pay”, which requires estimation when no observable rates are available
(such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and
conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Group estimates the IBR using
observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as
the subsidiary’s stand-alone credit rating). The IBR is reassessed when there is a reassessment of the lease liability or a lease
modification.

3. Segmental analysis
IFRS 8 ‘Operating Segments’ requires operating segments to be determined by the Group’s internal reporting to the Chief Operating
Decision Maker (CODM). The CODM has been determined to be both the CEO and CFO, who receive information on this basis of the
Group’s revenue in key geographical regions based on the Group’s management and internal reporting structure. The CODM
assesses the performance of geographical segments based on a measure of revenue and EBITDA. To increase transparency the
Group also includes additional voluntary disclosure analysis of global revenue within different operating channels. Included within
EMEA is revenue attributable to Airwair International Limited, the principal UK trading subsidiary of Dr. Martens plc, with revenue
from wholesale and export customers, Americas revenue is fully attributable to the USA including export revenue to certain South
America markets, and APAC revenue is mainly attributable to Japan, Australia, China and South Korea.

Revenue by geographical market

EMEA

Americas
APAC

Total revenue

EBITDA by geographical market

EMEA

Americas

APAC
Support costs

EBITDA
Exceptional items

EBITDA (post exceptional items)

Depreciation and amortisation

Depreciation of right-of-use assets2
Foreign exchange gains

Depreciation, amortisation and foreign exchange gains

Finance expense

Profit before tax

FY22
£m

FY21
£m

398.5

382.7
127.1

908.3

335.6

295.8
141.6

773.0

Notes

FY22
£m

FY211
£m

143.8

120.0

32.6
(33.4)

263.0
–

263.0

(14.4)

(22.5)
3.2

(33.7)

(15.0)

214.3

115.3

91.9

39.7
(24.0)

222.9
(80.5)

142.4

(13.4)

(21.5)
3.8

(31.1)

(41.6)

69.7

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. Includes impairment charge of £0.2m in relation to one store we decided to exercise a break clause to relocate to a better location recognised on property, plant and

equipment (see note 13). In the prior year, an impairment charge of £1.1m was recognised on right-of-use assets in relation to two stores.

Revenue by channel

Ecommerce
Retail

Total DTC revenue
Wholesale

Total revenue

FY22
£m

FY21
£m

262.4
185.6

448.0
460.3

908.3

DR. MARTENS PLC ANNUAL REPORT 2022

235.4
99.7

335.1
437.9

773.0

195

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

3. Segmental analysis continued

Non-current assets

EMEA2

Americas

APAC

Goodwill
Deferred tax

Total non-current assets

FY22
£m

FY211
£m

107.9

46.1

11.2

240.7
9.6

415.5

84.3

34.6

10.0

240.7
7.4

377.0

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. Included in the EMEA non-current assets is £60.6m (FY21: £52.0m) in relation to the UK market.

4. Expenses analysis
Profit before tax is stated after charging:

Selling and administrative expenses

Staff costs
Operating costs

Amortisation

Depreciation2

Depreciation of right-of-use assets
Foreign exchange gains

Depreciation, amortisation & foreign exchange gains
Exceptional items

Notes

FY22
£m

FY211
£m

132.6
183.2

315.8

4.7

9.7

22.5
(3.2)

33.7
–

33.7

109.6
138.0

247.6

4.4

9.0

21.5
(3.8)

31.1
80.5

111.6

Total selling and administrative expenses

349.5

359.2

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. Depreciation includes impairment of property, plant and equipment of £0.2m (FY21: £nil). See note 13 for further details.

There were no exceptional costs in the current year. In the prior year exceptional costs of £80.5m all related to the IPO which took
place on 29 January 2021. The main cost was in relation to an all employee ‘IPO bonus’ of £49.1m which was in part funded by shares
held by the EBT (and sold at IPO date) and also cash held by the EBT totalling £42.0m. Also included within this charge (of £49.1m)
was an employer’s national insurance charge in relation to the cash payment of £7.1m. In addition, the Group incurred an IFRS 2
share-based payment charge in relation to the IPO of £10.8m (which was non-cash and further described in note 7). The balance
of £20.6m was advisory fees.

196

DR. MARTENS PLC ANNUAL REPORT 2022

5. Auditor’s remuneration

Fees payable to the Company’s auditor for the audit of the Parent

Company and consolidated financial statements

Fees payable to the Company’s auditor for other services:

The audit of the Company’s subsidiaries
Other services – interim review

Fees payable to the Company’s auditor for other services:
Other services – exceptional items related to the IPO

FY22
£m

0.6

0.8
0.1

1.5

–

1.5

FY21
£m

0.5

0.6
0.1

1.2

2.4

3.6

6. Staff costs
The monthly number of employees (including Directors) employed by the Group during the year was:

EMEA

Americas

APAC
Global support functions

FTE1
As at 31 March

Average2
For the year ended 31 March

2022
No.

810

547

412
460

2021
No.

703

446

356
392

2022
No.

1,359

662

471
431

2021
No.

1,125

575

382
351

2,229

1,897

2,923

2,433

1. FTE (Full Time Equivalent) is calculated by dividing the employee’s contracted hours by the Company’s standard full time contact hours.

2. Average is the average actual employees of the Group during the year.

The aggregate payroll costs were as follows:

Wages and salaries

Social security costs

LTIPs – Share-based payments

Pension costs
Other post-employment benefits

Exceptionals:

IPO bonus for all employees
IFRS 2 accounting (non-cash)

Notes

FY22
£m

106.8

10.8

5.2

6.0
3.8

FY21
£m

94.1

8.0

0.7

5.8
1.0

132.6

109.6

–
–

49.1
10.8

132.6

169.5

DR. MARTENS PLC ANNUAL REPORT 2022

197

FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

7. Directors’ remuneration
The remuneration of Directors of the Company is set out below:

Salaries and benefits
Pension costs

Exceptionals:
IFRS 2 (non-cash)2

FY22
£m

2.6
0.1

2.7

–

2.7

FY211
£m

2.5
0.1

2.6

10.8

13.4

1. The Group listed on the London Stock Exchange on 29 January 2021. Prior to admission it was a private company which operated a customary private equity

remuneration model and post listing a ‘listed’ Remuneration Policy and practice were implemented. The Remuneration Policy post 29 January 2021 (and currently

applicable) is fully described in the Remuneration report on pages 150 to 161.

2. In relation to the period prior to admission and under a private equity remuneration structure the Company operated an EBT to warehouse shares for the benefit of

employees. On admission the shares in the EBT were sold (as described on page 185 of the Prospectus) and in recognition of the contribution made by all employees

of the Group to the success and continuing progress made by the business, and conditional on admission, the EBT distributed the net proceeds of shares it held

together with cash that it held to make a cash payment to each employee of the Group. As part of this, following legal advice, immediately prior to admission, shares

were transferred to the Executive Directors and, following accounting rules, these shares fell under IFRS 2 accounting requirements resulting in a non-cash

accounting charge of £10.8m which, being in relation to the transaction, was charged to exceptional items in FY21.

The remuneration of the highest paid Director was:

Salaries and benefits
Pension costs

Exceptionals:
IFRS 2 (non-cash)2

1. Refer to note 1 above.

2. Refer to note 2 above.

FY22
£m

1.3
–

1.3

–

1.3

FY211
£m

1.3
–

1.3

6.2

7.5

The highest paid Director is not entitled to receive benefits under the defined benefits pension scheme. No retirement benefits are
accruing to Directors under a defined contribution scheme (FY21: £nil). Further details on Directors’ remuneration can be found in
the Remuneration report on pages 150 to 161.

8. Finance expense

Bank debt – net1

Preference interest (non-cash)

Interest on lease liabilities

Amortisation loan issue costs – New funding (non-cash)
Amortisation loan issue costs – Old funding (non-cash)

Total financing expense

FY22
£m

10.3

–

3.5

1.2
–

15.0

FY21
£m

6.5

28.5

3.7

0.2
2.7

41.6

1. Finance expense includes £10.3m (FY21: £6.5m) of bank debt costs. Interest paid in the period was £10.8m (FY21: £7.4m), with the difference of £0.5m (FY21: £0.9m)

relating to movements in the bank interest and finance charges payable.

198

DR. MARTENS PLC ANNUAL REPORT 2022

9. Taxation

Current tax

Current tax on UK profit for the year

Adjustment in respect of prior years2
Current tax on overseas profits for the year

Deferred tax

Origination and reversal of temporary differences
Adjustment in respect of prior years

FY22
£m

FY211
£m

40.0

(8.8)
4.3

35.5

(2.5)
0.1

(2.4)

29.6

(1.0)
6.4

35.0

(1.2)
1.2

–

Total tax expense in the Consolidated Statement of Profit or Loss

33.1

35.0

Other Comprehensive Income
Tax in relation to unexercised share options

Total tax expense in the Consolidated Statement of Comprehensive Income

Factors affecting the tax expense for the year:
Profit before tax

Profit before tax multiplied by standard rate of UK corporation tax of 19% (FY21: 19%)

Effects of:

Non-deductible expenses

Temporary differences not provided for

Effect of change in tax rate

Share-based payments

Non-UK tax

Intangibles capitalised allowable for tax purposes
Other adjustments

Before prior year adjustments
Adjustments in respect of prior years

Total tax expense in the Consolidated Statement of Profit or Loss
Tax in relation to unexercised share options

Total tax expense in the Consolidated Statement of Comprehensive Income

Effective tax rate

– Before prior year adjustments

– After prior year adjustments

–

33.1

35.0

FY22
£m

FY211
£m

214.3

40.7

–

0.1

0.2

1.0

–
(0.2)

41.8
(8.7)

33.1
–

33.1

69.7

13.2

21.3

(0.2)

–

1.4

(0.6)
(0.1)

34.8
0.2

35.0
–

35.0

19.5%

15.4%

49.9%

50.2%

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. The adjustment in respect of the prior year is mainly in relation to bonus payments paid to all staff following the IPO which were treated as non-deductible. However,

following a similar tax case and subsequent tax counsel advice we have taken a deduction.

Factors that may affect future tax charges
On 3 March 2021, the 2021 UK Budget announced an increase to the corporation tax rate from 19% to 25% effective from April 2023.
This was substantively enacted on 24 May 2021.

DR. MARTENS PLC ANNUAL REPORT 2022

199

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

10. Earnings per share
The calculation of basic earnings per share is based on the profit attributable to ordinary shareholders of the Parent Company
divided by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share is calculated by dividing the profit for the year attributable to ordinary equity holders of the Parent
Company by the weighted average number of ordinary shares in issue during the year plus the weighted average number of
ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares.

Profit after tax
Exceptional items

Adjusted2 profit after tax

Notes

FY22
£m

181.2
–

181.2

FY22
No.

FY211
£m

34.7
80.5

115.2

FY21
No.

Weighted average number of shares for calculating basic earnings per share (millions)
Potentially dilutive share awards (millions)

1,000.1
2.8

1,000.0
0.4

Weighted average number of shares for calculating diluted earnings per share (millions)

1,002.9

1,000.4

Earnings per share

Basic earnings per share
Diluted earnings per share

Adjusted2 earnings per share

Adjusted2 basic earnings per share
Adjusted2 diluted earnings per share

Underlying3 earnings per share

Underlying3 basic earnings per share

Underlying3 diluted earnings per share

FY22

FY211

18.1p
18.1p

3.5p
3.5p

18.1p
18.1p

11.5p
11.5p

17.4p

14.4p

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. Adjusted earnings per share is calculated on adjusted profit after tax, being profit after tax before exceptional items.

3. Underlying earnings per share is calculated as earnings before taking into account exceptional items, preference share interest and prior year tax deduction.

11. Dividends

Equity dividends on ordinary shares declared and paid during the year:
Interim dividend for FY22: 1.22p (FY21: nil)

Total dividends declared and paid during the year

Proposed for approval by shareholders at the AGM

(not recognised as a liability at 31 March 2022 or 31 March 2021)
Final dividend for FY22: 4.28p (FY21: nil)

Total interim and final dividend relating to FY22

Dividend as a % of earnings

Dividend per share

Total dividend per share relating to FY22 (pence)

200

DR. MARTENS PLC ANNUAL REPORT 2022

FY22
£m

12.2

42.8

55.0

30.4%

5.50

FY21
£m

–

11. Dividends continued
The Board has approved and the Company has proposed a final dividend of 4.28p. As previously guided the Board has adopted
a progressive dividend policy which is unchanged at 25% to 35% of earnings payout. The policy takes into consideration the
characteristics of our business, our expectations for future cash flows and our plans for organic investment in innovation and
productivity. We intend to pay dividends twice a year following the normal in-year trading profile. The Dr. Martens plc International
Share Incentive Plan Trust has waived all dividends payable by the Company in respect of the ordinary shares it holds. Subject to
approval at the AGM on 14 July 2022, the dividends will be paid to shareholders on the register at 10 June 2022 with payment on
19 July 2022.

12. Intangible fixed assets

Cost

At 1 April 2020

Additions1

Disposals

Reclassifications to tangible fixed assets
Foreign exchange

At 31 March 20211

Additions

Disposals

Reclassifications to right-of-use assets2

Other intangible assets reclassification
Foreign exchange

At 31 March 2022

Accumulated amortisation

At 1 April 2020

Charge for the year1

Disposals

Reclassifications to tangible fixed assets
Foreign exchange

At 31 March 20211

Charge for the year

Disposals

Other intangible assets reclassification
Foreign exchange

At 31 March 2022

Net book value

At 31 March 2022

At 31 March 20211

Software1
£m

Goodwill
£m

Total1
£m

25.2

240.7

265.9

6.9

(0.9)

0.3
(0.5)

–

–
–

6.9

(0.9)

0.3
(0.5)

31.0

240.7

271.7

9.5

(0.2)

(2.2)

1.9
–

–

–
–

9.5

(0.2)

(2.2)

1.9
–

40.0

240.7

280.7

8.7

4.4

(0.9)

0.2
(0.3)

12.1

4.7

(0.2)

1.9
0.1

18.6

–

–
–

–

–
–

–

8.7

4.4

(0.9)

0.2
(0.3)

12.1

4.7

(0.2)

1.9
0.1

18.6

21.4

240.7

262.1

18.9

240.7

259.6

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. Relates to a reclassification of assets to right-of-use assets in relation to key money.

Impairment assessment
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a cash generating
unit (CGU) is determined based on value-in-use calculations which requires the use of assumptions. The calculations use cash flow
forecasts based on financial budgets approved by management covering a five-year period. Where the recoverable amount is less
than the carrying value, an impairment results. For the purposes of carrying out impairment tests, the Group’s total goodwill has
been allocated to a number of CGUs and each of these CGUs has been separately assessed and tested. The CGUs were agreed by the
Directors as the geographical regions in which the Group operates. These regions are the lowest level at which goodwill is monitored
and represent identifiable operating segments.

DR. MARTENS PLC ANNUAL REPORT 2022

201

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

12. Intangible fixed assets continued
The aggregate carrying amount of goodwill allocated to each CGU was as follows:

EMEA

Americas
APAC

FY22
£m

66.6

114.1
60.0

FY21
£m

66.6

114.1
60.0

240.7

All CGUs were tested for impairment. No charge was made in the current year (FY21: £nil).

Significant judgements, assumptions and estimates
All CGUs’ recoverable amounts are measured using value in use. At each period end, detailed forecasts for the following five years
have been used, which are based on approved annual budgets and strategic projections representing the best estimate of future
performance. Management considers forecasting over this period to appropriately reflect the business cycle of the CGUs. There
have been no changes to the composition of the Group’s CGUs during the period. In determining the value in use of CGUs it is
necessary to make a series of assumptions to estimate the present value of future cash flows. In each case, these key assumptions
have been made by management reflecting past experience and are consistent with relevant external sources of information.

Operating cash flows
The main assumptions within forecast operating cash flow include the achievement of future growth in ecommerce, retail and
wholesale channels, sales prices and volumes (including reference to specific customer relationships and product lines), raw material
input costs, the cost structure of each CGU, the impact of non-UK currency rates upon selling price and cost relationships and the
levels of capital expenditure required to support each sales channel.

Pre-tax risk adjusted discount rates
This rate reflects the specific risks relating to each segment and considers the countries and regions they operate in. This has been
considered and for the regions has been calculated to be approximately 9%. Pre-tax risk adjusted discount rates are derived from
risk-free rates based upon long-term government bonds in the territories and averaged for the Group.

Long-term growth rates
To forecast beyond the detailed cash flows into perpetuity, a long-term average growth rate has been used. In each case rates of
between 1.8% and 3.4% have been used, in line with geographical forecasts included within industry reports.

Goodwill sensitivity analysis
The results of the Group’s impairment tests are dependent upon estimates and judgements made by management, particularly in
relation to the key assumptions described above. Sensitivity analysis to potential changes in key assumptions has therefore been
reviewed and there are no reasonably possible changes to key assumptions that would cause the carrying amount for any CGU to
exceed its recoverable amount.

202

DR. MARTENS PLC ANNUAL REPORT 2022

13. Property, plant and equipment

Cost or valuation

At 1 April 2020

Additions

Disposals1

Reclassifications between asset class

Reclassifications to intangible fixed assets
Foreign exchange

At 31 March 2021

Additions

Disposals

Reclassifications between asset class

Reclassifications to intangible fixed assets
Foreign exchange

At 31 March 2022

Depreciation and impairment

At 1 April 2020

Charge for the year

Eliminated on disposal1

Reclassifications between asset class

Reclassifications to intangible fixed assets
Foreign exchange

At 31 March 2021

Charge for the year

Impairment2

Eliminated on disposal

Reclassifications between asset class

Reclassifications to intangible fixed assets
Foreign exchange

At 31 March 2022

Net book value

At 31 March 2022

At 31 March 2021

Freehold
property
£m

Leasehold
improvements
£m

Plant and
machinery
£m

Office
equipment
£m

Motor
vehicles
£m

Total
£m

59.3

10.4

(1.4)

–

(0.3)
(3.2)

64.8

15.5

(1.1)

–

–
0.3

43.6

7.9

(0.5)

(0.3)
(2.6)

47.6

12.8

(0.5)

–

–
0.1

3.5

0.7

–

–
–

4.2

0.4

–

–
–

5.2

1.4

(0.9)

0.5

–
(0.1)

6.1

2.3

(0.1)

–

–
–

0.1

–

–
–

0.1

–

–
–

60.0

4.6

8.3

0.1

79.5

20.4

7.0

(0.5)

(0.4)

(0.2)
(1.4)

24.9

7.0

0.2

(0.5)

–

–
0.3

1.6

0.7

–

–
–

2.3

0.9

–

–
–

3.6

1.2

(0.9)

0.4

–
(0.1)

4.2

1.5

–

(0.1)

–

–
–

0.1

26.6

–

–
–

9.0

(1.4)

–

(0.2)
(1.8)

0.1

32.2

–

–
–

9.5

0.2

(1.1)

–

–
0.4

31.9

3.2

5.6

0.1

41.2

6.9

0.4

–

–
(0.5)

6.8

–

(0.5)

–

–
0.2

6.5

0.9

0.1

–

–
(0.3)

0.7

0.1

–

(0.5)

–

–
0.1

0.4

6.1

28.1

22.7

1.4

1.9

2.7

1.9

–

38.3

32.6

1. The Group carried out a physical verification of assets during FY21 and identified assets with a total net book value that were no longer in physical existence but

remained on the assets register. These assets were therefore written off during the period to £nil net book value.

2. During the year, impairment charges of £0.2m were recognised in leasehold improvements due to a decision to exercise a break clause and relocate this store to a

better location.

DR. MARTENS PLC ANNUAL REPORT 2022

203

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

13. Property, plant and equipment continued
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year:

Cost or valuation

At 1 April 2020

Additions

Modification of leases1
Foreign exchange

At 31 March 2021

Additions

Modification of leases1

Reclassifications from intangible fixed assets

Disposals
Foreign exchange

At 31 March 2022

Depreciation and impairment

At 1 April 2020

Charge for the year
Impairment2

At 31 March 2021

Charge for the year

Disposals
Foreign exchange

At 31 March 2022

Net book value

At 31 March 2022

At 31 March 2021

Leasehold
£m

99.9

23.0

(2.2)
(3.9)

116.8

41.9

5.9

2.2

(8.4)
1.1

159.5

17.9

20.4
1.1

39.4

22.5

(8.4)
0.5

54.0

105.5

77.4

1. Lease modifications in the year relate to measurement adjustments for rent reviews and stores that have exercised lease breaks.

2. In the prior year impairment charges of £1.1m were recognised on right-of-use assets.

Impairment of property, plant and equipment and right-of-use assets
For impairment testing purposes, the Group has determined that each retail store is a separate CGU. Each CGU is tested for
impairment at the balance sheet date if any indicators of impairment have been identified.

Significant judgements, assumptions and estimates
All CGUs’ recoverable amounts are measured using value in use. At each reporting period end, detailed forecasts for the following
five years have been used, which are based on approved annual budgets and strategic projections representing the best estimate
of future performance. Management considers forecasting over this period to appropriately reflect the business cycle of the CGUs.
There have been no changes to the composition of the Group’s CGUs during the periods. In determining the value in use of CGUs it is
necessary to make a series of assumptions to estimate the present value of future cash flows. In each case, these key assumptions
have been made by management reflecting past experience and are consistent with relevant external sources of information.

Operating cash flows
The main assumptions within forecast operating cash flow include the achievement of future growth in the retail channel, sales
prices and volumes, raw material input costs, the cost structure of each CGU, the impact of non-UK currency rates upon selling price
and cost relationships and the levels of maintenance capital expenditure required to support each sales channel.

Pre-tax risk adjusted discount rates
This rate reflects the specific risks relating to each segment and considers the countries and regions they operate in. This has been
considered and for the Group has been calculated to be approximately 9% for all periods. Pre-tax risk adjusted discount rates are
derived from risk-free rates based upon long-term government bonds in the territories and averaged for the Group.

204

DR. MARTENS PLC ANNUAL REPORT 2022

13. Property, plant and equipment continued
Sensitivity analysis
The results of the Group’s impairment tests are dependent upon estimates and judgements made by management, particularly in
relation to the key assumptions of the Group. The cash flow projections include assumptions on store performance throughout the
remaining contractual lease term. In particular, the retail revenue recovery profile in the budget for 2022/23 represents sources
of significant estimation uncertainty. The projections for future years include conservative retail revenue recovery and build in
sensitivity of lower revenue recovery profiles compared to expected GDP rates on a regional basis (in line with CGUs). We have
concluded no material reasonable possible changes in assumptions will result in an impairment and therefore no sensitivity analysis
has been disclosed.

14. Inventories

Raw materials
Finished goods

Inventories net of provisions

Inventory provision

Inventory written off to Consolidated Statement of Profit or Loss

15. Trade and other receivables

Trade receivables
Less: allowance for expected credit losses

Trade receivables – net
Other receivables

Prepayments and accrued income

FY22
£m

1.2
121.8

123.0

FY21
£m

1.3
100.2

101.5

3.1

3.9

0.8

1.5

FY22
£m

76.6
(0.7)

75.9
5.6

81.5
4.1

85.6

FY21
£m

52.0
(1.3)

50.7
5.3

56.0
3.4

59.4

All trade and other receivables are expected to be recovered within 12 months of the year-end date. The fair value of trade and
other receivables is the same as the carrying values shown above. The carrying value of trade receivables represents the maximum
exposure to credit risk. For some trade receivables the Group may obtain security in the form of guarantees, insurances, mortgages
or letters of credit which can be called upon if the counterparty is in default under the terms. As at 31 March 2022 the amount of
collateral held was £0.4m (FY21: £0.6m).

As at 31 March 2022 trade receivables of £0.2m (FY21: £0.5m) were due over 90 days. Trade receivables are reviewed on a line-by-
line basis with consideration given to specific circumstances and credit history when calculating the provision. The ageing analysis
of these receivables is as follows:

Over 90 days

FY22
£m

0.2

FY21
£m

0.5

As at 31 March 2022 trade receivables were carried net of expected credit losses of £0.7m (FY21: £1.3m). The individually impaired
receivables relate mainly to accounts which are outside the normal credit terms. The ageing analysis of these receivables is as
follows:

Up to 60 days

60 to 90 days
Over 90 days

FY22
£m

0.2

0.1
0.4

0.7

FY21
£m

1.0

–
0.3

1.3

DR. MARTENS PLC ANNUAL REPORT 2022

205

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

15. Trade and other receivables continued

At 1 April
Change in provision for expected credit losses

At 31 March

Debtors days

The carrying amount of the Group’s trade and other receivables is denominated in the following currencies:

UK Sterling

Euro

US Dollar

Japanese Yen
Other currencies

16. Cash and cash equivalents

Cash and cash equivalents

17. Trade and other payables

Current

Trade payables

Taxes and social security costs

Other payables
Bank interest and finance charges

Accruals and deferred income

FY22
£m

1.3
(0.6)

0.7

FY21
£m

2.3
(1.0)

1.3

FY22
£m

7.4

15.1

45.5

3.0
4.9

75.9

FY22
£m

228.0

FY21
£m

3.0

9.6

29.1

2.8
6.2

50.7

FY21
£m

113.6

FY22
£m

FY21
£m

52.4

52.6

6.9

5.5
0.8

65.6
69.1

134.7

5.3

5.3
1.3

64.5
68.5

133.0

All trade and other payables are expected to be settled within 12 months of the year-end date. The fair value of trade and other
payables is the same as the carrying values shown above. At 31 March 2022, other payables consisted of £4.4m (FY21: £4.4m) in
relation to employment related payables.

206

DR. MARTENS PLC ANNUAL REPORT 2022

18. Borrowings

Current
Lease liabilities

Total current interest-bearing loans and borrowings

Non-current

Bank loans (including unamortised fees)
Lease liabilities

Total non-current

Total borrowings

Reconciliation of disclosed non-current borrowings to gross bank borrowings:

Non-current bank loans
Add back unamortised fees

Total gross bank borrowings

Notes

FY22
£m

19.8

FY21
£m

18.2

280.9
93.1

374.0

281.6
66.6

348.2

393.8

366.4

280.9
4.7

285.6

281.6
5.9

287.5

On 29 January 2021, the Group entered into a New Facilities Agreement, comprising a new Term Loan B (‘TLB’) facility of €337.5m
(equivalent to £300.0m at that date) and a new multi-currency revolving credit facility of £200.0m. These new facilities have a
maturity date of 2 February 2026. Under the ancillary facility a total of £6.0m has been utilised in relation to HMRC deferment
guarantee and landlord bank guarantees (£3.2m) and foreign exchange hedging contracts (£2.8m). No amount has been drawn
down under the revolving credit facility in the period.

The Group value of debt at 31 March 2022 (excluding unamortised fees) of £285.6m is £14.4m lower than the amount borrowed
on 29 January 2021 due to GBP Euro exchange rate movement.

The carrying value of the Group’s total borrowings (excluding lease liabilities) is denominated in the following currencies:

Euro Term Loan B

Total borrowings

Loan repayments will occur as follows:

Year to 31 March

2026 (2 February 2026)

Total

Interest is chargeable on the loan at the following rate:

Euro Term Loan B

Total loans before unamortised fees

FY22
£m

285.6

FY21
£m

287.5

Term Loan B (EURO)
£m

285.6

FY22
£m

Base rate

285.6

EURIBOR

Margin
%

2.75

285.6

The current margin on the Euro Term Loan B is 2.75%, however this will fall to a low of 2.25% based on the Group leverage.

DR. MARTENS PLC ANNUAL REPORT 2022

207

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

18. Borrowings continued
Bank loans

Revolving credit facility utilisation

Guarantees
Foreign exchange hedging contracts

Total utilised facility
Available facility (unutilised)

Total revolving facility

Interest rate charged on unutilised facility

FY22
£m

FY21
£m

3.2
2.8

6.0
194.0

2.6
2.0

4.6
195.4

200.0

0.88

The bank loans are secured by a fixed and floating charge over all assets of the Group.

On 29 January 2021, the Group entered into a new £200.0m multi-currency revolving credit facility available until 2 February 2026.

Fair value measurement
The fair value of the items classified as loans and borrowings is shown above. The book and fair values of borrowings are deemed
to be approximately equal.

Redeemable preference shares
Interest charged on preference shares which were redeemed in full on 28 January 2021 was £28.5m.

Movements in bank loans and preference shares were as follows:

Euro Term Loan B

Total borrowings

Bank loans (B and C)
Euro Term Loan B

Bank loans
Preference shares

Total borrowings

19. Provisions

At 1 April 2021

Arising during the year
Amounts utilised

At 31 March 2022

Cash flows

New loans
£m

Repayment of
capital
£m

Repayment of
interest
£m

Foreign
exchange
movement
£m

Non-cash
capitalised
interest
£m

–

(1.9)

–

Cash flows

New loans
£m

Repayment of
capital
£m

Repayment of
interest
£m

Foreign
exchange
movement
£m

Non-cash
capitalised
interest
£m

1 April
2021
£m

287.5

1 April
2020
£m

74.8
–

74.8
312.9

–
300.0

300.0
–

(72.7)
–

(72.7)
(165.8)

387.7

300.0

(238.5)

–
–

–
(175.6)

(175.6)

(2.1)
(12.5)

(14.6)
–

(14.6)

–
–

–
28.5

28.5

Other
provisions
£m

Property
provisions
£m

0.1

–
(0.1)

–

1.5

0.4
–

1.9

31 March
2022
£m

285.6

31 March
2021
£m

–
287.5

287.5
–

287.5

Total
£m

1.6

0.4
(0.1)

1.9

The property provisions relate to the estimated repair and restatement costs for retail stores at the end of the lease. The provisions
are not discounted for the time value of money as this is not considered materially different from the current cost.

208

DR. MARTENS PLC ANNUAL REPORT 2022

20. Derivative assets and liabilities

Assets
Foreign exchange forward contracts

Liabilities

Foreign exchange forward contracts

FY22
£m

FY21
£m

0.9

0.3

(0.5)

–

Assets and liabilities held at fair value are categorised into levels that have been defined as follows:

• quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

• inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is,

as prices) or indirectly (that is, derived from prices) (Level 2); and

• inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

Derivative financial instruments consist of foreign exchange forward contracts, which are categorised within Level 2. The full fair
value of a derivative which is designated in a hedge accounting relationship is classified as a non–current asset or liability if the
remaining maturity of the hedged item is more than 12 months and as a current asset or liability if the maturity of the hedged item
is less than 12 months.

Non-UK exchange forward contracts derivatives
The Group manages its exposure to variability in GBP equivalent cash flows by hedging highly probable future cash flows arising
in foreign currencies. The Group manages its exposure to net foreign currency cash flows and seeks to maximise natural offsets
wherever possible. The Group’s principal net foreign currency exposures are to USD, EUR and JPY.

The Group adopts a rolling, layered approach to hedging using forward foreign exchange contracts on an 18-month horizon. Other
derivative contracts and longer tenors may be used provided these are approved by the Board.

The following table represents the nominal amounts of derivatives in a continued hedge relationship as at each Balance Sheet date:

Average exchange rate

Cash flow hedges: sell GBP buy EUR

Cash flow hedges: sell EUR buy GBP

Cash flow hedges: sell GBP buy US Dollar

Cash flow hedges: sell EUR buy US Dollar

Nominal amounts

Cash flow hedges: sell GBP buy EUR

Less than a year

More than a year but less than two years

Cash flow hedges: sell EUR buy GBP

Less than a year

More than a year but less than two years

Cash flow hedges: sell GBP buy US Dollar

Less than a year

More than a year but less than two years

Cash flow hedges: sell EUR buy US Dollar

Less than a year

More than a year but less than two years

FY22

FY21

1.1716

1.1779

–

1.3734

1.2152

€m

107.8

–

£m

39.2

8.2

–

€m

–

£m

–

33.0

–

20.0

–

DR. MARTENS PLC ANNUAL REPORT 2022

209

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

21. Financial instruments
IFRS 13 requires the classification of financial instruments measured at fair value to be determined by reference to the source of
inputs used to derive fair value. The fair values of all financial instruments held at amortised cost in both years are approximately
equal to their carrying values. Derivatives carried at fair value are considered to be at Level 2 and are disclosed separately below.
The fair value hierarchy has been defined in note 20.

31 March 2022

Fair value
through other
comprehensive
income
£m

Receivables at
amortised cost
£m

81.5

–
228.0

309.5

–

0.9
–

0.9

Liabilities at
amortised cost
£m

Fair value
through other
comprehensive
income
£m

285.6

19.8

93.1

–
65.6

464.1

–

0.5
–

0.5

31 March 2021

Fair value
through other
comprehensive
income
£m

Receivables at
amortised cost
£m

56.0

–
113.6

169.6

–

0.3
–

0.3

Liabilities at
amortised cost
£m

Fair value
through other
comprehensive
income
£m

287.5

18.2

66.6
64.5

436.8

–

–
–

–

Total
£m

81.5

0.9
228.0

310.4

Total
£m

285.6

19.8

93.1

0.5
65.6

464.6

Total
£m

56.0

0.3
113.6

169.9

Total
£m

287.5

18.2

66.6
64.5

436.8

Assets as per Balance Sheet

Trade and other receivables excluding prepayments and accrued income

Derivative financial instruments
Cash and cash equivalents

Liabilities as per Balance Sheet

Bank debt (excluding unamortised fees)

Lease liabilities – Current

Lease liabilities – Non-current

Derivative financial instruments
Trade and other payables excluding non-financial liabilities

Assets as per Balance Sheet

Trade and other receivables excluding prepayments and accrued income

Derivative financial instruments
Cash and cash equivalents

Liabilities as per Balance Sheet

Bank debt (excluding unamortised fees)

Lease liabilities – Current

Lease liabilities – Non-current
Trade and other payables excluding non-financial liabilities

210

DR. MARTENS PLC ANNUAL REPORT 2022

21. Financial instruments continued
Group financial risk factors
The Group’s activities expose it to a wide variety of financial risks: liquidity risk, credit risk and market risk (including foreign
exchange and interest rate risks). The Group’s tolerance to the impact of financial risks on cash flows, financial performance and
its financial position is low. The Group’s treasury policies seek to manage residual financial risk to within this tolerance in a cost-
effective manner taking advantage of natural offsets that exist or can be created through its operating activities. The Group uses
derivative financial instruments to hedge certain risk exposures.

Risk management is carried out by a central Finance and Treasury department under policies approved by the Board of Directors.
Group Finance and Treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units.
The Board agrees written principles for overall risk management as well as written policies covering specific areas such as foreign
exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments and
investment of excess liquidity.

Liquidity risk
Cash flow forecasting is regularly performed in the operating entities of the Group and aggregated by Group Finance. Treasury
monitors rolling forecasts of the Group’s liquidity requirements to ensure that it has sufficient cash to meet operational needs
while maintaining sufficient headroom in its undrawn committed borrowing facilities at all times so that the Group does not breach
borrowing limits or covenants on any of its borrowing facilities. Surplus cash held by operating entities over and above balances
required for working capital are transferred to treasury. Treasury invests surplus cash in interest bearing accounts, choosing
instruments with sufficient liquidity to provide headroom as determined by the above-mentioned forecasts.

The table below sets out the contractual maturities (representing undiscounted contractual cash flows) of loans, borrowings and
other financial liabilities:

At 31 March 2022

Up to

3 months
£m

Between 3 &
12 months
£m

Between

1 & 5 years
£m

More than
5 years
£m

Bank loans – Principal
Bank loans – Interest

Total bank loans

Lease liability

Derivative financial instruments
Trade and other payables excluding non-financial liabilities

–
1.9

1.9

3.8

–
65.6

71.3

–
5.9

5.9

285.6
22.4

308.0

–
–

–

16.0

66.2

26.9

–
–

0.5
–

–
–

21.9

374.7

26.9

494.8

At 31 March 2021

Up to
3 months
£m

Between 3 &
12 months
£m

Between
1 & 5 years
£m

More than
5 years
£m

Bank loans – Principal
Bank loans – Interest

Total bank loans

Lease liability
Trade and other payables excluding non-financial liabilities

–
2.0

2.0

4.0
64.5

70.5

–
6.0

6.0

14.1
–

287.5
30.7

318.2

48.3
–

–
–

–

18.4
–

20.1

366.5

18.4

475.5

Credit risk
Credit risk is managed on a Group basis, except for credit risk relating to accounts receivable balances. Each local entity is
responsible for managing and analysing the credit risk of their new customers before standard payment and delivery terms and
conditions are offered. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks
and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and
committed transactions. For banks and financial institutions only independently rated parties with an investment grade rating are
accepted. Treasury policies in place do not allow concentration of risk with individual counterparties and do not allow significant
treasury exposures with counterparties which are rated below investment grade.

For wholesale customers, risk control assesses the credit quality of the customer, taking into account its financial position, past
experience and other factors. Individual risk limits are regularly monitored. Sales to wholesale customers are settled primarily by
bank transfer and retail customers are settled in cash or by major debit/credit cards. The Group has no significant concentration
of credit risk as exposure is spread over a large number of customers.

DR. MARTENS PLC ANNUAL REPORT 2022

211

Total
£m

285.6
30.2

315.8

112.9

0.5
65.6

Total
£m

287.5
38.7

326.2

84.8
64.5

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

21. Financial instruments continued
Market risk
Non-UK exchange risk
The Group operates internationally and is exposed to non-UK exchange risk arising from the various currency exposures, primarily
with respect to the US Dollar, Euro and Japanese Yen. Non-UK exchange risk arises from future commercial transactions, recognised
assets and liabilities and net investments in foreign operations. Non-UK exchange risk arises when future commercial transactions
or recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency.

The Group purchases the vast majority of its inventory from factories in Asia which are paid in US Dollars. Approximately 80%
of Group EBITDA is earned in currencies other than Pounds Sterling. In addition, the Group has certain investments in foreign
operations whose net assets are exposed to non-UK currency translation risk; or when the results, cash flows and financial position
of foreign subsidiaries are consolidated into, or paid up to, the parent company of the Group.

Cash flow and fair value interest rate risk
The Group’s interest rate risk arises from its floating rate borrowings and cash amounts held. Borrowings issued at fixed rates
expose the Group to fair value interest rate risk. The Group’s bank debt borrowings are denominated in Euros, and incur interest
at variable rates subject to a Euribor floor at 0%.

At 31 March 2022 if interest rates on bank borrowings had been 50 basis points higher or lower with all other variables held
constant, the calculated pre-tax profit for the year would change by £1.5m (FY21: £0.6m).

Capital risk
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the
return to stakeholders through the optimisation of the debt and equity balances. The Group’s overall strategy remains consistent
with that from the past few years.

The capital structure of the Group consists of net debt disclosed in note 18 and equity attributable to equity holders of the parent,
comprising issued share capital, reserves and retained earnings as disclosed in notes 23 and 24 and the Consolidated Statement of
Changes in Equity. The Group’s Board of Directors reviews the capital structure on an annual basis. The Group is not subject to any
externally imposed capital requirement.

Non-UK currency risk
The Group has analysed the impact of a movement in exchange rate of the major non-GBP currencies on its EBITDA (all other
exchange rates remaining unchanged) as follows:

10% appreciation
Currency

US Dollar

Euro

Yen

FY22
£m

2.4

18.0

3.6

FY21
£m

1.5

12.6

3.1

Note the US Dollar movement is lower as the Group earns US Dollars from its US business and purchases substantially all inventory
in US Dollar, which provides a degree of natural offset. In addition to the above, a 10% appreciation on the Euro rate would impact
annualised bank loan interest by £0.9m (FY21: £0.9m) under the terms of the new loan agreement.

212

DR. MARTENS PLC ANNUAL REPORT 2022

22. Deferred taxation
The analysis of deferred tax assets and liabilities is as follows:

Deferred tax assets

Deferred tax asset to be recovered after more than 12 months

The gross movement on the deferred income tax is as follows:

Deferred tax asset movement

FY22
£m

FY211
£m

9.6

7.4

FY22
£m

2.2

FY211
£m

–

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

The deferred tax asset provided in the financial statements is supported by budgets and trading forecasts and relates to the
following temporary differences:

• accelerated capital allowances are the differences between the net book value of fixed assets and their tax base;

• temporary differences are the differences between the carrying amount of an asset/liability and its tax base that eventually

will reverse and mainly comprise amounts for unrealised profits in intra-group transactions and expenses;

• trade losses expected to be utilised in future periods; and

• deferred tax on share-based payments in relation to the expected future tax deduction on the exercise of granted share options

spread over the vesting period.

The movement in deferred income tax assets and liabilities during the year is as follows:

At 1 April 2020
Statement of Profit or Loss (charge)/credit

At 31 March 2021

Statement of Profit or Loss (charge)/credit
Foreign exchange

At 31 March 2022

Accelerated
capital
allowances
£m

(0.2)
(0.4)

(0.6)

(1.4)
–

(2.0)

Temporary
differences1
£m

Tax losses
£m

Share-based
payments
£m

7.4
0.4

7.8

2.7
(0.2)

10.3

0.2
–

0.2

0.4
–

0.6

–
–

–

0.7
–

0.7

Total1
£m

7.4
–

7.4

2.4
(0.2)

9.6

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

Deferred taxation not provided in the financial statements:

Tax losses

FY22
£m

9.3

FY21
£m

7.3

The deferred tax asset has been remeasured, and the 31 March 2022 year-end balance calculated using the rate at which the
relevant asset is expected to reverse.

DR. MARTENS PLC ANNUAL REPORT 2022

213

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

23. Share capital
On 29 January 2021, the Company carried out a reorganisation of its share capital to facilitate a listing to the premium segment
of the Official List of the Financial Conduct Authority and to trade on the London Stock Exchange Main Market for listed securities.
This is described as follows:

Authorised, called up and fully paid

FY22
No.

FY22
£

FY21
No.

FY21
£

Ordinary shares of £0.01 each

1,000,222,700

10,002,227

1,000,000,100

10,000,001

The movements in the ordinary share capital during the year ended 31 March 2022 were as follows:

FY22
Shares
No.

FY22
Share capital
£m

FY21
Shares
No.

FY21
Share capital
£m

As at 1 April 2021

1,000,000,100

10.0

10,000,004

Issued on incorporation of Dr. Martens plc

Further shares issued

Share consolidation

Share for share exchange

Doc Topco Limited

Dr. Martens plc

Share cancellation

Capital reduction
Sub-division of shares (1 for 100 split)

–

222,600

–

–
–

–

–
–

139

(139)

(10,000,004)

10,000,003

(3)

–
990,000,099

–

1,400.0

–

(1,390.0)
–

As at 31 March 2022

1,000,222,700

10.0

1,000,000,100

10.0

24. Reserves
The following describes the nature and purpose of each reserve within equity:

Reserve

Share capital

Hedging reserve

Capital reserve – own shares

Capital redemption reserve

Merger reserve

Description and purpose

Nominal value of subscribed shares.

Represents the movements in fair value on designated hedging instruments.

This reserve relates to shares held by SIP Trusts as ‘treasury shares’. The shares
held by the SIP Trusts were issued directly to the Trusts in order to satisfy
outstanding employee share options and potential awards under the employee share
incentive schemes. The Company issued shares directly to the Trusts of 110,900 on
8 October 2021 and 111,700 on 31 March 2022, and at 31 March 2022 held 16,925
shares (FY21: nil).

A non-distributable reserve into which amounts are transferred following the
redemption or purchase of own shares. The reserve was created in order to ensure
sufficient distributable reserves were available for the purpose of redeeming
preference shares in the prior year.

The difference between the nominal value of shares acquired by Dr. Martens plc
(the Parent Company) in the share for share exchange with Doc Topco Limited and
the nominal value of shares issued to acquire them.

Non-UK currency translation reserve

Includes translation gains or losses on translation of non-UK subsidiaries’ financial
statements from the functional currencies to the presentational currency.

Retained earnings

Retained earnings represent the profits of the Group made in current and preceding
years, net of distributions and equity-settled share-based awards. Included in
retained earnings are distributable reserves.

214

DR. MARTENS PLC ANNUAL REPORT 2022

25. EBT
The Group had an Employee Benefit Trust (EBT), Doc Topco Limited Employee Benefit Trust, for the purpose of facilitating the
holding of shares in Doc Topco Limited (previously the Parent Company of the Group) for the benefit of employees of the Group.
The assets of the employee share trust were held by a separate trust, of which the Directors consider that Doc Topco Limited had
control for accounting purposes. Immediately prior to admission to the London Stock Exchange, shares were transferred to the
Executive Directors, in their positions as employees for past services at £nil cost and therefore the distribution falls within the
definition of equity-settled share-based payment under IFRS 2 Share-Based Payments and there are no vesting conditions attached
to these shares and they vest immediately on distribution to the CFO/CEO. The fair value of the shares at the date of transfer was
£3.70 per share resulting in a share-based payment charge of £10.8m. In addition, the EBT sold 10,570,300 shares at IPO date
generating cash of £37.8m and, in conjunction with £4.2m of cash held by the EBT from previous shares sold, funded a £42.0m
‘IPO bonus’ to all employees of the Group.

The Trust was dissolved on 1 July 2021.

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during
the year:

Outstanding at the beginning of the year

Granted

Vested
Forfeited

Outstanding at the end of the year

Weighted average contractual life remaining (years)

Fair value measurement
The following table lists the inputs to the model used for the plan for the year ended 31 March 2021:

Date of grant1

Share price (pence)

Fair value at grant date (pence)

Exercise price (pence)

Dividend yield (%)

Expected volatility (%)

Risk-free interest rate (%)

Expected life (years)

Model used

FY21

EBT

No.

–

2,929,700

(2,929,700)
–

–

WAEP

–

£0.00

£0.00
–

–

FY21
EBT

29/01/2021

425

358

Nil

0.00%

0 years

n/a

1. On 23 January 2021 the Trustees issued the Letter of Wishes to the Executive Directors.

26. Share-based payments
On 29 January 2021, the Group approved the award of shares to Executive Directors and other senior executives under a new
equity-settled Long Term Incentive Plan (LTIP) – the Performance Scheme Plan (PSP) for the Executive Directors and Global
Leadership Team (GLT) and the Restricted Scheme Plan (RSP) for GLT direct reports. The LTIP is a discretionary share plan under
which awards are approved and granted at the discretion of the Remuneration Committee.

Long Term Incentive Plan – Performance Scheme Plan (PSP)
On 9 February 2021, conditional awards of share options were granted to the Executive Directors and the other senior managers.
These awards are capable of vesting over the period from 9 February 2021 to the 2024 results announcement, subject to the
achievement of performance conditions and continued service. The performance conditions attached to the awards are Total
Shareholder Return (TSR), which is a market-based performance condition, and EPS growth, which is a non-market-based
performance condition. The fair value of the TSR element of the performance conditions is calculated and fixed at the date of grant
using a Stochastic options pricing model. The fair value of the EPS element of the performance conditions is reviewed at each
balance sheet date and adjusted through the number of options expected to vest. The awards will generally vest to participants at
the end of the vesting period subject to good and bad leaver provisions. There are no cash settlement alternatives and the Group
accounts for the PSP as an equity-settled plan.

DR. MARTENS PLC ANNUAL REPORT 2022

215

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

26. Share-based payments continued
Long Term Incentive Plan – Restricted Scheme Plan (RSP)
On 9 February 2021, service conditional awards of shares under the RSP were granted to certain employees of the Group. The
awards vest in two tranches, with 50% vesting 18 months following the grant date and 50% vesting 36 months following the grant
date. The members of the RSP must be employed by the Group at the end of the vesting or service period for each tranche. If
employees leave the Group after the first 50% tranche has vested but before the second 50% tranche is due to vest, the second
tranche will lapse. The fair value of restricted awards is the face value of the awards at the date of grant. There are no cash
settlement alternatives. The Group accounts for the restricted shares as an equity-settled plan. Full details on the performance
conditions for all the LTIP awards can be found in the Remuneration report on pages 150 to 161.

Free share award
On 8 October 2021, the Group granted free shares to all employees, offering all employees awards of ordinary shares in the
Company at an exercise price of £nil. All awards vested on 31 March 2022 and the vesting of these share awards was dependent
on continued employment from the grant date.

Included in staff costs is £5.2m (FY21: £0.7m) in relation to expenses arising from equity-settled share-based payments. Within this
amount is £0.8m (FY21: £nil) in relation to the free share award.

Global bonus scheme share plan
The Remuneration Committee of the Group has determined that a proportion of the annual Executive Bonus Scheme will be settled
in the form of purchased Parent Company’s shares. There were no cancellations or modifications to the awards during the year.

Included in staff costs is £1.9m (FY21: £nil) in relation to expenses arising from cash-settled share-based payments.

Movements during the year
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during
the year:

FY22

LTIP

FY21

LTIP

No.

WAEP

No.

WAEP

Outstanding at the beginning of the year

2,665,803

–

Granted

Vested
Forfeited

1,017,177

–
(495,081)

£0.00 2,665,803

£0.00

–
–

Outstanding at the end of the year

3,187,899

£0.00 2,665,803

£0.00

Weighted average contractual life remaining (years)

1.9

£0.00

2.9

£0.00

FY22

Free share award

No.

–

222,600

(205,675)
(16,925)

–

WAEP

–

£0.00

£0.00
–

–

Outstanding at the beginning of the year

Granted

Vested
Forfeited

Outstanding at the end of the year

Weighted average contractual life remaining (years)

216

DR. MARTENS PLC ANNUAL REPORT 2022

26. Share-based payments continued
Fair value measurement
The following table lists the inputs to the models used for the three plans for the year ended 31 March 2022:

Date of grant

Share price (pence)

Fair value at grant date (pence)

Exercise price (pence)

Dividend yield (%)

Expected volatility (%)

Risk-free interest rate (%)

Expected life (years)

Model used

Date of grant

Share price (pence)

Fair value at grant date (pence)

Exercise price (pence)

Dividend yield (%)

Expected volatility (%)

Risk-free interest rate (%)

Expected life (years)

Model used

Date of grant

Share price (pence)

Fair value at grant date (pence)

Exercise price (pence)

Dividend yield (%)

Expected volatility (%)

Risk-free interest rate (%)

Expected life (years)

Model used

FY22

LTIP

PSP

RSP

06/07/2021

15/12/2021

15/12/2021 06/07/2021

15/12/2021

451

371

Nil

388

301

Nil

388

Nil

453

Nil

388

Nil

54.11%

0.10%

54.57%

0.42%

0.00%

2.7 years

2.3 years

2.7 years

2.3 years

Monte Carlo Monte Carlo

n/a

FY21

LTIP

PSP

09/02/2021

513

439

Nil

50.59%

0.03%

3.3 years

Monte Carlo

RSP

09/02/2021

513

Nil

0.00%

1.5 – 3.0 years

n/a

FY22

Free share award

08/10/2021

373

Nil

0.00%

0.5 years

n/a

Volatility
For determining expected volatility, IFRS 2 requires the fair value to take into account historical volatility over the expected term.
As Dr. Martens plc has been listed for less than the expected life of the plans it does not have sufficient information on historical
volatility, and it computes volatility for the longest period for which trading activity is available. It also considered the historical
volatility of similar entities in the same industry for the equivalent period of their listed share price history.

Employer payroll taxes
Employer payroll taxes are being accrued, where applicable, at local rate, which management expects to be the prevailing rate when
the awards are exercised, based on the share price at the reporting date. The total employer payroll taxes for the year relating to all
the awards was £0.7m (FY21: £0.1m).

DR. MARTENS PLC ANNUAL REPORT 2022

217

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

27. Financial commitments and contingencies
Total future minimum lease payments (not discounted) under non-cancellable lease rentals are payable as follows:

Not later than one year

Later than one year and not later than five years
Later than five years

FY22
£m

24.9

73.2
29.2

127.3

FY21
£m

22.7

54.3
20.0

97.0

The financial commitments note has been prepared on the basis that the lease commitments will continue to the end of the lease
term and these lease breaks will not be exercised. The future minimum lease payments to the lease break are £84.6m (FY21:
£65.1m).

Contingent liabilities exist in the form of a duty deferment guarantee to HMRC for a maximum amount of £0.9m (FY21: £0.9m), rent
guarantees to various landlords of £2.1m (FY21: £1.7m) and other guarantees of £0.2m (FY21: £nil). These contingent liabilities which
aggregate to £3.2m (FY21: £2.6m) are guaranteed under the revolving credit facility.

28. Leases
Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrowings) and the
movements during the year:

At 1 April 2021

Additions and remeasurement

Interest

Payments
Foreign exchange

At 31 March 2022

Current

Non-current

The following amounts were recognised in the Statement of Profit or Loss:

Depreciation expense of right-of-use assets

Interest expense on lease liabilities

Expenses relating to short-term leases (included in cost of sales)
Variable lease payments (included in cost of sales)

Total operating expenses recognised in profit

Total amount recognised in profit

Notes

FY22
£m

84.8

47.8

3.5

(24.0)
0.8

112.9

19.8

93.1

FY22
£m

22.5

3.5

1.3
2.0

3.3

FY21
£m

88.4

20.4

3.7

(23.8)
(3.9)

84.8

18.2

66.6

FY21
£m

21.5

3.7

0.8
0.7

1.5

29.3

26.7

29. Pensions
Defined contribution scheme
The Group operates a defined contribution pension scheme for its employees. The Group’s contributions to this scheme were £6.0m
for the year ended 31 March 2022 (FY21: £5.8m) and at 31 March 2022 £0.8m (FY21: £0.9m) remained payable to the pension fund.

Defined benefit scheme
Airwair International Limited (a subsidiary of the Group) operates a pension arrangement called the Dr. Martens Airwair Group
Pension Plan (the Plan). The Plan has a defined benefit section that provides benefits based on final salary and length of service
on retirement, leaving service or death. The defined benefit section closed to new members on 6 April 2002 and closed to future
accrual with effect from 31 January 2006. The Plan also has a defined contribution section that provides money purchase benefits
to some current and former employees.

The Plan is managed by a board of Trustees appointed in part by Airwair International Limited and in part from elections by
members of the Plan. The Trustees have responsibility for obtaining valuations of the fund, administering benefit payments and
investing the Plan’s assets. The Trustees delegate some of these functions to their professional advisers where appropriate.

218

DR. MARTENS PLC ANNUAL REPORT 2022

29. Pensions continued
Defined benefit scheme continued
The defined benefit section of the Plan is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation
of the Plan is carried out at least once every three years to determine whether the Statutory Funding Objective is met. The last
valuation was carried out at 30 June 2019 which confirmed that the Plan had sufficient assets to meet the Statutory Funding
Objective. The next valuation is due at 30 June 2022. The Statutory Funding Objective does not currently impact on the recognition
of the Plan in these accounts.

During the year, no discretionary benefits were awarded. There were no Plan amendments, settlements or curtailments during
the period.

The weighted average duration of the defined benefit obligation is approximately 17 years (FY21: 17 years). Around 50% of the
undiscounted benefits are due to be paid beyond 18 years’ time, with the last payments expected to be over 70 years from now.

Key risks
The defined benefit section of the Plan exposes Airwair International Limited to a number of risks:

• Investment risk. The Plan holds investments in asset classes, such as equities, which have volatile market values and while these
assets are expected to provide the real returns over the long term, the short-term volatility can cause additional funding to be
required if a deficit emerges.

• Interest rate risk. The value of the Plan’s liabilities is assessed using market yields on high quality corporate bonds to discount the
liabilities. As the Plan holds assets such as equities, the value of the assets and liabilities may not move in the same way. The Plan
holds derivatives to manage a proportion of the interest rate risk.

• Inflation risk. A significant proportion of the benefits under the Plan are linked to inflation. Although the Plan’s assets are

expected to provide a good hedge against inflation over the long term, movements in inflation expectations over the short term
could lead to a deficit emerging. The Plan holds some derivatives to hedge a proportion of the potential changes in the value
of the liabilities due to changes in market inflation expectations.

• Mortality risk. In the event that members live longer than assumed, a deficit could emerge in the Plan.

Although the Lloyds Banking Group Pensions Trustees Limited v. Lloyds Bank PLC (and others) court judgment on 26 October 2018
(and the subsequent court judgement on 20 November 2020) provided some clarity in respect of GMP equalisation and the
obligations that this places on schemes, the actual impact of equalising the Plan’s GMPs remains uncertain. An approximate
allowance has been made in the disclosures for the impact of GMP equalisation. There were no other plan amendments, curtailments
or settlements during the period.

Effect of the Plan on Company’s future cash flows
Airwair International Limited is required to agree a Schedule of Contributions with the Trustees of the Plan following a valuation,
which must be carried out at least once every three years. Following the valuation of the Plan at 30 June 2019, a Schedule of
Contributions was agreed under which Airwair International Limited was not required to make any contributions to the defined
benefit section of the Plan (other than payments in respect of administrative expenses). Accordingly, Airwair International Limited
does not expect to contribute to the defined benefit section of the Plan, although it will continue to contribute to the defined
contribution section in line with the Schedule of Contributions. The next valuation of the Plan is due as at 30 June 2022. If this
reveals a deficit then Airwair International Limited may be required to pay contributions to the Plan to repair the deficit over time.

The amounts recognised in the Balance Sheet (under IAS 19 Employee Benefits) are determined as follows:

Fair value of assets – defined benefit section
Fair value of assets – defined contribution section

Fair value of plan assets

Present value of funded obligations – defined benefit section
Present value of funded obligations – defined contribution section

Present value of funded obligations – total

Surplus of funded plans
Impact of asset ceiling

Net pension asset

FY22
£m

68.6
20.4

89.0

(55.3)
(20.4)

(75.7)

13.3
(13.3)

–

FY21
£m

67.8
15.5

83.3

(59.0)
(15.5)

(74.5)

8.8
(8.8)

–

Although the Plan has a surplus, this is not recognised on the grounds that Airwair International Limited is unlikely to derive any
future economic benefits from the surplus.

DR. MARTENS PLC ANNUAL REPORT 2022

219

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

29. Pensions continued
A reconciliation of the net defined benefit asset over the year is given below:

Net defined benefit asset at beginning of year

Total defined benefit charge in the Statement of Profit or Loss

Remeasurement losses in Other Comprehensive Income (OCI)
Employer’s contributions

Net defined benefit asset at end of the year

FY22
£m

FY21
£m

–

–
–

–

–
–

–

The amount charged to the Statement of Profit or Loss and Statement of Other Comprehensive Income in respect of the defined
benefit section of the Plan was £nil (FY21: £nil). Costs in respect of the defined contribution section of the Plan, and other defined
contribution arrangements operated by Airwair International Limited, are allowed for separately.

The remeasurements in respect of the defined benefit section of the Plan, to be shown in Other Comprehensive Income, are shown below:

(Gains)/losses on defined benefit assets in excess of interest

Losses/(gains) from changes to demographic assumptions

Losses/(gains) from changes of financial assumptions
Change in effect of asset ceiling

Total remeasurements to be shown in the OCI

The change in assets over the year was:

At 1 April

Interest on defined benefit assets

Return on defined benefit section assets less interest

Benefits paid from the defined benefit section
Increase in defined contribution section assets

At 31 March

Split as:

Fair value of assets – defined benefit section

Fair value of assets – defined contribution section

At 31 March

FY22
£m

(1.4)

–

(2.9)
4.3

–

FY22
£m

83.3

1.3

1.4

(1.9)
4.9

FY21
£m

(5.1)

0.3

9.0
(4.2)

–

FY21
£m

73.2

1.4

5.1

(2.1)
5.7

89.0

83.3

68.6

20.4

89.0

67.8

15.5

83.3

The information above includes assets for the defined benefit section and also the defined contribution section. At 31 March 2022
the assets for each scheme are as outlined above.

The change in the funded obligations over the year was:

At 1 April

Past service cost

Interest cost on defined benefit obligation

Changes to demographic assumptions

Changes to financial assumptions

Benefits paid from the defined benefit section
Increase in defined contribution section assets

At 31 March

Split as:

Present value of funded obligations – defined benefit section
Present value of funded obligations – defined contribution section

At 31 March

220

DR. MARTENS PLC ANNUAL REPORT 2022

FY22
£m

74.5

–

1.1

–

(2.9)

(1.9)
4.9

FY21
£m

60.5

–

1.1

0.3

9.0

(2.1)
5.7

75.7

74.5

55.3
20.4

75.7

59.0
15.5

74.5

29. Pensions continued
The change in the effect of the asset ceiling over the year is as follows:

At 1 April

Net interest charge on asset ceiling
Changes in the effect of the asset ceiling excluding interest

At 31 March

FY22
£m

8.8

0.2
4.3

13.3

FY21
£m

12.7

0.3
(4.2)

8.8

A breakdown of the assets is set out below, split between those assets that have a quoted market value in an active market and
those that do not. The assets do not include any investment in shares of Airwair International Limited.

Assets with a quoted market value in an active market:

Cash and other
Domestic

Assets without a quoted market value in an active market:

Equities and property

Domestic
Foreign

Fixed interest bonds

Unspecified

Index linked gilts

Domestic

Alternatives

Unspecified

Property

Unspecified

Insured annuities

Domestic

Cash and other

Domestic

Foreign
Unspecified

Defined contribution section assets

Unspecified

FY22
£m

FY21
£m

–

0.2

0.5
15.9

16.4

17.9

28.6

6.3

1.0

1.3

3.0

0.1
(5.9)

(2.8)

20.3

1.1
19.4

20.5

7.2

34.6

5.8

–

1.5

2.6

–
(4.6)

(2.0)

15.5

Fair value of plan assets

89.0

83.3

DR. MARTENS PLC ANNUAL REPORT 2022

221

FINANCIAL STATEMENTSNotes to the Consolidated Financial Statements
for the year ended 31 March 2022 continued

29. Pensions continued
A full actuarial valuation was carried out at 30 June 2019. The results of that valuation were updated to 31 March 2022 by a qualified
independent actuary. The principal assumptions selected by Airwair International Limited and used by the actuary to calculate the
Plan’s defined benefit obligation were:

Discount rate

Inflation assumption (RPI)

Inflation assumption (CPI)

LPI pension increases subject to 5% cap
Revaluation in deferment

Post retirement mortality assumption

Tax free cash

Proportion married at retirement or earlier death

Assumed life expectancies on retirement at age 65 are:

Retiring today:

Retiring in 20 years’ time:

Male

Female

Male

Female

FY22

2.6%

3.6%

2.9%

3.5%
2.9%

FY21

2.0%

3.3%

2.5%

3.2%
2.5%

100% for males and 102%
for females of the S3PA
tables with CMI_2020
projections using a 0%
2020 weight parameter, a
long-term improvement
rate of 1.00% p.a. and no
initial addition

100% (males) and 102%
(females) of S3PA tables, with
allowance for future
improvements in line with
CMI_2019, 1.00% long-term
rate

Members are assumed to
take 50% of the maximum
tax free cash possible

Members are assumed to
take 50% of the maximum

tax free cash

70%

21.8

24.0

22.8

25.2

The key sensitivities of the defined benefit obligation to the actuarial assumptions are shown below:

Discount rate

Plus 0.5%

Minus 0.5%

Rate of inflation

Plus 0.5%

Minus 0.5%

Life expectancy

Plus 1.0 year

Minus 1.0 year

70%

21.8

24.0

22.8

25.1

FY21
£m

(4.7)

5.3

4.3

(4.6)

2.8

(2.7)

FY22
£m

(4.2)

4.7

4.1

(3.7)

2.6

(2.6)

The sensitivity illustrations set out above are approximate. They show the likely effect of an assumption being adjusted whilst all other
assumptions remain the same. Only the impact on the liability value (i.e. the defined benefit obligation) is considered – in particular:

• no allowance is made for any changes to the value of the Plan’s invested assets in scenarios where interest rates or market

inflation expectations change; and

• no allowance is made for changes in the value of the annuity policies held by the Plan, which is calculated using the same actuarial

assumptions as for the Plan’s defined benefit obligation.

Such changes to the asset values would be likely to partially offset the changes in the defined benefit obligation.

The net Balance Sheet and Statement of Profit or Loss are not sensitive to the actuarial assumptions used at the current time, due
to the effect of the asset ceiling.

222

DR. MARTENS PLC ANNUAL REPORT 2022

30. Related party transactions
Transactions with related parties
Transactions between the Company and its wholly owned subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note. A list of investments in subsidiary undertakings can be found
in note 12 to the Parent Company financial statements.

Alter Domus1

Amount incurred
Amount payable by/(owed) at year end

Genesys1

Amount incurred
Amount payable by/(owed) at year end

Klarna1

Amount incurred
Amount payable by/(owed) at year end

TeamViewer1

Amount incurred

Amount payable by/(owed) at year end

FY22
£’000

FY21
£’000

29
–

41
(1)

188
47

–

6
(6)

–
–

–

1. Alter Domus, Genesys, Klarna and TeamViewer are related to the Group as they are under the common control of Permira V Fund, which is itself controlled by

Permira Holdings Limited, a major shareholder which has significant influence over the Group.

Key management personnel compensation
The compensation of key management (including Executive Directors) for the year was as follows:

Salaries and benefits

Exceptionals: IFRS 2 (non-cash)

Pensions

This includes the Directors of all Group companies.

FY22
£m

8.7

–

0.2

FY21
£m

26.6

10.8

0.2

DR. MARTENS PLC ANNUAL REPORT 2022

223

FINANCIAL STATEMENTSCONTENTS

Parent Company Balance Sheet

225

Parent Company Statement
of Changes in Equity

Notes to the Parent Company
Financial Statements

226

227

ARENT
COMPANY

224

DR. MARTENS PLC ANNUAL REPORT 2022

Parent Company Balance Sheet
As at 31 March 2022

Non-current assets
Investments

Current assets

Trade and other receivables
Cash and cash equivalents

Total assets

Current liabilities
Trade and other payables

Total liabilities

Net assets

Equity attributable to the owners of the parent

Share capital

Capital reserve – own shares

Capital redemption reserve
Retained earnings

Total equity

Notes

Total
FY22
£m

Total
FY21
£m

1,413.4

7
8

34.0
–

34.0

10.2
9.5

19.7

1,447.4

1,433.1

(30.9)

(26.6)

(30.9)

(26.6)

1,416.5

1,406.5

11
11

10.0

–

10.0

–

–
1,406.5

–
1,396.5

1,416.5

1,406.5

As permitted by section 408 of the Companies Act 2006, the Company’s Statement of Profit and Loss has not been included
in these financial statements.

The Company incurred a profit for the year to 31 March 2022 of £17.0m (FY21: loss of £5.0m). The Directors consider £1,389.8m
(FY21: £1,385.0m) of retained earnings is distributable and £16.7m (FY21: £11.5m) is non-distributable.

The notes on pages 227 to 232 are an integral part of these financial statements.

The financial statements on pages 225 to 232 were approved and authorised by the Board of Directors and signed on its behalf by:

KENNY WILSON
CHIEF EXECUTIVE OFFICER
31 May 2022

JON MORTIMORE
CHIEF FINANCIAL OFFICER
31 May 2022

DR. MARTENS PLC ANNUAL REPORT 2022

225

FINANCIAL STATEMENTS

Parent Company Statement of Changes in Equity
For the year ended 31 March 2022

At date of incorporation on 19 October 2020

Comprehensive expense
Loss for the period

Total comprehensive expense for the period

Shares issued

Share for share exchange

Capital reduction
Share-based payments

At 31 March 2021

Comprehensive income
Profit for the year

Total comprehensive income for the year

Dividends paid

Shares issued
Share-based payments

At 31 March 2022

Share capital
£m

Notes

Capital
reserve
– own shares
£m

Capital
redemption
reserve
£m

–

1,400.0

(1,390.0)
–

10.0

–

–
–

10.0

–

–
–

–

–
–

–

–
–

–

–
–

–

Retained
earnings
£m

–

(5.0)

–

1,390.0
11.5

Total
equity
£m

–

(5.0)

–

1,400.0

–
11.5

1,396.5

1,406.5

17.0

(12.2)

–
5.2

17.0

(12.2)

–
5.2

1,406.5

1,416.5

The notes on pages 227 to 232 are an integral part of these financial statements.

226

DR. MARTENS PLC ANNUAL REPORT 2022

Notes to the Parent Company Financial Statements
For the year ended 31 March 2022

2. Accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. The Company has
presented a comparative period from incorporation on 19 October 2020 to 31 March 2021 and the policies were consistently applied
to the period presented, unless otherwise stated. Amounts are presented in GBP and to the nearest million pounds (to one decimal
place) unless otherwise noted.

Basis of preparation
The financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with United
Kingdom Accounting Standards, including FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’
(United Kingdom Generally Accepted Accounting Practice) and in conformity with the requirements of the Companies Act 2006.

Disclosure exemptions
The Company has taken advantage of the following disclosure exemptions permitted by FRS 102:

• the requirements of Section 7 Statement of Cash Flows and Section 3 Financial Statement Presentation, paragraph 3.17(d);

• the requirements of Section 11 Financial Instruments, paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and

11.48(c);

• the requirements of Section 33 Related Party Disclosures, paragraph 33.7.

Going concern
The financial statements have been prepared on a going concern basis. The Directors’ assessment is based on detailed trading and
cash flow forecasts, including forecast liquidity and covenant compliance. The period of management’s assessment is from the date
of the signing of the financial statements to 30 September 2023 and the going concern basis is dependent on the Group maintaining
adequate levels of resources to operate during the period.

The Directors remain vigilant and continue to monitor the effects of Covid-19 and supply chain challenges in all our core markets
(across ecommerce, retail and wholesale channels) and economic and political instability and will react appropriately to further
developments and associated risks. Trading in the year also identified that payments from wholesale customers remained strong
throughout with no material increase in bad debts from pre Covid-19 trading.

The base case assumes the Group continues to trade with no restrictions in core markets and trade continues to build in line with the
DOCS growth strategy.

DR. MARTENS PLC ANNUAL REPORT 2022

227

FINANCIAL STATEMENTSNotes to the Parent Company Financial Statements
For the year ended 31 March 2022 continued

2. Accounting policies continued
Going concern continued
In the severe but plausible scenario modelled the Group continues to have satisfactory liquidity headroom but required remediation
of the covenant headroom throughout the period under review. However, should this extreme downside scenario occur then
mitigating actions could be taken including, (but not limited to) cancellation of pay awards, reduction in planned marketing spend,
potential extension of payment terms with factories, reducing purchases in line with reduced sales, and delay/cancellation of IT
related capex and reduced future dividend payments. In addition, if inflation expectations are high, we expect to increase prices to
offset higher input costs. A more extreme downside scenario is not considered plausible.

Taxation
The tax expense would represent the sum of the tax currently payable and deferred tax movement recognised in the period. There
is no tax currently payable based on results for the period. Taxable profit differs from net profit as reported in the Statement of
Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated by using tax rates that have
been enacted or substantively enacted by the end of each reporting period.

Dividends
Final dividends are recorded in the financial statements in the period in which they are approved by the Company’s shareholders.
Interim dividends are recorded in the period in which they are approved and paid.

Investments
Investments are stated at cost (also deemed the fair value) less any provision for impairment.

Trade and other receivables
Trade receivables are classified under IFRS 9 and measured at amortised cost using the effective interest rate method. The
Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at FVPL. The most significant
financial assets of the Group are its trade receivables, which are referred to as ‘customer and other receivables’. ECLs are based
on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company
expects to receive, discounted at an approximation of the original effective interest rate.

Trade and other payables
Trade and other payables include related party obligations incurred in connection with the reorganisation of the share capital of the
Company and amounts due to subsidiary undertakings.

228

DR. MARTENS PLC ANNUAL REPORT 2022

2. Accounting policies continued
Share-based payments
The Company provides benefits to certain employees (including Executive Directors) in the form of share-based payment
transactions, whereby employees render services as consideration in exchange for equity instruments (equity-settled transactions).
Further details of the share-based payments accounting policy can be found in note 2.25 of the Consolidated Financial Statements.

Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.

Capital reserve – own shares
Dr. Martens plc shares held by the Company’s two SIP Trusts are classified in shareholders’ equity as ‘Capital reserve – own shares’
and are recognised at cost. No gain or loss is recognised in the income statement on the purchase or sale of such shares.

Significant judgements and estimates
The following judgements have had the most significant effect on amounts recognised in the financial statements:

Investments
The Company assesses, at each reporting date, whether there is an indication that any investment may be impaired. If any indication
exists, or when annual impairment testing for an investment is required, the Company estimates the investment’s recoverable
amount. In assessing an investment’s recoverable amount, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money.

3. Staff costs
Other than the Directors, the Company had no employees during the year. Details of Directors’ remuneration can be found in note 7
to the Consolidated Financial Statements and in the Remuneration report on pages 150 to 161.

4. Auditor’s remuneration
The Company has incurred audit fees of £15,750 (FY21: £15,000) for the year.

5. Dividends

Equity dividends on ordinary shares declared and paid during the year:
Interim dividend for FY22: 1.22p (FY21: nil)

Total dividends declared and paid during the year

Proposed for approval by shareholders at the AGM

(not recognised as a liability at 31 March 2022 or 31 March 2021)
Final dividend for FY22: 4.28p (FY21: nil)

Total interim and final dividend relating to FY22

Dividend as a % of earnings

Dividend per share

Total dividend per share relating to FY22 (pence)

6. Investments

At 1 April 2021
Acquisitions

At 31 March 2022

A list of the Company’s investments in subsidiary undertakings can be found in note 12.

FY22
£m

12.2

42.8

55.0

30.4%

5.50

FY21
£m

–

FY22
£m

1,413.4
–

FY21
£m

–
1,413.4

1,413.4

DR. MARTENS PLC ANNUAL REPORT 2022

229

FINANCIAL STATEMENTSNotes to the Parent Company Financial Statements
For the year ended 31 March 2022 continued

7. Trade and other receivables

Social security and other taxes

Prepayments and accrued income
Amounts owed by subsidiary undertakings

8. Cash and cash equivalents

Cash and cash equivalents

9. Trade and other payables

Trade creditors

Amounts due to subsidiary undertakings

Accruals and deferred income
Taxation

10. Share capital

Authorised, called up and fully paid

FY22
£m

0.1

0.5
33.4

34.0

FY22
£m

–

FY22
£m

0.5

27.8

2.4
0.2

30.9

FY22
No.

FY22
£m

FY21
No.

Ordinary shares of £0.01 each

1,000,222,700

10.0

1,000,000,100

1,000,222,700

10.0

1,000,000,100

The movements in the ordinary share capital during the period ended 31 March 2022 were as follows:

FY21
£m

0.7

0.4
9.1

10.2

FY21
£m

9.5

FY21
£m

–

18.1

8.5
–

26.6

FY21
£m

10.0

As at 1 April 2021

Further shares issued

Share consolidation

Issued on share for share exchange

Share cancellation

Capital reduction
Sub-division of shares

FY22
Ordinary shares
No.

FY22
Share capital
£m

FY21
Ordinary shares
No.

FY21
Share capital
£m

1,000,000,100

10.0

222,600

–

–
–

–

–
–

139

(139)

–

10,000,003

1,400.0

(3)

–
990,000,099

–

(1,390.0)
–

As at 31 March 2022

1,000,222,700

10.0

1,000,000,100

10.0

For details of share transactions during the year, refer to note 23 of the Group Consolidated Financial Statements.

230

DR. MARTENS PLC ANNUAL REPORT 2022

11. Reserves
Reserve

Share capital

Capital reserve – own shares

Capital redemption reserve

Retained earnings

Description and purpose

Nominal value of subscribed shares.

This reserve relates to shares held by SIP Trusts as ‘treasury shares’. The shares held by the SIP
Trusts were issued directly to the Trusts in order to satisfy outstanding employee share options
and potential awards under the employee share incentive schemes. The Company issued shares
directly to the Trusts of 110,900 on 8 October 2021 and 111,700 on 31 March 2022, and at 31 March
2022 held 16,925 shares (FY21: nil).

A non-distributable reserve into which amounts are transferred following the redemption or
purchase of own shares. The reserve was created in order to ensure sufficient distributable
reserves were available for the purpose of redeeming preference shares in the prior year.

To recognise the profit or loss, all other net gains and losses and transactions with owners
(e.g. dividends) not recognised elsewhere, and the value of equity-settled share-based awards
provided to Executive Directors and other senior executives as part of their remuneration
(refer to notes 25 and 26 of the Group Consolidated Financial Statements for further details).

DR. MARTENS PLC ANNUAL REPORT 2022

231

FINANCIAL STATEMENTSNotes to the Parent Company Financial Statements
For the year ended 31 March 2022 continued

12. Subsidiary undertakings
The registered address and principal place of business of each subsidiary undertaking are shown in the footnotes below the table. The
financial performance and financial position of these undertakings have been consolidated in the Group consolidated financial statements.

Name

Country of registration Class of share capital held

Direct

Indirect

Nature of business

Airwair (1994) Limited1

Airwair (1996) Limited1

England and Wales £1 Ordinary shares

Airwair International Limited1

England and Wales £1 Ordinary shares

Airwair Limited1

England and Wales £1 Ordinary shares

Airwair Property Limited1

England and Wales £1 Ordinary shares

–

100% Management company

100% Footwear retail and distribution

100% Management company

100% Property investment

Nature of
investment

England and Wales Ordinary shares

100%

– Management company

Ampdebtco Limited2

DM Germany GmbH13

DM Sweden AB14

Germany

Sweden

Ordinary

–

100% Footwear retail and distribution

100% Manufacturing support

100% Footwear retail and distribution

100% Management company

100% Footwear retail and distribution

50% Trademark registration

100% Footwear retail and distribution

100% Dormant

Dr. Martens Airwair (Ireland) Limited12

Republic of Ireland Ordinary

Dr. Martens Airwair (Zhuhai) Company Limited*4 China

Dr. Martens Airwair Belgium N.V8

Dr Martens Airwair Canada Inc.19

Dr. Martens Airwair France S.A.S9

Belgium

Canada

France

Ordinary

Capital of no par value

Ordinary

Dr Martens Airwair Group Limited1

England and Wales Ordinary shares

Dr. Martens Airwair Hong Kong Limited5

Hong Kong

Dr. Martens Airwair Japan KK7

Dr. Martens Airwair Korea Limited6

Dr. Martens Airwair Spain S.L.U17

Dr. Martens Airwair USA LLC3

Japan

Korea

Spain

USA

Ordinary

Capital of no par value

Dr. Martens Airwair Wholesale Limited1

England and Wales £1 Ordinary shares

Dr. Martens Italy SRL15

Italy

Dr. Martens Netherlands B.V.10

Netherlands

Ordinary

GFM Trademarks GmbH11

Shanghai Airwair Trading Ltd*16

Germany

China

DM1 Ordinary shares

Ordinary

Dr. Martens Sports & Leisure Limited1

England and Wales £1 Ordinary shares

Dr Martens Airwair Singapore PTE Limited18

Singapore

Ordinary

Dr Martens Airwair & Co Limited1

England and Wales £1 Ordinary shares

Dr. Martens Dept. Store Limited1

England and Wales £1 Ordinary shares

Dr Martens Limited1

England and Wales £1 Ordinary shares

*The financial year of this entity ends on 31 December in line with local requirements.

1. Cobbs Lane, Wollaston, Northamptonshire, England, NN29 7SW.

2. 28 Jamestown Road, Camden, London, England, NW1 7BY.

3. 10 Northwest, 10th Avenue, Portland, Oregon, USA, 97209.

4. No. 04B, F16. Seat B, No 2021, Jiuzhou Avenue West, Zhuhai 519000, Guangdong Province, China.

5. Unit 2306-11, 23F, Sun Life Tower, The Gateway Tower 5, Harbour City, 15 Canton Road, Tsim Sha Tsui, Hong Kong.

6. 1F, Yanghwa-ro 10-gil 45, Mapo-gu, Seoul, South Korea.

7. 5-2-28 Jingumae, Shibuya, Tokyo, Japan 150-0001.

8. Avenue du Port 86C, Box 204, 1000 Brussels.

9. 36 Rue Des Petits Champs, 75002, Paris, France.

10. Postbus 23393, 110DW Amsterdam Zuidoost.

11. An Der Arch 3, 82402, Bayern, Germany.

12. 3rd Floor Kilmore House, Park Lane, Spencer Dock, Dublin 1.

13. 5. Etage, Plane Mühle 2 40221 Düsseldorf.

14. Blekingegatan 48, 11662 Stockholm, Sweden.

15. Via Morimondo 26–20143 Milano.

16. Room 907, Gateway Office Tower 1, No 1, Hongqiao Road, Xuhui District, Shanghai, China.

17. C/Principe de Vergara, 112 4A Planta 28002, Madrid, Spain.

18. 77 Robinson Road, 13-00 Robinson 77, Singapore 068896.

19. 69 Wingold Avenue, Suite 107, Box 122, Toronto, Ontario, Canada M6B 1P8.

232

DR. MARTENS PLC ANNUAL REPORT 2022

NOTICE OF
ANNUAL
GENERAL
MEETING
2022

To be held at 28 Jamestown Road, Camden, NW1 7BY
on Thursday 14 July 2022 at 9.30am (BST)

THIS DOCUMENT IS IMPORTANT AND REQUIRES
YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the action you should take, you should
immediately consult your stockbroker, bank manager, solicitor, accountant
or other independent professional adviser authorised under the Financial
Services and Markets Act 2000 if you are resident in the United Kingdom
or, if you reside elsewhere, another appropriately authorised
financial adviser.

If you have sold or otherwise transferred all your shares in Dr. Martens plc,
please forward this document and accompanying documents (except any
personalised form of proxy, if applicable) to the purchaser or transferee, or
to the stockbroker or other agent through whom the sale or transfer was
effected, for transmission to the purchaser or transferee.

DR. MARTENS PLC ANNUAL REPORT 2022

233

NOTICE OF ANNUAL GENERAL MEETING 2022Notice of Annual General Meeting 2022

How to vote
Your votes are important to us. You can
cast your votes in advance of the meeting
in the following ways:

become due and payable on 19 July 2022
to shareholders named on the Register
of Members at the close of business on
10 June 2022.

How to ask questions
We encourage shareholders who wish
to do so to submit any questions for the
Board that relate to the resolutions
being proposed at the AGM by email to
company.secretariat@drmartens.com by
12 July 2022. This will enable the Board to
answer as many shareholder questions as
possible. We will publish a list of answers to
any questions received that relate to the
business of the AGM on drmartensplc.com
shortly after the meeting.

Recommendation
The Board believes that all the resolutions
to be proposed at the AGM are in the
best interests of the Company and its
shareholders as a whole. The Directors
therefore unanimously recommend
that shareholders vote in favour of all
resolutions, as they intend to do in
respect of their own shareholdings.

Yours faithfully,

EMILY REICHWALD
GENERAL COUNSEL
AND COMPANY SECRETARY

EMILY REICHWALD
GENERAL COUNSEL AND COMPANY
SECRETARY

Dear shareholder ,

I have the pleasure of writing to you with
details of Dr. Martens plc’s Annual General
Meeting (‘AGM’), which will be held on
Thursday 14 July 2022 at 28 Jamestown
Road, Camden, London, NW1 7BY. The
meeting will commence at 9.30am (BST).

The formal Notice of Meeting (the
‘Notice’) follows this letter on pages 235
and 236 and sets out details of each of
the resolutions to be proposed for
shareholder approval, together with
detailed explanatory notes relating to
each individual resolution, which can be
found on pages 237 to 239. Additional
useful notes for shareholders wishing
to issue proxy voting instructions
electronically or by post can be found
on pages 240 to 241.

• online by logging on to our Registrar
Equiniti’s website, sharevote.co.uk;

• via the electronic proxy appointment

service offered by Euroclear UK & Ireland
Limited for members of CREST; or

• by completing and returning a paper
proxy form, available from Equiniti on
request (contact details can be found
on the inside back cover).

Details of how to submit your proxy vote
by post, online or through CREST are set
out on pages 240 and 241.

We recommend that shareholders
intending to vote by proxy nominate the
Chair of the meeting as their proxy. Doing
so will ensure that your shares are voted
at the meeting, on your behalf and in
accordance with your voting instructions.

All of the resolutions at the AGM will be
taken on a poll vote. The results of the
AGM will be notified to the London Stock
Exchange and posted on our website,
drmartensplc.com, as soon as possible
after the AGM, along with details of the
business conducted at the AGM.

Meeting attendance
Whilst government restrictions relating to
Covid-19 have, as at the date of this Notice,
fallen away, the pandemic remains
ongoing. The health and wellbeing of all
our shareholders and employees is of
paramount importance and we therefore
ask that shareholders considering
attending the meeting take sensible
precautions before doing so and that you
do not attend if you are displaying any of
the symptoms of COVID-19.

Re-election of Directors
All Directors will once again stand for
re-election at the AGM, in line with the
provisions of the UK Corporate
Governance Code. Full biographies of
each Director standing for re-election can
be found on pages 114 to 117 of the Annual
Report and at drmartensplc.com. The
Board continues to consider that each
Director is fully effective and committed
to his or her role and is pleased to
recommend their re-election at the AGM.

We will continue to monitor public health
guidance in relation to the COVID-19
pandemic. Should it become appropriate
to amend arrangements for the AGM,
we will notify shareholders through our
corporate website, drmartensplc.com.

We would appreciate it if shareholders
planning to attend the meeting notify
us in advance by email to:
company.secretariat@drmartens.com
by 12 July 2022. This will enable us to
make the necessary arrangements to
comfortably accommodate shareholders
at our Camden office, which is currently
undergoing significant construction work
that will be unlikely to have concluded by
the date of the AGM.

Final dividend
As we most recently reiterated in our
Half Year Results, the Board has adopted
a progressive dividend policy that
reflects the long-term earnings and
cash flow potential of the Group, taking
into account the Group’s financial
performance, market conditions and need
for financial flexibility. Its policy takes into
consideration the characteristics of our
business, our expectations for future
cash flows and our plans for organic
investment in innovation and productivity.

In line with this policy, the Board is
recommending, under resolution 3, a final
dividend for the year ended 31 March
2022 of 4.28 pence per share, which,
subject to approval by shareholders, will

234

DR. MARTENS PLC ANNUAL REPORT 2022

DR. MARTENS PLC
Company number: 12960219

Notice of Meeting 14 July 2022
Notice is hereby given that the Annual
General Meeting of Dr. Martens plc (the
‘Company’) will be held at 28 Jamestown
Road, Camden, London, United Kingdom,
NW1 7BY on Thursday 14 July 2022 at
9.30am (the ‘AGM’) for the purposes set
out below.

You will be asked to consider and, if
thought fit, pass the following resolutions.
Resolutions 1 to 15 (inclusive) will be
proposed as ordinary resolutions, and
Resolutions 16 to 19 (inclusive) will be
proposed as special resolutions.

1. Reports and Accounts
To receive the Strategic Report, Directors’
Report, and the audited accounts for the
financial year ended 31 March 2022,
together with the report of the auditor.

2. Directors’ Remuneration report
To receive and to approve the Directors’
Remuneration report for the year ended 31
March 2022, as set out on pages 147 to 161
of the Annual Report, on an advisory basis.

3. Final dividend
To declare a final dividend of 4.28p per
share for the year ended 31 March 2022,
as recommended by the Directors.

4-11. Re-election of Directors
To re-elect the following Directors who
are seeking annual re-election in
accordance with the UK Corporate
Governance Code:

4. Paul Mason

5. Kenny Wilson

6. Jon Mortimore

7. Ian Rogers

8. Ije Nwokorie

9. Lynne Weedall

10. Robyn Perriss

11. Tara Alhadeff

To view our full Board biographies,
see P114-117 of the Annual Report
or visit drmartensplc.com

12. Appointment of auditors
To resolve that PricewaterhouseCoopers
LLP be, and is hereby, appointed as
auditor of the Company to hold office
from the conclusion of this meeting until
the conclusion of the next general
meeting at which accounts are laid before
the Company.

13. Auditor’s remuneration
To resolve that the Audit and Risk
Committee be authorised to determine
the remuneration of the auditor on
behalf of the Board.

14. Political donations
To resolve that, in accordance with
sections 366 and 367 of the Companies
Act 2006, the Company and any company
which, at any time during the period for
which this resolution has effect, is or
becomes a subsidiary of the Company,
be and are hereby authorised to:

(A) make political donations to political
parties and/or independent election
candidates, not exceeding £100,000
in total;

(B) make political donations to political
organisations, other than political
parties, not exceeding £100,000 in
total; and

provided that the aggregate amount of
any such donations and expenditure
under paragraphs (A), (B) and (C) shall
not exceed £100,000, during the period
beginning with the date of the passing of
this resolution and ending at the
conclusion of the Company’s AGM to be
held in 2023 or until 1 October 2023,
whichever is sooner.

For the purpose of this resolution the
terms ‘political donations’, ‘political
parties’, ‘independent election
candidates’, ‘political organisations’ and
‘political expenditure’ have the meanings
set out in sections 363 to 365 of the
Companies Act 2006.

15. Directors’ authority to

allot shares

To resolve that the Directors be and
are hereby authorised generally and
unconditionally pursuant to section 551
of the Companies Act 2006 to exercise
all the powers of the Company to allot
shares in the Company and to grant rights
to subscribe for or convert any security
into shares in the Company:

(A) Up to an aggregate nominal amount
of £3,334,075.67 (such amount to be
reduced by any allotments or grants
made under paragraph (B) below in
excess of such sum); and

(B) Comprising equity securities (as
defined in section 560(1) of the
Companies Act 2006) up to an
aggregate nominal amount of
£6,668,151.33 (such amount to be
reduced by any allotments made under
paragraph (A) above) in connection
with an offer by way of a rights issue:

(i) To ordinary shareholders in

proportion (as nearly as may
be practicable) to their existing
holdings; and

(ii) To holders of other equity securities

as required by the rights of those
securities or as the Directors
otherwise consider necessary,

and so that the Directors may impose any
limits or restrictions and make any
arrangements which they consider
necessary or appropriate to deal with any
treasury shares, fractional entitlements,
record dates, legal, regulatory or practical
problems in, or under the laws of, any
territory or any other matter.

The authorities conferred on the Directors
to allot securities under paragraphs (A)
and (B) will expire at the conclusion of the
AGM of the Company to be held in 2023 or
on 1 October 2023, whichever is sooner,
unless previously revoked or varied by the
Company, and such authority shall extend
to the making before such expiry of an
offer or an agreement that would or might
require relevant securities to be allotted
after such expiry, and the Directors may
allot relevant securities in pursuance of
that offer or agreement as if the authority
conferred hereby had not expired.

DR. MARTENS PLC ANNUAL REPORT 2022

235

NOTICE OF ANNUAL GENERAL MEETING 2022

Notice of Annual General Meeting 2022
continued

16. General disapplication of

pre-emption rights

To resolve as a special resolution that,
subject to the passing of Resolution 15,
the Directors be empowered to allot
equity securities (as defined in the
Companies Act 2006) for cash under the
authority given by that resolution (set out
in this Notice of Meeting), and/or to sell
ordinary shares held by the Company as
treasury shares for cash, as if section 561
of the Companies Act 2006 did not apply
to any such allotment or sale, provided
that such authority be limited:

(A) To the allotment of equity securities

and sale of treasury shares in
connection with an offer of, or invitation
to apply for, equity securities (but in
the case of the authority granted
under paragraph (B) of Resolution 15,
by way of a rights issue only):

(i) To ordinary shareholders in

proportion (as nearly as may be
practicable) to their existing
holdings; and

(ii) To holders of other equity securities

as required by the rights of those
securities or as the Directors
otherwise consider necessary,

(B) In the case of the authority granted

under paragraph (A) of Resolution 15
and/or in the case of any sale of
treasury shares, to the allotment of
equity securities or sale of treasury
shares (otherwise than under
paragraph (A) above) up to an
aggregate nominal amount of
£500,111.35.

and shall expire at the conclusion of the
AGM of the Company to be held in 2023 or
on 1 October 2023, whichever is sooner
(unless previously renewed, revoked or
varied by the Company in general
meeting), provided that the Company may
before that date make offers, and enter
into agreements, which would, or might,
require equity securities to be allotted (and
treasury shares to be sold) after the
authority ends and the Directors may allot
equity securities (and sell treasury shares)
under any such offer or agreement as if
the authority had not ended.

17. Additional disapplication
of pre-emption rights for
acquisitions and other
capital investments

To resolve as a special resolution that,
subject to the passing of Resolution 15,
the Directors be empowered in addition to
any authority granted under Resolution 16
to allot equity securities (as defined in the
Companies Act 2006) for cash under the
authority given by Resolution 15 (set out
in this Notice of Meeting) and/or to sell
ordinary shares held by the Company as
treasury shares for cash as if section 561
of the Companies Act 2006 did not apply
to any such allotment or sale, provided
that such authority be:

(A) limited to the allotment of equity

securities or sale of treasury shares
up to an aggregate nominal amount
of £500,111.35; and

(B) used only for the purposes of financing
(or refinancing, if the authority is to
be used within six months after the
original transaction) a transaction
which the Directors of the Company
determine to be an acquisition or
other capital investment of a kind
contemplated by the Statement of
Principles on Disapplying Pre-Emption
Rights most recently published by the
Pre-Emption Group prior to the date
of this Notice of Meeting,

and shall expire at the conclusion of the
AGM of the Company to be held in 2023
or on 1 October 2023, whichever is sooner
(unless previously renewed, revoked or
varied by the Company in general
meeting), provided that the Company may
before that date make offers, and enter
into agreements, which would, or might,
require equity securities to be allotted (and
treasury shares to be sold) after the
authority ends and the Directors may allot
equity securities (and sell treasury shares)
under any such offer or agreement as if
the authority had not ended.

18. Company’s authority to
purchase its own shares
To resolve as a special resolution that the
Company is authorised for the purposes
of section 701 of the Companies Act 2006
to make one or more market purchases
(as defined in section 693(4) of the
Companies Act 2006) of its ordinary
shares of £0.01 each (‘ordinary shares’),
such power to be limited:

(A) To a maximum number of 100,022,270

ordinary shares; and

(B) By the condition that the minimum
price which may be paid for an
ordinary share is £0.01 and the
maximum price which may be paid for
an ordinary share is the higher of:

(i) an amount equal to 105% of the
average market value of an
ordinary share for the five
business days immediately
preceding the day on which that
ordinary share is contracted to
be purchased; and

(ii) an amount equal to the higher of
the price of the last independent
trade of an ordinary share and
the highest current independent
bid for an ordinary share on the
trading venues where the
purchase is carried out,

in each case, exclusive of expenses, such
power to apply until the end of the AGM
of the Company to be held in 2023 or
until 1 October 2023, whichever is sooner,
but in each case so that the Company
may enter into a contract to purchase
ordinary shares which will or may be
completed or executed wholly or partly
after the power ends and the Company
may purchase ordinary shares pursuant
to any such contract as if the power had
not ended.

19. Calling of General Meetings
on 14 days’ notice
To resolve as a special resolution that a
general meeting other than an Annual
General Meeting may be called on no
fewer than 14 clear days’ notice.

By order of the Board

EMILY REICHWALD
GENERAL COUNSEL
AND COMPANY SECRETARY
London, 31 May 2022

Registered office 28 Jamestown Road,
Camden, London, United Kingdom, NW1 7BY

Registered in England and Wales
No. 12960219

236

DR. MARTENS PLC ANNUAL REPORT 2022

EXPLANATORY NOTES TO THE
RESOLUTIONS

1. Receive the reports and accounts
The Board asks that shareholders receive
the Strategic Report, Directors’ Report,
and the audited accounts for the financial
year ended 31 March 2022, together with
the report of the auditor.

2. Approval of the Directors’

Remuneration report

The Directors’ Remuneration report sets
out the pay and benefits received by
each of the Directors for the year ended
31 March 2022. This vote is advisory in
nature and the Directors’ entitlement to
remuneration is not conditional on it.

3. Approval of the final dividend
The proposal recommended by the
Directors in this resolution is 4.28 pence
for each ordinary share. If approved by
shareholders, this final dividend for the
financial year ended 31 March 2022 will
become due and payable on 19 July 2022
to shareholders named on the Register
of Members as at the close of business
on 10 June 2022.

4-11. Re-election of Directors
In accordance with the UK Corporate
Governance Code 2018 (the ‘Code’) and
the Company’s Articles of Association, all
Directors are standing for re-election at
the AGM this year and will be submitting
themselves for re-election at each
subsequent AGM.

Resolutions 7 to 10 (inclusive) relate to
the re-election of Ian Rogers, Ije
Nwokorie, Lynne Weedall and Robyn
Perriss who are the Directors that the
Board has determined are Independent
Non-Executive Directors for the purposes
of the Code (the ‘Independent Non-
Executive Directors’). As set out on page
133 of the Annual Report, Paul Mason and
Tara Alhadeff are not considered by the
Board to be independent for the purposes
of the Code. Paul Mason has held various
roles within the Group and Tara Alhadeff
was appointed as a Non-Executive Director
of the Company by its largest (and, for the
purposes of the Listing Rules, controlling)
shareholder, IngreLux S.àr.l., pursuant to
the terms of its relationship agreement
with the Company.

In compliance with the Listing Rules
relating to controlling shareholders, the
re-election of our Independent Non-
Executive Directors must be approved
by a majority of both:

a. the shareholders of the Company; and

the independent shareholders of the
Company (that is shareholders other than
IngreLux S.àr.l. and its concert parties).

For the purposes of the Listing Rules,
IngreLux S.àr.l. is a controlling
shareholder of the Company. A controlling
shareholder means any person who
exercises, or controls on their own, or
together with any person with whom
they are acting in concert, 30% or
more of the votes able to be cast on all
or substantially all matters at general
meetings of the Company.

Resolutions 7 to 10 (inclusive) are
proposed as ordinary resolutions and can
be voted on by all shareholders of the
Company. However, in addition to this, the
votes cast by independent shareholders
will be counted separately in order to
assess whether the second tier of the test
is satisfied.

In accordance with the Listing Rules,
if any of resolutions 7 to 10 are not
approved by a majority of both
shareholders of the Company and
independent shareholders of the
Company, the failed resolution may be
put to shareholders of the Company, at
a general meeting, which must be held
between 90 and 120 days from the date of
the original vote. In such circumstances,
any Independent Non-Executive
Director(s) whose appointment has not
been approved by both shareholders of
the Company and independent
shareholders of the Company will be
treated as having been re-elected from
the date of the original vote until either
the date when they are re-elected, being
the date of the subsequent general
meeting, or the date of any
announcement by the Board that the
Independent Non-Executive Director(s)
does not intend to stand for re-election.
If a subsequent general meeting does
not take place, the appointment will be
treated as ceasing 120 days from the
date of the original vote. If a subsequent
general meeting does take place and
the further resolution is approved, the
Independent Non-Executive Director(s)
will be treated as having been re-elected
until the following AGM of the Company.
However, if at a subsequent general
meeting the further resolution fails, the
Independent Non-Executive Director(s)
appointment will cease on that date.

The Listing Rules require companies with
a controlling shareholder to make the
following additional disclosures about
each Independent Non-Executive
Director’s relationships, independence,
effectiveness and appointments:

Relationships and transactions:
The Company has received confirmation
from each of the Independent Non-
Executive Directors that there are no
existing or previous relationships,
transactions or arrangements between
any of the Independent Non-Executive
Directors and the Company, its directors,
any controlling shareholder or any
associate of a controlling shareholder.

Effectiveness:
The Board believes that each of the
Independent Non-Executive Directors
continues to demonstrate commitment to
his or her role and is an effective member
of the Board.

Independence:
Each year the Board performance
evaluations will consider the
independence of each member of the
Board. The Board believes that each
Independent Non-Executive Director
remains independent in character and
judgement, and that there are no
relationships or circumstances that are
likely to affect, or appear to affect, his or
her judgement.

Selection:
As disclosed in the report of the
Nomination Committee on pages 136 and
137 of the Annual Report, the Nomination
Committee aims to ensure that the Board
remains balanced, knowledgeable and
diverse in order to meet the needs of the
Company. The Nomination Committee will
draw candidates from its internal and
external network, taking into account,
where appropriate, recommendations
from shareholders and external
recruitment consultants.

The Directors believe that the Board as a
whole comprises an appropriate balance
of knowledge, skills and experience and
that each of the Directors standing for
re-election continues to show the
necessary commitment to be an effective
member of the Board. Biographical details
of all Directors are available on pages 114
to 117 of the Annual Report and on our
website, drmartensplc.com. These include
details of each Director’s skills,
competencies and experience and
illustrates why the Board is satisfied that
each Director’s contribution is, and
continues to be, important to the
Company’s long-term sustainable success.

DR. MARTENS PLC ANNUAL REPORT 2022

237

NOTICE OF ANNUAL GENERAL MEETING 2022Notice of Annual General Meeting 2022
continued

12 & 13. Appointment and

remuneration of auditor

During the year a thorough and
comprehensive tender process for the
selection of the external auditor was
conducted, details of which can be found
on pages 144 and 145 of the Annual
Report. On the recommendation of the
Audit and Risk Committee, the Board
proposes in resolution 12 that
PricewaterhouseCoopers LLP be
appointed as auditor of the Company.

Resolution 13 proposes that the Audit and
Risk Committee be authorised to
determine the level of the auditor’s
remuneration.

14. Authority to make political

donations

The Companies Act 2006 prohibits
companies from making any political
donations to political organisations or
independent candidates, or incurring
political expenditure, unless authorised by
shareholders in advance.

The Company does not make, and does
not intend to make, any such donations or
incur such expenditure within the normal
meanings of those expressions. However,
the definitions of political donations,
political organisations and political
expenditure in the Companies Act 2006
Act are broad and, as a result, can capture
activities such as sponsorship,
subscriptions, payment of expenses, paid
leave for employees fulfilling certain
public duties, and support for bodies
representing the business community in
policy review or reform.

Accordingly, and in line with common
practice, the Company wishes to ensure
that neither it nor its subsidiaries
inadvertently commits any breaches of
the Companies Act 2006 through the
undertaking of routine activities, which
would not normally be considered to
result in the making of political donations
or in political expenditure being incurred.

The Board is therefore seeking authority
to make political donations and to incur
political expenditure not exceeding
£100,000 in total. The proposed authority
will expire at the next AGM of the
Company to be held in 2023 or on
1 October 2023, whichever is sooner.

15. Powers to allot shares
Paragraph (A) of this resolution would
give the Directors the authority to allot
ordinary shares of the Company up to an
aggregate nominal amount equal to
£3,334,075.67 (representing 333,407,567
ordinary shares of £0.01). This amount
represents approximately one-third
(33.33%) of the Company’s issued share
capital as at 31 May 2022, the latest
practicable date before the publication of
this Notice.

In line with guidance issued by the
Investment Association (IA), paragraph
(B) of this resolution would give the
Directors authority to allot ordinary
shares in connection with a rights issue in
favour of ordinary shareholders up to an
aggregate nominal amount equal to
£6,668,151.33 (representing 666,815,133
ordinary shares of £0.01), as reduced by
the nominal amount of any shares issued
under paragraph (A) of this resolution.
This amount (before any reduction)
represents approximately two-thirds
(66.66%) of the issued ordinary share
capital of the Company as at 31 May 2022,
the latest practicable date before the
publication of this Notice.

The authorities sought under paragraphs
(A) and (B) of this resolution will expire at
the conclusion of the Company’s AGM in
2023 or on 1 October 2023, whichever is
sooner. The Directors have no present
intention to exercise either of the
authorities sought under this resolution
except, under paragraph (A), to satisfy
options under the Company’s employee
share schemes; however, the Board
wishes to ensure that the Company has
maximum flexibility in managing the
Group’s capital resources.

As at the date of this Notice, no shares
are held by the Company in treasury.

16 & 17. Authority to disapply

pre-emption rights

Resolutions 16 and 17 are proposed as
special resolutions. Under section 561 of
the Companies Act 2006, if the Directors
wish to allot new shares and other equity
securities, or sell treasury shares, for cash
(other than in connection with an
employee share scheme), these shares
must first be offered to existing
shareholders pro rata to their holdings.
However, there may be occasions when the
Directors require the flexibility to respond
to market developments and to enable
allotments to take place to finance
business opportunities without making a
pre-emptive offer to existing shareholders,
which cannot be done unless shareholders
have first waived their pre-emption rights.
The purpose of resolutions 16 and 17 is to
enable shareholders to waive their
pre-emption rights.

Resolution 16 empowers the Directors to
allot equity securities for cash without
first offering them to existing
shareholders in proportion to their
existing holdings. If approved, the
resolution will authorise Directors to issue
shares in connection with pre-emptive
offers, or otherwise to issue shares for
cash up to an aggregate nominal amount
of £500,111.35 (representing 50,011,135
ordinary shares of £0.01 each) which
includes the sale on a non pre-emptive
basis of any shares the Company holds in
treasury for cash. This aggregate nominal
amount represents approximately 5% of
the issued ordinary share capital of the
Company as at 31 May 2022, being the
latest practicable date before the
publication of this Notice.

The purpose of resolution 17 is to authorise
the Directors to allot new shares and other
equity securities pursuant to the allotment
authority given by resolution 15, or sell
treasury shares for cash, without first
being required to offer such securities
to existing shareholders, up to a further
nominal amount of £500,111.35
(representing 50,011,135 ordinary shares
of £0.01), representing approximately 5%
of the issued ordinary share capital of
the Company as at 31 May 2022, being
the latest practicable date before the
publication of this Notice. The authority
granted by this resolution, if passed, will

238

DR. MARTENS PLC ANNUAL REPORT 2022

19. Notice of General Meeting
In accordance with the Companies Act
2006, the notice period for general
meetings (other than an AGM) is 21 clear
days’ notice unless the Company:

(i) Has gained shareholder approval for

the holding of general meetings on 14
clear days’ notice by passing a special
resolution at the most recent AGM;
and

(ii) Offers the facility for all shareholders

to vote by electronic means.

This shorter notice period would not be
used as a matter of routine, but only in
circumstances where time-sensitive matters
merit the flexibility afforded by the shorter
notice period and it is thought to be in the
interests of shareholders as a whole.

Resolution 19 seeks such approval and,
should it be approved, will be valid until
the end of the next AGM.

18. Authority for the Company

to purchase its own shares
Resolution 18 seeks authority for the
Directors to purchase up to 100,022,270
ordinary shares which, at 31 May 2022
(being the latest practicable date before
the publication of this Notice),
represented 10% of the Company’s issued
share capital. Whilst the Directors have no
present intention to exercise the authority
granted by this resolution, it would
provide them with the flexibility to do so
in the future should they be satisfied that
prevailing market conditions meant that
any such purchase would be in the best
long-term interests of shareholders.

Ordinary shares purchased by the
Company pursuant to this authority may
be held in treasury or may be cancelled.
The Company currently holds no shares
in treasury. The minimum price, exclusive
of expenses, which may be paid for an
ordinary share is £0.01. The maximum
price, exclusive of expenses, that may be
paid for an ordinary share is the higher of:

(i) An amount equal to 105% of the

average market value for an ordinary
share for the five business days
immediately preceding the date of
the purchase; and

(ii) The higher of the price of the last
independent trade and the highest
current independent bid on the
trading venues where the purchase
is carried out.

As at the latest practicable date prior
to publication of this Notice, there were
no outstanding warrants or options to
subscribe for ordinary shares.

only be used in connection with an
acquisition or specified capital investment
which is announced contemporaneously
with the allotment, or which has taken place
in the preceding six-month period and is
disclosed in the announcement of the issue.
If the authority given in resolution 17 is
used, the Company will publish details of
its use in its next Annual Report.

The authority granted by resolution 17
would be in addition to the general
authority to disapply pre-emption rights
under resolution 16. The maximum
aggregate nominal value of equity
securities which could be allotted if both
authorities were used would be
£1,000,222.70, which represents
approximately 10% of the issued ordinary
share capital of the Company as at 31 May
2022, being the latest practicable date
before the publication of this Notice.

The Directors intend to adhere to the
provisions in the Pre-emption Group’s
Statement of Principles and not to allot
shares or other equity securities or sell
treasury shares for cash on a non
pre-emptive basis pursuant to the
authority in resolution 16 in excess of an
amount equal to 7.5% of the total issued
ordinary share capital of the Company,
excluding treasury shares, within a rolling
three-year period, other than:

(i) With prior consultation with

shareholders; or

(ii) In connection with an acquisition or
specified capital investment which is
announced contemporaneously with
the allotment or which has taken
place in the preceding six-month
period and is disclosed in the
announcement of the allotment.

The Directors have no current intention
to allot shares except in connection
with employee share schemes. These
authorities will expire at the conclusion
of the Company’s AGM in 2023 or on
1 October 2023, whichever is sooner.

DR. MARTENS PLC ANNUAL REPORT 2022

239

NOTICE OF ANNUAL GENERAL MEETING 2022Notice of Annual General Meeting 2022
continued

IMPORTANT NOTES

Biographies of the Directors seeking
election are given in the Annual
Report on pages 114 to 117, including
membership of the principal
Committees. The terms of the current
Directors’ service contracts are such
that all Executive Director
appointments may be terminated by
both the Company and the individual
giving nine months’ notice;
Independent Non-Executive Directors
have agreements for service which
can be terminated on three months’
notice by either party; the Chairman
has an agreement for service which
requires six months’ notice by either
party; Tara Alhadeff’s appointment is
governed by the terms of the
Company’s relationship agreement
with its largest (and, for the purposes
of the Listing Rules, controlling)
shareholder, IngreLux S.àr.l, pursuant
to which IngreLux S.àr.l is entitled to
appoint one Non-Executive Director to
the Board (and, on provision of written
notice to the Company, to remove
from office any such person so
appointed and appoint another person
in that person’s place) for so long as it
(together with its associates)
continues to control the exercise of, in
aggregate, 10% or more of the votes
able to be cast on all or substantially
all matters at general meetings of the
Company. Tara’s agreement for
service can be terminated by her on
three months’ notice.

Registered shareholders: Members
are entitled to appoint a proxy to
exercise all or any of their rights to
attend, speak and vote on their behalf
at the AGM. Members may appoint
more than one proxy in relation to the
AGM provided that each proxy is
appointed to exercise the rights
attached to a different share or
shares held by that shareholder. A
proxy need not be a shareholder of
the Company. A proxy form which may
be used to make such appointment
and give proxy instructions
accompanies this Notice. If you do not
have a proxy form and believe that
you should have one, or if you require
additional proxy forms (to appoint
more than one proxy), please contact
our Registrar on 0371 384 2030
(+44 (0)121 415 7047 if calling from
overseas) or, alternatively, you may
photocopy the proxy form enclosed

with your paper copy of the Annual
Report, if you received one. Please
indicate the number of shares in
relation to which each proxy is
authorised to act in the box below the
proxy holder’s name. Please also
indicate if the instruction is one of
multiple instructions being given, and
if a proxy is being appointed for less
than your full entitlement, please
enter the number of shares in relation
to which each such proxy is entitled to
act in the box below the relevant
proxy holder’s name. The proxy form
accompanying this Notice assumes
you wish to vote on all your shares in
the same way. To vote only part of
your holding or to vote some shares
one way and some another, please
contact the shareholder helpline. All
proxy forms must be signed and
should be returned together.

If you would like to submit your vote
electronically in advance of the AGM,
please visit www.sharevote.co.uk,
where there are full instructions, and
submit your vote by no later than 9am
on 12 July 2022. You are advised to
read the terms and conditions of use.
If you return paper and electronic
instructions, those received last by
the Registrar before 9am on Tuesday
12 July 2022 will take precedence.
Electronic communication facilities
are available to all shareholders and
those that use them will not be
disadvantaged.

In the case of joint holders, where
more than one of the joint holders
purports to appoint a proxy, only the
appointment submitted by the most
senior holder will be accepted.
Seniority is determined by the order
in which the names of the joint
holders appear in the Company’s
register of members in respect of the
joint holding (the first-named being
the most senior).

To be valid, any proxy form or other
instrument appointing a proxy must be
received by post (during normal business
hours only) or by hand at Equiniti,
Aspect House, Spencer Road, Lancing,
West Sussex BN99 6DA no later than
9am on Tuesday 12 July 2022.

The return of a completed proxy form,
other such instrument or any CREST
proxy instruction (as described in
paragraph 13 of this section) will not
prevent a shareholder attending the
AGM and voting in person or
electronically if he/she/they wishes
to do so.

Indirect shareholders: Any person to
whom this Notice is sent who is a
person nominated under section 146
of the Companies Act 2006 to enjoy
information rights (a ‘Nominated
Person’) may, under an agreement
between him/her and the shareholder
by whom he/she was nominated, have
a right to be appointed (or to have
someone else appointed) as a proxy
for the AGM. If a Nominated Person
has no such proxy appointment right
or does not wish to exercise it, he/she
may, under any such agreement, have
a right to give instructions to the
shareholder as to the exercise of
voting rights.

The statement of the rights of
shareholders in relation to the
appointment of proxies in paragraphs
2 to 6 does not apply to Nominated
Persons. The rights described in these
paragraphs can only be exercised by
shareholders of the Company.

To be entitled to attend, speak and
vote at the meeting (and for the
purpose of the determination by the
Company of the votes they may cast),
shareholders must be entered on the
Register of Members of the Company
by 6.30pm on Tuesday 12 July 2022
(or, in the event of any adjournment,
6.30pm on the date which is two
working days prior to the adjourned
meeting). Changes to the Register of
Members after the relevant deadline
shall be disregarded in determining
the rights of any person to attend,
speak and vote at the meeting.

10. The following documents are available
for inspection during normal business
hours at the Company’s registered
office: 28 Jamestown Road, Camden,
London, United Kingdom, NW1 7BY
and at the AGM from 15 minutes
before the AGM until it ends:

(i) Copies of the Executive Directors’

service contracts.

(ii) Copies of the Non-Executive

Directors’ letters of appointment.

(iii) Copies of the Directors’ Deeds of

Indemnity.

(iv) A copy of the Articles of

Association of the Company.

11.

Shareholders are advised that, unless
otherwise specified, the telephone
numbers, website and email addresses
set out in this Notice or proxy forms
are not to be used for the purpose of
serving information or documents on
the Company, including the service of
documents or information relating to
proceedings at the Company’s AGM.

240

DR. MARTENS PLC ANNUAL REPORT 2022

12. As at 31 May 2022 (the latest
practicable date before the
publication of this Notice) the
Company’s issued share capital
consists of 1,000,222,700 ordinary
shares carrying one vote each.
Therefore, the total voting rights in
the Company as at 31 May 2022 are
1,000,222,700.

13. CREST members who wish to appoint
a proxy or proxies through the CREST
electronic proxy appointment service
may do so for the AGM and any
adjournment thereof by using the
procedures described in the CREST
manual. CREST personal members or
other CREST-sponsored members,
and those CREST members who have
appointed a service provider, should
refer to their CREST sponsor or voting
service provider, who will be able to take
the appropriate action on their behalf.

14. In order for a proxy appointment or

instruction made using the CREST
service to be valid, the appropriate
CREST message (a ‘CREST proxy
instruction’) must be properly
authenticated in accordance with
Euroclear UK & Ireland Limited’s
specifications and must contain the
information required for such
instruction, as described in the CREST
manual (available via euroclear.com).
The message, regardless of whether
it constitutes the appointment of a
proxy or is an amendment to the
instruction given to a previously
appointed proxy must, in order to be
valid, be transmitted so as to be
received by Equiniti (ID RA19) by 9am
on Tuesday 12 July 2022. For this
purpose, the time of receipt will be
taken to be the time (as determined
by the time stamp applied to the
message by the CREST Application
Host) from which Equiniti is able to
retrieve the message by enquiry to
CREST in the manner prescribed by
CREST. After this time, any change of
instructions to proxies appointed
through CREST should be
communicated to the appointee
through other means.

15. CREST members and, where

(ii) Any circumstance connected

applicable, their CREST sponsors, or
voting service providers should note
that Euroclear UK & Ireland Limited
does not make available special
procedures in CREST for any
particular message. Normal system
timings and limitations will, therefore,
apply in relation to the input of CREST
proxy instructions. It is the
responsibility of the CREST member
concerned to take (or, if the CREST
member is a CREST personal member,
or sponsored member, or has
appointed a voting service provider,
to procure that his/her/their CREST
sponsor or voting service provider(s)
take(s)) such action as shall be
necessary to ensure that a message is
transmitted by means of the CREST
system by any particular time. In this
connection, CREST members and,
where applicable, their CREST
sponsors or voting system providers
are referred in particular to those
sections of the CREST manual
concerning practical limitations of
the CREST system and timings.

16. The Company may treat as invalid
a CREST proxy instruction in the
circumstances set out in Regulation
35(5)(a) of the Uncertificated
Securities Regulations 2001.

17. Any corporation that is a member
can appoint one or more corporate
representatives who may exercise
on its behalf all of its powers as a
member, provided that they do not
do so in relation to the same shares.

18. Under section 527 of the Companies
Act 2006, members meeting the
threshold requirements set out in
that section have the right to require
the Company to publish on a website
a statement setting out any matter
relating to:

(i) The audit of the Company’s

accounts (including the auditor’s
report and the conduct of the
audit) that are to be laid before
the AGM; or

with an auditor of the Company
ceasing to hold office since the
previous meeting at which annual
accounts and reports were laid in
accordance with section 437 of
the Companies Act 2006. The
Company may not require the
shareholders requesting any
such website publication to pay
its expenses in complying with
sections 527 or 528 of the
Companies Act 2006. Where the
Company is required to place a
statement on a website under
section 527 of the Companies
Act 2006, it must forward the
statement to the Company’s
auditor not later than the time
when it makes the statement
available on the website. The
business which may be dealt
with at the AGM includes any
statement that the Company has
been required under section 527
of the Companies Act 2006 to
publish on a website.

19. Any member attending the meeting

has the right to ask questions. The
Company must have cause to answer
any such question relating to the
business being dealt with at the
meeting but no such answer need
be given if:

(i) to do so would interfere unduly
with the preparation for the
meeting or involve the disclosure
of confidential information;

(ii) the answer has already been given
on a website in the form of an
answer to a question; or

(iii) it is undesirable in the interests

of the Company or the good order
of the meeting that the question
be answered.

20. A copy of this Notice, and other

information required by section 311A
of the Companies Act 2006, can be
found at drmartensplc.com.

21. Please see the letter dated 31 May

2022 from the General Counsel and
Company Secretary on page 234
and pages 237 to 239 for further
explanatory notes.

DR. MARTENS PLC ANNUAL REPORT 2022

241

NOTICE OF ANNUAL GENERAL MEETING 2022

CONTENTS

Five-year financial summary
(unaudited)

First half/second half analysis

Glossary

Shareholder information

Company information

243

245

247

249

250

DDITIONAL
INFORMATION

242

DR. MARTENS PLC ANNUAL REPORT 2022

Five-year financial summary (unaudited)
For the year ended 31 March 2022

Revenue:

Ecommerce
Retail

DTC
Wholesale5

Gross margin

EBITDA2

Profit before tax and exceptional items

Profit before tax3
Tax expense

Profit/(loss) after tax

Earnings per share

Basic
Diluted

Adjusted earnings per share

Basic
Diluted

Underlying earnings per share

Basic
Diluted

Key statistics:

Pairs sold (m)

No. of stores4

DTC mix %

Gross margin %

EBITDA %

FY22
£m

FY211
£m

FY20
£m

FY19
£m

FY18
£m

262.4
185.6

448.0
460.3

235.4
99.7

335.1
437.9

136.4
165.2

301.6
370.6

72.7
126.7

199.4
255.0

43.6
97.1

140.7
207.9

908.3

773.0

672.2

454.4

348.6

578.8

263.0

214.3

214.3
(33.1)

181.2

470.5

222.9

150.2

69.7
(35.0)

34.7

401.5

184.5

113.0

101.0
(26.2)

74.8

260.5

85.0

34.1

28.9
(11.7)

17.2

186.0

50.0

2.5

0.7
(6.4)

(5.7)

CAGR
%

57%
18%

34%
22%

27%

33%

51%

204%

318%
51%

18.1p
18.1p

3.5p
3.5p

7.5p
7.5p

18.1p
18.1p

11.5p
11.5p

8.6p
8.6p

17.4p
17.4p

14.4p
14.4p

11.8p
11.8p

14.1

158

49%

63.7%

29.0%

12.7

135

43%

60.9%

28.8%

11.1

122

45%

59.7%

27.4%

8.3

109

44%

57.3%

18.7%

6.9

40%

53.4%

14.3%

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. EBITDA – earnings before exchange gains/losses, finance income/expense, income tax, depreciation and amortisation and exceptional items.

3. Post exceptional items.

4. Own stores on streets and malls operated under arm’s length leasehold arrangements.

5. Wholesale revenue including distributor customers.

DR. MARTENS PLC ANNUAL REPORT 2022

243

DDITIONAL

INFORMATION

ADDITIONAL INFORMATIONFive-year financial summary (unaudited)
For the year ended 31 March 2022 continued

Revenue by region:

EMEA

Americas
APAC

Revenue mix:

EMEA %

Americas %
APAC %

EBITDA by region:

EMEA

Americas

APAC
Support costs

EBITDA % by region:

EMEA %

Americas %
APAC %

FY22
£m

FY211
£m

FY20
£m

FY19
£m

FY18
£m

398.5

382.7
127.1

335.6

295.8
141.6

287.9

252.2
132.1

195.1

161.1
98.2

149.6

117.4
81.6

908.3

773.0

672.2

454.4

348.6

CAGR
%

28%

34%
12%

27%

44%

42%
14%

44%

38%
18%

43%

37%
20%

43%

35%
22%

43%

34%
23%

143.8

120.0

32.6
(33.4)

115.3

91.9

39.7
(24.0)

92.4

75.4

35.5
(18.8)

263.0

222.9

184.5

39.5

33.0

23.7
(11.2)

85.0

22.7

18.5

19.3
(10.5)

50.0

59%

60%

14%
-34%

51%

36.1%

31.4%
25.6%

29.0%

34.4%

31.1%
28.0%

28.8%

32.1%

29.9%
26.9%

27.4%

20.2%

20.5%
24.1%

18.7%

15.2%

15.8%
23.6%

14.3%

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

244

DR. MARTENS PLC ANNUAL REPORT 2022

First half/second half analysis
For the year ended 31 March 2022

Revenue:

Ecommerce
Retail

DTC
Wholesale6

Gross margin

EBITDA2

Profit before tax and
exceptional items

Profit before tax4
Tax expense

Profit after tax

Earnings per share

Basic
Diluted

Adjusted EPS

Basic
Diluted

Underlying EPS

Basic
Diluted

Key statistics:

Pairs sold (m)

No. of stores5

DTC mix %

Gross margin %

EBITDA %

Revenue by region:

EMEA

Americas
APAC

Unaudited
FY22
£m

Audited
FY211
£m

82.6
65.9

75.3
34.3

148.5
221.4

109.6
208.6

369.9

318.2

226.6

186.3

88.8

86.3

Variance
%

Unaudited
FY22
£m

Unaudited
FY211
£m

Variance
%

Audited
FY22
£m

Audited
FY211
£m

Variance
%

10%
92%

35%
6%

16%

22%

179.8
119.7

299.5
238.9

160.1
65.4

225.5
229.3

538.4

454.8

352.2

284.2

174.2

136.6

12%
83%

33%
4%

18%

24%

28%

262.4
185.6

448.0
460.3

235.4
99.7

335.1
437.9

908.3

773.0

578.8

470.5

263.0

222.9

11%
86%

34%
5%

18%

23%

18%

61.3

44.9

37%

153.0

105.3

46%

214.3

150.2

43%

61.3
(12.7)

41.9
(12.4)

48.6

29.5

46%
-2%

65%

153.0
(20.4)

132.6

27.8
(22.6)

5.2

450%
10%

214.3
(33.1)

69.7
(35.0)

207%
5%

181.2

34.7

422%

4.8p
4.8p

3.0p
3.0p

60%
60%

13.3p
13.3p

0.5p
0.5p

na
na

18.1p
18.1p

3.5p
3.5p

na
na

4.8p
4.8p

3.3p
3.3p

45%
45%

13.3p
13.3p

8.2p
8.2p

62%
62%

18.1p
18.1p

11.5p
11.5p

57%
57%

4.8p
4.8p

5.0p
5.0p

-4%
-4%

12.6p
12.6p

9.4p
9.4p

34%
34%

17.4p
17.4p

14.4p
14.4p

21%
21%

6.3

147

5.6

130

13%

40%

34%

+6pts

7.8

158

56%

7.1

135

10%

17%

50%

+6pts

14.1

158

49%

12.7

135

10%

17%

43%

+6pts

61.3% 58.5% +2.8pts

65.4% 62.5% +2.9pts

63.7% 60.9% +2.8pts

24.0%

27.1% -3.1pts

32.4% 30.0% +2.4pts

29.0% 28.8% +0.2pts

167.6

147.5
54.8

159.6

102.6
56.0

369.9

318.2

44%
-2%

16%

230.9

235.2
72.3

176.0

193.2
85.6

538.4

454.8

31%

22%
-16%

18%

398.5

335.6

382.7
127.1

295.8
141.6

908.3

773.0

19%

29%
-10%

18%

DR. MARTENS PLC ANNUAL REPORT 2022

245

ADDITIONAL INFORMATIONFirst half/second half analysis
For the year ended 31 March 2022 continued

Revenue mix:

EMEA %

Americas %
APAC %

EBITDA by region:

EMEA

Americas

APAC
Support costs

EBITDA % by region:

EMEA %

Americas %

APAC %

Unaudited
FY22
£m

Audited
FY211
£m

Variance
%

Unaudited
FY22
£m

Unaudited
FY211
£m

Variance
%

Audited
FY22
£m

Audited
FY211
£m

Variance
%

45%

40%
15%

50%

32%
18%

-5pts

+8pts
-3pts

43%

44%
13%

39%

42%
19%

+4pts

+2pts
-6pts

44%

42%
14%

44%

38%
18%

–

+4pts
-4pts

55.2

40.0

10.7
(17.1)

53.8

28.9

13.5
(9.9)

88.8

86.3

38%

-21%
-73%

88.6

80.0

21.9
(16.3)

61.5

63.0

26.2
(14.1)

174.2

136.6

44%

27%

-16%
-16%

28%

143.8

120.0

32.6
(33.4)

115.3

91.9

39.7
(24.0)

263.0

222.9

25%

31%

-18%
-39%

18%

32.9% 33.7% -0.8pts

38.4% 34.9% +3.5pts

36.1% 34.4% +1.7pts

27.1% 28.2%

-1.1pts

34.0% 32.6% +1.4pts

31.4%

31.1% -0.3pts

19.5% 24.1% -4.6pts

30.3% 30.6% -0.3pts

25.6% 28.0% -2.4pts

1. Results for the year ended 31 March 2021 have been retrospectively restated in relation to a change in accounting policy for the treatment of cloud-based software.

This resulted in £nil impact on cash. See note 2.14 for further details.

2. EBITDA – earnings before exchange gains/losses, finance income/expense, income tax, depreciation and amortisation and exceptional items.

3. Before exceptional items.

4. Post exceptional items.

5. Own stores on streets and malls operated under arm’s length leasehold arrangements.

6. Wholesale revenue including distributor customers.

246

DR. MARTENS PLC ANNUAL REPORT 2022

Glossary

Alternative Performance Measures (APMs) and other non-statutory measures
The Group tracks a number of performance measures (KPIs) including Alternative Performance Measures (APMs) in managing its
business, which are not defined or specified under the requirements of IFRS because they exclude amounts that are included in, or
include amounts that are excluded from, the most directly comparable measures calculated and presented in accordance with IFRS
or are calculated using financial measures that are not calculated in accordance with IFRS.

The Group believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide
stakeholders with additional helpful information on the performance of the business. These APMs are consistent with how the
business performance is planned and reported within the internal management reporting to the Board.

These APMs should be viewed as supplemental to, but not as a substitute for, measures presented in the consolidated financial
statements relating to the Group, which are prepared in accordance with IFRS. The Group believes that these APMs are useful
indicators of its performance. However, they may not be comparable with similarly titled measures reported by other companies
due to differences in the way they are calculated.

Definition

Rationale

Revenue per financial statements.

Helps evaluate growth trends, establish
budgets and assess operational performance
and efficiencies.

APM

KPI

Yes

Revenue per Group’s geographical segments. Helps evaluate growth trends, establish

Yes

budgets and assess operational performance
and efficiencies.

Metric

Revenue

Revenue by
geographical market

Revenue: EMEA

Revenue: Americas

Revenue: APAC

Revenue by channel

Revenue: ecommerce Revenue from Group’s ecommerce platforms.

Revenue: retail

Revenue: DTC

Revenue from Group’s own stores (including
concessions).

Revenue from the Group’s direct-to-consumer
(DTC) channel (= ecommerce plus retail revenue).

Revenue: wholesale Revenue from the Group’s business-to-
business channel revenue to wholesale
customers, distributors and franchisees.

Constant currency
basis

Non-GBP results with the same exchange
rate applied to the current and prior periods,
based on the current budgeted rates.

Gross margin

Revenue less cost of sales (raw materials
and consumables).

Cost of sales is disclosed in the Consolidated
Statement of Profit or Loss.

Gross margin %

Gross margin divided by revenue.

Helps evaluate growth trends, establish
budgets and assess operational performance
and efficiencies.

Yes

Presenting results of the Group excluding
foreign exchange volatility.

Yes

Helps evaluate growth trends, establish
budgets and assess operational performance
and efficiencies.

Yes

Helps evaluate growth trends, establish
budgets and assess operational performance
and efficiencies.

Yes

EBITDA

Profit/(loss) for the year before income tax
expense, financing expense, foreign exchange
gains/(losses), depreciation of right-of-use
assets, depreciation, amortisation and
exceptional items.

EBITDA is used as a key profit measure
because it shows the results of normal, core
operations exclusive of income or charges that
are not considered to represent the underlying
operational performance.

Exceptional items are material items that are
considered exceptional in nature by virtue of
their size and/or incidence.

EBITDA %

EBITDA divided by revenue.

Helps evaluate growth trends, establish
budgets and assess operational performance
and efficiencies.

Yes

DR. MARTENS PLC ANNUAL REPORT 2022

247

ADDITIONAL INFORMATION
Glossary
continued

Alternative Performance Measures (APMs) and other non-statutory measures continued

Metric

Definition

Rationale

EBITDA (post
exceptional items)

EBITDA less change in net working capital
and capital expenditure.

Adjusted profit
before tax

Statutory profit before tax adjusted to
exclude exceptional items.

Operating cash flow EBITDA less change in net working capital

and capital expenditure.

Operating cash flow
conversion

Operating cash flow divided by EBITDA.

Adjusted profit before tax is used as a
measure to represent the results for the
business excluding exceptional items.

Operating cash flow is used as a trading cash
generation measure because it shows the results
of normal, core operations exclusive of income
or charges that are not considered to represent
the underlying operational performance.

Used to evaluate the efficiency of a company’s
operations and its ability to employ its
earnings toward repayment of debt, capital
expenditure and working capital requirements.

Free cash flow

Operating cash flow less cash outflows for
exceptional items, net interest paid, taxation,
lease liabilities and net cash foreign exchange.

Free cash flow is used as a net cash flow
measure for the Group before changes in
the debt/capital structure.

Consolidated
non-GAAP Statement
of Cash Flows

Movement in cash flows from EBITDA.

To aid the understanding of the reader of the
accounts of how the Group’s cash and cash
equivalents changed during the period, including
cash inflows and outflows in the period.

APM

Yes

KPI

Yes

Underlying operating
cash flow

Operating cash flow representing
adjustments for optional, abnormal payment
term changes in relation to specific events.

Earnings per share

IFRS measure.

Presenting consistent, comparable operating
cash flow results.

Yes

This indicates how much money a company
makes for each share of its stock, and is a widely
used metric to estimate company value.

Yes

Basic earnings per
share

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

A higher EPS indicates greater value because
investors will pay more for a company’s shares
if they think the company has higher profits
relative to its share price.

Diluted earnings per
share

Calculated by dividing the profit attributable
to ordinary equity holders of the parent by
the weighted average number of ordinary
shares in issue during the period/year plus
the weighted average number of ordinary
shares that would have been issued on the
conversion of all dilutive potential ordinary
shares into ordinary shares.

Adjusted EPS

EPS calculated as earnings before taking
into account exceptional items.

Underlying EPS
(previously
Normalised Adjusted
EPS)

EPS calculated as earnings before taking into
account exceptional items, preference share
interest and prior year tax deductions.

Used to gauge the quality of EPS if all
convertible securities were exercised.

Yes

This metric enables the profitability of the
Group and its ability to return funds to
shareholders to be evaluated consistently
year on year, and against other businesses.

Yes

Reconciliation of EPS from the Remuneration
Committee report.

Yes

Ecommerce mix % Ecommerce revenue as a percentage
of total revenue.

Helps evaluate progress towards strategic
objectives.

DTC mix %

DTC revenue as a percentage of
total revenue.

No. of stores

Number of ‘own’ stores open in the Group.

Helps evaluate progress towards strategic
objectives.

Yes

Pairs

Pairs of footwear sold during a period.

Used to show volumes and growths in the Group.

Yes

248

DR. MARTENS PLC ANNUAL REPORT 2022

Shareholder information

Analysis of share register
Ordinary shares
As at 31 March 2022, the Company had 458 registered holders of ordinary shares. Their shareholdings are analysed below.

Range of shareholding

1 to 2,000

2,001 to 5,000

5,001 to 10,000

10,001 to 100,000

100,001 to 1,000,000
1,000,001 to Highest

Totals

Number of
shareholders

Percentage of
total shareholders

Total number
of shares

Percentage issued
share capital

112

112
86

17.47%

9.83%

5.02%

24.45%

24.45%
18.78%

55,230

145,546

178,533

4,532,459

38,886,405
956,424,527

0.01%

0.02%

0.45%

3.89%
95.62%

458

100.00%

1,000,222,700

100.00%

Shareholders’ enquiries
Any shareholder with enquiries relating to their shareholding should, in the first instance, contact our registrar, Equiniti, using the

telephone number or address on page 250.

Electronic shareholder communications
Shareholders can elect to receive communications by email each
time the Company distributes documents, instead of receiving
paper copies. This can be done by registering via Shareview at
no extra cost, at www.shareview.co.uk. In the event that you
change your mind or require a paper version of any document
in the future, please contact the registrar.

Access to Shareview allows shareholders to view details about
their holdings, submit a proxy vote for shareholder meetings
and notify a change of address. In addition to this, shareholders
have the opportunity to complete dividend mandates online
which facilitates the payment of dividends directly into a
nominated account.

Financial calendar
Announcement of full year results

1 June 2022

Ex-dividend date for final dividend

9 June 2022

Record date for final dividend

10 June 2022

Annual General Meeting

14 July 2022

Payment date for final dividend

19 July 2022

Announcement of FY23 half
year results

24 November 2022

Shareholder security
Shareholders should be very wary of any unsolicited calls or
correspondence they receive concerning investment matters.
These are typically from purported ‘brokers’ who can be
persistent and persuasive and often have professional websites
and telephone numbers to support their activities. These
operations are commonly known as boiler rooms. Shareholders
should always check that any firm contacting them about
potential investment opportunities is authorised by the FCA.
Remember, if it sounds too good to be true, it probably is.

If you think you have been approached by an unauthorised firm,
you should contact the FCA consumer helpline on 0800 111 6768.

More detailed information and guidance for shareholders on
how to avoid scams can be found on the FCA’s website at
www.fca.org.uk/consumers/protect-yourself/unauthorised-firms.

AGM
The AGM will be held at 28 Jamestown Road, Camden, London,
NW1 7BY at 9.30am on Thursday 14 July 2022. Shareholders are
asked to send any questions they may have for the Board,
relating to the business of the meeting, in advance by email to
company.secretariat@drmartens.com. Any such questions will be
responded to in full. We will also publish all answers to any
questions submitted that relate to the business of the meeting,
together with the full voting results for the 2022 AGM, on
drmartensplc.com shortly after the meeting.

More information can be found in the Notice of Meeting, starting
from page 233 of this document.

Website
The investor section of Dr. Martens’ corporate website,
drmartensplc.com, contains a wide range of information
including regulatory news, results announcements, share price
information and information about our Board and Committees.

It is also possible to sign up to receive regulatory news relating
to Dr. Martens plc alerts by email at drmartensplc.com/investors/
regulatory-news/rns-alerts/.

Our privacy policy
Our privacy policy, which sets out how Dr. Martens collects and
uses personal information, can be found at drmartensplc.com/
privacy-policy.

DR. MARTENS PLC ANNUAL REPORT 2022

249

ADDITIONAL INFORMATION

Company information

Registered office
28 Jamestown Road
Camden
London
NW1 7BY

Investor Relations
investor.relations@drmartens.com

Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA

Tel: 0371 384 2030 (from the UK)
Tel: +44 121 4157047 (from overseas)

Auditor for FY22
Ernst & Young LLP
1 More London Place
London
SE1 2AF

250

DR. MARTENS PLC ANNUAL REPORT 2022

Notes

DR. MARTENS PLC ANNUAL REPORT 2022

251

Notes

252

DR. MARTENS PLC ANNUAL REPORT 2022

Dr. Martens plc’s commitment to environmental issues
is reflected in this Annual Report, which has been printed
on Evolution Offset, manufactured from 100% recycled
post-consumer waste, FSC® and ISO 14001 certified material.

This document was printed by Principal Colour, accredited
to the ISO 14001 Environmental Management System with
99% of dry waste diverted from landfill, minimising the
impact of printing on the environment.

The publication is CarbonNeutral®.

Designed and produced by three thirty studio
www.threethirty.studio

DR. MARTENS PLC
28 Jamestown Rd
Camden
London NW1 7BY

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Dr. Martens plc

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